Document:

EXHIBIT 4.33

 

EXECUTION COPY

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”), dated as of March 12, 2013, by and among 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 liability company (“GAP Coinvestments III”), GAP Coinvestments IV, LLC, a Delaware limited liability company (“GAP Coinvestments IV”), GapStar, LLC, a Delaware limited liability company (“GapStar”) and GAPCO GmbH & Co. KG, a German limited partnership (together with GAP LP, GAP-W, GAP Coinvestments III, GAP Coinvestments IV and GapStar, each an “Assignor,” and collectively, the “Assignors”), and Steve Bishop (the “Assignee”), and for purposes of Section 2 hereof and the consent set forth on the signature page hereto, Vimicro International Corporation (the “Company”).

 

Capitalized terms used and not otherwise defined herein will have the respective meanings ascribed to such terms in the Registration Rights Agreement (the “Registration Rights Agreement”), dated as of October 12, 2004, by and among the Assignors and the Company;

 

WHERAS, the Assignors and the Company are parties to the Registration Rights Agreement relating to the Company’s American Depository Shares held by the Assignors;

 

WHEREAS, the Assignors and the Assignee entered into a Purchase and Sale Agreement, dated as of the date hereof, in connection with the sale of 500,000 American Depositary Shares (the “Transferred Shares”) of the Company by the Assignors to the Assignee (the “Transaction”);

 

WHEREAS, in connection with the Transaction and pursuant to the Registration Rights Agreement, each of the Assignors wishes to assign certain of its rights, title and interests under the Registration Rights Agreement with respect to the Transferred Shares (including, the F-3 Registration rights and related rights contained in Sections 4 and 5 under the Registration Rights Agreement) to the Assignee, effective at closing of the Transaction (for the avoidance of doubt, it is understood that the Assignor shall retain all of its rights, title and interests under the Registration Rights Agreement with respect to any remaining Ordinary Shares or the American Depositary Shares of the Company that such Assignor continues to hold after the Transaction);

 

WHEREAS, in connection with the Transaction and pursuant to the Registration Rights Agreement, the Assignee wishes to become a party to the Registration Rights Agreement, and be subject to applicable terms and obligations under the Registration Rights Agreement, effective at closing of the Transaction;

 

WHEREAS, the Assignee has received and read a copy of the Registration Rights Agreement and is thoroughly familiar with its terms; and

 

WHEREAS, pursuant to Section 11(f) of the Registration Rights Agreement, the Assignors and the Assignee wish to obtain consent from the Company for the assignment and assumption set forth in this Agreement and to the amendments to the Registration Rights Agreement set forth in Section 1 below.

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged:

 

1.                                       Assignment and Assumption. Pursuant to Section 11(f) of the Registration Rights Agreement, effective at the closing of the Transaction, each of the Assignors hereby transfers, conveys and assigns to the Assignee all of its rights, title and interests under the Registration Rights Agreement with respect to the Transferred Shares (including the F-3 Registration rights and related rights contained in Section 5 under the Registration Rights Agreement and Incidental or “Piggy-Back” Registration rights under Section 4 of the Registration Rights Agreement), and the Assignee, accepts such assignment.  The Assignee agrees to become a party to the Registration Rights Agreement, and be subject to applicable terms and obligations under the Registration Rights Agreement.

 

 

It is understood and agreed that, notwithstanding any provisions of the Registration Rights Agreement, (i) the Assignee and the Assignors (acting together) may not act as Initial Holders under Section 3(a) of the Registration Rights Agreement, (ii) the Assignee and the Assignors (acting together) may independently act as F-3 Initiating Holders under Section 5(a) of the Registration Rights Agreement, (iii) notwithstanding any provisions of Section 5(d) and Section 7(d) of the Registration Rights Agreement and subject to Section 2 hereof, the Assignors shall reimburse the Company for all costs and expenses relating to this assignment and the Registration Expenses in connection with any F-3 Registration or any amendment or supplement thereto requested by or for the benefit of the Assignee pursuant to this Agreement, up to US$10,000, (iv) the Assignee shall not be deemed to be a General Atlantic Shareholder, and (v) notice information for the Assignee for purposes of Section 11(e) of the Registration Rights Agreement shall be the same as that set forth in Section 7 hereof.

