Document:

Assets Transfer Agreement, dated December 27, 2011

 Exhibit 4.27 

 
  
 Assets Transfer Agreement 
 between 

Vimicro Corporation (北京中星微电子有限公司) 

and 
 Vimicro Qingdao Corporation
(青岛中星微电子有限公司) 
 December 27, 2011 

 
  

 Table of Contents 

 

							
	 	  	Page	 
	 Article
	  			
			
	1	  	Transfer of Target Assets	  	 	1	  
			
	2	  	Closing and Payment	  	 	1	  
			
	3	  	Covenants	  	 	3	  
			
	4	  	Tax	  	 	3	  
			
	5	  	Confidentiality	  	 	3	  
			
	6	  	Representations and Warranties	  	 	4	  
			
	7	  	Indemnity	  	 	5	  
			
	8	  	Effective, Performance and Termination	  	 	5	  
			
	9	  	Settlement of Disputes	  	 	5	  
			
	10	  	Force Majeure	  	 	6	  
			
	11	  	Notices	  	 	6	  
			
	12	  	Assignment	  	 	7	  
			
	13	  	Severability	  	 	7	  
			
	14	  	Amendment and Supplement	  	 	7	  
			
	15	  	Governing Law	  	 	7	  

 This Assets Transfer Agreement (the “Agreement”) is entered into on Dec 27, 2011
(the “Execution Date”), by and between: 
  

	A	Vimicro Corporation, a company with limited liability incorporated and existing under the laws of People’s Republic of China (“PRC”), whose
registered office is at 15/F, Shining Tower, No. 35 Xueyuan Road, Beijing, P.R.C, together with its affiliates, as one party (“Party A”); and 

 

	B	Vimicro Qingdao Corporation, a company with limited liability incorporated and existing under the laws of the PRC, whose registered office is at 201-C Entrepreneurship
Centre of Qingdao National High-tech Industrial Development Zone, together with its affiliates, as the other party (“Party B”), (together with Party A, the “Parties”). 

Whereas 
  

	1	Party A is a limited liability company duly registered in the PRC; 

  

	2	Party B is a limited liability company duly registered in the PRC; 

  

	3	Party A agrees to transfer to Party B and Party B agrees to accept Party A’s certain assets at the mutual agreed price hereunder. 

NOW, THEREFORE, in consideration of the promises contained herein, and intending to be legally bound, the parties agree as follows: 

 

	1	Transfer of Target Assets 

  

	 	1.1	Subject to terms and conditions of this Agreement, Party A agrees to transfer certain assets relating to mobile products business which include but not limited to the
fixed assets and inventories (“Target Assets”) to Party B as confirmed by Parties by purchase orders; 

  

	 	1.2	Based on the appraisal value by independent evaluator American Appraisal within an effective period of the valuation report (“Appraisal Value”),
the Parties agree that the price of the Target Assets under this Agreement shall be not less than the Appraisal Value (“Transfer Price”). 

 

	2	Closing and Payment 

  

	 	2.1	Closing 

  

	 	(a)	The delivery of the Target Assets and transfer deliverables as set forth in section 2.3 by Parties, respectively (the “Closing”), shall take place remotely
via the exchange of documents, at a time and place as both Parties mutually agree, or at such other date as mutually agreed by the Parties in writing. The date on which the Closing occurs is referred to as the “Closing Date.”

  

	 	(b)	In case the items of Target Assets delivered by Party A on the Closing Date differs from the Target Assets in this Agreement, upon written consent from Party B, Party A
shall be entitled to deliver other items with equivalent value to make the replacement. 

  
 1 

	 	2.2	Payment 

  

	 	(a)	Ninety (90) days after the Closing, Party B shall deliver the Transfer Price to Party A, by wire transfer of immediately available funds to the account designated
by Party A (the details of which Party A shall provide to Party B in writing prior to the Closing) (“Closing Payment”) without any withholding, deduction or set-off. Upon receipt of the Closing Payment, Party A shall deliver to Party B a
certificate to confirm that the Closing Payment has been fully paid by Party B and Party B shall be the owner of the Target Assets. 

  

	 	(b)	In case the actual value of Target Assets delivered by Party A on the Closing Date differs from the Transfer Price on the Execution Date, the amount of payment shall be
adjusted for the difference. For the part more than the Transfer Price, the amount of payment shall be increased accordingly; for the part less than the Transfer Price, the amount of payment shall be decreased accordingly. If the total adjusted
amount for Target Assets is less than 10% of the Target Price, then no adjustment will be made. 

  

	 	2.3	Closing Deliverables 

  

	 	(a)	On the Closing Date, Party A shall deliver to Party B the following documents: 

 

	 	(i)	all the seals, chops and legal documents relating to the Target Assets, include but not be limited to the constitutive documents, qualification, licenses and tax
relating documents; 

  

	 	(ii)	a receipt signed by Party B for the confirmation of the transfer of Target Assets of this Agreement; 

 

	 	(iii)	a certificate signed by a duly authorized officer to the effect that the conditions set forth in this Agreement have been satisfied. 

 

	 	(b)	On the Closing Date, Party B shall deliver to Party A the following documents: 

 

	 	(i)	a certificate confirming that it has received the Target Assets; 

  

	 	(ii)	a certificate signed by a duly authorized officer to the effect that the conditions set forth in this Agreement have been satisfied. 

 

	 	2.4	Additional Orders 

 If Party B
would like to purchase additional mobile assets that are produced after signing this Agreement from Party A, then upon consent of Party A, Party B can place purchase orders to Party A. The mutually agreed transfer price will be not less than the
appraisal value. The product item, quantity, unit price, delivery terms, payment terms and other routine business terms will be stated at purchase orders. 

  
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	3	Covenants 

  

	 	3.1	Party A shall use its best endeavors to complete the changes of ownership in relation to the Target Assets except as otherwise provided in this Agreement;

  

	 	3.2	Party A shall take all necessary actions and cooperate with Party B to ensure Party B obtaining the entire interests and legal title regarding the Target Assets, and
execute all related documents, take related measures (or request other related third parties to execute related documents or take related measures) to ensure Party B obtaining all necessary or proper rights and interests; 

 

	 	3.3	Party A shall deliver all related documents of the Target Assets to party B; and Party B shall check and receive such documents. Party B shall issue a certificate
indicating that it is comfortable with the status of the Target Assets and related documents. Upon the Closing Date, legal title to the Target Assets shall be deemed to have been passed to Party B except as otherwise provided in this Agreement;

  

	 	3.4	Party B shall be solely responsible for any liability and obligation with respect to the Target Assets, even if such liability and obligation incurred before Closing.
Party A agrees to cooperate fully with Party B in the prosecution of any infringement claims and, at Party B’s expense, will use reasonable efforts to supply Party B with all documents and other information as it may reasonably request as
reasonably necessary to the action. 

