Document:

Reorganization and Subscription Agreement

 Exhibit 4.5 
  
 REORGANIZATION AND SUBSCRIPTION AGREEMENT 
  
 by and among 
  
 Vimicro International Corporation 
  
 and 
  
 the Subscribers 
  
 (as defined herein) 
  
  

  
 Dated as of March 17, 2004 

 REORGANIZATION AND SUBSCRIPTION AGREEMENT 
  
 This REORGANIZATION AND SUBSCRIPTION AGREEMENT (this
“Agreement”) dated as of March 17, 2004, is made and entered into by and among the subscribers listed in Schedule I hereto (collectively, the “Subscribers” and each individually, a
“Subscriber”), and Vimicro International Corporation, an exempted company with limited liability organized and existing under the laws of Cayman Islands (the “Company). 
  
 WHEREAS, in connection with the reorganization of Beijing Vimicro
Corporation (“Vimicro Beijing”), a limited liability company organized and existing under the laws of the People’s Republic of China (the “PRC”), the Subscribers or their respective Associates, as the case may
be, have agreed to transfer, and the Company has agreed to acquire, all of the outstanding equity interests in Vimicro Beijing (each an “Equity Interest”), pursuant to the terms and conditions of various shareholding transfer
agreements, each in a form substantially similar to the form set forth as Exhibit A hereto (collectively, the “Shareholding Transfer Agreements”); 
  
 WHEREAS, the Company wishes to issue to certain of the Subscribers, and certain of the Subscribers wish to subscribe
for, an aggregate of 73,647,440 Common Shares (as defined below) of the Company (the “Shares”) and an aggregate of 8,500,000 Warrants (as defined below), as more particularly set forth on Schedule I; 
  
 WHEREAS, it is intended that as a result of the transactions
contemplated by this Agreement and the Shareholding Transfer Agreements, Vimicro Beijing will undergo a corporate reorganization and will become a wholly-owned subsidiary of the Company; 
  
 WHEREAS, the transactions contemplated by this Agreement and the Shareholding Transfer Agreements are for the
purpose of forming a holding company within the meaning of Rule 144(d)(3)(viii) promulgated under the Securities Act (as defined below); 
  
 NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as follows: 
  
 ARTICLE 1 
  
 DEFINITIONS 
  
 1.1 Definitions. As used in
this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated: 
  
 “Affiliate” shall mean any Person (a) directly or indirectly controlling, controlled by, or under common control with, the Company
or a Subscriber, (b) directly or indirectly owning or holding five percent (5%) or more of any equity interest in the Company or a Subscriber, or (c) five percent (5%) or more of whose voting shares or other equity interest is
directly or indirectly owned or held by the Company or a Subscriber. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling”, “controlled by” and under “common
control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
  
 “Agreement” shall have the meaning ascribed to it in the
recitals. 
  

 - 2 - 

 “Articles of Association” shall mean the Memorandum and Articles of Association of the
Company, as in effect as of the date hereof. 
  
 “Associate” shall mean, with respect to any Subscriber, the Person (if any) set forth opposite such Subscriber’s name in Schedule I under the heading “Name and Address of Subscriber’s Associate”,
which Person holds the Subscriber’s Equity Interest in Vimicro Beijing. 
  
 “Board of Arbitration” shall have the meaning ascribed to it in Section 12.8 of this Agreement. 
  
 “Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the PRC, New York or Hong Kong
are authorized or required by law or governmental order to close. 
  
 “Cash Subscribers” shall mean the Subscribers paying the Subscription Price for their Shares in cash in accordance with Schedule I. 
  
 “Closing” shall mean the First Closing, the Second Closing or the Third Closing, as the case may be.

  
 “Closing Date” shall mean the First Closing
Date, the Second Closing Date or the Third Closing Date, as the case may be, and “Closing Dates” shall have the correlative meaning. 
  
 “Common Shares” shall mean the Company’s ordinary shares, par value US$0.0001 per share. 
  
 “Company” shall have the meaning ascribed to it in the
recitals. 
  
 “Contractual Obligation” shall have
the meaning ascribed to it in Section 7.2 of this Agreement. 
  
 “Equity Interest” shall have the meaning ascribed to it in the recitals. 
  
 “First Closing “ shall have the meaning ascribed to it in Section 2.2(a) of this Agreement. 
  
 “First Closing Date” shall have the meaning ascribed to it
in Section 2.2(a) of this Agreement. 
  
 “Governmental Authority” shall mean the government of any nation, state, city, locality or other political subdivision of any thereof, any entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, regulation or compliance, and any corporation or other entity owned or controlled, through share or capital ownership or otherwise, by any of the foregoing. 
  
 “Industrial and Commercial Alteration Registration” shall
mean the industrial and commercial alteration registration

 from the relevant PRC Governmental Authority regarding the transfer of the Equity Interests to the Company and the conversion of Vimicro Beijing into a wholly-foreign-owned enterprise, as contemplated by the
Shareholding Transfer Agreements. 
  
 “Laws”
shall have the meaning ascribed to it in Section 3.3 of this Agreement. 
  

 - 3 - 

 “Majority of Subscribers” shall mean the Subscribers who, directly or through their
respective Associates, represent a majority of the total Equity Interests. 
  
 “Person” shall mean any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental
Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. 
  
 “PRC” shall have the meaning ascribed to it in the recitals. 
  
 “Private Equity Funding” shall mean the issuance and sale by the Company of not less than US$15 million of
its preferred shares to one or more private equity investors. 
  
 “Second Closing” shall have the meaning ascribed to it in Section 2.3(a) of this Agreement. 
  
 “Second Closing Date” shall have the meaning ascribed to it in Section 2.3(a) of this Agreement 
  
 “Securities Act” shall have the meaning ascribed to it in
Section 7.7 of this Agreement. 
  
 “Share Exchange
Subscribers” shall mean the Subscribers transferring their Equity Interests to the Company as consideration for their Shares in accordance with Schedule I. 
  
 “Shareholding Transfer Agreement” shall have the meaning ascribed to it in the recitals. 
  
 “Shares” shall have the meaning ascribed to it in the
recitals. 
  
 “Subscriber” or
“Subscribers” shall have the meaning ascribed to it in the recitals. 
  
 “Subscription Amount” shall mean, with respect to each Subscriber paying the Subscription Price in cash in accordance with Schedule I, the aggregate Subscription Price for the Shares and/or
Warrants subscribed for hereunder. 
  
 “Subscription
Price” shall have the meaning ascribed to it in Section 2.1 of this Agreement. 
  
 “Third Closing” shall have the meaning ascribed to it in Section 2.4(a) of this Agreement. 
  
 “Third Closing Date” shall have the meaning ascribed to it in Section 2.4(a) of this Agreement. 
  
 “UNCITRAL” shall have the meaning ascribed to it in
Section 12.8 of this Agreement. 
  
 “United
States” shall mean the United States of America. 
  
 “Vimicro Beijing” shall have the meaning ascribed to it in the recitals. 
  
 “Warrant” shall mean a warrant to purchase Common Shares of the Company, substantially in the form of Exhibit B. 
  

 - 4 - 

 ARTICLE 2 
  

REORGANIZATION AND SUBSCRIPTION 
  
 2.1 Transfer of Equity Interests; Subscription for Shares and/or Warrants; Consideration. Subject to the terms and conditions herein set forth,
(i) the Subscribers or their respective Associates, as the case may be, agree that they will transfer their respective Equity Interests in Vimicro Beijing and (ii) the Company agrees that it will issue to each Subscriber, and each
Subscriber agrees, severally and not jointly, that it will subscribe for, the number of Shares and/or Warrants set forth opposite such Subscriber’s name on Schedule I hereto, in the respective amounts indicated in such Schedule. Each
Subscriber’s consideration for its Shares and/or Warrants shall consist of (a) the transfer of its Equity Interest to the Company or (b) the payment of the per share cash subscription price of US$0.1238 (the “Subscription
Price”). The type of consideration to be paid by each Subscriber is set forth in Schedule I opposite such Subscriber’s name under the heading “Consideration”. Promptly following the execution of this Agreement, Vimicro
Beijing shall submit an application to the relevant PRC Governmental Authorities to obtain the Industrial and Commercial Alteration Registration. 
  
 2.2 First Closing. The transfer of all of the Equity Interests to the Company pursuant to the Shareholding Transfer Agreements shall occur in
connection with a closing (the “First Closing”) which shall be immediately effective upon the receipt by the Company of the Industrial and Commercial Alteration Registration (the date of such Closing, the “First Closing
Date”). 
  
 2.3 Second Closing. 
  
 (a) The issuance of 14,437,500 Shares to the Share Exchange Subscribers and
the payment of cash consideration to the Cash Subscribers shall occur in connection with a closing (the “Second Closing”) to be held at the offices of Clifford Chance, 3326 China World Tower 1, No. 1 Jianguomenwai Dajie,
Chaoyang District, Beijing, the PRC, within three Business Days following the closing of the Private Equity Funding, provided the conditions set forth in Article 5 have been fulfilled, or at such other time and place as the Company and a Majority of
Subscribers may agree upon in writing (such date, the “Second Closing Date”). 
  
 (b) At the Second Closing, upon the terms and subject to the conditions hereof, (i) the Company shall pay each Cash Subscriber the consideration
contemplated in its respective Shareholding Transfer Agreement, and (ii) the Company will issue to each Share Exchange Subscriber the relevant number of Shares set forth opposite such Share Exchange Subscriber’s name on Schedule I.

  
 2.4 Third Closing. 
  
 (a) The issuance of an aggregate of 59,209,940 Shares and 8,500,000
Warrants, shall occur in connection with a closing (the “Third Closing”) to be held at the offices of Clifford Chance, 3326 China World Tower 1, No. 1 Jianguomenwai Dajie, Chaoyang District, Beijing, the PRC, within forty-five
calendar days following the Second Closing Date, provided the conditions set forth in Article 6 hereof have been fulfilled, or at such other time and place as the Company and a Majority of Subscribers may agree upon in writing (such date, the
“Third Closing Date”). 
  

 - 5 - 

 (b) At the Third Closing, upon the terms and subject to the conditions hereof, each Cash Subscriber
shall pay its respective Subscription Amount in accordance with Schedule I and the Company will issue to each Cash Subscriber the relevant number of Shares and/or Warrants, as the case may be, set forth opposite such Cash Subscriber’s
name on Schedule I. 
  
 ARTICLE 3 
  
 CONDITIONS TO THE OBLIGATIONS OF 
 THE SUBSCRIBERS AT THE FIRST CLOSING 
  
 The obligations of each Subscriber to transfer its Equity Interest to the Company under its respective Shareholding Transfer Agreement at the First
Closing shall be subject to the satisfaction as determined by, or waived by a Majority of Subscribers of the following conditions on or before the First Closing Date; provided, however, that any waiver of a condition shall not be
deemed a waiver of any breach of any representation, warranty, agreement, term or covenant or of any misrepresentation by the Company, except to the extent expressly so waived. 
  
 3.1 Representations and Warranties; Performance of Covenants. The representations and warranties of the Company
contained in Article 7 hereof shall be true and correct at and as of the date hereof and as of the First Closing Date as if made at and as of each such date, and the Company shall have performed and complied with all of its agreements and conditions
set forth or contemplated herein that are required to be performed by, or complied with by the Company on or before the First Closing Date. 
  
 3.2 Proceedings. All corporate and other proceedings taken or required to have been taken by the Company and the Company’s shareholders in
connection with the transactions contemplated hereby and all documents incident thereto shall be satisfactory in form and substance to a Majority of Subscribers. 
  
 3.3 Equity Transfer Permitted by Applicable Laws. The transfer of the Equity Interests to the Company at the First
Closing shall not be prohibited by the Company’s Articles of Association or any domestic, foreign or local statute, rule, regulation or other law (collectively, “Laws”). 
  
 ARTICLE 4 
  
 CONDITIONS TO THE OBLIGATIONS 
 OF THE COMPANY AT THE FIRST CLOSING 
  
 The obligations of the Company to acquire the Equity Interests from the Subscribers under the Shareholding Transfer Agreements at the First Closing shall
be subject to the satisfaction as determined by, or waived by, the Company of the following conditions on or before the First Closing Date; provided, however, that any waiver of a condition shall not be deemed a waiver of any breach of
any representation, warranty, agreement, term or covenant or of any misrepresentation by the Subscribers, except to the extent expressly so waived. 
  

 - 6 - 

 4.1 Representations and Warranties; Performance of Covenants. The representations and warranties
of the Subscribers contained in Article 8 hereof shall be true and correct at and as of the date hereof and the date of the First Closing as if made at and as of each such date, and the Subscribers shall have performed and complied with all of their
agreements and conditions set forth or contemplated herein that are required to be performed by, or complied with by the Subscribers on or before the First Closing Date. 
  
 4.2 Compliance with this Agreement. The Subscribers shall have performed and complied with all of its agreements and
conditions set forth or contemplated herein that are required to be performed or complied with by the Subscribers on or before the First Closing Date. 
  
 ARTICLE 5 
  
 CONDITIONS TO THE OBLIGATIONS 
 OF THE COMPANY AT THE SECOND CLOSING

  
 The obligations of the Company to pay the consideration
under the Shareholding Transfer Agreements to the Cash Subscribers and issue Shares to the Share Exchange Subscribers at the Second Closing shall be subject to the satisfaction as determined by, or waived by, the Company of the following conditions
on or before the Second Closing Date; provided, however, that any waiver of a condition shall not be deemed a waiver of any breach of any representation, warranty, agreement, term or covenant or of any misrepresentation by the
Subscribers, except to the extent expressly so waived. 
  
 5.1
First Closing. The First Closing shall have occurred. 
  
 5.2 Private Equity Funding Completed. The sale and purchase of preferred shares of the Company contemplated by the Private Equity Funding shall have been completed. 
  
 5.3 Representations and Warranties; Performance of Covenants. The representations and warranties of the Subscribers
contained in Article 8 hereof shall be true and correct at and as of the date hereof and the Second Closing Date as if made at and as of each such date, and the Subscribers shall have performed and complied with all of their agreements and
conditions set forth or contemplated herein that are required to be performed by, or complied with by the Subscribers on or before the Second Closing Date. 
  
 5.4 Compliance with this Agreement. The Subscribers shall have performed and complied with all of its agreements and conditions set forth or
contemplated herein that are required to be performed or complied with by the Subscribers on or before the date of the Second Closing. 
  
 5.5 Issuance of Shares Permitted by Applicable Laws. The issuance of the Shares by the Company hereunder and the consummation of the transactions
contemplated hereby shall not be prohibited by any Law. 
  

 - 7 - 

 ARTICLE 6 
  

CONDITIONS TO THE OBLIGATIONS 
 OF
THE COMPANY AT THE THIRD CLOSING 
  
 The obligations of the
Company to issue Shares and/or Warrants to the Cash Subscribers at the Third Closing shall be subject to the satisfaction as determined by, or waived by, the Company of the following conditions on or before the Third Closing Date; provided,
however, that any waiver of a condition shall not be deemed a waiver of any breach of any representation, warranty, agreement, term or covenant or of any misrepresentation by the Subscribers, except to the extent expressly so waived.

  
 6.1 Second Closing. The Second Closing shall have
occurred. 
  
 6.2 Representations and Warranties; Performance
of Covenants. The representations and warranties of the Subscribers contained in Article 8 hereof shall be true and correct at and as of the date hereof and the Third Closing Date as if made at and as of each such date, and the Subscribers shall
have performed and complied with all of their agreements and conditions set forth or contemplated herein that are required to be performed by, or complied with by the Subscribers on or before the Third Closing Date. 
  
 6.3 Compliance with this Agreement. The Subscribers shall have
performed and complied with all of its agreements and conditions set forth or contemplated herein that are required to be performed or complied with by the Subscribers on or before the date of the Third Closing. 
  
 6.4 Issuance of Shares and/or Warrants Permitted by Applicable Laws.
The issuance of the Shares and/or Warrants by the Company hereunder and the consummation of the transactions contemplated hereby shall not be prohibited by any Law. 
  
 ARTICLE 7 
  
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
  
 The Company hereby represents and warrants to the Subscribers as set forth below as of the date of this Agreement and as of each Closing Date. 

 
 7.1 Corporate Organization, Existence and Power. The Company:
(a) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (b) has all requisite corporate power and authority to own and operate its property, to lease the property
it operates as lessee and to conduct the business in which it is currently, or is currently proposed to be, engaged; and (c) has the corporate power and authority to execute, deliver and perform its obligations under this Agreement. 

 
 7.2 Corporate Authorization; No Contravention. The execution,
delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby, including, without limitation, the issuance of the Shares: (a) has been duly authorized by all necessary corporate, and if
required, shareholder action; (b) do not and will not contravene the terms of the Articles of Association of the Company, or any amendment thereof or any Laws applicable to the Company or its assets, business or properties; (c) do not and
will not (i) conflict with, contravene, result in any violation or breach of or default under (with or without the giving of notice or the lapse of time or both), (ii) create in any other Person a right or claim of termination or
amendment, or (iii) require modification, acceleration or cancellation of any provision of any security issued by such Person in any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument or arrangement
(whether in writing or otherwise) to which such Person or its property is bound, or any amendment of any of the foregoing (collectively, “Contractual Obligations”); and (d) do not and will not result in the creation of any lien
against any property, asset or business of the Company or the suspension, revocation, impairment, forfeiture or non renewal of any material permit, license, authorization or approval applicable to the Company, or its businesses or operations or any
of its assets or properties. 
  

 - 8 - 

 7.3 Governmental Authorization; Third Party Consents. Other than requisite approvals under the
laws of the PRC (including without limitation the Industrial and Commercial Alteration Registration), no material approval, consent, compliance, exemption, authorization, or other action by, or notice to, or filing with, any governmental entity or
authority or any other Person in respect of any Law or Contractual Obligation, and no lapse of a waiting period under any Law or Contractual Obligation, is necessary or required in connection with the execution, delivery or performance by, or
enforcement against, the Company of this Agreement or the consummation of the transactions contemplated hereby. 
  
 7.4 Binding Effect; Enforceability. This Agreement has been duly executed and delivered by the Company, and this Agreement constitutes the legal,
valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity relating to enforceability. 
  
 7.5 No Legal Bar. Neither the execution, delivery and performance of this Agreement, nor the issuance of or performance of the terms of the Shares
will violate any Law or any Contractual Obligation of the Company, where such violations could reasonably have or be expected to have a material adverse effect on the business or condition of the Company. 
  
 7.6 Compliance with Laws. The Company is in material compliance with
all Laws applicable to the Company. 
  
 7.7 Private
Offering. No form of general solicitation or general advertising was used by the Company, or its representatives in connection with the offer or sale of the Shares. No registration of the Shares pursuant to the provisions of the United States
Securities Act of 1933, as amended (the “Securities Act”) or the state securities or “blue sky” laws will be required for the offer, sale or issuance of the Shares pursuant to this Agreement. The Company agrees that
neither it, nor anyone acting on its behalf, will offer or sell the Shares or any other security so as to require the registration of the Shares pursuant to the provisions of the Securities Act or any state securities or “blue sky” laws,
unless such Shares so registered. 
  

 - 9 - 

 ARTICLE 8 
  

REPRESENTATIONS AND 
 WARRANTIES OF
THE SUBSCRIBERS 
  
 Each of the Subscribers hereby, severally
and not jointly, represents and warrants as to itself only, as follows: 
  
 8.1 Authorization; No Contravention. The execution, delivery and performance by it of this Agreement: (a) is within its power and authority and has been duly authorized by all necessary action;
(b) does not contravene the terms of its organizational documents or any amendment thereof; and (c) will not violate, conflict with or result in any breach or contravention of any of its Contractual Obligations, or any order or decree
directly relating to it. 
  
 8.2 Binding Effect. This
Agreement has been duly executed and delivered by it and this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability. 
  