 

For the avoidance of doubt, each of the Assignors shall retain all of its rights, title and interests arising under the Registration Rights Agreement with respect to any Ordinary Shares or American Depositary Shares of the Company that such Assignor continues to hold after the Transaction.  The Registration Rights Agreement shall be deemed to be amended to effect the assignment and assumption set forth in this Agreement.  Except as expressly provided for in this Agreement, the Registration Rights Agreement shall remain in full force and effect.

 

2.                                       Shelf Registration Post Effective Amendment.  The Company consents and agrees to the terms of Section 1 above and agrees to file with the Securities and Exchange Commission (the “SEC”) a new Registration Statement on Form F-3 or an amendment or supplement to the Registration Statement on Form F-3 (file No. 333-166948) such that the Assignee shall be named as a “Selling Shareholder” under the section of the Shelf Registration Statement entitled “Selling Shareholders” within the meaning of the Shelf Registration Statement and that such registration statement, amendment or supplement shall be submitted with the SEC no later than the date on which the Company files with the SEC an annual report on Form 20-F with respect to the fiscal year ended December 31, 2012. The Company agrees to use its best effort to file such annual report on or before May 15, 2013. Upon the request of the Company, the Assignee agrees to deliver any information reasonably required by the Company in order to comply with any rule or regulation of the SEC applicable to the Shelf Registration Statement.

 

3.                                       Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. 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 or the affairs of the Company.  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, actin or proceeding brought in any such court has been brought in an inconvenient forum.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 2.

 

4.                                       No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person; except that this Agreement shall inure to the benefit of the Company, who shall be a third party beneficiary with respect hereto.

 

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5.                                       Further Assurances.  Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

6.                                       Amendment.  No provision of this Agreement may be amended other than by an instrument in writing signed by the parties hereto.

 

7.                                       Counterparts.  This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

 

8.                                       Notice.  All notices, demands and 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, email, courier service or personal delivery:

 

if to the Assignors:

 

c/o General Atlantic Service Company, LLC

3 Pickwick Plaza

Greenwich, CT 06830

Telecopy: (917) 206-1944

Attention: David A. Rosenstein

Email: DRosenstein@generalatlantic.com

 

with a copy to:

 

Paul Weiss Rifkind Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Telecopy: (212) 757-3990

Attention: John C. Kennedy

Email: jkennedy@paulweiss.com

 

if to the Assignee:

 

RS Investments

388 Market Street

San Francisco, CA 94111

Telecopy:  (415) 591-2854

Attention: Steve Bishop

Email: sbishop@rsinvestments.com

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

 

 

	
 
    	
General Atlantic Partners (Bermuda), L.P 
    
	
 
    	
By: General Atlantic GenPar (Bermuda), L.P.,
    
	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas J. Murphy
    
	
 
    	
 
    	
Name:
    	
Thomas J. Murphy
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GAP-W International, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas J. Murphy
    
	
 
    	
 
    	
Name:
    	
Thomas J. Murphy
    
	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GAP Coinvestments III, LLC  
    
	
 
    	
By: General Atlantic LLC, its Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas J. Murphy
    
	
 
    	
 
    	
Name:
    	
Thomas J. Murphy
    
	
 
    	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GAP Coinvestments IV, LLC  
    
	
 
    	
By: General Atlantic LLC, its Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas J. Murphy
    
	
 
    	
 
    	
Name:
    	
Thomas J. Murphy
    
	
 
    	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GapStar, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas J. Murphy
    
	
 
    	
 
    	
Name:
    	