  

	4	Tax 

 Any applicable tax
payable under PRC law arising as a result of or in consequence of this Agreement or its implementation shall be borne by Party A or Party B (as applicable) in accordance with the relevant PRC law. 

 

	5	Confidentiality 

  

	 	5.1	Party A and Party B agree to take various measures to maintain as confidential any confidential materials and information (“Confidential
Information”) acquired by the Parties and shall not disclose, grant or transfer such Confidential Information to any third parties without prior written consent of the other Party. Once this Agreement is terminated, Party A and Party B
shall return any documents, materials or software carrying such Confidential Information to the original owner of the Confidential Information or destroy the same by its own at the request of the other Party, delete any Confidential Information
stored in any memory device and shall not continue to use such Confidential Information. Party A and Party B shall take all necessary measures to disclose such Confidential Information to Party A’s employees, agents or professional consultants
who need to know such Confidential Information and procure such employees, agents or professional consultants to abide by the confidentiality responsibility under this Agreement. 

 

	 	5.2	Article 5.1 shall not apply to the information which: 

  

	 	(a)	has already become known to the public at the time of disclosure; 

  

	 	(b)	becomes available to the public after the disclosure not due to the fault of Party A or Party B; 

  
 3 

	 	(c)	is proved to be known to either Party before the disclosure from any parties other than Parties to this Agreement; 

 

	 	(d)	is required to be disclosed by law, pursuant to a court order, by any securities exchange or by any governmental or regulatory body, so is disclosed to its direct legal
counsel or financial consultant for the purpose of ordinary business operations of either party. 

  

	 	5.3	Both Parties agree that this Article shall survive the modification, elimination or termination of this Agreement. 

 

	6	Representations and Warranties 

  

	 	6.1	Party A hereby represents and warrants as follows: 

  

	 	(a)	Party A is a wholly foreign owned company duly registered and validly existing under PRC laws; 

 

	 	(b)	Party A is properly authorized to perform this Agreement within its corporation powers and business scope, and has gained all necessary corporate and government
consents and approvals, if any. The performance of this Agreement shall not be in violation of any applicable laws or contracts binding on Party A; 

  

	 	(c)	The Agreement will constitute a legal, valid and binding agreement of Party A, enforceable against it in accordance with the terms hereunder upon Execution;

  

	 	(d)	It has legal and complete ownership title to the Target Assets, and its rights in relation to the Target Assets are free and clear of all and any lease, lien, mortgage,
pledge or encumbrance and any third party rights, licenses or claims. 

  

	 	6.2	Party B hereby represents and warrants as follows: 

  

	 	(a)	Party B is a limited liability company duly registered and validly existing under PRC laws; 

 

	 	(b)	Party B is properly authorized to perform this Agreement within its corporation powers and business scope, and has gained all necessary corporate and governmental
consents and approvals, if any. The performance of this Agreement is not and shall not be in violation of any applicable laws or contracts binding on Party B; 

 

	 	(c)	Once the Agreement has been duly executed by both parties, it will constitute a legal, valid and binding agreement of Party B, enforceable against it in accordance with
terms hereunder upon Execution; 

  

	 	(d)	Party B has full power and right to conduct the business contemplated by this Agreement. 

  
 4 

	7	Indemnity 

  

	 	7.1	If either party to this Agreement breaches this Agreement or any representations and warranties made in this Agreement, the other party may notify in writing the
breaching party requesting it to correct its wrongdoings within 10 days upon receival of such notice, take relevant measures to effectively and promptly avoid the occurrence of any damages, and to resume the performance of this Agreement 30 business
days after receipt of the notice. The notice shall set forth in reasonable detail the nature of the breach. The breaching party shall compensate the non-breaching party for any losses caused to the abiding party if the breach is not cured within the
time frame required by this Article 7.1; 

 The total compensation paid by the breaching party to the other party
shall equal the losses caused by the breach of this Agreement, which shall include the receivable interests by the other party for the performance of this Agreement, but shall not exceed the reasonable expectations of the Parties; 

In the event both Parties breach this Agreement, they shall determine the compensation payable to each other based on the extent of their
breach respectively. 
  

	 	7.2	Notwithstanding any provision to the contrary under this Agreement, Party B hereby irrevocably waives any right to claim against Party A with respect to the acquirement
and the possession of the ownership of the Target Assets by Party B after Closing, including but not limited to the occupation, use and disposal of the Target Assets, and hold Party A harmless against any damage that may be claimed by any third
party, any compensation in any form that may be demanded or penalties that may be imposed by any such third party with respect to the Target Assets after Closing. 

 

	8	Effective, Performance and Termination 

  

	 	8.1	This Agreement shall take effect as of the date first written in this Agreement. 

 

	 	8.2	This Agreement may be terminated by the Parties with their mutual consent after consultation. Additionally, this agreement shall terminate automatically in the event
that: 

  

	 	(a)	within thirty (30) days following the notice by the non-breaching Party in accordance with Article 7.1 of this Agreement, the breaching Party fails to remedy the
breach or to take sufficient, effective and timely measures to resolve any consequences of the said breach, or to compensate, the non-breaching Party shall be entitled to terminate this Agreement unilaterally by means of a written notice;

  

	 	(b)	Force Majeure prevails for thirty (30) or more days such that the continued performance of this Agreement becomes impossible, either Party shall be entitled to
terminate this Agreement unilaterally by means of a written notice. 

  

	9	Settlement of Disputes 

  

	 	9.1	Should a dispute arise between the Parties in connection with the interpretation or performance of this Agreement, they shall attempt to resolve such dispute through
friendly consultations. If the dispute cannot be resolved within thirty (30) days after the commencement of such consultations, or such longer period as may be agreed upon by the Parties, then either Party may submit it to the China
International Economic and Trade Commission in Beijing for arbitration in accordance with its current effective arbitration rules. The arbitration site shall be Beijing and the language shall be Chinese. The arbitration award shall be final and
binding to both parties. This Article shall not be affected by the termination or discharge of this Agreement. 

  
 5 

	 	9.2	During arbitration, the Parties shall, in good faith, continue to implement those parts of this Agreement unrelated to such arbitration. 