 8.3 No Legal Bar. The execution, delivery and performance of this Agreement by it will not violate any Law applicable to it. 
  
 8.4 Purchase for Own Account. The Shares to be acquired by it pursuant
to this Agreement are being or will be acquired for its own account and with no intention of distributing or reselling such securities or any part thereof in any transaction that would be in violation of the securities laws of the United States, or
any state, without prejudice, however, to its right at all times to sell or otherwise dispose of all or any part of the Shares under an effective registration statement under the Securities Act, or under an exemption from such registration available
under the Securities Act, and subject, nevertheless, to the disposition of its property being at all times within its control. If the Subscriber should in the future decide to dispose of any of the Shares, the Subscriber understands and agrees that
it may do so only in compliance with the Securities Act and applicable state securities laws, as then in effect. It agrees to the imprinting of a legend on certificates representing the Shares to the following effect: “THE SECURITIES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.” 
  
 8.5 Tax Matters. Such Subscriber has had an opportunity to review with its own tax advisors the tax consequences to such Subscriber of its
subscription for Shares and/or Warrants and the other transactions contemplated by this Agreement. Such Subscriber understands that it must rely solely on its own advisors and not on any statements or representations by the Company or any of its
agents with respect to tax matters. Such Subscriber understands that it (and not the Company) shall be responsible for any tax liability of such Subscriber that may arise from the transactions contemplated by this Agreement. 
  

 - 10 - 

 ARTICLE 9 
  

COVENANTS OF THE COMPANY 
  
 The Company covenants and agrees with the Subscribers that, at all times from and after the date hereof until the Second Closing, the Company will comply
with all covenants and provisions of this Article 9, except to the extent the Subscribers may otherwise consent in writing. 
  
 9.1 Notice and Cure. The Company will notify the Subscribers promptly in writing of, and contemporaneously will provide the Subscribers with true
and complete copies of any and all information or documents relating to, and will use all commercially reasonable efforts to cure before the First or Second Closing, as the case may be, any event, transaction or circumstance occurring after the date
of this Agreement that causes or will cause any covenant or agreement of the Company under this Agreement to be breached or that renders or will render untrue any representation or warranty of the Company contained in this Agreement as if the same
were made on or as of the date of such event, transaction or circumstance. The Company also will notify the Subscribers promptly in writing of, and will use all commercially reasonable efforts to cure, before the First or Second Closing, as the case
may be, any violation or breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, whether occurring or arising before, on or after the date of this Agreement. No notice given pursuant to this Section shall
have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining satisfaction of any condition contained herein or shall in any way limit the Subscribers’ right to seek any
remedy available at law or in equity. 
  
 9.2 Fulfillment of
Conditions. The Company will execute and deliver at the First or Second Closing, as the case may be, each document that it is required hereby to execute and deliver as a condition to the First or Second Closing, as the case may be, and will take
all commercially reasonable steps necessary or desirable and proceed diligently and in good faith to satisfy each other condition to the obligations of the Subscribers contained in this Agreement and will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any such condition. 
  
 9.3 Issuance of Additional Shares. From and after the date hereof until the Second Closing, the Company will not issue any shares, or rights, options or warrants convertible or exchangeable into the shares of
the Company, except for the Shares, the Warrants, any shares to be issued in connection with the Private Equity Funding, and any employee stock options issued or exercised in accordance with past practice. 
  
 ARTICLE 10 
  
 COVENANTS OF THE SUBSCRIBERS 
  
 Each Subscriber covenants and agrees, severally and not jointly, with the
Company that, at all times from and after the date hereof until the Third Closing, such Subscriber will comply with all covenants and provisions of this Article 10, except to the extent the Company may otherwise consent in writing. 
  

 - 11 - 

 10.1 Notice and Cure. Each Subscriber will notify the Company promptly in writing of, and
contemporaneously will provide the Company with true and complete copies of any and all information or documents relating to, and will use all commercially reasonable efforts to cure before the First, Second or Third Closing, as the case may be, any
event, transaction or circumstance occurring after the date of this Agreement that causes or will cause any covenant or agreement of such Subscriber under this Agreement to be breached or that renders or will render untrue any representation or
warranty of such Subscriber contained in this Agreement as if the same were made on or as of the date of such event, transaction or circumstance. Each Subscriber also will notify the Company and other Subscribers promptly in writing of, and will use
all commercially reasonable efforts to cure, before the First, Second or Third Closing, as the case may be, any violation or breach of any representation, warranty, covenant or agreement made by such Subscriber in this Agreement, whether occurring
or arising before, on or after the date of this Agreement. No notice given pursuant to this Section shall have any effect on the representations, warranties, covenants or agreements contained in this Agreement for purposes of determining
satisfaction of any condition contained herein or shall in any way limit the Company’s right to seek any remedy available at law or in equity. 
  
 10.2 Fulfillment of Conditions. Each Subscriber will execute and deliver at the First, Second or Third Closing, as the case may be, each document
that the Subscriber is hereby required to execute and deliver as a condition to the First, Second or Third Closing, as the case may be, will take all commercially reasonable steps necessary or desirable and proceed diligently and in good faith to
satisfy each other condition to the obligations of the Company contained in this Agreement and will not take or fail to take any action that could reasonably be expected to result in the nonfulfillment of any such condition. 
  
 ARTICLE 11 
  
 TERMINATION 
  
 11.1 Termination. 
  
 (a) This Agreement may be terminated, and the transactions contemplated
hereby may be abandoned: 
  
 (i) at any time by mutual written
agreement of the Company and a Majority of Subscribers; 
  
 (ii)
at any time before the First Closing, by the Company or the Subscribers, in the event of a material breach hereof by the non-terminating party if such non-terminating party fails to cure such breach within five Business Days following notification
thereof by the terminating party; 
  
 (iii) at any time after the
earlier of (i) September 30, 2004 or (ii) the 90th calendar day following the First Closing, by the Company or a Majority of Subscribers if the Second Closing has not occurred by such earlier date and such failure to consummate is not
caused by a breach of this Agreement by the terminating party. Upon termination of this Agreement pursuant to this Section 11.1(a)(iii), the Company shall transfer back to each Subscriber (or its respective Associate) such Subscriber’s (or
its respective Associate’s) Equity Interest, and will use all reasonable efforts to cooperate with the Subscribers to effectuate the cancellation of the Industrial and Commercial Alteration Registration. 
  

 - 12 - 

 (b) In furtherance and not in limitation to the provisions of paragraph (a) of this
Section 11.1, this Agreement may be terminated by the Company as to any Cash Subscriber, and the right of such Cash Subscriber to receive Shares hereunder shall be forfeited and abandoned, in the event the Second Closing has occurred and such
Cash Subscriber has failed to pay its respective Subscription Amount at the Third Closing or otherwise within forty-five (45) calendar days of the Second Closing Date. 
  
 11.2 Effect of Termination. If this Agreement is validly terminated pursuant to Section 11.1, this Agreement
will forthwith become null and void, and there will be no liability or obligation on the part of the Company or Subscribers (or any of their respective officers, directors, employees, agents or other representatives, Associates or Affiliates) other
than liability for breach of this Agreement arising prior to such termination. 
  
 ARTICLE 12 
  
 MISCELLANEOUS 
  
 12.1 Survival of
Representations and Warranties. None of the representations and warranties made herein shall survive the consummation of the Third Closing. 
  
 12.2 Notices. All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by telefax,
commercial express courier service or personal delivery: 
  
 (a)
if to the Company: 
  
 Vimicro International
Corporation  
 5/F Haidian Science & Technology Building, 
 No. 3 Zhongguancun South Street, 
 Haidian District, Beijing, China 100081  
 Fax No.: +8610 6894 4075 
 Attention: Gordon Cheng  
  
 with a copy to: 
  
 Clifford Chance LLP 
 3326 China World Tower 1 
 No. 1 Jianguomenwai Avenue 
 Beijing 100004 
 PRC 
 Fax No.: +8610 6505 9028 
 Attention: Matt Adler 
  

 - 13 - 

 (b) if to the Subscribers, at the Subscribers’ addresses set forth on Schedule A or to such
other address or addresses as shall have been furnished in writing to the other parties hereto. Each Subscriber agrees, at all times, to provide the Company with an address for notices hereunder. All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial express courier service; or if faxed, when receipt is acknowledged. 
  
 12.3 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of the parties hereto. No Subscriber may assign its right to subscribe for Shares hereunder to another Person without the prior written consent of the Company. No Person other than the
parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement. 
  
 12.4 Amendment and Waiver. 
  
 (a) No failure or delay on the part of any of the parties hereto in exercising any right, power or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to the parties hereto at law, in equity or otherwise. 
  
 (b) Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by any party from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing and signed by the Company and a Majority of Subscribers, and (ii) only in the specific instance and for the specific purpose for which made or given. No
amendment, supplement or modification of or to any provision of this Agreement or any waiver of any such provision or consent to any departure by any party from the terms of any such provision may be made orally. 
  
 12.5 Signatures; Counterparts. Telefacsimile transmissions of any
executed original document and/or retransmission of any executed telefacsimile transmission shall be deemed to be the same as the delivery of an executed original. At the request of any party hereto, the other parties hereto shall confirm
telefacsimile transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 
  
 12.6 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

  

 - 14 - 

 12.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND
ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH STATE. 
  
 12.8 Arbitration  
  
 (a) Except as otherwise provided in this Agreement, any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach,
termination or validity thereof, shall be finally settled by a board of arbitration consisting of three members (hereinafter referred to as the “Board of Arbitration”) under the rules of the United Nations Commission on
International Trade Law (“UNCITRAL”). The place of arbitration shall be the Hong Kong International Arbitration Centre, and the language used in the arbitral proceedings shall be English. 
  
 (b) A Majority of Subscribers (collectively) and the Company shall each
select one member to the Board of Arbitration and the third member shall be selected by mutual agreement of the other members, or if the other members fail to reach agreement on a third member within twenty days after their selection, such third
member shall thereafter be selected by the Hong Kong International Arbitration Centre upon application made to it for such purpose by the members. 
  
 (c) The arbitral proceeding shall accord the right of cross-examination of witnesses, the right to provide witnesses, including expert witnesses, and the
right to make both written and oral submissions. 
  
 (d) The
arbitral award made and granted by the Board of Arbitration shall be final, binding and incontestable and may be used as a basis for judgment thereon in any court having jurisdiction. All costs of arbitration (including, without limitation, those
incurred in the appointment of arbitrator) shall be apportioned in the arbitral award. 
  
 (e) No person who is, or has been, an employee or agent of, or consultant or counsel to, the Subscribers, the Company or any of their respective Affiliates shall be eligible to act as an arbitrator at any time.

  
 (f) This Agreement and the rights and obligations of the
Subscribers and the Company shall remain in full force and effect pending the award in any arbitration proceeding hereunder. 
  
 12.9 Severability. If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions
held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further agree to replace such invalid, illegal or unenforceable provision of this Agreement with a
valid, legal and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal or unenforceable provision. 
  

 - 15 - 

 12.10 Rules of Construction. Unless the context otherwise requires, “or” is not
exclusive, and references to sections or subsections refer to sections or subsections of this Agreement. 
  
 12.11 Entire Agreement. This Agreement, including the exhibits and schedules hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein or therein. This Agreement, together with the exhibits and schedules hereto, supersedes all prior agreements and understandings between the parties with respect to such subject matter. 
  
 12.12 Publicity. Except as may be required by applicable law, none of
the parties hereto shall issue a publicity release or announcement or otherwise make any public disclosure concerning this Agreement or the transactions contemplated hereby, without prior approval of the Company. 
  
 12.13 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any governmental entity or authority or any other
Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement, including, without limitation, any post-closing transfer(s) by a Subscriber of a portion of the Shares to a Person not currently a party
hereto. 
  
 12.14 No Strict Construction. The parties
hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises under any provision of this Agreement, this Agreement shall be construed as if drafted
jointly by the parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. 
  
 12.15 Confidentiality. Each party to this Agreement agrees that it will maintain the confidentiality of any
proprietary information of the Company; provided, however, such obligation of confidentiality shall not apply to (i) information which was in the public domain or otherwise known to the relevant party before it was furnished to it
by another party hereto or, after it was furnished to that party, entered the public domain otherwise than as a result of (1) a breach by that party of this Section 12.15 or (2) a breach of a confidentiality obligation by the
disclosing party, where the breach was known to that party; or (ii) information the disclosure of which is necessary in order to comply with applicable law, the order of any court, the requirements of a stock exchange or other governmental or
regulatory authority or to obtain tax or other clearances or consents from any relevant authority. 
  
 12.16 Conflict. In the event there is any conflict, inconsistency or discrepancy between the terms of this Agreement and the terms of any of the
Shareholding Transfer Agreements, the terms of this Agreement shall prevail. 
  

 - 16 - 

 12.17 Standoff Agreement. Each Subscriber agrees not to sell or otherwise transfer or dispose of
any Shares (or other securities) of the Company held by it during the 180-day period (or such longer or shorter period or periods as shall be required by the underwriters of the Company’s initial public offering, including one or more staggered
periods) following the date of the final prospectus for the Company’s initial public offering, if so requested of the Company by the underwriters of the Company’s initial public offering, provided that all directors and senior officers of
the Company enter into substantially identical agreements. The Company may impose stop-transfer instructions with respect to the Shares (or other securities) subject to the foregoing restriction until the end of such period. 
  
 12.18 English Language. This Agreement is in the English language
only, which language shall be controlling in all respects. No translation, if any, of this Agreement into Chinese or any other language shall have any force or effect in the interpretation of or in the determination of the intent of the Parties with
respect hereto. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 - 17 - 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by
their respective officers hereunto duly authorized as of the date first above written. 
  

			
	VIMICRO INTERNATIONAL CORPORATION
		
	By:	 	 /s/

	Name:	 	Deng Zhonghan
	Title:	 	Director
	
	VIMICRO BEIJING CORPORATION
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 
	
	VIMICRO TIANJIN CORPORATION
		
	By:	 	 /s/

	Name:	 	Xiao Dong Yang
	Title:	 	 
	
	 GREAT VENTURE INTERNATIONAL
 LIMITED

		
	By:	 	 /s/

	Name:	 	RIDONG TANG
	Title:	 	Director
	
	DI-HWA TIEN
	
	 /s/ Di-Hwa Tien

	
	EAGLE HONEST DEVELOPMENTS LIMITED
		
	By:	 	 /s/ Cong Wei

	Name:	 	 
	Title:	 	 

  
 [SIGNATURE
PAGE TO REORGANIZATION AND SUBSCRIPTION AGREEMENT] 

			
	HENRY NEW ENTERPRISE CO., LIMITED
		
	By:	 	 /s/ Zhang Tao

	Name:	 	 
	Title:	 	 
	
	HANGZHOUVISION TECHNOLOGY LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 
	
	LAP LEE
	
	 /s/

	
	PALIO MANAGEMENT GROUP CO., LTD.
		
	By:	 	 /s/

	Name:	 	Kar Lun Tang
	Title:	 	Director
	
	PING KEUNG KO
	
	 /s/

	
	HSIA REVOCABLE TRUST OF VICTOR HSIA AND VIRGINIA HSIA
		
	By:	 	 /s/

	Name:	 	VICTOR HSIA
	Title:	 	TRUSTEE
	
	SPRING RIVER INVESTMENT INC.
		
	By:	 	 /s/ Chen Yong Chuan

	Name:	 	CHEN, YONG CHUAN
	Title:	 	Chairman

  
 [SIGNATURE
PAGE TO REORGANIZATION AND SUBSCRIPTION AGREEMENT] 

			
	 DAYUE INTERNATIONAL COMPANY
 LIMITED

		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 
	
	CENTURY GLORY HOLDINGS LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 
	
	HUANA INVESTMENT INC.
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 
	
	XIANG YU
	
	 /s/ Xiang Yu

	
	ORIENTAL YIHUI TECHNOLOGY LIMITED
	
	 For and on behalf of
 Oriental Yihui
Technology Limited

	
	 /s/

	Authorized Signature(s)
		
	By:	 	

	Name:	 	 
	Title:	 	 
	
	XIYOU HOLDINGS LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  
 [SIGNATURE
PAGE TO REORGANIZATION AND SUBSCRIPTION AGREEMENT] 

			
	SOUTH LIGHT HOLDINGS LIMITED
		
	By:	 	 /s/ Zhang Xian Wei

	Name:	 	Zhang Xian Wei
	Title:	 	Director
	
	PRINTOUT TECHNOLOGY LIMITED
	
	For and on behalf of PRINTOUT TECHNOLOGY LIMITED
	Happy Pacific Investment Limited as director
	
	 /s/

	Authorized signature(s)
	
	Ms. Ip Wai Man representing Happy Pacific Investment Limited - director
		
	By:	 	

	Name:	 	 
	Title:	 	 
	
	PIONEER LEADER TRADING LIMITED
	
	For and on behalf of PIONEER LEADER TRADING LIMITED
	Gillingham Assets Limited as director
	
	 /s/

	Authorized signature(s)
	
	Ms. Ip Wai Man representing Gillingham Assets Limited - director
		
	By:	 	

	Name:	 	 
	Title:	 	 
	
	INFOTECH VENTURES CAYMAN COMPANY LIMITED
		
	By:	 	 /s/ LIU, TING RU

	Name:	 	LIU, TING RU
	Title:	 	Director
	
	POWER PACIFIC (MAURITIUS) LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  
 [SIGNATURE
PAGE TO REORGANIZATION AND SUBSCRIPTION AGREEMENT] 

			
	VIMICRO SHANGHAI CORPORATION
		
	By:	 	 /s/

	Name:	 	Zhang, Hui (Tom)
	Title:	 	 
	
	VIMICRO SHENZHEN CORPORATION
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  
 [SIGNATURE
PAGE TO REORGANIZATION AND SUBSCRIPTION AGREEMENT] 

 SCHEDULE I 
  

									
	 Name and
 Address of
 Subscriber

	 	 Name and Address
 of Subscriber’s
 Associate (if any)

	 	 Number of
 Subscribed Shares or
 Warrants*

	 	 Consideration

	 	 Percentage of
 Equity Interest
 in Vimicro
 Beijing to be
 Transferred**

	 Vimicro Beijing Corporation
  
 P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
	 	 Zhonghan Deng
  
 

  
 No. 17, Haidian Road, Haidian District, Beijing,
China (home)
	 	 16,429,490 Shares
 (20%)
	 	Cash	 	20%
	 	 	 	 
					
	 Vimicro Tianjin Corporation
  
 P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
	 	 Xiaodong Yang
  
 

  
 715 Sheraton Dr., Sunnyvale, CA 94087
(home)
	 	 7,947,110 Shares
 (9.68%)
	 	Cash	 	9.68%
	 	 	 	 
					
	 Vimicro Shanghai Corporation
  
 P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
	 	 Xiaodong Yang
  
 

  
 715 Sheraton Dr., Sunnyvale, CA 94087
(home)
	 	 2,500,000 Shares
 (3.04%)
	 	Cash	 	3.04%
	 	 	 	 
					
	 Vimicro Shenzhen Corporation
  
 P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
	 	 Xiaodong Yang
  
 

  
 715 Sheraton Dr., Sunnyvale, CA 94087
(home)
	 	 1,875,000 Shares
 (2.28%)
	 	Cash	 	2.28%
	 	 	 	 
					
	 Great Venture International Limited
  
 Flat/Rm 1210, 12/F, Harcourt House, 39 Gloucester Rd, Wanchai, Hong Kong
	 	 Tang Ridong
  
 

  
 

	 	 3,125,000 Shares
 (3.8%)
	 	Cash	 	3.8%
	 	 	 	 

	*	Represents percentage of outstanding share capital of the Company to be acquired after giving effect to the exercise of the Warrants, but without giving effect to the exercise of
employee stock options or the issuance of shares in connection with the Private Equity Funding. 