Thomas J. Murphy
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to the Assignment and Assumption Agreement]

 

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GAPCO GmbH & Co. KG
    
	
 
    	
By: GAPCO Management GMBH,
    
	
 
    	
its General Partner
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas J. Murphy
    
	
 
    	
 
    	
Name:
    	
Thomas J. Murphy
    
	
 
    	
 
    	
Title:
    	
Managing Director
    

 

[Signature Page to the Assignment and Assumption Agreement]

 

5

 

	
 
    	
By:
    	
/s/ Steve Bishop
    
	
 
    	
 
    	
Name:
    	
Steve Bishop
    

 

[Signature Page to the Assignment and Assumption Agreement]

 

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As of the date first written above, the undersigned consents and agrees to the terms of this Assignment and Assumption Agreement (including, without limitation, the amendment provisions of Section 2 hereof) and agrees to file with the Securities and Exchange Commission a new Registration Statement on Form F-3 or an amendment or supplement to the Registration Statement on Form F-3 (file No. 333-166948), such that the Assignee shall be named as a “Selling Shareholder” under the section of such filing entitled “Selling Shareholders” within the meaning of such filing and that such registration statement, amendment or supplement shall be submitted with the SEC no later than the date on which the Company files with the SEC an annual report on Form 20-F with respect to the fiscal year ended December 31, 2012.  The undersigned further agrees to use its best effort to file such annual report on or before May 15, 2013.

 

 

	
Vimicro International Corporation
    	
 
    
	
 
    	
 
    
	
/s/ Authorized Signatory
    	
 
    
	
Authorized Signatory
    	
 
    

 

[Signature Page to the Assignment and Assumption Agreement]

 

7Exhibit 4.34

 

SHARE TRANSFER AGREEMENT

 

This share transfer agreement is made in Shanghai, China on this day of August 2, 2012 by and between:

 

(1) Vimicro International Corporation, a corporation established and existing under the laws of Cayman Islands, with its registered address at P.O. BoX 209GT, Ugland House South Church Street, George Town, Grand Cayman, Cayman Island (hereinafter referred to as “Transferor”);and

 

(2)  Vimicro Xingguang Corporation, a corporation established and existing under the laws of British Virgin Islands, with its registered address at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands

 

(Hereinafter referred to as “Transferee”);

 

In this Agreement, each of Transferor and Transferee shall be referred to as a “Party”, and, collectively, the “Parties”.

 

WHEREAS, (1) Vimicro VMF Shanghai Corporation is a corporation duly organized and validly existing under the laws of British Virgin Islands, with its registered address at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (Hereinafter referred to as “Target Company”); (2) Transferor is the legal and beneficial owner of one (1) issued and outstanding ordinary share of the Target Company, representing 100% of the entire issued share capital of the Target Company; (3) Target Company is the sole legal and beneficial owner of Vimicro High-Tech Corporation (Hereinafter referred to as “Vimicro Shanghai”) duly organized and validly existing under the laws of P.R.C.; (4) Transferor hereby agrees to transfer 100% of the issued and outstanding shares of the Target Company (Hereinafter referred to as “Target Equity”) to Transferee. The Transferee hereby agrees to purchase such Target Equity.

 

NOW, THEREFORE, in consideration of the premises, and the mutual representations, warranties, covenants and agreements herein set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION

 

1.1 Unless the terms or context of this Agreement otherwise provide, each of the terms used in this Agreement shall have the meaning specified below:

 

1.1.1”Agreement” means this Share Transfer Agreement (including the Annexes, Schedules and Exhibits hereto), as amended, supplemented, modified or restated from time to time.

 

 

1.1.2 “Transferor” has the meaning set forth in the introductory paragraph hereto.

 

1.1.3 “Transferee” has the meaning set forth in the introductory paragraph hereto.

 

1.1.4 “Target Company” has the meaning set forth in the introductory paragraph hereto.