 

	10	Force Majeure 

  

	 	10.1	If performance of this Agreement is delayed or prevented by an Event of Force Majeure (as defined below), the party affected by such Event of Force Majeure is excused
from any liability under this Agreement only within the limit of such delay or prevention. “Event of Force Majeure” means any event that is unforeseeable or beyond the affected party’s reasonable control and cannot be
prevented with reasonable care, which includes but is not limited to the acts of governments, including changes in government laws and policies, acts of nature, fire, explosion, geographic change, flood, earthquake, tide, lightning, war, shortages
in raw materials, insurrection, and labor disputes to which the delayed Party is not a party. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Party affected by an
Event of Force Majeure who claims to be excused from performing any obligations under this Agreement or under any Article herein shall notify each other Party promptly thereof and advise him of, and implement, all necessary steps to resume
performance. 

  

	 	10.2	Subject to the Party affected by Force Majeure having taken its reasonable and practicable efforts to perform this Agreement and to overcome the Event of Force Majeure,
such Party shall be exempted from performing its obligations under this Agreement to the extent performance is delayed or prevented by Force Majeure. Once the Event of Force Majeure has ceased, the affected Party shall resume performance of this
Agreement. 

  

	11	Notices 

 Unless prior notice of a change
of address is given by the relevant Party, all correspondence between the Parties during the performance of this Agreement shall be in writing and delivered either in person, by registered mail, postage prepaid mail, recognized express service,
e-mail or facsimile transmission, to the following correspondence addresses: 
  

			
	 Party A:
	  	Vimicro Corporation
	 Address:
	  	15/F, Shining Tower, No. 35 Xueyuan Road, Beijing, P.R.C
	 Fax:
	  	(86) 10 8233 5762
	 Telephone:
	  	(86) 10 6894 8888
		
	 Party B:
	  	Vimicro Qingdao Corporation
	 Address:
	  	201-C Entrepreneurship Centre of Qingdao National High-tech Industrial
	 Development Zone

 Any notice by facsimile transmission or e-mail shall be effective only if the recipient acknowledges receipt. 

  
 6 

	12	Assignment 

 Each Party shall not assign
its rights or obligations under this Agreement to any third party without the prior written consent from the other Party. 
  

	13	Severability 

 In case any provision in
this Agreement is determined to be illegal or unenforceable in accordance with the applicable laws, it shall be null and void within competent jurisdiction, and be deemed to be deleted from this Agreement and all other provisions of this Agreement
will remain effective. The parties shall replace the deleted provisions with lawful and effective provisions that as closely as possible reflect the original intent of the parties under the deleted provision. 

 

	14	Amendment and Supplement 

 Any amendment
and supplement to this Agreement shall be in writing and take effect only after it is executed by all Parties. The amendment and supplement duly executed shall be part of this Agreement and shall have the same legal effect as this Agreement.

  

	15	Governing Law 

 The execution, validity,
interpretation and performance of this Agreement shall all be subject to the laws of the PRC, as shall the resolution of any disputes arising in respect of this Agreement. 
 IN WITNESS THEREOF the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first set forth above. 

(Below intentionally left blank) 

  
 7 

	
	(Signature Page to Assets Transfer Agreement)
	
	Party A: Vimicro Corporation
	
	(Stamp)
	
	 [Company chop affixed]

	
	Authorized Representative:

  

	
	Party B: Vimicro Qingdao Corporation
	
	(Stamp)
	
	 [Company chop affixed]

	
	Authorized Representative:

  
 8Fixed Assets Loan Contract, dated March 28, 2012,

 Exhibit 4.28 
 Fixed Assets Loan Contract 

  
 1 

 Contract No.: 127093992012001 
 Borrower (Party A): Vimicro Electronics Corporation 
 Address: 11/F, Ronghui Tower, No. 58
Dongting Road, Tianjin Economic and Technological Development Zone 
 Postal Code: 300457 

Legal Representative (Principal Officer): Deng Zhonghan 
 Fax: 59861000                     Tel.: 59861000 

Lender (Party B): China Construction Bank Tianjin Development Zone Branch 
 Address: E3AB, Binhai Financial Street, No. 20 Guangchang East Road, Tianjin Development Zone Branch 
 Postal Code: 300457 
 Principal Officer: Zhang Zhe 

Fax: 66280947                     Tel.: 66280915

  
 2 

 WHEREAS Party A has applied for a loan from Party B and Party B has agreed to provide a loan to Party A for
Party A’s research and development, design and industrialization of digital high-definition surveillance chips and systems, Party A and Party B hereby enter into this Contract on the basis of mutual consensus in accordance with the
relevant laws and regulations and to be complied with by both parties. 
 Article 1 Amount of the Loan 

The Amount of the loan borrowed by Party A from Party B is RMB ONE HUNDRED AND EIGHTY-SIX MILLION. 

Article 2 Purpose and Source of Repayment 
 Party A shall use the loan for investing in fixed assets. Without Party B’s written consent, Party A shall not change the purpose of the loan. 

The fixed assets to be invested in (hereafter referred to as the “Project”), the specific purpose of the loan and the source of repayment under
this Contract are detailed in Annex 1 “Basic Information of the Project and Loan.” 
 Article 3 Term of the Loan 

The Term of the loan is Sixty (60) months from 28 (day) March (month) 2012 (year) to 27 (day) March
(month) 2017 (year). 
 If the start date of loan under this Contract is inconsistent with that in the Loan Transfer Certificate (also
referred to hereafter as the Loan Receipt), the start date shall be the actual date indicated in the Loan Transfer Certificate upon the issuance of the first disbursement of loan, and the due date in Clause 1 thereof shall be adjusted accordingly.

 The Loan Transfer Certificate is an integral part of this Contract and has the same legal effect as this Contract. 

Article 4 Interest Rate, Penalty Interest Rate, Interest Calculation and Settlement 
 I. Interest Rate 
 An annual interest rate shall be adopted in this Contract. The interest rate
shall be calculated as set forth in (3) below: 
 (I) Fixed rate, i.e. BLANK%, that shall remain unchanged during the
loan period; 
 (II) Fixed rate, i.e. the benchmark interest rate as of the Interest Commencement Date BLANK (insert “plus” or
“minus”) BLANK%, that shall remain unchanged during the loan period; 
 (III) Floating interest rate, i.e. the benchmark
interest rate as of the Interest Commencement Date plus (insert “plus” or “minus”) 5 % of such benchmark interest rate and adjusted once every twelve months during the period from the Interest
Commencement Date to the date on which the entire principal and interest are paid back. This adjustment will be based on the benchmark interest rate on the interest rate adjustment date plus or minus the percentage listed above. The interest rate
adjustment date is the day of the adjustment month that corresponds to the day of the month of the Interest Commencement Date and may be the last day of the adjustment month if there is no corresponding day in the adjustment month. 