	**	Represents percentage of outstanding equity capital of Vimicro Beijing without giving effect to the exercise of employee stock options. 

										
	 Name and
 Address of
 Subscriber

	 	 Name and Address
 of Subscriber’s
 Associate (if any)

	 	 Number of
 Subscribed Shares or
 Warrants*

	 	 Consideration

	 	 Percentage of
 Equity Interest
 in Vimicro
 Beijing to be
 Transferred**

	 
	 Di-Hwa Tien
  
 2440 Summit Drive, Hillsborough, Ca
 94010
	 	 Chang-lin Tien
  
 

  
 2440 Summit Drive, Hillsborough, CA
94010
	 	 312,500 Shares
 (0.38%)
	 	 Equity Interest in
 Vimicro Beijing
	 	0.38	%
					
	 Eagle Honest
 Developments Limited
  
 P.O.Box 957, Offshore
 Incorporations Centre,
 Road Town, Torrola,
 British Virgin Islands
	 	 Cong Wei
  
 

  
 

	 	 2,500,000 Shares
 (3.04%)
	 	Cash	 	3.04	%
					
	 Henry New Enterprise
 Co., Limited
  
 12/F, At Tower, 180
 Electric Road, North
 Point, Hong Kong
	 	 Zhang Tao
  
 

  
 

	 	 1,250,000 Shares
 (1.52%)
	 	Cash	 	1.52	%
					
	 Hangzhouvision
 Technology
  
 P.O. Box 957, Offshore
 Incorporations Centre,
 Road Town, Tortola,
 British Virgin Islands
	 	 Du Yueren
  
 

  
 

	 	 1,250,000 Shares
 (1.52%)
	 	Cash	 	1.52	%
					
	 Lap Lee
  
 5B, Block 4, 21 Tat Chee Ave., Yau Yat Chuen, Kln., Hong Kong
	 	 Lap Lee
  
 5B, Block 4, 21 Tat Chee Ave., Yau Yat Chuen, Kln., Hong Kong
	 	 1,250,000 Shares
 (1.52%)
	 	 Equity Interest in
 Vimicro Beijing
	 	1.52	%

	*	Represents percentage of outstanding share capital of the Company to be acquired after giving effect to the exercise of the Warrants, but without giving effect to the exercise of
employee stock options or the issuance of shares in connection with the Private Equity Funding. 

	**	Represents percentage of outstanding equity capital of Vimicro Beijing without giving effect to the exercise of employee stock options. 

										
	 Name and
 Address of
 Subscriber

	 	 Name and Address
 of Subscriber’s
 Associate (if any)

	 	 Number of
 Subscribed Shares or
 Warrants*

	 	 Consideration

	 	 Percentage of
 Equity Interest
 in Vimicro
 Beijing to be
 Transferred**

	 
	 Palio Management
 Group Co. Ltd.
  
 Flat E, 20/F, Block 1, Cheerful Garden, 23 Siu Sai Wan Road, Chai Wan, Hong
Kong
	 	 Lap Lee
  
 5B, Block 4, 21 Tat Chee Ave., Yau Yat Chuen, Kln., Hong Kong
	 	 62,500 Shares
 (0.08%)
	 	 Equity Interest in
 Vimicro Beijing
	 	0.08	%
					
	 Ping Keung Ko
  
 5263 Coachdrive,
 Richmond, Ca94803,
 USA
	 	 Ping Keung Ko
  
 5263 CoachDrive, Richmond, CA94803, USA
  
 

	 	 156,250 Shares
 (0.19%)
	 	 Equity Interest in
 Vimicro Beijing
	 	0.19	%
					
	 Hsia Revocable Trust
 Of Victor Hsia And
 Virginia Hsia
  
 848 Summit Court, Sunnyvale, CA 94087-1358
	 	 Ping Keung Ko
  
 5263 CoachDrive,
 Richmond, CA94803,
 USA
  
 

	 	 156,250 Shares
 (0.19%)
	 	 Equity Interest in
 Vimicro Beijing
	 	0.19	%
					
	 Spring River
 Investment Inc
  
 P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin
Islands
	 	 

  
 

	 	 3,125,000 Shares
 (3.8%)
	 	Cash	 	3.8	%
					
	 Dayue International Company Limited
  
 Omar Hodge Building,
 Wickhams Cay I,
 P.O.Box 362, Road
 Town, Tortola, British
 Virgin Islands
	 	 

  
 

	 	 1,250,000 Shares
 (1.52%)
	 	Cash	 	1.52	%

	*	Represents percentage of outstanding share capital of the Company to be acquired after giving effect to the exercise of the Warrants, but without giving effect to the exercise of
employee stock options or the issuance of shares in connection with the Private Equity Funding. 

	**	Represents percentage of outstanding equity capital of Vimicro Beijing without giving effect to the exercise of employee stock options. 

										
	 Name and
 Address of
 Subscriber

	 	 Name and Address
 of Subscriber’s
 Associate (if any)

	 	 Number of
 Subscribed Shares or
 Warrants*

	 	 Consideration

	 	 Percentage of
 Equity Interest
 in Vimicro
 Beijing to be
 Transferred**

	 
	 Century Glory Holdings
 Limited
  
 P.O. Box 957, Offshore
 Incorporations Centre,
 Road Town, Tortola,
 British Virgin Islands
	 	 

  
 

	 	 2,062,500 Shares
 (2.51%)
	 	Cash	 	2.51	%
					
	 Huana Investment Inc.
  
 P.O. Box 957, Offshore
 Incorporations Centre,
 Road Town, Tortola,
 British Virgin Islands
	 	 

  
 

	 	 437,500 Shares
 (0.53%)
	 	Cash	 	0.53	%
					
	 Xiang Yu
  
 1020 Augustine Trail,
 Apex, NC 27539,
 USA
	 	 

  
 

	 	 222,500 Shares
 (0.27%)
	 	Cash	 	0.27	%
					
	 Oriental Yihui
 Technology Limited
  
 7/F, Jade Centre, 98
 Wellington Road,
 Central, Hong Kong
	 	 

  
 

	 	 2,277,500 Shares
 (2.77%)
	 	Cash	 	2.77	%
					
	 Xiyou Holdings Limited
  
 Suite B, 5/F Wing Hing Comm Bldg., 139 Wing Lok St., Sheung Wan, Hong Kong
	 	 

  
 

	 	 1,250,000 Shares
 (1.52%)
	 	Cash	 	1.52	%
					
	 South Light Holdings Limited
  
 P.O. Box 957, Offshore
 Incorporations Centre,
 Road Town, Tortola,
 British Virgin Islands
	 	 

  
 

	 	 208,340 Shares
 (0.25%)
	 	Cash	 	0.25	%

	*	Represents percentage of outstanding share capital of the Company to be acquired after giving effect to the exercise of the Warrants, but without giving effect to the exercise of
employee stock options or the issuance of shares in connection with the Private Equity Funding. 

	**	Represents percentage of outstanding equity capital of Vimicro Beijing without giving effect to the exercise of employee stock options. 

									
	 Name and
 Address of
 Subscriber

	 	 Name and Address of
 Subscriber’s
 Associate (if any)

	 	 Number of
 Subscribed Shares or
 Warrants*

	 	 Consideration

	 	 Percentage of
 Equity Interest
 in Vimicro
 Beijing to be
 Transferred**

	 Printout Technology Limited
  
 P.O.Box 957, Offshore
 Incorporations Centre,
 Road Town, Tortola,
 British Virgin Islands
	 	 

  
 

	 	 3,474,808 Shares
 (4.23%)
	 	Cash	 	4.23%
					
	 Pioneer Leader Trading Limited
  
 P.O.Box 957, Offshore
 Incorporations Centre,
 Road Town, Tortola,
 British Virgin Islands
	 	 

  
 

	 	 4,025,192 Shares
 (4.90%)
	 	Cash	 	4.90%
					
	 Infotech Ventures (US) Inc.
  
 330 Port Royal Avenue, Foster City,
 California 94404
	 	 Infotech Ventures Co., Ltd.
  
 

	 	 4,000,000 Shares
 8,500,000 Warrants
 (15.22%)
	 	Cash	 	15.22%
					
	 Power Pacific
 (Mauritius) Limited
  
 Les Cascades, Edith
 Cavell Street, Port-Louis,
 Republic Of
 Mauritius
	 	 Power Pacific (Mauritius)
 Limited

 
 

	 	 12,500,000 Shares
 (15.22%)
	 	 Equity Interest in
 Vimicro Beijing
	 	15.22%

	*	Represents percentage of outstanding share capital of the Company to be acquired after giving effect to the exercise of the Warrants, but without giving effect to the exercise of
employee stock options or the issuance of shares in connection with the Private Equity Funding. 

	**	Represents percentage of outstanding equity capital of Vimicro Beijing without giving effect to the exercise of employee stock options. 

 EXHIBIT A 
  

[Intentionally omitted; Please see Exhibit 4.4 to the Form F-1 Registration 
 Statement] 

 EXHIBIT B 
  

[•], 2004 
  
 THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH
LAWS. 
  
 Warrant to Subscribe for 8,500,000 
 Common Shares (as defined herein) 
  
 VIMICRO INTERNATIONAL CORPORATION 
  
 WARRANT 
  
 Void after [•], 2009 
  
 Vimicro International Corporation (the “Company”), an exempted company with limited liability organized and existing under the laws of the Cayman Islands, hereby certifies that, Infotech
Ventures (US) Inc., or its successors or assigns (the “Holder”), is entitled to subscribe for, subject to the terms and conditions hereinafter set forth, an aggregate of 8,500,000 fully paid and nonassessable Common Shares (as
defined herein) of the Company, at the Purchase Price, subject to adjustment as provided herein, at any time or from time to time beginning on the second anniversary of the date hereof and prior to 5:00 P.M., New York City time, on the Expiration
Date. 
  
 This Warrant is issued pursuant to the Reorganization
and Subscription Agreement (the “Subscription Agreement”), dated as of the date hereof, by and among the Company and the Purchaser, and is subject to the terms thereof; capitalized terms used herein and not otherwise defined shall
have the respective meanings assigned to such terms in the Subscription Agreement. The Holder is entitled to the rights and subject to the obligations contained in the Subscription Agreement and other agreements relating to this Warrant and the
Common Shares issuable upon exercise of this Warrant. 
  

 - 2 - 

 1. Definitions. For the purposes of this Warrant, the following terms shall have the meanings
indicated: 
  
 “Business Day” shall mean any day
other than a Saturday, Sunday or other day on which commercial banks in the PRC, the City of New York or Hong Kong are authorized or required by law or executive order to close. 
  
 “Closing Price” shall mean, with respect to each Warrant Share for any day, (a) the last reported sale
price or, in case no such sale takes place on such day, the average of the closing bid and asked prices, in either case as reported on the principal internationally-recognized securities exchange on which the Common Shares are listed or admitted for
trading or (b) if the Common Shares are not listed or admitted for trading on any internationally-recognized securities exchange, the last reported sale price or, in case no such sale takes place on such day, the average of the highest reported
bid and the lowest reported asked quotation for the Common Shares, in either case as reported on an inter-dealer quotation or similar service reporting such information. 
  
 “Common Shares” shall mean the Common Shares of the Company, par value US$0.0001 per share. 
  
 “Company” has the meaning ascribed to such term in the first
paragraph of this Warrant. 
  
 “Current Market
Price” in respect of each Common Share on any date shall be deemed to be the average of the daily Closing Prices per Common Share for the 10 consecutive trading days commencing 15 trading days before such date. If on any such date the
Common Shares are not listed or admitted for trading on any internationally-recognized securities exchange or quoted on an inter-dealer quotation or a similar service, then the Current Market Price shall be determined by the Board of Directors of
the Company in the good faith exercise of its reasonable business judgment. 
  
 “Dilution Price” shall mean, with respect to each Common Share, US$0.1238, subject to appropriate adjustment for events described in Subsection 3(a). 
  
 “Election to Purchase Shares” shall have the meaning
ascribed to it in Subsection 2(a). 
  
 “Exercise
Date” has the meaning ascribed to such term in Subsection 2(c). 
  
 “Expiration Date” shall mean a date that is five years after the date of issuance of this Warrant. 
  
 “Holder” has the meaning ascribed to such term in the first paragraph and Section 9 of this Warrant. 
  
 “Issued Warrant Shares” means any Common Shares issued upon
exercise of the Warrant. 
  
 “Person” shall mean
any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity. 
  

 - 3 - 

 “Purchase Price” shall mean US$0.1238 per Common Share. 
  
 “Subscription Agreement” has the meaning ascribed to such
term in the second paragraph of this Warrant. 
  
 “Transferee” shall have the meaning ascribed to it Subsection 9(d) of this Warrant. 
  
 “Warrant” shall mean this Warrant and any subsequent Warrant issued pursuant to the terms of this Warrant. 
  
 “Warrant Register” has the meaning ascribed to such term in
Subsection 9(c). 
  
 2. Exercise of Warrant. 
  
 (a) Exercise. This Warrant shall not be exercisable for a period of
two years following the date hereof and shall thereafter become exercisable in accordance with the following schedule: 
  

			
	 Date

	  	Number of Common Shares

	  [two years from issue date]
	  	4,250,000
	 [three years from issue date]
	  	2,125,000
	  [four years from issue date]
	  	2,125,000

  
 Pursuant to the
foregoing schedule, the Holder may, at any time and from time to time after [•], 2006, exercise this Warrant for all or part of the amount of Common Shares for which it is then exercisable by surrendering to the Company at its principal office
this Warrant, with the form of Election to Purchase Shares (the “Election to Purchase Shares”) attached hereto as Exhibit A duly executed by the Holder and accompanied by payment of the Purchase Price for the number of Common
Shares specified in such form. Notwithstanding the foregoing, at no time may this Warrant be exercised for less than 250,000 Common Shares. 
  
 (b) Issuance of Shares; Payment of Purchase Price. As soon as practicable after surrender of this Warrant and receipt of payment, the Company shall
promptly issue to the Holder the number of Common Shares set forth in the Election to Purchase Shares (by registering the Holder as the holder of such Common Shares in the Company’s register of members and, as soon as practicable thereafter,
delivering to the Holder a share certificate therefor), in such name or names as may be designated by such Holder, along with a check for the amount of cash to be paid in lieu of issuance of fractional shares, if any. The certificate or certificates
of the Common Shares shall bear a legend to the following effect: “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.” Payment of
the Purchase Price may be made in United States currency by cash or delivery of a certified check, bank draft or postal or express money order payable to the order of the Company. 
  

 - 4 - 

 (c) When Exercise Effective. The exercise of this Warrant shall be deemed to have been effective
immediately prior to the close of business on the Business Day on which this Warrant is surrendered to and the Purchase Price is received by the Company as provided in this Section 2 (the “Exercise Date”) and the Person in
whose name any Common Shares shall be issuable upon such exercise, as provided in Subsection 2(b), shall be deemed to be the record holder of such Common Shares for all purposes on the Exercise Date. 
  
 (d) Issued Warrant Shares Fully Paid, Nonassessable. The Company shall
take all actions necessary to ensure that following exercise of this Warrant in accordance with the provisions of this Section 2, the Issued Warrant Shares issued hereunder shall, without further action by the Holder, be fully paid and
nonassessable. 
  
 (e) Partial Exercise. If this Warrant is
exercised for less than all of the Common Shares issuable under this Warrant at the time of exercise, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver to the Holder a new Warrant of like tenor for the balance
of the Warrant Shares issuable hereunder. 
  
 (f) Continued
Validity. A Holder of Common Shares issued upon the exercise of this Warrant shall continue to be entitled to all of the rights and subject to all of the obligations set forth in Section 9. 
  
 (g) Expiration of Warrant. This Warrant shall expire and shall no
longer be exercisable on the Expiration Date. 
  
 3. Adjustment
of Purchase Price and Number of Shares.  
  
 (a) Dividend, Subdivision, Combination or Reclassification of the Common Shares. If the Company shall, from time to time, (i) declare a dividend on the Common Shares payable in share capital (including the Common Shares),
(ii) subdivide the outstanding Common Shares into a larger number of Common Shares, (iii) combine the outstanding Common Shares into a smaller number of shares, or (iv) issue any share capital in a reclassification of the Common
Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then in each such case, the number of Common Shares issuable upon exercise of this Warrant at the time of
the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the kind of shares issuable on such date shall be proportionately adjusted so that the Holder of any Warrant exercised after such
date shall be entitled to receive, upon payment of the same aggregate amount as would have been payable before such date, the aggregate number and kind of shares which, if such Warrant had been exercised immediately prior to such date, such Holder
would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. Any such adjustment shall become effective immediately after the record date of such dividend or the effective
date of such subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. 
  

 - 5 - 

 (b) Adjustments to Other Shares. In the event that at any time, as a result of an adjustment made
pursuant to Subsection 3(a), the Holder shall become entitled to receive, upon exercise of this Warrant, any share capital of the Company other than Common Shares, the number of such other shares so receivable upon exercise of this Warrant shall be
subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Shares contained in Subsection 3(a), and the provisions of Sections 2, 5, 6 and 7 with respect to the
Common Shares shall apply on like terms to any such other shares. 
  
 (c) Reorganization, Reclassification, Merger and Sale of Assets. If there occurs any capital reorganization or any reclassification of the Common Shares of the Company, the consolidation or merger of the Company with or into another
Person (other than a merger or consolidation of the Company in which the Company is the continuing corporation and which does not result in any reclassification or change of outstanding Common Shares) or the sale or conveyance of all or
substantially all of the assets of the Company to another Person, then the Holder will thereafter be entitled to receive, upon the exercise of this Warrant in accordance with the terms hereof, the same kind and amounts of securities (including
shares) or other assets, or both, which were issuable or distributable to the holders of outstanding Common Shares of the Company upon such reorganization, reclassification, consolidation, merger, sale or conveyance, in respect of that number of
Common Shares then issuable upon the exercise of this Warrant if this Warrant had been exercised immediately prior to such reorganization, reclassification, consolidation, merger, sale or conveyance; and, in any such case, appropriate adjustments
(as determined in good faith by the Board of Directors of the Company) shall be made to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be practicable, in relation to any securities or other assets
thereafter deliverable upon exercise of this Warrant. In addition to the foregoing adjustments, in the event of a consolidation or merger of the Company with or into another Person (other than a merger or consolidation of the Company in which the
Company is the continuing corporation) or the sale of all or substantially all of the assets of the Company to another Person, this Warrant shall become immediately exercisable (upon the closing of such transaction) for the full amount of Common
Shares represented hereby notwithstanding the schedule set forth in Section 2(a). 
  
 (d) Winding Up. If the Company shall, at any time prior to the Expiration Date, dissolve, liquidate or wind up its affairs, the Holder shall have the right, but not the obligation, to exercise this Warrant.
Upon such exercise the Holder shall have the right to receive upon payment of the Purchase Price, in lieu of the Common Shares that the Holder otherwise would have been entitled to receive, the same kind and amount of assets as would have been
issued, distributed or paid to the Holder upon any such dissolution, liquidation or winding up with respect to such Common Shares had the Holder been the holder of record of such Common Shares on the date for determining those entitled to receive
any such distribution. If any such dissolution, liquidation or winding up would result in any cash distribution in excess of the Purchase Price provided for by this Warrant, the Holder may, at the Holder’s option, exercise this Warrant without
making a cash payment of the Purchase Price and, in such case, the Company shall, upon distribution to the Holder, deduct an amount equal to the aggregate Purchase Price from the amount otherwise payable to the Holder. 
  