 

1.1.5 “Target Equity” has the meaning set forth in the introductory paragraph hereto.

 

1.1.6 “Financial Statement” refers to the Target Company’s and Vimicro Shanghai’s financial statements and accounts for the accounting period until the Base Date which are examined and approved by the Transferee, including the balance sheet, statement of loss and profit and all notes, reports and other documents attached thereto.

 

1.1.7 “Base Date” refers to June 30, 2012 as specified in the Financial Statement.

 

1.1.8 “China” refers to the People’s Republic of China.

 

1.1.9 “Closing Date” refers to the date on which the Target Company completes formalities for equity change with BVI registration office.

 

1.1.10 “Encumbrance” refers to any equity guarantee, lien, mortgage, limit, pledge, third party’s right, mortgage of any kind, encumbrance, option, priority and other rights of any kind.

 

1.2 Rules of Construction.

 

1.2.1 Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in either the masculine or the neuter gender shall include the masculine, the feminine and the neuter.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

 

1.2.2 Any reference to any provision of a statute, rule, regulation, order or similar authority shall be deemed to refer to any successor or amendment to such provision.

 

 

ARTICLE 2 SALE AND PURCHASE OF EQUITY

 

2.1 Under the terms and conditions hereof, the Transferor agrees to sell to the Transferee, and the Transferee agrees to purchase from the Transferor, the equity interest of the Target Company.  The purchase price of the 100% Target Equity is US$10.41 million (the “Consideration”). The Target Company was obliged to pay the Transferor the amount of US$10 million pursuant to the share transfer agreement signed by and between the Target Company and the Transferor in February, 2012.  The Transferee agrees to undertake the obligation of the Target Company to repay such debt to the Transferor as partial payment of the Consideration. The Transferee shall pay the amount of US$10 million to the Target Company and the Target Company shall immediately pay such US$10 million to the Transferor to repay the debt and hereby settle the liability to the Transferor. The Transferee shall also pay the remaining US$0.41 million to the Transferor directly. Once the Transferor receives the payment of US$10 million from the Target Company and US$0.41 million from the Transferee, it shall be deemed that the Transferee performs the payment obligation under this Agreement.

 

2.2 The Target Equity is clear of any Encumbrances and any other third party’s rights.

 

2.3 The Target Company and Vimicro Shanghai are clear of any capital commitment, hidden or contingent liabilities or guarantee obligations undisclosed to the Transferee in writing.

 

2.4 The Transferor warrants that, during the transition period from the execution hereof until the Closing Date, the Transferor shall endeavor to effectively and prudently run the current business, keep the Target Company and Vimicro Shanghai in normal operation, ensure service quality, human resource management, operation and goodwill of the Company not be damaged. Without the Transferee’s approval, the Transferor shall ensure the Target Company and Vimicro Shanghai will not assume any new major burdens (including guarantee liability) during the transition period from the execution hereof until the Closing Date.

 

2.5 Within the transition period from the execution hereof until the Closing Date, the Transferor shall, at the request of the Transferee, use its best effort to provide the Transferee with materials relating to the Target Equity, business, finance and management of the Target Company and Vimicro Shanghai, and shall not conceal any materials, data or certificates. In addition, the Transferor agrees that, upon execution hereof, the Transferee and its agent may enter the office of the Target Company and Vimicro Shanghai to inquire and duplicate relevant business materials, asset state, accounts and records at any time. After the Closing Date, if required by the Transferee, the Transferor has the responsibility to assist the Transferee obtaining and/or explaining materials relating to the business, finance and management of the Target Company and Vimicro Shanghai.

 

ARTICLE 3 PAYMENT OF TRANSFER PRICE

 

3.1 The representations and warranties of the Transferor and the Target Company in Article 4 hereof shall be authentic and correct on/prior to the Closing Date.

 

3.2 All Parties shall have performed all obligations to be fulfilled before the Closing Date in compliance with the provisions hereof.