(IV) 
 1.     BLANK
                                         
        ; 
 2.     BLANK
                                         
        ; 
 3.     BLANK
                                         
        . 
 II. Penalty Interest Rate 
 (I) If the Borrower does not use the loan in accordance with this Contract, the penalty interest rate shall be the loan interest rate plus 100%; if the interest rate is adjusted under Article
4.I.(3) the penalty interest will be calculated accordingly after the interest rate has been adjusted and then increased by the amount set forth above. 
 (II) If Party A fails to repay the loan on due date, the overdue penalty interest rate under this Contract shall be the loan interest rate plus 50%; if the interest rate is adjusted under Article 4.I.(3)
the penalty interest will be calculated accordingly after the interest rate has been adjusted and then increased by the amount set forth above. 

(III) In case of both overdue repayment and misappropriation of the loan, the penalty interest rate or the compound interest rate shall be adopted,
whichever is higher. 

  
 3 

 III. The Interest Commencement Date in this Article refers to the date on which the first disbursement of
the loan is transferred to the stipulated disbursement account in Article 6 (hereafter referred to as “Disbursement Account”). 
 The
benchmark interest rate for the first disbursement of the loan is based on the lending rate announced by the People’s Bank of China on the Interest Commencement Date, after which the benchmark interest rate shall be the lending rate issued by
People’s Bank of China on the adjustment date when the lending interest rate is adjusted in accordance with the terms above; if no same-grade lending rate is issued by the People’s Bank of China, the benchmark interest rate shall comply
with the publicly accepted or normal industry rates on the adjustment date, unless agreed otherwise. 
 IV. The loan interest shall be
calculated from the date on which the loan is transferred to the Disbursement Account at a daily rate. The daily interest rate = annual rate / 360. If Party A fails to pay the interest on the settlement date, the compound rate shall be applied from
the following day. 
 V. Settlement 

(I) Loans with fixed interest rate shall be settled based on the agreed rate, while interest for loans with floating interest rates shall be calculated
based on the floating interest rate for each floating interest period; in case of several interest rate fluctuations in a single settlement period, interest of each floating period shall be first calculated respectively and added together on the
settlement date. 
 (II) The loan interest under this Contract is settled in the first way below: 

1. For monthly settlements, the settlement date shall be the 20th day of each month; 
 2. For quarterly settlements, the settlement date shall be the 20th day of the last month of the quarter; 
 3. Other methods BLANK. 
 Article 5 Disbursement and Payment of Loan 

I. Preconditions of Disbursement 
 Unless waived
in full or in part by Party B, Party B shall undertake no obligation to disburse the loan unless all the following preconditions have been continuously satisfied: 
 1. Party A has completed all approval, registration, delivery, insurance and other statutory formalities related to the loan under this Contract; 
 2. If a guarantee is provided for this Contract, such guarantee has met with the requirements of Party B and has come into effect and shall remain effective; 

3. Party A has opened an account for withdrawal and repayment subject to the requirements of Party B; 

4. Party A has not defaulted in connection with any term or condition in this Contract or incurred any situation that may undermine the creditor’s
rights of Party B; 
 5. Party B is not prohibited or restricted from issuing the loan to Party A by the requirement of any law, regulation,
rule or authorized authority; 
 6. Capital funds in proportion to the loan to be issued have been in place in full amount, and the actual
Project progress matches the investment amount; 
 7. Party A’s major financial indicators shall continuously comply with the requirements
set out in Annex 2 “Binding Terms on Financial Indicators”; 
 8. In the event any of the following apply to a single payment
(disbursement), Party A shall provide Party B with relevant materials: 
 (1) The amount of one single payment (disbursement) exceeds 5% of the
total investment in the Project (RMB 13,533,185); 
 (2) The amount of one single payment (disbursement) exceeds over RMB 5 million; 

(3)
BLANK                             ; 
 (4) BLANK                             . 

If any of the above situations apply, Party A shall provide Party B with the following: 
 (1) the loan transfer certificate and the payment settlement voucher signed by Borrower; 

  
 4 

 (2) the corresponding business contract, agreement, etc. of such disbursement, and the corresponding
invoices under Party B’s payment contract within one month following such disbursement; 
 (3) Other materials requested by Party
B. 
 9. If a single payment (disbursement) does not fall into the situations set out in Clause I. 8, Party A shall provide Party B with the
corresponding use plan of the disbursement and other materials requested by Party B; 
 10. Materials provided by Party A to Party B shall be:

 (1) Legal, truthful, complete, accurate and effective; 
 (2) BLANK here and
below                                        
                             ; 
 (3)                                 
                                         
                                  ; 

(4) Other requirements put forward by Party B. 

11. Other conditions: 
 Party A shall
promise to obtain the formal real estate title deed in a timely fashion, and assist Party B to handle the re-registration of the mortgage to ensure consistency between the collateral and all the bank’s creditor’s rights. Party A shall
promise that no mortgage or pledge over any assets of the Project (including intellectual property rights) will be provided to others. 

II. Planned Use of Loan 
 The planned use of
loan is as set forth in number 4 below: 
 (I) The planned use of loan is as follows: 

 

							
				
	1. Date BLANK here and below	  	amount                     ;	  		  	
				
	2. Date                    	  	amount                     ;	  		  	
				
	3. Date                    	  	amount                     ;	  		  	
				
	4. Date                    	  	amount                     ;	  		  	
				
	5. Date                    	  	amount                     ;	  		  	
				
	6. Date                    	  	amount                     .	  		  	

 (II) The planned use of loan is as follows: 

 

							
				
	1. From BLANK here and below (date)	  	 to             (date)
	  	 amount                    
;
	 	
				
	2. From                             
(date)	  	to             (date)	  	amount                     ;	 	
				
	3. From                             
(date)	  	to             (date)	  	amount                     ;	 	
				
	4. From                             
(date)	  	to             (date)	  	amount                     ;	 	
				
	5. From                             
(date)	  	to             (date)	  	amount                     ;	 	
				
	6. From                             
(date)	  	to             (date)	  	amount                     ;	 	

 (3) Disbursement of loan shall be applied for at any time based on the actual needs of the Project. 