 - 6 - 

 4. Certificate as to Adjustments. Whenever the Purchase Price and the number of Common Shares
issuable, or the securities or other property deliverable, upon the exercise of this Warrant shall be adjusted pursuant to the provisions hereof, the Company shall promptly give written notice thereof to the Holder, in accordance with
Section 13, in the form of a certificate signed by the Chairman of the Board, President or the Chief Executive Officer of the Company, stating the adjusted Purchase Price, the number of Common Shares issuable, or the securities or other
property deliverable, upon exercise of the Warrant and setting forth in reasonable detail the method of calculation and the facts requiring such adjustment and upon which such calculation is based. Each adjustment shall remain in effect until a
subsequent adjustment is required. 
  
 5. Fractional
Shares. Notwithstanding an adjustment pursuant to Section 3 in the number of Common Shares covered by this Warrant or any other provision of this Warrant, the Company shall not be required to issue fractions of shares upon exercise of this
Warrant or to distribute certificates which evidence fractional shares. In lieu of fractional shares, the Company may make payment to the Holder, at the time of exercise of this Warrant as herein provided, of an amount in cash equal to such fraction
multiplied by the greater of the Current Market Price of a Common Share on the Exercise Date and the Dilution Price. 
  
 6. Notice of Proposed Actions. In case the Company shall propose at any time or from time to time (a) to declare or pay any dividend payable
in shares of any class to the holders of Common Shares or to make any other distribution to the holders of Common Shares (other than a regularly scheduled cash dividend), (b) to offer to the holders of Common Shares rights or warrants to
subscribe for or to purchase any additional Common Shares or shares of any class or any other securities, rights or options, (c) to effect any reclassification of its Common Shares, (d) to effect any consolidation, merger or sale, transfer
or other disposition of all or substantially all of the property, assets or business of the Company which would, if consummated, adjust the Purchase Price or the securities issuable upon exercise of the Warrant, (e) to effect the liquidation,
dissolution or winding up of the Company, or (f) to take any other action that would require a vote of the Company’s shareholders, then, in each such case, the Company shall give to the Holder, in accordance with Section 13, a written
notice of such proposed action, which shall specify (i) the record date for the purposes of such share dividend, distribution of rights or warrants or vote of the shareholders of the Company, or if a record is not to be taken, the date as of
which the holders of Common Shares of record to be entitled to such dividend, distribution of rights or warrants, or vote is to be determined, or (ii) the date on which such reclassification, consolidation, merger, sale, transfer, disposition,
liquidation, dissolution or winding up is expected to become effective, and such notice shall be so given as promptly as possible but in any event at least twenty (20) Business Days prior to the applicable record, determination or effective
date specified in such notice. 
  

 - 7 - 

 7. No Dilution or Impairment. The Company will not, through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against dilution or other impairment. Without limiting the generality of the foregoing, the Company
(a) will at all times reserve and keep available the maximum number of its authorized Common Shares, free from all preemptive rights therein, which will be sufficient to permit the full exercise of this Warrant, and (b) will take all such
action as may be necessary or appropriate in order that all Common Shares as may be issued pursuant to the exercise of this Warrant will, upon issuance, be duly and validly issued, fully paid and nonassessable, and free from all taxes, liens and
charges with respect to the issue thereof. 
  
 8. Replacement
of Warrants. On receipt by the Company of an affidavit of an authorized representative of the Holder stating the circumstances of the loss, theft, destruction or mutilation of this Warrant (and in the case of any such mutilation, on surrender
and cancellation of such Warrant), the Company at its expense will promptly execute and deliver, in lieu thereof, a new Warrant of like tenor which shall be exercisable for a like number of Common Shares. If required by the Company, such Holder must
provide an indemnity bond or other indemnity sufficient in the judgment of the Company’s Board of Directors to protect the Company from any loss which it may suffer if a lost, stolen or destroyed Warrant is replaced. 
  
 9. Restrictions on Transfer. 
  
 (a) Subject to the provisions of this Section 9, this Warrant may be
transferred or assigned, in whole or in part, by the Holder at any time, and from time to time. The term “Holder” as used herein shall also include any transferee of this Warrant whose name has been recorded by the Company in the
Warrant Register (as hereinafter defined). Each transferee of the Warrant acknowledges that the Warrant and the Common Shares issuable upon the exercise of the Warrant have not been registered under the Securities Act and may be transferred only
pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from the registration requirements of the Securities Act. 
  

(b) With respect to a transfer that should occur prior to the time that the Warrant or the Common Shares issuable upon the exercise thereof is
registered under the Securities Act, such Holder shall request an opinion of counsel (which shall be rendered by counsel reasonably acceptable to the Company) that the proposed transfer may be effected without registration or qualification under any
federal or state securities or blue sky law. Counsel shall, as promptly as practicable, notify the Company and the Holder of such opinion and of the terms and conditions, if any, to be observed in such transfer, whereupon the Holder shall be
entitled to transfer this Warrant or such Common Shares, subject to any other provisions and limitations of this Warrant. In the event this Warrant shall be exercised as an incident to such transfer, such exercise shall relate back and for all
purposes of this Warrant be deemed to have occurred as of the date of such notice regardless of delays incurred by reason of the provisions of this Section 9 which may result in the actual exercise on any later date. 
  

 - 8 - 

 (c) The Company shall maintain a register (the “Warrant Register”) at its principal for
the purpose of registering the Warrant and any transfer thereof, which register shall reflect and identify, at all times, the legal ownership of any Warrant. Upon the issuance of this Warrant, the Company shall record the name of the initial
purchaser of this Warrant in the Warrant Register as the first Holder. Upon surrender for registration of transfer or exchange of this Warrant together with a properly executed Form of Assignment attached hereto as Exhibit B at the principal
office of the Company, the Company shall, at its expense, execute and deliver one or more new Warrants of like tenor which shall be exercisable for a like aggregate number of Common Shares, registered in the name of the Holder or a transferee or
transferees. 
  
 (d) Notwithstanding any provision in this Warrant
to the contrary, the Holder shall not sell, assign, or otherwise transfer to any Person (a “Transferee”) any Issued Warrant Shares prior to the Expiration Date unless such Transferee agrees in writing to be bound in the same manner
as the Holder by the provisions of this Section 9 as they relate to the Issued Warrant Shares. 
  
 10. No Rights or Liability as a Stockholder. This Warrant does not entitle the Holder hereof to any voting rights or other rights as a shareholder
of the Company. No provisions hereof, in the absence of affirmative action by the Holder hereof to purchase the Common Shares, and no enumeration herein of the rights or privileges of the Holder shall give rise to any liability of such Holder as a
shareholder of the Company. 
  
 11. Charges, Taxes and
Expenses. Issuance of certificates for Common Shares upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax, or other incidental expense, in respect of such issuance or delivery of share
certificates therefor, all of which taxes and expenses shall be paid by the Company, provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the Holder of this Warrant. 
  
 12. Amendment or Waiver. This Warrant and any term hereof may be amended, waived, discharged or terminated only by and with the written consent of the Company and the Holder. 
  
 13. Notices. Any notice or other communication (or delivery) required
or permitted hereunder shall be made in writing and shall be by telecopier, commercial express courier service or personal delivery to the Company at its principal office as specified in the Subscription Agreement and to the Holder at its address as
it appears in the Warrant Register. All such notices and communications (and deliveries) shall be deemed to have been duly given: when delivered by hand, if personally delivered; when delivered by courier, if delivered by commercial express courier
service; and when receipt is acknowledged, if telecopied. 
  

 - 9 - 

 14. Certain Remedies. The Holder shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Warrant and to enforce specifically the terms and provisions of this Warrant in any court having jurisdiction, this being in addition to any other remedy to which such Holder may be entitled at law or in equity.

  
 15. Governing Law. This Agreement shall be governed by,
construed in accordance with, and enforced under, the Law of the State of New York applicable to agreements or instruments entered into and performed entirely within such State. 
  
 16. Headings. The headings in this Warrant are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. 
  
 [REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK] 
  

 - 10 - 

			
	VIMICRO INTERNATIONAL CORPORATION
		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 [SIGNATURE
PAGE TO WARRANT] 
  

 - 11 - 

 Exhibit A 
  

[FORM OF] 
  
 ELECTION TO PURCHASE SHARES 
  
 The undersigned hereby irrevocably elects to exercise the attached Warrant dated [•], 2004 (the “Warrant”; capitalized terms used but not otherwise defined herein shall have the respective
meanings ascribed to them in the Warrant) to subscribe for              Common Shares of Vimicro International Corporation (the “Company”) and hereby makes payment
of US$             therefore. The undersigned hereby requests that certificates for such shares be issued and delivered as follows: 
  

			
	ISSUE TO:	 	  

	(NAME)
	  
  

 (ADDRESS, INCLUDING ZIP CODE)

	  
  

 (SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)

  
  

			
	DELIVER TO:	 	  

	(NAME)
	  
  

 (ADDRESS, INCLUDING ZIP CODE)

  

 - 12 - 

					
	Dated:                     	 	[NAME OF HOLDER1]
			
	 	 	By:	 	  

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

	1	Name of Holder must conform in all respects to name of Holder as specified on the face of the
Warrant. 

  

 - 13 - 

 Exhibit B 
  

[FORM OF] ASSIGNMENT 
  
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto the Assignee named below all of the rights of the undersigned to subscribe
for the Common Shares of Vimicro International Corporation represented by the attached Warrant dated [•], 2004 (the “Warrant”; capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed
to them in the Warrant), with respect to the number of Common Shares set forth below: 
  

					
	 Name of Assignee

	  	Address

	  	 No. of Shares

  
  
 and does hereby irrevocably constitute and appoint
                                        
Attorney to make such transfer on the books of Vimicro International Corporation maintained for that purpose, with full power of substitution in the premises. 
  

This assignment shall be governed by, construed in accordance with, and enforced under, the Law of the State of New York applicable to agreements or instruments
entered into and performed entirely within such State 
  

					
	Dated:                     	  	[NAME OF HOLDER1]
			
	 	  	By:	 	  

	 	  	Name:	 	 
	 	  	Title:	 	 

	1	Name of Holder must conform in all respects to name of Holder as specified on the face of the Warrant. 

  

 - 14 -Shareholders Agreement

 Exhibit 4.6 
  

  
 SHAREHOLDERS AGREEMENT 
  
 among 
  
 VIMICRO INTERNATIONAL CORPORATION, 
  
 GENERAL ATLANTIC PARTNERS (BERMUDA), L.P., 
  
 GAP-W INTERNATIONAL, LLC, 
  
 GAP COINVESTMENTS III, LLC, 
  
 GAP COINVESTMENTS IV, LLC, 
  
 GAPSTAR, LLC, 
  
 GAPCO GMBH & CO. KG 
  
 and 
  
 THE OTHER SHAREHOLDERS NAMED HEREIN 
  
 Dated: October 12, 2004 
  

 Table of Contents 
  

					
	 	  	 	  	Page

	1.	  	Definitions.	  	2
			
	2.	  	Restrictions on Transfer of Shares.	  	10
			
	3.	  	Right of First Offer, Tag-Along Rights and Drag-Along Rights.	  	13
			
	4.	  	Future Issuance of Shares; Preemptive Rights.	  	20
			
	5.	  	After-Acquired Securities; Agreement to be Bound.	  	22
			
	6.	  	Corporate Governance.	  	23
			
	7.	  	Share Certificate Legend.	  	27
			
	8.	  	Miscellaneous.	  	28

  

			
	 SCHEDULES

		
	 Schedule 1
	  	 Major Investors

	 Schedule 2
	  	 Minor Shareholders

	 Schedule 3
	  	 Other Series A Investors

	 Schedule 4
	  	 Additional Series A Investors

	 Schedule 5
	  	 Shareholders not a Party to the Shareholders Agreement

	
	 EXHIBITS

		
	 Exhibit A
	  	 Restated Articles (including the Certificate of Designations)

	 Exhibit B-1
	  	 Acknowledgment and Agreement

	 Exhibit B-2
	  	 Acknowledgment and Agreement

	 Exhibit B-3
	  	 Acknowledgement and Agreement

 SHAREHOLDERS AGREEMENT 
  
 SHAREHOLDERS AGREEMENT (this “Agreement”) dated October 12, 2004, among Vimicro International
Corporation, a company incorporated and existing under the laws of the Cayman Islands (the “Company”), General Atlantic Partners (Bermuda), L.P., a Bermuda limited partnership (“GAP LP”), GAP-W International,
LLC, a Delaware limited liability company (“GAP-W”), GAP Coinvestments III, LLC, a Delaware limited partnership (“GAP Coinvestment III”), GAP Coinvestments IV, LLC, a Delaware limited liability company (“GAP
Coinvestment IV”), GapStar, LLC, a Delaware limited liability company (“GapStar”), GAPCO GmbH & Co. KG, a German limited partnership (“GmbH Coinvestment”), the shareholders listed on Schedule
1 hereto (the “Major Investors”) and the other existing shareholders listed on Schedule 2 hereto (the “Minor Shareholders”) and the shareholders listed on Schedule 3 hereto (the “Other
Series A Investors”). 
  
 WHEREAS, pursuant to the Share
Subscription Agreement, dated October 12, 2004 (the “Share Subscription Agreement”), among the Company, Vimicro (as hereinafter defined), GAP LP, GAP-W, GAP Coinvestment III, GAP Coinvestment IV, GapStar, GmbH Coinvestment
and the Other Series A Investors, the Company has agreed to issue and sell to (a) GAP LP, GAP-W, GAP Coinvestment III, GAP Coinvestment IV, GapStar and GmbH Coinvestment an aggregate of 12,517,705 Series A Convertible Preferred Shares, par
value US$0.0001 per share, of the Company (the “Series A Preferred Shares”) and (b) the Other Series A Investors an aggregate of 2,699,445 Series A Preferred Shares. 
  
 WHEREAS, on a date on or prior to the date forty-five (45) days after
the date hereof, the Company may issue and sell to the Additional Series A Investors up to an aggregate of 429,982 Series A Preferred Shares at a price per share equal to the price paid by GAP LP, GAP-W, GAP Coinvestment III, GAP Coinvestment IV,
GapStar, GmbH Coinvestment and the Other Series A Investors under the Share Subscription Agreement. Each Additional Series A Investor, if any, shall become a party to this Agreement immediately upon the completion of the purchase of any Series A
Preferred Shares under the Additional Placement (as hereinafter defined). 
  
 WHEREAS, pursuant to the Reorganization (as hereinafter defined), the Company owns 100% of the equity interest of Vimicro Corporation (“Vimicro”), a wholly-foreign owned enterprise organized and
existing under the laws of the People’s Republic of China, and the particulars of Vimicro and its Subsidiaries (as hereinafter defined) are set forth on Schedule 2 to the Share Subscription Agreement. 
  
 WHEREAS, pursuant to the transactions contemplated under the Reorganization,
the Company will issue and sell to the Subscribers (as defined in the Reorganization Agreement) up to an aggregate of 82,147,440 Ordinary Shares, subject to the terms and conditions of the Reorganization Agreement. Each Subscriber shall become a
party to this Agreement immediately upon the completion of the purchase of any Ordinary Shares under the Reorganization (including in connection with the exercise of any warrants issued thereunder). 

 WHEREAS, the parties hereto wish to restrict the transfer of the Shares (as hereinafter defined) and to
provide for, among other things, first offer, tag-along, drag-along and preemptive rights, corporate governance rights and obligations and certain other rights under certain conditions. 
  
 NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

  
 “Additional Placement” means the additional
placement by the Company to one or more Additional Series A Investors of up to an aggregate of 429,982 Series A Preferred Shares on a date not later than forty-five (45) days after the date hereof at a price per share equal to the price per
share paid by GAP LP, GAP-W, GAP Coinvestment III, GAP Coinvesment IV, GapStar, GmbH Coinvestment and Other Series A Investors under the Share Subscription Agreement. 
  
 “Additional Series A Investors” means the one or more “accredited investors” (as defined in Rule
501 under the Securities Act) selected by the Company to subscribe for Series A Preferred Shares pursuant to the Additional Placement and listed on Schedule 4 hereto. 
  
 “Additional Series A Shareholders” means the Other Series A Investors and Additional Series A Investors and
any Permitted Transferee thereof to whom Shares are transferred in accordance with Section 2.2 of this Agreement, and the term “Additional Series A Shareholder” shall mean any such Person. 
  
 “Affiliate” means, with respect to any Person, any other
Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or under common control with, the Person specified. 
  
 “Agreement” means this Agreement as the same may be amended, supplemented or modified in accordance with the terms hereof. 
  
 “Assets” means all assets, rights and privileges of any
nature and all goodwill associated therewith, including without limitation all rights in respect of Contractual Obligations, all Intellectual Property and Equipment, but excluding rights in respect of real property. 
  
 “Board of Directors” means the Board of Directors of the
Company. 
  
 “Business Day” means any day other
than a Saturday, Sunday or other day on which commercial banks in the State of New York, the Cayman Islands or the PRC are authorized or required by law or executive order to close. 
  

 2 

 “Capital Stock” means, with respect to any Person, any and all shares, interests,
participations, rights in, or other equivalents (however designated and whether voting or non-voting) of, such Person’s capital stock (including, without limitation, common stock and preferred stock) and any and all rights, warrants or options
exchangeable for or convertible into such capital stock. 
  
 “Certificate of Designations” means the Certificate of Designations with respect to the Preferred Shares to be adopted by the Company as Schedule A to the Restated Articles on or before the Closing Date in the form
attached hereto as Exhibit A. 
  
 “Code” means the United States Internal Revenue Code of 1986, as amended, or any successor statute thereto. 
  
 “Commission” means the United States Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the
Securities Act. 
  
 “Company” has the meaning set
forth in the preamble to this Agreement. 
  
 “Company
Option” has the meaning set forth in Section 3.1(b) of this Agreement. 
  
 “Company Option Period” has the meaning set forth in Section 3.1(b) of this Agreement. 
  
 “Contract Date” has the meaning set forth in Section 3.1(e) of this Agreement. 
  
 “Contractual Obligations” means, as to any Person, any
provision of any security or financial instrument issued by such Person or of any agreement, undertaking, contract, license, engagement, lease, indenture, mortgage, deed of trust, purchase order, commitment or other instrument or contractual
arrangement to which such Person is a party or by which it or any of its property is bound. 
  
 “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
  
 “Controlling Series A Shareholder” means (i) the General Atlantic Shareholders so long as the General Atlantic Shareholders, as a
group, own a majority of the outstanding Preferred Shares and (ii) if the General Atlantic Shareholders own less than a majority of the outstanding Preferred Shares, the Shareholder which, together with its Affiliates, owns the largest number
of the outstanding Preferred Shares. 
  
 “Copyrights” means any copyright registrations and applications for registration thereof in the United States, the PRC or any other jurisdiction, and any non-registered copyrights. 
  

 3 

 “Drag-Along Sellers” has the meaning set forth in Section 3.1(g). 
  
 “Equipment” means all the plant and machinery, tools and
equipment, vehicles and office furniture, computer equipment and accessories and other tangible Assets. 
  
 “Excess New Securities” has the meaning set forth in Section 4.2(a) of this Agreement. 
  
 “Excess Offered Securities” has the meaning set forth in
Section 3.1(c) of this Agreement. 
  
 “Exchange
Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. 
  
 “Exempt Issuances” has the meaning set forth in Section 4.1 of this Agreement. 
  
 “Fair Value” has the meaning set forth in
Section 3.2(b) of this Agreement. 
  
 “Five Percent
Shareholder” means any Person who owns, of record or beneficially, five percent or more of the outstanding voting power of any other Person entitled to vote in the election of directors of such other Person. 
  
 “Family Members” has the meaning set forth in
Section 2.2 of this Agreement. 
  
 “GAP Coinvestment
III” has the meaning set forth in the preamble to this Agreement. 
  
 “GAP Coinvestment IV” has the meaning set forth in the preamble to this Agreement. 
  
 “GAP LLC” means General Atlantic Partners, LLC, a Delaware limited liability company. 
  
 “GAP LP” has the meaning set forth in the preamble to this
Agreement. 
  