 

 

3.3 Within 30 working days upon completion of the alteration registration of the Target Equity hereunder, the Transferee shall pay the Consideration as provided in article 2.1 of this Agreement or its equivalent to the Transferor. As of the date when the Transferee pays the Consideration (the “Date of Payment”), the Transferee shall be deemed to have fulfilled its obligation of payment under this Agreement.

 

3.4 On or prior to the Closing Date, if aware of any of the following events, the Transferee may unilaterally terminate this Agreement at any time:

 

3.4.1 if the evidence, representations or guarantee, made by the Transferor in any notice, certificate, certification, document or statement made or delivered in accordance with this Agreement or warranty document, or in or assumed by this Agreement or any warranty document, is in any way untrue or incorrect;

 

3.4.2 if the Transferor, the Target Company or Vimicro Shanghai is under any of the following circumstances:

 

(a) any court or other competent department issues an order of bankruptcy, liquidation, winding-up or dissolution of the Transferor or the Target Company, or issues an order to engage a liquidator, receiver, trustor or a similar officer concerning the Transferor, the Target Company or Vimicro Shanghai, or any resolution of such kind is passed, or any procedure of such kind is started;

 

(b) any movable properties, real estate or Assets of the Transferor, the Target Company or Vimicro Shanghai are detained, or detained for the purpose of executing a decree or as applied to a court;

 

(c) the Transferor, the Target Company or Vimicro Shanghai completely ceases payment to creditors, and shall be unable to pay their respective liabilities to the extent of any applicable laws on insolvency, bankruptcy, liquidation, winding-up or dissolution, or shall shut up or proposes to shut up most business;

 

3.4.3 if it is impracticable or illegal for the Transferor to fulfill any material undertakings or responsibilities specified in any document or responsibilities under this Agreement or the warranty document;

 

3.4.4 if any major change occurs to the business, assets, general condition or prospect of the Transferor, the Target Company or Vimicro Shanghai;

 

3.4.5 if the assets of the Target Company or Vimicro Shanghai or major part thereof are attached, confiscated, recovered or expropriated (whether compensated or not), or all or part thereof are damaged or destroyed;

 

3.4.6 if on or at any time after of the execution of this Agreement, the registration or beneficial ownership the Target Company or Vimicro Shanghai are altered without written consent of the Transferee; or

 

 

3.4.7 if the Target Company or Vimicro Shanghai is subject to any liabilities, debts (including contingent and guaranteed debts) or guarantee obligations undisclosed to Transferee.

 

ARTICLE 4 REPRESENTAION AND WARRANTIES OF THE TRANSFEROR AND THE TARGET COMPANY

 

4.1 Entity, good standing and qualification

 

The Transferor is an entity duly organized, validly existing and in good standing under the laws of its registration jurisdiction. It has all necessary right, power and authority to own all existing Assets, run current business or any proposed business, and perform all obligations under this Agreement or any document signed under this Agreement. The Transferor has adequate qualification of transaction and is in good standing within the jurisdiction.

 

4.2 Authorization

 

All company actions to be conducted by the board of directors and shareholders for the purpose of authorizing the Transferor to enter into this Agreement and deliver the equity have been or will be completed. All company actions to be conducted by the Transferor officers for the purpose of entering into and delivering this Agreement as well as delivering the equity have been or will be completed. This Agreement and any possible document signed under this Agreement shall constitute valid and legally binding obligations to the Transferor and may be performed for the Transferor in accordance with relevant provisions.

 

4.3 Disclosure

 

The Transferor has provided all information as required by the Transferee in deciding purchasing the Target Equity and all information which, in the view of the Transferor, may have major affect to the Transferee in deciding purchasing the equity. No false statement or omission of any major facts or misleading statements are made in this Agreement, other statements, certificates or documents provided to the Transferee.