(4) Party A shall withdraw based on the progress of the Project and use such amount no later than 27 March 2017. 

III. Party A shall use the loan in accordance with the use plan set forth in Clause II, and shall not bring forward, postpone, split or cancel the
withdrawal of the loan unless with Party B’s written consent. 
 Party A shall pay Party B a sum of the loan commitment fee as follows:

 Commitment fee exempted. 

The formula to calculate the loan commitment fee is as follows: 
 BLANK             . 
 Party A
shall pay the loan commitment fee on a BLANK (alternatively, (1) monthly, (2) quarterly) basis and within the first BLANK business day(s) of each BLANK (alternatively, (1) month, (2) quarter). 

  
 5 

 IV. In case that Party A uses the disbursement by installments, the expiration date of the loan term shall
still be subject to Article 3. 
 V. Trustee Payment of Party B 
 1. In case that a single payment meeting any condition listed in Clause I.8, Party A shall entrust Party B to pay the counterparty of Party A with the disbursement. Party A shall not make the payment to
the counterparty by itself. 
 2. If entrusted to make such payment, Party B shall transfer the disbursement to the Loan Disbursement Account
and then to the account of Party A’s counterparty directly. Party A shall not dispose of the loan in any form (including but not limited to the transfer or disbursement). 
 3. Party B shall undertake a pro forma review of the amount, time, recipient, method and account of payment based on the materials provided by Party A. Upon completion of such pro forma review of the
payment factors, if Party B finds that such factors have met its requirements, it shall transfer the disbursement to Party A’s counterparty. 
 4. The foregoing pro forma review of the payment factors by Party B shall not be interpreted as Party B’s confirmation of the authenticity and legal and regulatory compliance of the transaction, nor
shall Party B be involved in any dispute between Party A and its counterparty or any other third Party, or assume any liability or obligation for Party A. In addition, Party A shall compensate Party B for any loss incurred to Party B arising from
the trustee payment. 
 5. Under the trustee payment arrangement with Party B, if any failure to transfer the disbursement to Party A’s
counterparty’s account is caused by inaccurate information provided by Party A, then this situation shall be handled as agreed below: 

Party A shall promptly correct the information and agree that Party B shall return the disbursement to the original account. 

6. Any risk, liability or loss in case of any failure, mistake or delay of the disbursement transfer caused by mistake of anyone other than Party B shall
be borne by Party A. Party A shall compensate for any loss incurred to Party B arising therefrom. 
 VI. Party A shall assume any risk,
liability or loss in the event that any authorized agency freezes or deducts any disbursement transferred into the Loan Disbursement Account. Party A shall compensate for any loss incurred to Party B arising therefrom. 

Article 6 Account Use and Supervision 

1. Loan Disbursement Account 
 Loan
Disbursement Account under this Contract shall be determined as specified in (2) below: 
 (1) Party A shall open a Loan
Disbursement Account in Party B for the disbursement and payment of the loan under this Contract within BLANK business day(s) following the effective date hereof before the first disbursement. 

 

	(2)	Other accounts opened by Party A in Party B (Account No.: 12001835100052513510). 

 2. Repayment Reserve Account 
 Party A shall open a Repayment Reserve Account in Party B or
use the existing account (Account No.: 12001835100052506057) in Party B as the Repayment Reserve Account within thirty business days following the effective date hereof. The Repayment Reserve Account shall meet the following
requirements: 
 (1)     95%     of the Project’s or Party A’s cash flow
(including but not limited to the sales revenue) shall be transferred to such account. 
  

	(2)	The average reserve amount in such account shall meet the following requirement: BLANK. 

 

	(3)	BLANK. 

 (4) Without consent of Party B,
Party A shall not misappropriate the capital in the Repayment Reserve Account in any manner (including but not limited to transfer or disbursement) 

  
 6 

 3. Party B is entitled to supervise the account opened by Party A in Party B: 

(1) Account No.: 12001835100052506057
                                         
   ; 
 (2) Account No.:
                                         
                                         
  ; 
 (3) Account No.:
            BLANK                            
                              . 
 Supervision measures of Party B include but not limit to: 

(1)                        
                                         
                       ; 

(2)                        
                                         
                       ; 

(3)                        
                                         
                       . 

Party A shall not misappropriate the capital in said account in any manner (including but not limited to the transfer or disbursement) without consent of
Party B. 
 Article 7 Repayment 

I. Principle of Repayment 
 Party A shall repay
the loan under this Contract in accordance with the following principle: 
 Party B enjoys the right to first repay the advance payment by Party
B for various fees that shall be paid by Party A and other fees for realizing Party B’s creditor’s rights with the repayment by Party A hereunder; and the remaining interest repayment shall be repaid prior to the remaining capital
repayment and be settled when the latter is settled. But in case of a loan for which no principal or interest has been paid within ninety overdue days, or where otherwise required by laws and regulations, Party A shall repay the principal prior to
the interest after the repayment of the said fees. 
 II. Interest Repayment 
 Party A shall repay the interest on the interest settlement date. The first interest repayment date is the first settlement date after the disbursement date of the loan, and the last repayment shall clear
the interest and capital. 
 III. Repayment Plan 
 The repayment plan is determined as specified in (2) below: 
 (1) Repayment plan
is as follows: 
 1. Date BLANK here and
below   amount                ; 
 2.
Date                                       
     amount                ; 
 3.
Date                                       
     amount                ; 
 4.
Date                                       
     amount                ; 
 5.
Date                                       
     amount                ; 
 6.
Date
                                        
   amount                . 
 (2) 30%
and 35% of the withdrawal amount shall be repaid in 2015 and 2016 respectively with two installments of principal repayment each year, and the entire loan shall be repaid before its expiration date in 2017. 

IV. Method of Repayment 
 Party A shall deposit
a sufficient amount for current repayment in the Repayment Reserve Account or other accounts opened in Party B and automatically transfer the amount to repay the loan before the agreed repayment date hereof (Party B is entitled to transfer the
amount from the foregoing accounts), or transfer the amount for repayment in other accounts on the agreed date hereof. 
 V. Early Repayment

 Party A shall submit a written application to Party B within thirty business days before paying the loan and may repay part or all of
the capital in advance with the consent of Party B. 
 Interest of early repayment of Party A shall be calculated based on the actual lending
days and agreed loan interest rate hereof. 