 “GAP-W” has the meaning set forth
in the preamble to this Agreement. 
  
 “GapStar”
has the meaning set forth in the preamble to this Agreement. 
  
 “General Atlantic Shareholders” means GAP LP, GAP-W, GAP Coinvestment III, GAP Coinvestment IV, GapStar, GmbH Coinvestment, any Subsequent General Atlantic Purchaser and any Permitted Transferee thereof to whom Shares
are transferred in accordance with Section 2.2 of this Agreement, and the term “General Atlantic Shareholder” shall mean any such Person. 
  

 4 

 “GmbH Coinvestment” has the meaning set forth in the preamble to this Agreement.

  
 “GmbH Management” means GAPCO Management
GmbH, a German company with limited liability and the general partner of GmbH Coinvestment, and any successor to such entity. 
  
 “Governmental Authority” means the government of any nation, state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

  
 “Intellectual Property” means, collectively,
Copyrights, Patents, Trade Secrets, Trademarks, Internet Assets, Software and other proprietary rights. 
  
 “Internet Assets” means any Internet domain names and other computer user identifiers and any rights in and to sites on the worldwide
web, including rights in and to any text, graphics, audio and video files and html or other code incorporated in such sites. 
  
 “Involuntary Transfer” means any transfer, proceeding or action by or in which a Shareholder shall be deprived or divested of any right,
title or interest in or to any of the Shares, including, without limitation, (i) any seizure under levy of attachment or execution, (ii) any transfer in connection with bankruptcy (whether pursuant to the filing of a voluntary or an
involuntary petition under the United States Bankruptcy Code of 1978, as amended, or similar laws or regulations of any jurisdiction) or other court proceeding to a debtor in possession, trustee in bankruptcy or receiver or other officer or agency,
(iii) any transfer to a state or to a public officer or agency pursuant to any statute pertaining to escheat or abandoned property and (iv) any transfer pursuant to a divorce or separation agreement or a final decree of a court in a
divorce action. 
  
 “Involuntary Transferee” has
the meaning set forth in Section 3.2(a) of this Agreement. 
  
 “IPO Effectiveness Date” means the date upon which the Company closes its Qualified Initial Public Offering. 
  
 “Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any kind or nature whatsoever. 
  
 “Liquidation” shall mean the voluntary or involuntary liquidation under applicable bankruptcy or reorganization legislation, or the
dissolution or winding up of the Company. 
  

 5 

 “Lock-up Agreement” has the meaning set forth in Section 2.5 of this Agreement.

  
 “Lock-up Period” has the meaning set forth in
Section 2.5 of this Agreement. 
  
 “Major
Investors” has the meaning set forth in the preamble to this Agreement. 
  
 “Major Shareholders” means the Major Investors and any Permitted Transferee thereof to whom Shares are transferred in accordance with Section 2.2 of this Agreement, and the term “Major
Shareholder” means any such Person. 
  
 “Minor
Shareholders” has the meaning set forth in the preamble to this Agreement. 
  
 “New Issuance Notice” has the meaning set forth in Section 4.1 of this Agreement. 
  
 “New Securities” has the meaning set forth in Section 4.1 of this Agreement. 
  
 “Offer Price” has the meaning set forth in
Section 3.1(a) of this Agreement. 
  
 “Offered
Securities” has the meaning set forth in Section 3.1(a) of this Agreement. 
  
 “Offering Notice” has the meaning set forth in Section 3.1(a) of this Agreement. 
  
 “Ordinary Shares” means the Ordinary Shares, par value US$0.0001 per share, of the Company or any other capital stock of the Company into
which such stock is reclassified or reconstituted and any other ordinary shares of the Company. 
  
 “Ordinary Share Equivalents” means any security or obligation which is by its terms, directly or indirectly, convertible into or
exchangeable or exercisable for Ordinary Shares, including, without limitation the Preferred Shares, and any option, warrant or other subscription or purchase right with respect to Ordinary Shares or any Ordinary Share Equivalent. 
  
 “Other Shareholder” means (a) any transferee of a
General Atlantic Shareholder, an Additional Series A Shareholder, a Major Shareholder or a Minor Shareholder (in each case, other than a Permitted Transferee thereof), who has agreed to be bound by the terms and conditions of this Agreement in
accordance with Section 2.4 or to whom Shares have been transferred in accordance with Section 3.1(e) and (b) any Person other than a General Atlantic Shareholder, an Additional Series A Shareholder, a Major Shareholder or a Minor
Shareholder who has agreed to be bound by the terms and conditions of this Agreement in accordance with Section 5.2(a). 
  

 6 

 “Patents” means any patents and patent applications issued by or made in the PRC, the
United States or any other jurisdiction, including any divisions, continuations, continuations-in-part, substitutions or reissues thereof, whether or not patents are issued on such applications and whether or not such applications are modified,
withdrawn or resubmitted. 
  
 “Permitted
Transferee” has the meaning set forth in Section 2.2 of this Agreement. 
  
 “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Authority
or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. 
  
 “PRC” means the People’s Republic of China, excluding the Hong Kong Special Administrative Region. 
  
 “Preemptive Rightholder(s)” has the meaning set forth in
Section 4.1 of this Agreement. 
  
 “Preferred
Shares” means the Series A Preferred Shares. 
  
 “Proportionate Percentage” has the meaning set forth in Section 4.2(a) of this Agreement. 
  
 “Proposed Price” has the meaning set forth in Section 4.1 of this Agreement. 
  
 “Qualified Initial Public Offering” means the first bona
fide firm commitment underwritten public offering of Ordinary Shares resulting in (i) net proceeds (after underwriting discounts and commissions) to the Company of at least US$30 million and (ii) a public offering price per share (prior to
underwriter commissions and expenses) that is not less than US$1.60, and in which the underwriting is lead managed by an internationally recognized investment banking firm and the Ordinary Shares are listed on The Nasdaq Stock Market, Inc. or other
internationally recognized stock exchange outside of the PRC. 
  
 “Related Party” means (i) any shareholder of the Company or any Subsidiary, (ii) any director of the Company or any Subsidiary, (iii) any officer of the Company or any Subsidiary, (iv) any Relative of a
Five Percent Shareholder, director or officer of the Company or any Subsidiary and (v) any Person in which any director or officer of the Company or any Subsidiary, or in which any Five Percent Shareholder, has any interest, other than a
passive shareholding of less than 1% in a publicly listed company. 
  

 7 

 “Relative” of a natural person means any spouse, parent, child, grandparent, grandchild,
sibling, uncle, aunt, nephew, niece or great-grandparent of such person. 
  
 “Reorganization” means the reorganization of the Company and Vimicro pursuant to the transactions contemplated under the Reorganization Agreement. 
  
 “Reorganization Agreement” means the Reorganization and
Subscription Agreement dated as of March 17, 2004 by and among the Company and the other parties named therein. 
  
 “Requirement of Law” means, as to any Person, any law, statute, treaty, rule, regulation, right, privilege, qualification, license or
franchise or determination of an arbitrator or a court or other governmental authority or stock exchange, in each case applicable or binding upon such Person or any of its property or to which such Person or any of its property is subject or
pertaining to any or all of the transactions contemplated or referred to herein. 
  
 “Restated Articles” means, collectively, the Amended and Restated Memorandum and Articles of Association of the Company (which, for the avoidance of doubt, shall include the Certificate of
Designations) as in effect on the date hereof, copies of which are attached hereto as Exhibit A. 
  
 “Rightholder(s)” has the respective meanings set forth in Sections 3.1(c) and 3.2(a) of this Agreement. 
  
 “Rightholder Option Period” has the meaning set forth in
Section 3.1(c) of this Agreement. 
  
 “Sale
Transaction” shall mean (a) (i) the merger or consolidation of the Company into or with one or more Persons, (ii) the merger or consolidation of one or more Persons into or with the Company or (iii) a tender offer or
other business combination if, in the case of (i), (ii) or (iii), the shareholders of the Company prior to such merger or consolidation do not retain at least a majority of the voting power of the surviving Person or (b) the voluntary
sale, conveyance, exchange or transfer to another Person of (i) the voting Capital Stock of the Company if, after such sale, conveyance, exchange or transfer, the shareholders of the Company prior to such sale, conveyance, exchange or transfer
do not retain at least a majority of the voting power of the Company or (ii) all or substantially all of the assets of the Company. 
  
 “Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated
thereunder. 
  
 “Selling Shareholder” has the
meaning set forth in Section 3.1(a) of this Agreement. 
  

 8 

 “Series A Director” has the meaning set forth in Section 6.3(b) of this Agreement.

  
 “Series A Preferred Shares” has the
meaning set forth in the recitals to this Agreement. 
  
 “Shanghai Micro” means Shanghai Pudong Micro-electronics Development Corporation. 
  
 “Share Option Plan” means the employee share option plan of the Company pursuant to which restricted stock and options to purchase
Ordinary Shares are reserved and available for grant to officers, directors and employees of the Company or any of its wholly-owned Subsidiaries (which shall include for the purposes of this definition, Vimicro Electronics International Limited).

  
 “Share Subscription Agreement” has the
meaning set forth in the recitals to this Agreement. 
  
 “Shareholders” means (a) the General Atlantic Shareholders, the Additional Series A Shareholders, the Major Shareholders, the Minor Shareholders, the Other Shareholders and any transferee thereof who has agreed to be
bound by the terms and conditions of this Agreement in accordance with Section 2.4 and (b) any Person who has agreed to be bound by the terms and conditions of this Agreement in accordance with Section 5.2(a), and the term
“Shareholder” shall mean any such Person. 
  
 “Shareholders Meeting” has the meaning set forth in Section 6.1 of this Agreement. 
  
 “Shares” means, with respect to each Shareholder, Ordinary Shares and Preferred Shares, whether now owned or hereafter acquired, and any
other Ordinary Share Equivalents owned thereby; provided, however, for the purposes of any computation of the number of Shares pursuant to Sections 2, 3, 4.1, 4.2, 6 and 8.4, all outstanding Ordinary Share Equivalents shall be deemed
converted, exercised or exchanged as applicable and the Ordinary Shares issuable upon such conversion, exercise or exchange shall be deemed outstanding, whether or not such conversion, exercise or exchange has actually been effected. 
  
 “Shenzhen HIT” means Shenzhen HIT Information Technology.

  
 “Software” means any computer software
programs, source code, object code, data and documentation, including, without limitation, any computer software programs that incorporate and run the Company’s or any Subsidiaries’ pricing models, formulae and algorithms. 
  
 “Subject Purchaser” has the meaning set forth in
Section 4.1 of this Agreement. 
  

 9 

 “Subsequent General Atlantic Purchaser” means any Affiliate of GAP LLC that, after the
date hereof, acquires Shares. 
  
 “Subsidiaries”
means, as of the relevant date of determination, (a) with respect to any Person, any other Person of which more than 50% of the voting power of the outstanding voting securities or more than 50% of the outstanding economic equity interest or
ownership is held, directly or indirectly, by such Person and (b) with respect to Company and Vimicro, any other Person of which actual or de facto control is held, directly or indirectly, by the Company or Vimicro. Unless otherwise qualified,
or the context otherwise requires, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company and/or Vimicro. 
  
 “Subsidiary Equivalents” means any security or obligation
which is by its terms convertible or exchangeable into shares of Capital Stock of any Subsidiary or another Subsidiary Equivalent, and any option, warrant or other subscription or purchase right with respect to such Capital Stock. 
  
 “Tag-Along Rightholder” has the meaning set forth in
Section 3.1(f)(i) of this Agreement. 
  
 “Third Party
Purchaser” has the meaning set forth in Section 3.1(a) of this Agreement. 
  
 “Trade Secrets” means any trade secrets, research records, processes, procedures, manufacturing formulae, technical know-how, technology, blue prints, designs, plans, inventions (whether patentable
and whether reduced to practice), invention disclosures and improvements thereto, in each case, the value of which is contingent upon the maintenance of confidentiality thereof. 
  
 “Trademarks” means any trademarks, service marks, trade names or product or service identifiers, whether
registered or unregistered, and all registrations and applications for registration thereof. 
  
 “Transfer” has the meaning set forth in Section 2.1 of this Agreement. 
  
 “Transferred Shares” has the meaning set forth in Section 3.2(a) of this Agreement. 
  
 “Vimicro” has the meaning set forth in the recitals to this
Agreement. 
  
 “Written Consent” has the meaning
set forth in Section 6.1 of this Agreement. 
  
 2.
Restrictions on Transfer of Shares. 
  
 2.1 Limitation
on Transfer. No Shareholder shall sell, give, assign, hypothecate, pledge, encumber, grant a security interest in or otherwise dispose of (whether by operation of law or otherwise) (each a “transfer”) any Shares or any right,
title or interest therein or thereto, except in accordance with the provisions of this Agreement, including, without limitation, Section 2.4. Any attempt to transfer any Shares or any rights thereunder in violation of the preceding sentence
shall be null and void ab initio. Any such transfer not made in accordance with this Agreement shall not be recorded in the books of the Company and shall not be recognized by the Company. 
  

 10 

 2.2 Permitted Transfers. Notwithstanding anything to the contrary contained in this Agreement,
but subject to Sections 2.1, 2.3 and 2.4, at any time, (a) each of the Additional Series A Shareholders and the Major Shareholders who is an individual may transfer all or a portion of his or its Shares to or among (i) a member of
such Additional Series A Shareholder’s or Major Shareholder’s immediate family, which shall include his spouse, parents, siblings, children or grandchildren (“Family Members”) or (ii) a trust, corporation, partnership
or limited liability company, all of the beneficial interests in which shall be held by such Additional Series A Shareholder or Major Shareholder or one or more Family Members of such Additional Series A Shareholder or Major Shareholder;
provided, however, that during the period that any such trust, corporation, partnership or limited liability company holds any right, title or interest in any Shares, no Person other than such Additional Series A Shareholder or Major
Shareholder or one or more Family Members of such Additional Series A Shareholder or Major Shareholder may be or may become beneficiaries, shareholders, limited or general partners or members thereof and (b) (i) each of the General
Atlantic Shareholders and Additional Series A Shareholders who are not individuals may transfer all or a portion of its Shares to any of its Affiliates and (ii) GapStar may pledge and grant a security interest in all or any portion of its
Shares to a financial institution to secure certain obligations to such financial institution (the Persons referred to in the preceding clauses (a) and (b) are each referred to hereinafter as a “Permitted Transferee”). A
Permitted Transferee of Shares pursuant to this Section 2.2 may transfer its Shares pursuant to this Section 2.2 only to the transferor Shareholder or to a Person that is a Permitted Transferee of such transferor Shareholder. No
Shareholder shall avoid the provisions of this Agreement by making one or more transfers to one or more Permitted Transferees and then disposing of all or any portion of such party’s interest in any such Permitted Transferee, and any transfer
or attempted transfer in violation of this covenant shall be null and void ab initio. 
  
 2.3 Permitted Transfer Procedures. If any Shareholder wishes to transfer Shares (other than a pledge by GapStar) to a Permitted Transferee under Section 2.2 such Shareholder shall give notice to the
Company of its intention to make such a transfer not less than ten (10) days prior to effecting such transfer, which notice shall state the name and address of each Permitted Transferee to whom such transfer is proposed, the relationship of
such Permitted Transferee to such Shareholder, and the number of Shares proposed to be transferred to such Permitted Transferee. 
  
 2.4 Transfers in Compliance with Law; Substitution of Transferee. Notwithstanding any other provision of this Agreement, no transfer may be made
pursuant to this Section 2 or Section 3 unless (a) the transferee (other than a financial institution in the case of a pledge by GapStar) has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to an
instrument substantially in the form attached hereto as Exhibit B-1, (b) the transfer complies in all respects with the applicable provisions of this Agreement and (c) the transfer complies in all respects with applicable foreign,
federal and state securities laws, including, without limitation, the Securities Act. If requested by the Company, an opinion of counsel to such transferring Shareholder shall be supplied to the Company, at such transferring Shareholder’s
expense, to the effect that such transfer complies with the applicable federal and state securities laws. Upon becoming a party to this Agreement, (i) the Permitted Transferee of a Major Shareholder shall be substituted for, and shall enjoy the
same rights and be subject to the same obligations as, the transferring Major Shareholder hereunder with respect to the Shares transferred to such Permitted Transferee, (ii) the Permitted Transferee of a General Atlantic Shareholder shall be
substituted for, and shall enjoy the same rights and be subject to the same obligations as, a General Atlantic Shareholder hereunder with respect to the Shares transferred to such Permitted Transferee, (iii) the Permitted Transferee of an
Additional Series A Shareholder shall be substituted for, and shall enjoy the same rights and be subject to the same obligations as, the transferring Additional Series A Shareholder hereunder with respect to the Shares transferred to such Permitted
Transferee, (iv) an Other Shareholder shall be subject to the same obligations as, but none of the rights of, the transferring Major Shareholder, Minor Shareholder, Additional Series A Shareholder or General Atlantic Shareholder, as the case
may be, and (v) the transferee of an Other Shareholder shall be substituted for, and shall be subject to the same obligations as, the transferring Other Shareholder hereunder with respect to the Shares transferred to such transferee.

  

 11 

 2.5 Market Stand-off. If reasonably requested by the lead underwriter of a Qualified Initial
Public Offering, each Shareholder shall enter into a lock-up agreement (the “Lock-up Agreement”), pursuant to which such Shareholder shall agree to not, without the prior written consent of such lead underwriter, for a period of not
less than one hundred and eighty (180) days and not more than three hundred and sixty five (365) days, in each case beginning from the date of the Qualified Initial Public Offering (the “Lock-up Period”) (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Ordinary Shares
or any securities convertible into or exercisable or exchangeable for Ordinary Shares held immediately prior to the effectiveness of a registration statement governing such offering or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of ownership of the Ordinary Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Ordinary Shares or other
securities, in cash or otherwise; provided that, nothing in this Section 2.5 shall prevent (i) a General Atlantic Shareholder from Transferring any Shares to an Affiliate so long as such Affiliate enters into an agreement with the lead
underwriter substantially in the form of the Lock-up Agreement and (ii) GapStar from pledging and granting a security interest in all or any portion of its Shares to a financial institution to secure certain obligations to such financial
institution. The foregoing provisions of this Section 2.5 shall (a) not apply to the sale of any Ordinary Shares to the underwriters pursuant to an underwriting agreement and as part of the Qualified Initial Public Offering and
(b) only apply to the Shareholders if each officer and director of the Company and each shareholder of the Company holding Ordinary Shares representing a number of Ordinary Shares equal to or greater than 2.5% of the Ordinary Shares outstanding
immediately prior to the Qualified Initial Public Offering (on a non-diluted basis but assuming the conversion of all the outstanding Series A Preferred Shares) enter into an identical Lock-up Agreement. 
  

 12 

 3. Right of First Offer, Tag-Along Rights and Drag-Along Rights. 
  
 3.1 Proposed Voluntary Transfers. 
  
 (a) Offering Notice. Subject to Section 2, if any Shareholder
(a “Selling Shareholder”) wishes to transfer all or any portion of its or his Shares to any Person (other than to a Permitted Transferee) (a “Third Party Purchaser”), such Selling Shareholder shall offer such Shares
first to the Company, by sending written notice (an “Offering Notice”) to the Company, which shall state (a) the number of Shares proposed to be transferred (the “Offered Securities”); (b) the proposed
purchase price per Share for the Offered Securities (the “Offer Price”); and (c) the terms and conditions of such sale. Upon delivery of the Offering Notice, such offer shall be irrevocable unless and until the rights of first
offer provided for herein shall have been waived or shall have expired. The Company shall promptly deliver a copy of the Offering Notice to each of the General Atlantic Shareholders and the Major Shareholders. 
  