 

4.4 Land Use Rights

 

4.4.1 Vimicro Shanghai has the land use right of a piece of land located at 5/91 Qiu, No. 15 Street, Zhangjiang Hi-Tech Park, Pudong New Area, Shanghai (上海市浦东新区张江高科技园区15街坊5/91丘) with the area of 21,123 square meters (the “Target Land”), free from any Encumbrance, and there is no agreement or commitment to give or create any such Encumbrance.

 

 

4.4.2 In the event that the land use right of the Target Land is taken back by the competent government authority prior to the Date of Payment due to the failure of compliance with the Land Use Right Transfer Contract by Vimicro Shanghai, including the failure of the commencement of the construction of the Target Land on or prior to the construction date specified therein, the Transferee is entitled to terminate this Agreement unilaterally by a writing notice to the Transferor.  Notwithstanding of the foregoing, the Transferor shall not be accountable for the confiscation of the Target Land by competent government authority after the Date of Payment.

 

4.4.3 If Vimicro Shanghai shall pay any charges or penalties for idle land with respect to the Target Land prior to the Date of Payment pursuant to any applicable laws and regulations of the PRC, the Transferee shall be entitled to (i) require the Transferor to reimburse all such charges or penalties paid by Vimicro Shanghai to the Transferee within ten (10) working days after the Transferee conveys relevant government notice to the Transferor, or (ii) deduct such charges and penalties from the Consideration that has not been paid to the Transferor (if any), provided that the Transferee issues to the Transferor relevant notice together with relevant documentary proof issued from competent government authorities against Vimicro Shanghai.  Before any payment or deduction of the charges or penalties to government under this Clause, the Transferee shall notify the Transferor in writing. Notwithstanding of the foregoing, the Transferor shall not be accountable for the above penalties or charges by competent government authority after the Date of Payment.

 

4.4.4. The aforesaid indemnification specified in Section 4.4.2 and 4.4.3 is subject to the conditions that (i) this indemnification keeps effective till the Date of Payment, and (ii) the withdrawal of the land use right of the Target Land by the competent government authority and the penalties set forth in Section 4.4.3 shall not be caused by its own reasons of the Transferee.

 

4.5 Compensation responsibility

 

4.5.1 Unless otherwise described in this Agreement, the Transferor hereby confirms that in the event the Transferee and/or the Target Company suffers from any losses arising from legal responsibilities incurred by the Target Company before the Closing Date (except for those disclosed to the Transferee), the Transferor shall be liable for full guarantee or compensation to the Transferee, the Target Company or Vimicro Shanghai. For the avoidance of doubt, the Transferor hereby undertakes to the Target Company, Vimicro Shanghai and the Transferee that the Transferor shall compensate the Target Company, Vimicro Shanghai and the Transferee for all legal responsibilities and liabilities incurred by the Target Company before the Closing Date, so as to guarantee the Target Company, Vimicro Shanghai and the Transferee suffer from no losses.

 

 

4.6 Actions before the Closing Date

 

4.6.1 Prior to closing of the equity transaction, the Transferor shall urge the Target Company and Vimicro Shanghai as follows:

 

(1) the Target Company and Vimicro Shanghai  shall only engage in general and daily business;

 

(2) the Target Company and Vimicro Shanghai  shall execute and affix its official stamp on all necessary documents, go through all necessary procedures and make all applications to the examination and approval authority and all relevant departments of the government for approval hereof;

 

(3) the board of directors of the Target Company and Vimicro Shanghai shall vote for this Agreement, transfer hereunder and agreement on amendment to the joint venture articles of association; and

 

(4) the Target Company and Vimicro Shanghai shall disclose all information relating to any facts or issues (disregarding occurring prior to, on or after the execution date hereof), as known by the Transferor, the Target Company or Vimicro Shanghai, to the Transferee in a timely manner.