  
 7 

 In case of Party B’s consent of Party A’s early repayment, Party B is entitled to receive
compensation from Party A that is calculated based on 1 below: 
 1. Compensation = early repayment × number of months paid in
advance × 1% (less than one month is calculated as one month); 
 2.
BLANK                                        
            . 
 In case of installment repayment by Party A, the early repayment
of partial capital, shall follow the reverse sequence set forth in the Repayment Plan, after which the remaining non-repaid loan shall be calculated as the agreed loan interest rate hereof. 
 Article 8 Rights and Obligations of Party A 
 I. Rights of Party A 

 

	(1)	Party A is entitled to request Party B to disburse the loan in accordance with this Contract; 

 

	(2)	Party A is entitled to use the loan in accordance with this Contract; 

 (3) Party A is entitled to apply to Party B for loan extensions provided that it complies with the requirements of Party B; 
 (4) Party A is entitled to request Party B to keep financial information and other trade secrets in connection with Party A’s manufacturing and operation provided by Party A confidential, unless
otherwise required by laws and regulations or by authorized agencies or as otherwise agreed by both Parties; 
 (5) Party A is entitled to
refuse to provide any bribe demanded by Party B or its staff, and report such demand or Party B’s violation of state laws and regulations on credit interest rate and service charges to the relevant authorities. 

II. Obligations of Party A 
 (1) Party A shall
withdraw the loan and repay the entire principal and interest as well as any fees agreed under this Contract; 
 (2) Party A shall provide
relevant financial statements, accounting and operation materials, etc. requested by Party B, including but not limited to the balance sheet as of the end of the previous quarter, the profit and loss statement (or the revenue and expenditure
statement, in case of a public sector institution) as of the end of the previous quarter within the first three business days of the first month of each quarter, and the cash flow statement of the current year at the year end; in addition,
Party A shall ensure that the information provided is legal, truthful, complete and valid, with no false materials or concealment of any significant financial or operational issues; 
 (3) In case of any major adverse event that has an impact on Party A’s solvency or other events that cause damage to Party B’ creditor’s rights, or in case of any changes to the name, legal
representative (principal officer), address, business scope, registered capital or the articles of associations, Party A shall send a written notice and the related material after such change to Party B within 3 business days following the
occurrence of such event or change; 
 (4) Party A shall use the loan in accordance with this Contract without diverting or misappropriating the
loan or using the loan for illegal or non-compliant trades; and shall cooperate with and accept the inspection and supervision from Party B on its business, finance, and the use of loan under this Contract. In addition, Party A shall not evade the
debt owed to Party B by surreptitiously withdrawing the capital or transferring the assets or through related transactions, nor utilize any false contract entered into with an affiliate to obtain capital or credit through discount or pledge with the
notes receivable, accounts receivable and other financial claim without actual trades; 
 (5) If Party A uses the loan under this Contract for
the purpose of production and construction, it shall comply with the state environmental regulations; 
 (6) Party A shall not provide guarantee
with the assets generated from the loan under this Contract to any third parties without the prior consent of Party B before repaying the entire amount of principal and interest; 
 (7) Party A shall promptly report to Party B the related transactions with value equal to more than 10% of the net assets of Party A if it is a group client, including: (a) the relationship among the
transaction parties; (b) items and nature of transactions; (c) amount or corresponding proportion of the transactions; (d) pricing polices (including transactions with no amount or only nominal amount); 

  
 8 

 (8) Party A shall ensure the approval of the proposed Project by relevant authority and no illegal practice,
as well as obtain sufficient capital or other funds to be raised at the prescribed proportion, within the stipulated time period and in full amount, and obtain sufficient project capital in proportion to the loan which shall be used together with
the loan, as well as complete the Project as planned; 
 (9) Party A shall obtain written consent from Party B before Party A undertakes merger,
division, equity transfer, outbound investment and substantial increase in debt financing, etc. However, such written consent of Party B shall not affect Party B’s right to resort to any remedies hereunder if Party B finds that the said actions
may damage its creditor’s rights; 
 (10) Party A shall regularly summarize and report the payment of loan to Party B on a quarterly
basis [alternatively, (1) monthly, (2) quarterly]. Party A shall report the payment of loan in the previous quarter [alternatively , (1) month, (2) quarter] within the first three business days of each
quarter [alternatively, (1) month, (2) quarter]. 
 (11) Party A shall assist and cooperation Party B with the inspection and
supervision of the business, financial activities and construction and operation of the Project, and request the sponsor of the Project to cooperate with such inspection and supervision by Party B. 

Article 9 Rights and Obligations of Party B 
 I. Party B is entitled to request Party A to repay the principal, interest and expenses of the loan on time, to manage and control the payment of the loan, to dynamically monitor the income cash flow of
the Project and the entire cash flow of Party A, to exercise other rights agreed hereunder, and to request Party A to perform any other obligations under this Contract; 
 II. Party B shall disburse the loan in accordance with this Contract, except for delays caused by the fault of Party A or by any other reason that cannot be attributed to Party B; 

III. Party B shall keep the trade secrets in connection with financial information and manufacturing and operation provided by Party A confidential,
unless otherwise required by laws and regulations, or otherwise required by authorized agencies or otherwise agreed by both Parties; 
 IV.
Party B shall not offer bribe to Party A and its staff, or demand for or accept any bribe from Party A and its staff; 
 V. Party B shall not
commit any conduct not in good faith or that will damage the legal rights of Party A. 
 Article 10 Default Liability and Remedies for
Damage to Creditor’s Right of Party B 
 I. Party B’s Default Event and Default Liability 

(1) Party A may request Party B to continue to disburse the loan hereunder if Party B has no justifiable reason to reject such disbursement; 

(2) Party A is entitled to request Party B to return any interest or fees charged by Party B in violation of any prohibitive provisions of state laws and
regulations. 
 II. Party A’s Default Event 
 (1) Party A breaches any provisions under this Contract or violates any statutory obligations; 

(2) Party A expressly indicates or indicates by act that Party A will not perform any obligation under this Contract. 