 (b) Company Option; Exercise. For a period of thirty (30) days
after the giving of the Offering Notice pursuant to Section 3.1(a) (the “Company Option Period”), the Company shall have the right (the “Company Option”) but not the obligation to purchase any or all of the
Offered Securities at a purchase price equal to the Offer Price and upon the terms and conditions set forth in the Offering Notice. The right of the Company to purchase any or all of the Offered Securities under this Section 3.1(b) shall be
exercisable by delivering written notice of the exercise thereof, prior to the expiration of the Company Option Period, to the Selling Shareholder, with a copy to the General Atlantic Shareholders, which notice shall state the number of Offered
Securities proposed to be purchased by the Company. The failure of the Company to respond within the Company Option Period shall be deemed to be a waiver of the Company Option, provided that the Company may waive its rights under this
Section 3.1(b) prior to the expiration of the Company Option Period by giving written notice to the Selling Shareholder, with a copy to the General Atlantic Shareholders. 
  
 (c) Rightholder Option; Exercise. 
  
 (i) If the Company does not elect to purchase all of the Offered Securities prior to the expiration of the Company Option
Period, then for a period of thirty (30) days after the earlier to occur of (a) the expiration of the Company Option Period and (b) the date upon which the Selling Shareholder shall have received written notice from the Company of its
exercise of the Company Option pursuant to Section 3.1(b) or its waiver thereof (the “Rightholder Option Period”), each of the General Atlantic Shareholders and the Major Shareholders (who, in each case, is not a Selling
Shareholder) (for the purpose of Section 3.1, each, a “Rightholder” and collectively, the “Rightholders”) shall have the right to purchase all, but not less than all, of the remaining Offered Securities at a purchase
price equal to the Offer Price and upon the terms and conditions set forth in the Offering Notice. Each Rightholder shall have the right to purchase that percentage of the Offered Securities determined by dividing (i) the total number of Shares
then owned by such Rightholder by (ii) the total number of Shares then owned by all such Rightholders. If any Rightholder does not fully subscribe for the number or amount of Offered Securities it is entitled to purchase, then each other
participating Rightholder shall have the right to purchase that percentage of the Offered Securities not so subscribed for (for the purposes of this Section 3.1(c), the “Excess Offered Securities”) determined by dividing
(x) the total number of Shares then owned by such fully participating Rightholder by (y) the total number of Shares then owned by all fully participating Rightholders who elected to purchase Offered Securities. The procedure described in
the preceding sentence shall be repeated until there are no remaining Excess Offered Securities. If the Company and/or the Rightholders do not purchase all of the Offered Securities pursuant to Section 3.1(b) and/or this Section 3.1(c),
then the Selling Shareholder may, subject to Section 3.1(f), sell the Offered Securities to a Third Party Purchaser in accordance with Section 3.1(e). Any of the General Atlantic Shareholders may assign to any of its Affiliates all or any
portion of its rights as a Rightholder pursuant to this Section 3(c)(i). 
  

 13 

 (ii) The right of each Rightholder to purchase all of the remaining Offered Securities under subsection
(i) above shall be exercisable by delivering written notice of the exercise thereof, prior to the expiration of the Rightholder Option Period, to the Selling Shareholder with a copy to the Company. Each such notice shall state (a) the
number of Shares held by such Rightholder and (b) the number of Shares that such Rightholder is willing to purchase pursuant to this Section 3.1(c). The failure of a Rightholder to respond within the Rightholder Option Period to the
Selling Shareholder shall be deemed to be a waiver of such Rightholder’s rights under subsection (i) above, provided that each Rightholder may waive its rights under subsection (ii) above prior to the expiration of the
Rightholder Option Period by giving written notice to the Selling Shareholder, with a copy to the Company. 
  
 (d) Closing. The closing of the purchases of Offered Securities subscribed for by the Company under Section 3.1(b) and/or the Rightholders
under Section 3.1(c) shall be held at the executive office of the Company at 11:00 a.m., local time, on the 75th day after the giving of the Offering Notice pursuant to Section 3.1(a) or at such other time and place as the parties to
the transaction may agree. At such closing, the Selling Shareholder shall deliver certificates representing the Offered Securities, duly endorsed for transfer and accompanied by all requisite transfer taxes, if any, and such Offered Securities shall
be free and clear of any Liens (other than those arising hereunder and those attributable to actions by the purchasers thereof) and the Selling Shareholder shall so represent and warrant, and shall further represent and warrant that it is the sole
beneficial and record owner of such Offered Securities. The Company and/or each Rightholder, as the case may be, purchasing Offered Securities shall deliver at the closing payment in full in immediately available funds for the Offered Securities
purchased by it or him. At such closing, all of the parties to the transaction shall execute such additional documents as are otherwise necessary or appropriate. 
  

 14 

 (e) Sale to a Third Party Purchaser. Unless the Company and/or the Rightholders elect to purchase
all, but not less than all, of the Offered Securities under Sections 3.1(b) and 3.1(c), the Selling Shareholder may, subject to Section 3.1(f), sell all, but not less than all, the Offered Securities to a Third Party Purchaser on the terms and
conditions set forth in the Offering Notice; provided, however, that such sale is bona fide and made pursuant to a contract entered into within sixty (60) days after the earlier to occur of (i) the waiver by the Company and
all of the Rightholders of their options to purchase the Offered Securities and (ii) the expiration of the Rightholder Option Period (the “Contract Date”); and provided further, that such sale shall not be
consummated unless and until (x) such Third Party Purchaser shall represent in writing to the Company and each Rightholder that it is aware of the rights and obligations of the Company and the Shareholders contained in this Agreement and
(y) prior to the purchase by such Third Party Purchaser of any of such Offered Securities, such Third Party Purchaser shall become a party to this Agreement and shall agree to be bound by the terms and conditions hereof in accordance with
Section 2.4 hereof. If such sale is not consummated within thirty (30) days after the Contract Date for any reason, then the restrictions provided for herein shall again become effective, and no transfer of such Offered Securities may be
made thereafter by the Selling Shareholder without again offering the same to the Company and the Rightholders in accordance with this Section 3.1. 
  
 (f) Tag-Along Rights. 
  
 (i) If a Shareholder is transferring Offered Securities to a Third Party Purchaser pursuant to Section 3.1(e), then each of the General Atlantic
Shareholders, the Additional Series A Shareholders and the Major Shareholders (other than the Selling Shareholder) (each, a “Tag-Along Rightholder”) shall have the right to sell to such Third Party Purchaser, upon the terms set
forth in the Offering Notice, that number of Shares held by such Tag-Along Rightholder equal to that percentage of the Offered Securities determined by dividing (i) the total number of Shares then owned by such Tag-Along Rightholder by
(ii) the sum of (x) the total number of Shares then owned by all such Tag-Along Rightholders exercising their rights pursuant to this Section 3.1(f) and (y) the total number of Shares then owned by the Selling Shareholder. The
Selling Shareholder and the Tag-Along Rightholder(s) exercising their rights pursuant to this Section 3.1(f) shall effect the sale of the Offered Securities and such Tag-Along Rightholder(s) shall sell the number of Offered Securities required
to be sold by such Tag-Along Rightholder(s) pursuant to this Section 3.1(f)(i), and the number of Offered Securities to be sold to such Third Party Purchaser by the Selling Shareholder shall be reduced accordingly. 
  

 15 

 (ii) The Selling Shareholder shall give notice to each Tag-Along Rightholder of each proposed sale by it
of Offered Securities which gives rise to the rights of the Tag-Along Rightholders set forth in this Section 3.1(f), at least fifteen (15) days prior to the proposed consummation of such sale, setting forth the name of such Selling
Shareholder, the number of Offered Securities, the name and address of the proposed Third Party Purchaser, the proposed amount and form of consideration and any other material terms and conditions of payment offered by such Third Party Purchaser,
the percentage of Shares that such Tag-Along Rightholder may sell to such Third Party Purchaser (determined in accordance with Section 3.1(f)(i)), and a representation that such Third Party Purchaser has been informed of the
“tag-along” rights provided for in this Section 3.1(f) and has agreed to purchase Shares in accordance with the terms hereof. The tag-along rights provided by this Section 3.1(f) must be exercised by any Tag-Along Rightholder
wishing to sell its Shares within ten (10) days following receipt of the notice required by the preceding sentence, by delivery of a written notice to the Selling Shareholder indicating such Tag-Along Rightholder’s wish to exercise its
rights and specifying the number of Shares (up to the maximum number of Shares owned by such Tag-Along Rightholder required to be purchased by such Third Party Purchaser) it wishes to sell, provided that any Tag-Along Rightholder may waive
its rights under this Section 3.1(f) prior to the expiration of such 10-day period by giving written notice to the Selling Shareholder, with a copy to the Company. The failure of a Tag-Along Rightholder to respond within such 10-day period
shall be deemed to be a waiver of such Tag-Along Rightholder’s rights under this Section 3.1(f). If a Third Party Purchaser fails to purchase Shares from any Tag-Along Rightholder that has properly exercised its tag-along rights pursuant
to this Section 3.1(f)(ii), then the Selling Shareholder shall not be permitted to consummate the proposed sale of the Offered Securities, and any such attempted sale shall be null and void ab initio. 
  
 (iii) The closing of any sale of Shares under this Section 3.1(f) shall
take place at the same time and place as the closing of the sale of Shares by the Selling Shareholder to the Third Party Purchaser pursuant to Section 3.1(e) or at such other time and place as the parties to the transaction may agree. At such
closing, if required by the definitive agreements governing such sale, the Tag-Along Rightholder shall deliver certificates representing the Shares being sold, duly endorsed for transfer, and such Shares shall be free and clear of any Liens (other
than those arising hereunder and those attributable to actions by the Third Party Purchaser) and the Tag-Along Rightholder shall so represent and warrant, and shall further represent and warrant that it is the sole beneficial and record owner of
such Shares. At the closing, the Third Party Purchaser or a paying agent (if so provided in the definitive agreements governing such sale) shall deliver to the Tag-Along Rightholder payment in full in immediately available funds for the Shares
purchased by the Third Party Purchaser. Notwithstanding anything to the contrary, none of the Tag-Along Rightholders shall be obligated to make any representations, warranties, covenants or indemnities with respect to the business of the Company or
any Subsidiary thereof in any document delivered in connection with such transfer. The consideration paid to the Tag-Along Rightholder shall be in the same form, proportion (if the consideration is a combination of both cash and securities) and
amount per Share and have the same rights as the consideration paid by the Third Party Purchaser to the Selling Shareholder, unless such sale of Shares is pursuant to a Sale Transaction, in which case, (A) the consideration paid with respect to
any Preferred Shares shall be in the form and amount per Share determined and calculated based upon the rights and preferences of the Preferred Shares in the event of a Sale Transaction as set forth in the Restated Articles, and nothing in this
Agreement shall in any way limit or derogate from the rights and preferences of the Preferred Shares in connection with a Sale Transaction and (B) as a result of rights and preferences of the Preferred Shares in the event of a Sale Transaction
as set forth in the Restated Articles, the consideration paid with respect to the Preferred Shares may have rights superior to the rights of the consideration paid by the Third Party Purchaser with respect to other Capital Stock of the Company.

  

 16 

 (g) Drag-Along Rights. 
  
 (i) In the event that (x) the Company receives a bona fide written offer from a Person to consummate a Sale
Transaction (the “Drag Transaction”) and (y) such Drag Transaction is approved by both (A) a resolution or written consent of the holders of a majority of the Ordinary Shares and (B) a resolution or written consent of
the holders of a majority of the Series A Preferred Shares, then the Company shall send written notice to the Shareholders (the “Drag-Along Sellers”) notifying them they will be required to sell all (but not less than all) of
their Shares in such Drag Transaction on the terms and conditions thereof. Each Drag-Along Seller shall be obligated to (i) sell all of its Shares in the Drag Transaction on the terms and conditions thereof and (ii) otherwise take all
necessary action to cause the consummation of such Drag Transaction, including voting its Shares in favor of such Drag Transaction at any regular or special meeting of the shareholders of the Company or in any written consent in lieu of such meeting
and not exercising any appraisal or dissenting rights in connection therewith, and executing documents that are reasonable and appropriate in connection with the consummation of the Drag Transaction as may reasonably be requested by the Company.

  
 (ii) At the closing of the Drag Transaction, (x) if
required by the definitive agreements governing such Drag Transaction, the Shareholders shall deliver certificates representing the Shares being sold, duly endorsed for transfer, and such Shares shall be free and clear of any Liens (other than those
arising hereunder and those attributable to actions by the purchasers thereof) and the Shareholders shall so represent and warrant, and shall further represent and warrant that they are the sole beneficial and record owner of such Shares,
(y) the purchaser in such Drag Transaction or a paying agent (if so provided in the definitive agreements governing such Drag Transaction) shall deliver to the Shareholders the consideration for the Shares purchased by it and (z) the
parties to the Drag Transaction shall execute such additional documents as are otherwise reasonably necessary or appropriate; provided, however, that, notwithstanding anything to the contrary in this Agreement, none of the Shareholders
shall be obligated to make any representations, warranties, covenants or indemnities with respect to the business of the Company or any Subsidiary thereof in any document delivered in connection with such Drag Transaction, except that to the extent
that the purchaser in such Drag Transaction requires, as a condition to such Drag Transaction, that a portion of the purchase price paid in such Drag Transaction be placed in escrow to secure the Company’s or the Shareholder’s obligations
arising from a breach of its representations and warranties in the definitive agreement governing such Drag Transaction, the Shareholders shall participate in such escrow on a pro rata basis calculated based upon the amount of the purchase price
paid to each such Shareholder. 
  

 17 

 (iii) Notwithstanding anything in this Section 3.3(g) or anything to the contrary set forth in this
Agreement, the form and amount of consideration payable with respect to the Preferred Shares in any Drag Transaction shall be determined and calculated based upon the rights and preferences of the Preferred Shares as set forth in the Restated
Articles and nothing in this Agreement shall in any way limit or derogate from the rights and preferences of the Preferred Shares in connection with a Sale Transaction. 
  
 3.2 Involuntary Transfers. 
  

(a) Rights of First Offer upon Involuntary Transfer. If an Involuntary Transfer of any Shares (the “Transferred Shares”) owned
by any Shareholder shall occur, then the Company and the General Atlantic Shareholders (unless such Shareholder is the Shareholder transferring the Transferred Shares) (for the purpose of Section 3.2, each, a “Rightholder” and
collectively, the “Rightholders”) shall have the same rights as specified in Sections 3.1(b) and 3.1(c), respectively, with respect to such Transferred Shares as if the Involuntary Transfer had been a proposed voluntary transfer by
a Selling Shareholder and shall be governed by Section 3.1 except that (i) the time periods shall run from the date of receipt by the Company of actual notice of the Involuntary Transfer (and the Company shall immediately give notice to
the Rightholders of the date of receipt of such notice), (ii) such rights shall be exercised by notice to the transferee of such Transferred Shares (the “Involuntary Transferee”) rather than to the Shareholder who suffered or
will suffer the Involuntary Transfer and (iii) the purchase price per Transferred Share shall be agreed upon by the Involuntary Transferee and the Company and/or the purchasing Rightholders purchasing a majority of the Transferred Shares, as
the case may be; provided, however, that if such parties fail to agree as to such purchase price, the purchase price shall be the Fair Value thereof as determined in accordance with Section 3.2(b). 
  
 (b) Fair Value. If the parties fail to agree upon the purchase price
of the Transferred Shares in accordance with Section 3.2(a) hereof, then the Company or the Rightholders, as the case may be, shall purchase the Transferred Shares at a purchase price equal to the Fair Value thereof. The Fair Value of the
Transferred Shares shall be determined by a panel of three independent appraisers, which shall be internationally recognized investment banking firms or internationally recognized experts experienced in the valuation of corporations engaged in the
business conducted by the Company. Within five (5) Business Days after the date the applicable parties determine that they cannot agree as to the purchase price, the Involuntary Transferee and the Board of Directors (in the case of a purchase
by the Company), or the purchasing Rightholders purchasing a majority of the Transferred Shares being purchased by the purchasing Rightholders (if the Company is not purchasing any Transferred Shares), or the Board of Directors and such purchasing
Rightholders jointly (in the case of a purchase by the Company and Rightholders), as the case may be, shall each designate one such appraiser that is willing and able to conduct such determination. If either the Involuntary Transferee or the Board
of Directors or the purchasing Rightholders or both, as the case may be, fails to make such designation within such period, then the other party that has made the designation shall have the right to make the designation on its behalf. The two
appraisers designated shall, within a period of five (5) Business Days after the designation of the second appraiser, designate a mutually acceptable third appraiser. The three appraisers shall conduct their determination as promptly as
practicable, and the Fair Value of the Transferred Shares shall be the average of the determination of the two appraisers that are closer to each other than to the determination of the third appraiser, which third determination shall be discarded;
provided, however, that if the determination of two appraisers are equally close to the determination of the third appraiser, then the Fair Value of the Transferred Shares shall be the average of the determination of all three
appraisers. Such determination shall be final and binding on the Involuntary Transferee, the Company and the Rightholders. The Involuntary Transferee shall be responsible for the fees and expenses of the appraiser designated by or on behalf of it,
and the Company or the purchasing Rightholders (if both the Company and the purchasing Rightholders), or the purchasing Rightholders (if the Company is not purchasing any Transferred Shares) for the fees and expenses of the appraiser designated by
or on behalf of the Board of Directors or the purchasing Rightholders (if the Company is not purchasing any Transferred Shares), as the case may be. The Involuntary Transferee and the Company or the purchasing Rightholders, as the case may be, shall
each share half the fees and expenses of the appraiser designated by the appraisers. For purposes of this Section 3.2(b), the “Fair Value” of the Transferred Shares means the fair market value of such Transferred Shares
determined in accordance with this Section 3.2(b) based upon all considerations that the appraisers determine to be relevant. All expenses to be shared by the Company and the purchasing Rightholders, or among the purchasing Rightholders (if the
Company is not purchasing any Transferred Shares), shall be shared in proportion to the number of Shares purchased. 
  

 18 

 (c) Closing. The closing of any purchase under this Section 3.2 shall be held at the
executive office of the Company at 11:00 a.m., local time, on the earlier to occur of (a) the fifth Business Day after the purchase price per Transferred Share shall have been agreed upon by the Involuntary Transferee and the Company or
the purchasing Rightholders, as the case may be, in accordance with Section 3.2(a)(iii), or (b) the fifth Business Day after the determination of the Fair Value of the Transferred Shares in accordance with Section 3.2(b), or at such
other time and place as the parties to the transaction may agree. At such closing, the Involuntary Transferee shall deliver certificates, if applicable, or other instruments or documents representing the Transferred Shares being purchased under
this Section 3.2, duly endorsed with a signature guarantee for transfer and accompanied by all requisite transfer taxes, if any, and such Transferred Shares shall be free and clear of any Liens (other than those arising hereunder) arising
through the action or inaction of the Involuntary Transferee and the Involuntary Transferee shall so represent and warrant, and further represent and warrant that it is the beneficial owner of such Transferred Shares. The Company or each
Rightholder, as the case may be, purchasing such Transferred Shares shall deliver at closing payment in full in immediately available funds for such Transferred Shares. At such closing, all parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate. 
  

 19 

 (d) General. In the event that the provisions of this Section 3.2 shall be held to be
unenforceable with respect to any particular Involuntary Transfer, the Company and the Rightholders shall have the rights specified in Sections 3.1(b) and 3.1(c), respectively, with respect to any transfer by an Involuntary Transferee of such
Shares, and each Rightholder agrees that any Involuntary Transfer shall be subject to such rights, in which case the Involuntary Transferee shall be deemed to be the Selling Shareholder for purposes of Section 3.1 of this Agreement and shall be
bound by the provisions of Section 3.1 and other related provisions of this Agreement. 
  
 4. Future Issuance of Shares; Preemptive Rights. 
  
 4.1 Offering Notice. Except for (a) any issuance of restricted stock and options to purchase Ordinary Shares which may be issued pursuant to the Share Option Plan or any broad-based stock option or
incentive plan for employees, officers and directors approved by the Board of Directors (which approval shall include the affirmative vote of the Series A Director), (b) any issuance of Capital Stock of the Company: (i) issued in
connection with any share dividend, subdivision, combination or reclassification of Capital Stock or (ii) upon exercise, conversion or exchange of any Ordinary Share Equivalent (x) then outstanding or (y) issued in accordance with the
terms of this Agreement, (c) up to 82,147,440 Ordinary Shares to be issued in accordance with the terms of the Reorganization Agreement, (d) up to 429,982 Series A Preferred Shares to be issued pursuant to the Additional Placement,
(e) any issuance of Ordinary Shares upon the conversion of the Series A Preferred Shares, (f) Capital Stock of the Company issued in consideration of an acquisition, approved by the Board of Directors in accordance with the terms of this
Agreement, by the Company or any of its Subsidiaries of another Person or any Assets of another Person, (g) Ordinary Shares issued in a Qualified Initial Public Offering, and (h) Capital Stock of the Company issued in connection with a
strategic partnership or joint venture (other than a Sale Transaction) that has been approved by the Board of Directors and is not a private equity, venture capital or similar financing, ((a)-(h) being referred to collectively as
“Exempt Issuances”), if the Company wishes to issue any Capital Stock or Ordinary Share Equivalents (collectively, “New Securities”) to any Person (the “Subject Purchaser”), then the Company shall
offer such New Securities first to each of the General Atlantic Shareholders, the Additional Series A Shareholders and the Major Shareholders (each, a “Preemptive Rightholder” and collectively, the “Preemptive
Rightholders”) by sending written notice (the “New Issuance Notice”) to the Preemptive Rightholders, which New Issuance Notice shall state (x) the number of New Securities proposed to be issued and (y) the
proposed purchase price per security of the New Securities (the “Proposed Price”). Upon delivery of the New Issuance Notice, such offer shall be irrevocable unless and until the rights provided for in Section 4.2 shall have
been waived or shall have expired. 
  

 20 

 4.2 Preemptive Rights; Exercise. 
  
 (a) For a period of twenty (20) days after the giving of the New Issuance Notice pursuant to Section 4.1, each of
the Preemptive Rightholders shall have the right to purchase its Proportionate Percentage (as hereinafter defined) of the New Securities at a purchase price equal to the Proposed Price and upon the same terms and conditions set forth in the New
Issuance Notice. Each Preemptive Rightholder shall have the right to purchase that percentage of the New Securities determined by dividing (x) the total number of Shares then owned by such Preemptive Rightholder exercising its rights under this
Section 4.2 by (y) the total number of Shares owned by all of the Preemptive Rightholders exercising their rights under this Section 4.2 (the “Proportionate Percentage”). If any Preemptive Rightholder does not fully
subscribe for the number or amount of New Securities that it or he is entitled to purchase pursuant to the preceding sentence, then each Preemptive Rightholder which elected to purchase New Securities shall have the right to purchase that percentage
of the remaining New Securities not so subscribed for (for the purposes of this Section 4.2(a), the “Excess New Securities”) determined by dividing (x) the total number of Shares then owned by such fully participating
Preemptive Rightholder by (y) the total number of Shares then owned by all fully participating Preemptive Rightholders who elected to purchase Excess New Securities. Any of the General Atlantic Shareholders and any of the Additional Series A
Shareholders may assign to any of its Affiliates all or any portion of its rights as a Preemptive Rightholder pursuant to this Section 4.2. 
  
 (b) The right of each Preemptive Rightholder to purchase the New Securities under subsection (a) above shall be exercisable by delivering written
notice of the exercise thereof, prior to the expiration of the 20-day period referred to in Section 4.2(a) above, to the Company, which notice shall state the amount of New Securities that such Preemptive Rightholder elects to purchase pursuant
to Section 4.2(a). The failure of a Preemptive Rightholder to respond within such 20-day period shall be deemed to be a waiver of such Preemptive Rightholder’s rights under Section 4.2(a), provided that each Preemptive
Rightholder may waive its rights under Section 4.2(a) prior to the expiration of such 20-day period by giving written notice to the Company. 
  
 4.3 Closing. The closing of the purchase of New Securities subscribed for by the Preemptive Rightholders under Section 4.2 shall be held at
the executive office of the Company at 11:00 a.m., local time, on (a) the 45th day after the giving of the New Issuance Notice pursuant to Section 4.1, if the Preemptive Rightholders elect to purchase all of the New Securities under
Section 4.2, (b) the date of the closing of the sale to the Subject Purchaser made pursuant to Section 4.4 if the Preemptive Rightholders elect to purchase some, but not all, of the New Securities under Section 4.2 or (c) at
such other time and place as the parties to the transaction may agree. At such closing, the Company shall deliver certificates representing the New Securities, and such New Securities shall be issued free and clear of all Liens (other than those
arising hereunder and those attributable to actions by the purchasers thereof) and the Company shall so represent and warrant, and further represent and warrant that such New Securities shall be, upon issuance thereof to the Preemptive Rightholders
and after payment therefor, duly authorized, validly issued, fully paid and non-assessable. Each Preemptive Rightholder purchasing the New Securities shall deliver at the closing payment in full in immediately available funds for the New Securities
purchased by him or it. At such closing, all of the parties to the transaction shall execute such additional documents as are otherwise necessary or appropriate. 
  

 21 

 4.4 Sale to Subject Purchaser. The Company may sell to the Subject Purchaser all of the New
Securities not purchased by the Preemptive Rightholders pursuant to Section 4.2 on terms and conditions that are no more favorable to the Subject Purchaser than those set forth in the New Issuance Notice; provided, however, that
such sale is bona fide and made pursuant to a contract entered into within ninety (90) days following the earlier to occur of (i) the waiver by the Preemptive Rightholders of their option to purchase New Securities pursuant to
Section 4.2, and (ii) the expiration of the 20-day period referred to in Section 4.2. If such sale is not consummated within such 90-day period for any reason, then the restrictions provided for herein shall again become effective,
and no issuance and sale of New Securities may be made thereafter by the Company without again offering the same in accordance with this Section 4. The closing of any issuance and purchase pursuant to this Section 4.4 shall be held at a
time and place as the parties to the transaction may agree within such 90 day period. 
  
 5. After-Acquired Securities; Agreement to be Bound. 
  
 5.1 After-Acquired Securities. All of the provisions of this Agreement shall apply to all of the Shares and Ordinary Share Equivalents now owned or which may be issued or transferred hereafter to a Shareholder
in consequence of any additional issuance, purchase, exchange or reclassification of any of such Shares or Ordinary Share Equivalents, corporate reorganization, or any other form of recapitalization, consolidation, merger, share split or share
dividend, or which are acquired by a Shareholder in any other manner. 
  
 5.2 Agreement to be Bound. Subject to Section 5.3, the Company shall not issue any shares of capital stock or any Ordinary Share Equivalents to any Person not a party to this Agreement, other than to directors, officers or
employees of the Company pursuant to the Share Option Plan, unless either (a) such Person has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument substantially in the form attached hereto as
Exhibit B-2, or (b) such Person has entered into an agreement with the Company restricting the transfer of its or his Shares in form and substance reasonably satisfactory to the Board of Directors Shareholders. Upon becoming a party to
this Agreement, such Person shall be deemed to be, and shall be subject to the same obligations as, an Other Shareholder hereunder. Any issuance of shares of capital stock or any Ordinary Share Equivalents by the Company in violation of this
Section 5.2 shall be null and void ab initio. 
  
 5.3
Additional Placement and Reorganization. The Company shall not issue (a) Series A Preferred Shares to any Additional Series A Investor or (b) Ordinary Shares to any Subscriber (other than Persons listed on Schedule 5 hereto)
pursuant to the Additional Placement and the Reorganization, as the case may be, unless such Additional Series A Investor and Subscriber, as the case may be, has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to
an instrument substantially in the form attached hereto as Exhibit B-3. Upon becoming a party to this Agreement, such Additional Series A Investor and Subscriber, as the case may be, shall be deemed to be, and shall be subject to the same
obligations as, (x) in the case of an Additional Series A Investor, an Additional Series A Shareholder hereunder and (y) in the case of a Subscriber, a Major Shareholder or Minor Shareholder as set out on Schedule 1 and Schedule
2 hereto. Any issuance of Series A Preferred Shares or Ordinary Shares by the Company in violation of this Section 5.3 shall be null and void ab initio. The Company may not issue any Series A Preferred Shares to an Additional Series
A Investor under the Additional Placement at any time after the date forty-five (45) days following the Closing Date. 
  

 22 

 6. Corporate Governance. 
  
 6.1 General. At any regular or special meeting of shareholders of the Company (a “Shareholders
Meeting”) or in any written consent executed in lieu of such a meeting of shareholders (a “Written Consent”) (a) each Shareholder shall vote its Shares, and each Shareholder and the Company shall take all other actions
necessary, to give effect to the provisions of this Agreement (including, without limitation, Sections 6.3 and 6.6 hereof) and to ensure that the Restated Articles do not, at any time hereafter, conflict in any respect with the provisions of
this Agreement; (b) each Shareholder shall vote his or its Shares, upon any matter submitted for action by the Company’s shareholders or with respect to which such Shareholder may vote or act by Written Consent, in conformity with the
specific terms and provisions of this Agreement and the Restated Articles; and (c) no Shareholder shall vote his or its Shares in favor of any amendment of the Restated Articles which would conflict with, or purport to amend or supersede, any
of the provisions of this Agreement (including, without limitation, Sections 6.3 and 6.6 hereof). 
  
 6.2 Shareholder Actions. In order to effectuate the provisions of this Agreement, each Shareholder (a) hereby agrees that when any action or
vote is required to be taken by such Shareholder pursuant to this Agreement, such Shareholder shall use his or its reasonable best efforts to call, or cause the appropriate officers and directors of the Company to call, a Shareholders Meeting, or to
execute or cause to be executed a Written Consent to effectuate such shareholder action, (b) shall use his or its reasonable best efforts to cause the Board of Directors to adopt, either at a meeting of the Board of Directors or by unanimous
written consent of the Board of Directors, all the resolutions necessary to effectuate the provisions of this Agreement, and (c) shall use his or its reasonable best efforts to cause the Board of Directors to cause the Secretary of the Company,
or if there be no secretary, such other officer of the Company as the Board of Directors may appoint to fulfill the duties of Secretary, not to record any vote or consent contrary to the terms of this Agreement. 
  
 6.3 Election of Directors; Number and Composition. 
  
 (a) Each Shareholder shall vote its Shares at any Shareholders Meeting, or
act by Written Consent with respect to such Shares, and take all other actions necessary to ensure that the number of directors constituting the entire Board of Directors shall be nine (9). 
  

 23 

 (b) Each Shareholder shall vote its Shares at any Shareholders Meeting called for the purpose of filling
the positions on the Board of Directors, or in any Written Consent executed for such purpose, and take all other actions necessary to ensure the election to the Board of Directors of one (1) individual (the “Series A Director”)
designated by the Controlling Series A Shareholder. 
  
 (c) The
directors initially constituting the Board of Directors shall include (i) Zhonghan Deng, (ii) Xiaodong Yang, (iii) Fan Bao, (iv) Zhaowei Jin, (v) Victor Yang, (vi) Robert Chen, (vii) Theodore Van Duzer,
(viii) Donald L. Lucas and (ix) Vince Feng. 
  
 (d) In
addition, the Company shall, and each Shareholder shall cause the Board of Directors to, have a remuneration committee and an audit committee only, and to cause the audit committee to include, the Series A Director, so long as the Series A Director
meets the requirements of law and rules applicable to members of the Company’s audit committee after completion of an IPO. The Company agrees, and each Shareholder agrees to procure, that neither the Company nor the Board of Directors shall
delegate any rights or obligations to any committee of the Board of Directors without the prior written consent of the Controlling Series A Shareholder, and the Shareholders shall cause the Board of Directors not to act in contravention of the
foregoing. 
  
 6.4 Removal and Replacement of Director.

  
 (a) Removal of Directors. If at any time the
Controlling Series A Shareholder notifies the other Shareholders of its wish to remove at any time and for any reason (or no reason) a Series A Director, then each Shareholder shall vote all of its Shares so as to remove such Series A Director.

  
 (b) Replacement of Directors. 
  
 (i) If at any time, a vacancy is created on the Board of Directors by
reason of the incapacity, death, removal or resignation of a Series A Director designated pursuant to Section 6.3(b)(i) hereof, then the Controlling Series A Shareholder shall designate an individual who shall be elected to fill the vacancy
until the next Shareholders Meeting. 
  
 (ii) Upon receipt of
notice of the designation of a nominee pursuant to Section 6.4(b), each Shareholder shall, as soon as practicable after the date of such notice, take all reasonable actions, including the voting of its Shares, to elect the director so
designated to fill the vacancy. 
  

 24 

 6.5 Reimbursement of Expenses; D&O Insurance. The Company shall reimburse the Controlling
Series A Shareholder, or its respective designees, for all reasonable travel and accommodation expenses incurred by the Series A Director in connection with the performance of his duties as a director of the Company upon presentation of appropriate
documentation therefor. The Company shall, and each Shareholder shall use reasonable commercial efforts to cause the Board of Directors to cause the Company to, maintain a directors’ liability insurance policy that is reasonably acceptable to
the Board of Directors. 
  
 6.6 Actions of the Shareholders
and Board of Directors; Extraordinary Actions. Notwithstanding anything to the contrary set forth in this Agreement, without the prior written consent of the Controlling Series A Shareholder, neither the Company, any of the Company’s
Subsidiaries, the shareholders of the Company, nor the Board of Directors shall approve, consent to or ratify any of the following actions: 
  
 (a) (x) other than the issuance of up to 429,982 Series A Preferred Shares pursuant to the Additional Placement, the creation or issuance of or
agreement to create or issue any shares of Capital Stock or Ordinary Share Equivalents of the Company ranking senior to or pari passu with the Series A Preferred Shares, (y) the creation or issuance of or agreement to create or issue any
Capital Stock or Subsidiary Equivalents of any of the Company’s Subsidiaries or (z) the redemption of any shares of Capital Stock or Ordinary Share Equivalents of the Company or any shares of Capital Stock or Subsidiary Equivalents of any
of the Company’s Subsidiaries, other than the purchase of Ordinary Shares or Ordinary Share Equivalents from former employees of the Company in connection with the cessation of their employment with the Company at a price per share equal to the
lower of (A) the then applicable fair market value as determined by the Board of Directors or (B) the cost basis of such Ordinary Shares or Ordinary Share Equivalents initially paid by such employees; 
  
 (b) any change to the aggregate number of authorized Preferred Shares or any
issuance of Preferred Shares other than the issuance of up to 429,982 Series A Preferred Shares pursuant to the Additional Placement; 
  
 (c) any action which adversely affects or harms the interests of the Preferred Shares, whether by amendment, modification or restatement of the Restated
Articles or the organizational documents of any of the Company’s Subsidiaries, or by merger, consolidation, business combination or otherwise; 
  
 (d) a Sale Transaction or Liquidation; 
  
 (e) any declaration, distribution or payment of any dividend or other distribution on any shares of Capital Stock of the Company or any Capital Stock of
any of its Subsidiaries; 
  

 25 

 (f) the Company’s or any of its Subsidiaries’ issuance or becoming liable for any
indebtedness, on an aggregate basis with respect to the Company and its Subsidiaries, equal to or in excess of US$10 million; 
  
 (g) the creation of any Lien on any of the Assets of the Company or any of its Subsidiaries in an aggregate amount in excess of US$1 million; 

 
 (h) any transaction between the Company or any of its Subsidiaries, on
the one hand, and any Related Party, on the other hand; 
  
 (i)
any capital expenditures by the Company and its Subsidiaries, on an aggregate basis, in excess of US$2 million annually and any other expenditures by the Company and its Subsidiaries, on an aggregate basis, in excess of US$2 million not included in
the annual operating budget of the Company; 
  
 (j) any change in
the size of the Board of Directors; and 
  
 (k) any amendment or
modification of this Section 6.6. 
  
 6.7 Rights and
Obligations of the Shareholders and the Company in Relation to Each Subsidiary. The Company shall cause the board of directors (or similar governing body) of each Subsidiary, to the extent permitted by applicable law, to be the same size as the
Board of Directors and, at the election of any Shareholder entitled to designate a director pursuant to Section 6.3(b) or the Restated Articles, to be comprised of director(s) designated by such Shareholder in the same proportion as such
Shareholder is represented on the Board of Directors. The right of designation by each Shareholder shall also carry the right to remove or replace the director so nominated, and if a designating Shareholder ceases to be a Shareholder, such
Shareholder shall immediately cause the directors on the board of directors of each Subsidiary appointed by such Shareholder to resign or be removed. The Shareholders shall cause their designees to the boards of directors of the Subsidiaries to vote
in the manner determined by the Board of Directors and shall cause any director who fails to vote in such manner to be removed. 
  
 6.8 Extraordinary Actions and each Subsidiary. The Company covenants and agrees that it shall procure that, and each of the Shareholders covenants
and agrees that it will cause the Company to procure that, none of the Subsidiaries or any of their respective officers, directors, employees, agents or representatives takes any action described in Section 6.6 in relation to a Subsidiary,
whether by way of shareholder approval, consent, ratification or otherwise, without the prior written consent of the Controlling Series A Shareholder. 
  
 6.9 Annual Budget. Not less than thirty (30) days after the commencement of each fiscal year, the Company shall prepare and submit to the
Board of Directors for its approval an annual operating budget of the Company for such fiscal year in reasonable detail. 
  

 26 

 6.10 Books and Records. The Company shall, and shall cause its Subsidiaries to, keep proper books
of records and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Company and each of its Subsidiaries in accordance with generally accepted accounting principles consistently
applied. 
  
 6.11 Discrepancies. Subject to the proviso
set forth below, if there is any discrepancy between any provision of this Agreement and any provision of the Restated Articles or the charter documents of any Subsidiary, the provisions of this Agreement shall prevail, and the parties shall procure
that the Restated Articles or the charter documents of the relevant Subsidiary, as the case may be, are promptly amended, to the extent permitted by applicable law, in order to conform with this Agreement; provided, however, nothing in this
Section 6.11 or this Agreement shall limit, reduce or derogate from, or authorize the limitation, reduction or derogation of the rights of General Atlantic Shareholder set forth in Schedule A to the Restated Articles. 
  
 7. Share Certificate Legend. A copy of this Agreement shall be filed
with the Secretary of the Company and kept with the records of the Company. Each certificate representing Shares now held or hereafter acquired by any Shareholder shall for as long as this Agreement is effective bear legends substantially in the
following forms: 
  
 THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY FOREIGN JURISDICTION. THE SECURITIES MAY NOT BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE AND FOREIGN SECURITIES LAWS OR UPON DELIVERY OF AN OPINION FROM COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE OR TRANSFER IS MADE PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. 
  
 THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION (EACH A “TRANSFER”) AND
VOTING OF ANY OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE SHAREHOLDERS AGREEMENT, DATED OCTOBER 5, 2004, AMONG THE COMPANY AND THE SHAREHOLDERS NAMED THEREIN, A COPY OF WHICH MAY BE INSPECTED AT THE
COMPANY’S PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE SHAREHOLDERS AGREEMENT. 
  

 27 

 8. Miscellaneous. 
  
 8.1 Notices. All notices, demands or other communications provided for or permitted hereunder shall be made in
writing and shall be by registered or certified first class mail, return receipt requested, telecopier, courier service or personal delivery: 
  
 (a) if to the Company: 
  
 15/F Shining Tower 
 No.35 Xueyuan Road,
Haidian District 
 Beijing 100083 
 People’s Republic of China 
 Telecopy: (86-10) 8233-5762 
 Attention: Gordon Cheng 
  
 with a copy to: 
  
 Latham & Watkins LLP 
 41st Floor, One Exchange Square 
 8 Connaught Place 
 Central 
 Hong Kong 
 Telecopy: (852) 2522-7006

 Attention: David Zhang, Esq. 
  