III. Possible Damage to Creditor’s Right of Party B 
 (1) Party B may deem it as damage to its creditor’s rights in the event of the following circumstances: Party A is under contract operation, custody (administration), lease, joint-stock reform,
registered capital decrease, investment, joint operation, consolidation, merger, acquisition and restructuring, division, equity joint venture, equity transfer, substantial increase of debt financing, (being filed or) filing for winding-up, filing
for dissolution, being revoked, (being filed or) filing for bankruptcy, change of controlling shareholder/actual controller, or major asset transfer, production stoppage, operation suspension, huge penalty imposed by the authorized authority, being
cancelled from registration, revocation of business license, involvement in material legal disputes, serious difficulty in production and operation, or deterioration of financial position, inability of the legal representative or the principal to
normally perform its duties; 

  
 9 

 (2) Party B may deem it as damage to its creditor’s rights in the event of the following circumstances:
Party A’s failure to repay the mature debt (including the mature debts to each agency of the China Construction Bank or other third parties), transferring assets at undervalued cost or for free, reducing debts for third parties, indolence in
exercising the creditor’s or other rights, or providing guarantees to third parties; Party A’s financial indicators not continuously meeting the requirements of Annex 2 “Binding Terms on Financial Indicators”; Party A’s
failure to repay the loan in accordance with this Contract, or avoiding payment entrusted by Party B by breaking up the total sum into smaller ones; the progress of the Project lagging behind the use of the loan; unusual fluctuations of capital in
any accounts of Party A (including but not limited to the Repayment Reserve Account and other accounts supervised by Party B); 
 (3)
Shareholders of Party A abuse the independent legal person status of company or the limited liability of shareholders to evade the debt, which Party B deems it as a possible damage to its creditor’s rights; 

(4) Any agreed precondition for the disbursement of loan under this Contract is not met in a continuous manner; 

(5) Party B may deem it as damage to its creditor’s rights if any of the following circumstances occurs to the guarantor: 

1. Violation of any agreement in the guarantee contract, or any fraud, mistake or omission in the representations or warranties thereof; 

2. In the event of the following circumstances: contract operation, custody (administration), lease, joint-stock reform, registered capital decrease,
investment, joint operation, consolidation, merger, acquisition and restructuring, division, equity joint venture, equity transfer, substantial increase of debt financing, (being filed or) filing for winding-up, filing for dissolution, being
revoked, (being filed or) filing for bankruptcy, change of controlling shareholder/actual controller, or major asset transfer, production stoppage, operation suspension, huge penalty imposed by the authorized authority, being cancelled from
registration, revocation of business license, involvement in material legal disputes, serious difficulty in production and operation or deterioration of financial position, inability of the legal representative or the principal to normally perform
its duties; 
 3. Other circumstances under which the guarantee capacity will be or might be lost; 

(6) Party B may deem it as damage to its creditor’s rights if the mortgage or pledge is under any of following circumstances: 

1. Damage, loss, reduction in the value of mortgaged property or pledged property due to acts of a third party, collection by the state, confiscation,
expropriation, unpaid recovery, removal, changes in market or any other reasons; 
 2. Seizure, detainment, freezing and deduction, auction, or
supervision by administrative authorities, or ownership dispute of mortgaged property or pledged property; 
 3. Violation of the agreement set
out in the mortgage contract or pledge contract by the mortgagor or pledgor, or any fraud, mistake or omission in the representations or warranties thereof; 
 4. Other circumstances that may affect the realization of the rights of mortgage or pledge; 
 (7)
Under the circumstance that the security is false, ineffective, invalid, revoked or repealed, or that the guarantor defaults or expressly indicates or indicates by act that it will not perform its guarantee obligations, or that the guarantor has
lost part or all of its guarantee capacity, or the reduction in the value of collateral and other circumstances, which Party B deems may damage its creditor’s rights hereunder; or 

 

	(8)	Other circumstances that Party B deems may damage its creditor’s rights hereunder. 

 IV. Remedies of Party B 
 Party B is entitled to excise any one or more of the following right(s)
in case of the circumstance set forth in the Clauses 2 or 3 of this Article: 
 (1) To stop the disbursement of the loan; 

(2) To declare the loan immediately due, and require Party A to promptly repay all due and undue principal, interest and fees hereunder; 

(3) Party B is entitled to require Party A to pay liquidated damages equal to 1% of the amount not drawn and used by Party A as agreed in this
Contract, as well as reject Party A’s drawing and use of the amount yet to be drawn under this Contract; 

  
 10 

 (4) If Party A does not use the loan as stipulated hereunder, the misappropriated part shall be imposed with
penalty interest rate and compound interest based on the penalty interest rate and the agreed way of interest settlement hereunder for the period from the date of misappropriation to the date on which the entire principal and interest is settled;

 (5) In case of overdue repayment, the overdue principal and interest (including the principal and interest of all or part of loan that Party
B declares early due) shall be imposed with the penalty interest and compound interest based on the penalty interest rate and the agreed way of interest settlement hereunder for the period from the overdue date to the date on which the entire
principal and interest is settled. Overdue repayment refers to Party A’s failure to repay the loan on time or as scheduled by this Contract for repayment by installments. 
 Before the due date, the overdue interest of Party A shall be imposed with compound interest based on the agreed loan rate and way of settlement hereunder. 

(6) Other remedies shall include but not limit to: 
 1. To transfer the related amount in RMB or other currencies from Party A’s account in China Construction Bank without notifying Party A in advance; 

2. To excise the security rights; 
 3. To
require Party A to provide additional guarantee that meets the requirements of Party A for all the debts under this Contract; 
 4. To terminate
this Contract. 
 Article 11 Miscellaneous 
 I. Cost Assumption 
 Any fees in connection with this Contract and the security hereunder,
including but not limited to legal services, insurance, evaluation, registration, custody, appraisal, notary, tax, technology, environmental protection, supervision, etc., shall be borne by Party A, unless otherwise agreed by both Parties.

 Any fees incurred by Party B to realize its creditor’s rights, including but not limited to litigation fees, arbitration fees, property
preservation fees, travel fees, enforcement fees, assessment fees, auction fees, notary fees, service fees, advertising fees, legal fees, shall be borne by Party A. 
 II. Use of Party A’s Information 
 Party A agrees that Party B may make inquiries on Party
A’s status of credit to the credit database established under the approval of the People’s Bank of China and the authorized credit reporting authority or the relevant unit or department, and agrees that Party B may provide Party A’s
information for the credit database established under the approval of the People’s Bank of China and the authorized credit reporting authority. Party A also agrees that Party B may reasonably use and disclose Party A’s information to meet
the needs of business. 
 III. Announcement for Overdue Debts 
 In case of Party A’s overdue payment of the loan principal or interest, or other breach of contract, Party B shall be entitled to report such breach of contract to the relevant department or unit and
make an announcement via press media to press for the overdue debts. 
 IV. Evidence Effectiveness of Party B’s Records 

Unless there is any reliable and definite evidence to the contrary, Party B’s internal account records in relation to principal, interest, costs and
debt repayment records, the vouchers and proofs for Party A’s withdrawal of loans, repayment of loans and payment of interest which are prepared and retained by Party B, and Party B’s records and proofs for the press for overdue debts
shall all constitute the definite evidence to effectively prove the relationship between Party A and Party B. Party A shall not raise any objections only because such records, vouchers and proofs are unilaterally prepared or retained by Party B.

 V. Retention of Rights 
 Party
B’s rights under this Contract shall not affect and eliminate any of its rights under the laws, regulations and other contracts. Any tolerance, grace period or favorable treatment granted to the breach of contract or delay of performance, or
any delay in performing any rights under this Contract shall not be deemed as a waiver of the rights and interests under this Contract or consent or acceptance of any breaching behaviors, nor shall it affect, prevent or impede the continuous
exercise of such rights or the exercise of any other rights, or incur any obligations and responsibilities of Party B to Party A. 

  
 11 

 VI. In case that Party A is liable for any other due debts to Party B besides the debts hereunder, Party B
is entitled to transfer the capital in RMB or other currencies from Party A’s account opened in China Construction Bank to repay any of such debts with priority. Party A agrees that it shall not raise any objection. 

VII. Party A shall promptly deliver a written notice to Party B in case of any changes to Party A’s mailing address or contact, and shall bear all
the losses due to the failure of prompt notice of such change. 
 VIII. Transfer of Amounts Payable 

Party B is entitled to transfer the appropriate amount in RMB or other currencies from Party A’s account opened in China Construction Bank for all
the amounts payable by Party A under this Contract without notifying Party A in advance. Party A shall be obligated to assist Party B in handling the foreign exchange settlement and sale or purchase as necessary. The related exchange rate risks
shall be born by Party A. 
 IX. Dispute Resolution 
 Any dispute arising out of the implementation of this Contract may be resolved through consultation. If no resolution can be reached through consultation, the dispute shall be resolved through the
first way as follows: 
 1. To file a lawsuit with the people’s court in the locality of Party B. 

2. To refer the dispute to BLANK Arbitration Commission (with the arbitration venue at BLANK) for arbitration in accordance with the
arbitration rules of such Commission in effect at the time of referral. The arbitration awards shall be final and binding upon both parties. 

During the period of litigation or arbitration, the terms of this Contract which are not involved in disputes shall still be implemented. 

X. Effectiveness of this Contract 
 This
Contract shall only take effect after being signed or sealed with the company seals by Party A’s legal representative (principal) or authorized agent and Party B’s principal or authorized agent. 

XI. This Contract shall be made in four copies. 
 XII. Miscellaneous 
 Party A mortgages its land and projects in construction to China
Construction Bank, and at the same time, Vimicro Corporation assumes third party joint and several guarantee liabilities in connection with the entire credit facility. When conditions are met, all the real estate and equipment of this Project shall
be further used as maximum amount mortgage for the entire credit facility. Party A promises Party B that all the assets (including intellectual property rights) of the Project will not be mortgaged or pledged to any other parties. Otherwise, it
shall be deemed as default. 
 Article 12 Statements 
 I. Party A clearly understands the business scope and limit of authorization of Party B. 
 II.
Party A has read through all the terms hereunder. Upon Party A’s request, Party B has explained the terms hereunder accordingly. Party A has full knowledge and thorough understanding of the meaning of the terms hereunder and the legal
consequences thereof. 
 III. Party A’s execution and performance of obligations under this Contract is in compliance with the laws,
administrative regulations, rules and the provisions of articles of association or internal constitutional documents of Party A, and have been approved by the authority within the company and/or the state authorized authorities. 

IV. Party A meets the state requirements for the operational qualifications as an investment subject. 

V. The Project is in compliance with the relevant state policies on industry, land, environmental protection, investment management, etc., and Party A
has undertaken the legal management procedures as required. 
 VI. The Project of Party A is in compliance with the state regulations on capital
system of investment projects. 
 VII. Party A and its controlling shareholders are in good credit status and have no significant negative
records. 

  
 12 

 Party A (Company Seal): Vimicro Electronics Corporation 

[Company Seal Affixed] 

Legal Representative (Principal Officer) or Authorized Agent (Signature): /s/ Deng Zhonghan 
 Date: 26 March 2012 
 Party B (Company Seal): China Construction Bank Tianjin Development
Zone Branch 
 [Company Seal Affixed] 
 Principal Officer or Authorized Agent (Signature): /s/ Zhang Zhe 
 Date: 28 March 2012

  
 13 

 Annex 1 
 Basic Information of the Project and Loan 
 1. Name of the Project: Research and development,
design and industrialization of digital high-definition surveillance chips and systems 
 2. Total Investment: RMB 270,663,700 

RMB (Amount in Capital) TWO HUNDRED AND SEVENTY MILLION SIX HUNDRED AND SIXTY THREE THOUSAND SEVEN HUNDRED. Party A shall not propose any increase
of total investment amount unless Party A provides express written proof documents recognized by Party B. 
 3. Location: Service Outsourcing
Base in Tianjin Economic and Technological Development Zone 
 4. Construction and operation period: two years of construction period

 5. Purpose of the loan under this Contract: Research and development, design and industrialization of digital high-definition surveillance
chips and systems 
 6. Source of repayment of the loan hereunder: 
 (1) The repayment source includes the sales revenue of the company and other sources; 
 (2) Party
A shall repay the loan hereunder with the abovementioned source in accordance with the following arrangement (in terms of time, frequency, method, etc.): 
 30% and 35% of the withdrawn amount shall be repaid in 2015 and 2016 respectively. The principal shall be repaid by two installments each year, and the entire loan shall be repaid in full before its
maturity date in 2017. 
 Party A shall ensure that the repayment source are true, and shall keep the cash flow of repayment stable and
sufficient. 
 7. Others: None 

  
 14 

 Annex 2: 
 Binding Terms on Financial Indicators 
 The financial indicators of Party A shall always meet the
following limits: 
 The asset-liability ratio shall not exceed 70%. The working capital ratio shall not exceed 0.7. The balance of
contingent liabilities shall not exceed RMB 250 million. The contingent liability ratio shall not exceed 50%. 
 Party B is entitled to
amend the forgoing binding terms after giving a notice to Party A THREE business days in advance. 

  
 15

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