 (b) if to any of the General Atlantic Shareholders: 
  
 c/o General Atlantic Service Corporation 
 3
Pickwick Plaza 
 Greenwich, CT 06830 
 Telecopy: (203) 622-8818 
 Attention: Matthew Nimetz 
                 Thomas Murphy 
  
 with a copy to: 
  
 Paul, Weiss, Rifkind, Wharton & Garrison 
 1285 Avenue of the Americas 
 New York, NY
10019-6064 
 Telecopy: (212) 757-3990 
 Attention: Douglas A. Cifu, Esq. 
  
 (c) if to any other Shareholder, at its address as it appears on the record books of the Company. 
  

 28 

 All such notices, demands and other communications shall be deemed to have been duly given when delivered by hand, if
personally delivered; when delivered by courier, if delivered by commercial courier service; five (5) Business Days after being deposited in the mail, postage prepaid, if mailed; and when receipt is mechanically acknowledged, if telecopied. Any
party may by notice given in accordance with this Section 8.1 designate another address or Person for receipt of notices hereunder. 
  
 8.2 Publicity; Confidentiality. Except as may be required by applicable Requirement of Law, none of the parties shall issue a press release or
public announcement or otherwise make any public disclosure concerning this Agreement without prior approval by (i) the Company and (ii) the General Atlantic Shareholders; provided, however, that nothing in this Agreement
shall restrict any party from disclosing information (a) that is already publicly available, (b) that may be required or appropriate in response to any summons or subpoena or in connection with any litigation, provided that such
party will use reasonable efforts to notify the other parties in advance of such disclosure so as to permit the other parties to seek a protective order or otherwise contest such disclosure, and such party will use reasonable efforts to cooperate,
at the expense of the party, with the other parties in pursuing any such protective order, (c) to the extent that such party reasonably believes it appropriate in order to comply with any Requirement of Law, (d) to such party’s
officers, directors, shareholders, investors, advisors, employees, members, partners, controlling persons, auditors or counsel as may be reasonably required or (e) to Persons from whom releases, consents or approvals are required, or to whom
notice is required to be provided, pursuant to any Requirement of Law; and provided further, that GAP LLC may disclose on its worldwide web page, www.gapartners.com, the name of the Company and its Subsidiaries, the name of the Chief
Executive Officer of the Company and its Subsidiaries, a brief description of the business of the Company and its Subsidiaries, the Company’s and the Subsidiaries’ logo and the aggregate amount of the General Atlantic Shareholders’
investment in the Company. Nothing in this Agreement shall restrict the Company from making disclosure concerning this Agreement in its filings under the Securities Act. 
  
 8.3 Successors and Assigns; Third Party Beneficiary. This Agreement shall inure to the benefit of and be binding
upon successors and permitted assigns of the parties hereto. This Agreement is not assignable except in connection with a transfer of Shares in accordance with this Agreement. No person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement. 
  

 29 

 8.4 Amendment and Waiver. 
  
 (a) No failure or delay on the part of any party hereto in exercising any right, power or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise. 
  
 (b) Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to
any departure by any party from the terms of any provision of this Agreement, shall be effective only if it is made or given in writing and signed by (i) the Company, (ii) the General Atlantic Shareholders, (iii) the Additional Series
A Shareholders (if any) and (iv) if the proposed amendment, supplement, modification or waiver would materially adversely effect the Major Shareholders in a manner different than the Other Shareholders, the Major Shareholders holding a majority
of Shares owned by all Major Shareholders. Any such amendment, supplement, modification, waiver or consent shall be binding upon the Company and all of the Shareholders. Notwithstanding the first sentence of this Section 8.4(b), the Company,
without the consent of any other party hereto (other than the General Atlantic Shareholders), may amend this Agreement to add any Subsequent General Atlantic Purchaser as a party to the Agreement as a General Atlantic Shareholder. 
  
 8.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile shall be as effective as delivery of a manually executed counterpart of a signature page of this Agreement. 
  
 8.6 Specific Performance. The parties hereto intend that each of the parties have the right to seek damages or specific performance in the event
that any other party hereto fails to perform such party’s obligations hereunder. Therefore, if any party shall institute any action or proceeding to enforce the provisions hereof, any party against whom such action or proceeding is brought
hereby waives any claim or defense therein that the plaintiff party has an adequate remedy at law. 
  
 8.7 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

  
 8.8 GOVERNING LAW; CONSENT TO JURISDICTION. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. The parties hereto irrevocably submit to the exclusive
jurisdiction of any state or federal court sitting in the County of New York, in the State of New York over any suit, action or proceeding arising out of or relating to this Agreement. To the fullest extent they may effectively do so under
applicable law, the parties hereto irrevocably waive and agree not to assert, by way of motion, as a defense or otherwise, any claim that they are not subject to the jurisdiction of any such court, any objection that they may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. 
  

 30 

 8.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE
PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.9. 
  
 8.10 Severability. If any one or more of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof. 
  
 8.11 Rules of Construction. Unless the context otherwise requires, references to sections or subsections refer to sections or subsections of this
Agreement. 
  
 8.12 Entire Agreement. This Agreement,
together with the exhibits hereto, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises, representations, warranties or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits hereto, supersede all prior
agreements and understandings among the parties with respect to such subject matter. 
  
 8.13 Term of Agreement. This Agreement shall become effective upon the execution hereof and shall terminate upon the earliest of (a) the IPO Effectiveness Date, (b) a Liquidation, (c) the
consummation of a Sale Transaction and (d) the tenth anniversary of the date hereof. 
  

 31 

 8.14 Further Assurances. Each of the parties shall, and shall cause their respective Affiliates
to, execute such documents and perform such further acts as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement. 
  

[Remainder of page intentionally left blank] 
  

 32 

 IN WITNESS WHEREOF, the undersigned have executed, or have caused to be executed, this Shareholders
Agreement on the date first written above. 
  

			
	 VIMICRO INTERNATIONAL CORPORATION

		
	 By:
	 	 /s/

	 Name:
	 	 Zhonghan Deng

	 Title:
	 	 Chief Executive Officer and Director

  

 Signature Page to Shareholders Agreement 

			
	GENERAL ATLANTIC PARTNERS (BERMUDA), L.P.
		
	By:	 	GAP (BERMUDA) LIMITED,
	 	 	its General Partner
		
	By:	 	 /s/

	Name:	 	Matthew Nimetz
	Title:	 	Vice President
	
	GAP-W INTERNATIONAL, LLC
		
	By:	 	 /s/

	Name:	 	Matthew Nimetz
	Title:	 	Vice President
	
	GAP COINVESTMENTS III, LLC
		
	By:	 	 /s/

	Name:	 	Matthew Nimetz
	Title:	 	Managing Member
	
	GAP COINVESTMENTS IV, LLC
		
	By:	 	 /s/

	Name:	 	Matthew Nimetz
	Title:	 	Managing Member
	
	GAPSTAR, LLC
		
	By:	 	GENERAL ATLANTIC PARTNERS, LLC,
	 	 	its Sole Member
		
	By:	 	 /s/

	Name:	 	Matthew Nimetz
	Title:	 	Managing Member

  

 Signature Page to Shareholders Agreement 

			
	GAPCO GMBH & CO. KG
		
	By:	 	GAPCO MANAGEMENT GMBH,
	 	 	its General Partner
		
	By:	 	 /s/

	Name:	 	Matthew Nimetz
	Title:	 	Managing Director

  

 Signature Page to Shareholders Agreement 

			
	MAJOR SHAREHOLDERS:
	
	VIMICRO BEIJING CORPORATION
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

			
	VIMICRO TIANJIN CORPORATION
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

			
	POWER PACIFIC (MAURITIUS) LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

			
	INFOTECH VENTURES CAYMAN COMPANY LIMITED
		
	By:	 	 /s/

	Name:	 	Ting Ru Liu
	Title:	 	Director

  

 Signature Page to Shareholders Agreement 

	
	MINOR SHAREHOLDERS
	
	DI-HWA TIEN
	
	 /s/

  

 Signature Page to Shareholders Agreement 

	
	LAP LEE
	
	 /s/

  

 Signature Page to Shareholders Agreement 

			
	PALIO MANAGEMENT GROUP CO., LTD.
		
	By:	 	 /s/

	Name:	 	Kar Lun Tang
	Title:	 	Director

  

 Signature Page to Shareholders Agreement 

	
	PING KEUNG KO
	
	 /s/

  

 Signature Page to Shareholders Agreement 

			
	HSIA REVOCABLE TRUST OF VICTOR HSIA AND VIRGINIA HSIA
		
	By:	 	 /s/

	Name:	 	Victor Hsia
	Title:	 	Trustee

  

 Signature Page to Shareholders Agreement 

			
	GREAT VENTURE INTERNATIONAL LIMITED
		
	By:	 	 /s/

	Name:	 	Ridong Tang
	Title:	 	Director

  

 Signature Page to Shareholders Agreement 

							
	 	 	EAGLE HONEST DEVELOPMENTS LIMITED
				
	 	 	By:	  	 /s/

	  	 /s/

	 	 	Name:	  	Wang Gianzhi	  	Cong Wei
	 	 	Title:	  	Director	  	Director
			
	 	 	 	  	For and on behalf of
			
	 	 	 	  	EAGLE HONEST DEVELOPMENTS LIMITED
			
	 	 	 	  	 /s/

	 	 	 	  	Authorized Signature(s)

  

 Signature Page to Shareholders Agreement 

			
	HENRY NEW ENTERPRISE CO., LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	Director

  

 Signature Page to Shareholders Agreement 

			
	HANGZHOUVISION TECHNOLOGY LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

			
	SPRING RIVER INVESTMENT INC.
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	Chairman

  

 Signature Page to Shareholders Agreement 

			
	DAYUE INTERNATIONAL COMPANY LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

			
	CENTURY GLORY HOLDINGS LIMITED
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

			
	HUANA INVESTMENT INC.
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

	
	XIANG YU
	
	 /s/

  

 Signature Page to Shareholders Agreement 

			
	SOUTH LIGHT HOLDINGS LIMITED
		
	 	 	For and on behalf of
		
	 	 	South Light Holdings Limited
		
	 	 	 /s/

	 	 	Authorized Signature(s)
		
	By:	 	  

	Name:	 	Zhang Xia Wei
	Title:	 	Director

  

 Signature Page to Shareholders Agreement 

			
	VIMICRO SHANGHAI CORPORATION
		
	By:	 	 /s/

	Name:	 	Hui (Tom) Zhang
	Title:	 	Director

  

 Signature Page to Shareholders Agreement 

			
	VIMICRO SHENZHEN CORPORATION
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 Signature Page to Shareholders Agreement 

			
	GARTNER TECHNOLOGY LTD.
		
	By:	 	 /s/

	Name:	 	Wanda Chang
	Title:	 	Authorized Signatory

  

 Signature Page to Shareholders Agreement 

			
	FUJITSU MICROELECTRONICS ASIA PTE LTD
		
	By:	 	 /s/

	Name:	 	Satoru Igarashi
	Title:	 	President

  

 Signature Page to Shareholders Agreement 

			
	CAPITAL GROUP RESOURCES LTD
		
	 	 	For and on behalf of
		
	 	 	CAPITAL GROUP RESOURCES LIMITED
		
	 	 	 /s/

	 	 	Authorized Signature(s)
		
	By:	 	  

	Name:	 	Jacqui Tan Wee Joo
	Title:	 	Director

  

 Signature Page to Shareholders Agreement 

	
	LI DONG
	
	 /s/

  

 Signature Page to Shareholders Agreement 

			
	SURE TECH INVESTMENT LTD
		
	By:	 	 /s/

	Name:	 	James Dong
	Title:	 	Chairman & CEO

  

 Signature Page to Shareholders Agreement 

			
	A&E INVESTMENT LLC.
		
	By:	 	 /s/

	Name:	 	Lip-Bu Tan
	Title:	 	Sole Manager

  

 Signature Page to Shareholders Agreement 

			
	DONALD L. LUCAS TTEE, DONALD L. LUCAS &
	LYGIA S. LUCAS TRUST DTD 12-3-84
		
	By:	 	 /s/

	Name:	 	Donald L. Lucas
	Title:	 	Trustee

  

 Signature Page to Shareholders Agreement 

	
	TAK HING DAVID CHAN
	
	 /s/

  

 Signature Page to Shareholders Agreement 

	
	HUI YIN
	
	 /s/

  

 Signature Page to Shareholders Agreement 

	
	TIEMIN ZHAO
	
	 /s/

  

 Signature Page to Shareholders Agreement 

	
	JUNIEN LABROUSSE
	
	 /s/

  

 Signature Page to Shareholders Agreement 

	
	STEPHEN E. STONEFIELD
	
	 /s/

  

 Signature Page to Shareholders Agreement 

 Schedule 1 
  

Major Investors 
  

			
	1.  	  	Vimicro Beijing Corporation
		
	2.	  	Vimicro Tianjin Corporation
		
	3.	  	Power Pacific (Mauritius) Limited
		
	4.	  	Infotech Ventures Cayman Company Limited

 Schedule 2 
  

Minor Shareholders 
  

			
	1.	  	Di-Hwa Tien
		
	2.	  	Lap Lee
		
	3.	  	Palio Management Group Co., Ltd.
		
	4.	  	Ping Keung Ko
		
	5.	  	Hsia Revocable Trust of Victor Hsia and Virginia Hsia
		
	6.	  	Great Venture International Limited
		
	7.	  	Eagle Honest Developments Limited
		
	8.	  	Henry New Enterprise Co., Limited
		
	9.	  	Hangzhouvision Technology Limited
		
	10.	  	Spring River Investment Inc.
		
	11.	  	Dayue International Company Limited
		
	12.	  	Century Glory Holdings Limited
		
	13.	  	Huana Investment Inc.
		
	14.	  	Xiang Yu
		
	15.	  	South Light Holdings Limited
		
	16.	  	Vimicro Shanghai Corporation
		
	17.  	  	Vimicro Shenzhen Corporation

 Schedule 3 
  

Other Series A Investors 
  

			
	1.	  	Gartner Technology Ltd.
		
	2.	  	Fujitsu Microelectronics Asia Pte Ltd
		
	3.	  	Capital Group Resources Ltd.
		
	4.	  	Li Dong
		
	5.	  	Sure Tech Investment Ltd
		
	6.	  	A&E Investment LLC
		
	7.	  	Donald L. Lucas TTEE, Donald L. Lucas & Lygia S. Lucas Trust DTD 12-3-84
		
	8.	  	Tak Hing David Chan
		
	9.	  	Hui Yin
		
	10.	  	Tiemin Zhao
		
	11.	  	Junien Labrousse
		
	12.  	  	Stephen E. Stonefield

 Schedule 4 
  

Additional Series A Investors 

 Schedule 5 
  

Shareholders Not a Party To Shareholders Agreement 
  

			
	1.  	  	Printout Technology Limited
		
	2.	  	Pioneer Leader Trading Limited
		
	3.	  	Xiyou Holdings Limited
		
	4.	  	Oriental Yihui Technology Limited

 Exhibit A 
  

Restated Articles (including the Certificate of Designations) 
  
 INTENTIONALLY OMITTED 

 Exhibit B-11 
  
 ACKNOWLEDGMENT AND AGREEMENT 
  
 The undersigned wishes to receive from
                     (“Transferor”) certain shares or certain options, warrants or other rights to purchase
             Ordinary Shares, par value US$0.0001 per share (the “Shares”), of Vimicro International Corporation, a company organized and existing under the laws of
the Cayman Islands (the “Company”); 
  
 The
Shares are subject to the Shareholders Agreement, dated [                    ], 2004 (the “Agreement”), among the Company and the
other parties listed on the signature pages thereto; 
  
 The
undersigned has been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms; 
  
 Pursuant to the terms of the Agreement, the Transferor is prohibited from transferring such Shares and the Company is
prohibited from registering the transfer of the Shares unless and until a transfer is made in accordance with the terms and conditions of the Agreement and the recipient of such Shares acknowledges the terms and conditions of the Agreement and
agrees to be bound thereby; and 
  
 The undersigned wishes to
receive such Shares and have the Company register the transfer of such Shares. 
  
 In consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce the Transferor to transfer such
Shares to the undersigned and the Company to register such transfer, the undersigned does hereby acknowledge and agree that (i) he[/she] has been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review
it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to the terms and conditions set forth in the Agreement, and (iii) the undersigned does hereby agree fully to be bound thereby as [a “General
Atlantic Shareholder”] [an “Existing Shareholder”] [an “Other Shareholder”] (as therein defined). 
  
 This      day of
                    , 20    . 
  

	
	  

  

	1	For transfers of previously issued stock. 

 Exhibit B-21 
  
 ACKNOWLEDGMENT AND AGREEMENT 
  
 The undersigned wishes to receive from Vimicro International Corporation, a company organized and existing under the laws of the Cayman Islands (the
“Company”),              Ordinary Shares, par value US$0.0001 per share, or certain newly issued options, warrants or other rights to purchase
            Ordinary Shares (the “Shares”), of the Company; 
  
 The Shares are subject to the Shareholders Agreement, dated
[                    ], 2004 (the “Agreement”), among the Company and the other parties listed on the signature pages thereto;

  
 The undersigned has been given a copy of the Agreement and
afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms; 
  
 Pursuant to the terms of the Agreement, the Company is prohibited from issuing the Shares unless and until the same are first offered to the Preemptive
Rightholders (as defined in the Agreement) in accordance with the terms and conditions of the Agreement and the recipient of such Shares acknowledges the terms and conditions of the Agreement and agrees to be bound thereby; and 
  
 The undersigned wishes to receive such Shares. 
  
 In consideration of the mutual promises contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce the Company to issue such Shares, the undersigned does hereby acknowledge and agree that (i) he[/she] has been given a copy of the Agreement
and afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to terms and conditions set forth in the Agreement, and (iii) the undersigned does
hereby agree fully to be bound thereby as an “Other Shareholder” (as therein defined). 
  
 This      day of
                    , 20    . 
  

	
	  

  

	1	For newly issued stock. 

 Exhibit B-3 
  
 ACKNOWLEDGMENT AND AGREEMENT 
  

The undersigned wishes to receive from Vimicro International Corporation, a company organized and existing under the laws of the Cayman Islands (the
“Company”), [                     Series A Preferred Shares]
[             Ordinary Shares], par value US$0.0001 per share, (the “Shares”), of the Company; 
  
 The Shares are subject to the Shareholders Agreement, dated
[                    ], 2004 (the “Agreement”), among the Company and the other parties listed on the signature pages thereto;

  
 The undersigned has been given a copy of the Agreement and
afforded ample opportunity to read and to have counsel review it, and the undersigned is thoroughly familiar with its terms; and 
  
 The undersigned wishes to receive such Shares. 
  
 In consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to induce the Company to issue such Shares, the undersigned does hereby acknowledge and agree that (i) he[/she] has been given a copy of the Agreement and afforded ample opportunity to read and to have counsel review it, and
the undersigned is thoroughly familiar with its terms, (ii) the Shares are subject to terms and conditions set forth in the Agreement, and (iii) the undersigned does hereby agree fully to be bound thereby as an [“Additional Series
A Shareholder”]1 [“Major Shareholder”] [“Minor Shareholder”]2 (as therein defined). 
  
 This      day of
                    , 2004. 
  

	
	  

  

	1	For Series A Preferred Shares to be issued under the Additional Placement. 

	2	For Ordinary Shares to be issued under the Reorganization.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]