 

4.6.2 Limit on the Transferor

 

During the period as of the execution hereof until the completion of the transfer hereunder, in terms of all major matters concerning operation of the Target Company and Vimicro Shanghai, the Transferor shall fully cooperate with the Transferee, and ensure the Target Company and Vimicro Shanghai shall not conduct any of the following actions without the written consent of the Transferee:

 

(1) borrow additional loans or incur any other liabilities (except for normal commercial credits in the process of general and usual business);

 

(2) make any guarantee set up on company Assets or business to any party, or set up any Encumbrance on company Assets or business to which the beneficiary may be any party.

 

(3) declare, make or pay any dividends or other distribution to the shareholders;

 

(4) issue any capital stocks or borrow any amount (except for debts occurring in the process of current operations);

 

(5) take any action which may involve substantial obligation or may lead to substantial change of the nature of the Target Company and Vimicro Shanghai, their structure or business scope (except that of general and usual business);

 

(6) purchase or dispose, or agree to purchase or dispose any major business, equity, shares or any major Assets with a value of more than RMB1,000,000.00; or

 

 

(7) agree to take any of the above actions.

 

ARTICLE5 REPRESENTAIONS AND WARRANTIES OF THE TRANSFEREE

 

5.1 The Transferee is fully competent for purchasing the equity in its own name.

 

5.2 The Transferee has fulfilled necessary internal approval and authorization prior to execution hereof.

 

5.3 The Transferee guarantees to perform and be capable of performing the obligations as stipulated herein.

 

ARTICLE6 CONFIDENTIALITY

 

6.1 Without prior written consent of the other Party, either Party may not make any notice or announcement concerning the Parties’ intention to sell and purchase the Target Equity or any matters relating thereto.

 

6.2 Each Party may not disclose any matters and/ or materials relating hereto to any third party;

 

6.3 To the extent of the following circumstances and scope, any party may disclose any materials relating to this Agreement or any relevant matters:

 

6.3.1 Any legal provisions within the jurisdiction;

 

6.3.2 Disclosure to the professional consultant of any party and/or the Target Company, Vimicro Shanghai as well as banks;

 

6.3.3 Relevant data being known to the public not due to any party’s default; or

 

6.3.4 Written agreement by and among the Parties.

 

6.4 Each Party shall in absolute confidentiality any data relating to the content, negotiation and relevant matters of this Agreement or to another party which is acquired or accessed due to execution or performance hereof;

 

6.5 Disregarding termination hereof under any circumstances, the provisions in this Article 6 shall continue being valid within three (3) years upon such termination. The rights and remedies of each party hereunder are accumulative, which shall not prejudice any other legitimate rights and remedies.

 

 

ARTICLE7 DEFAUT ACTION AND REMEDY

 

7.1 Any material breach of any representations, warranties or undertakings hereunder by any party hereto shall constitute a default of this Agreement. The default party shall compensate the non-default party’s actual losses, unless as otherwise provided herein. The payment of the above compensation, late fee and damages shall not prejudice the continuous performance hereof by the non-default party as stipulated herein.

 

7.2 Where this Agreement is invalid or unable to be performed due to any party’s violation or failure in performance of all or part of the obligations hereunder, the default party shall compensate the non-default party’s actual losses, unless as otherwise provided herein.

 

7.3 In the event that one Party breaches this Agreement, the non-default party has the right to exercise any one or more of the following remedies to safeguard its rights:

 

7.3.1 Suspend performance of the obligations under or relating to this Agreement, and resume the performance after the default party has eliminated the default situation; suspension of performance of obligations by the non-default party shall not constitute non-performance or delay in performance of such obligations.

 

7.3.2 Rescind this Agreement unilaterally with a 20 days prior written notice which shall come into force as of the date when it is served on the default party. If the default party fails to take effective remediation, then the non default party can terminate the Agreement unilaterally by its further notice.

 

7.3.3 Require the default party to compensate the losses of the non-default party.

 

ARTICLE 8 SUPPLEMENTARY PROVISIONS

 

8.1 Transaction expenses

 

Taxes and expenses incurred by the transaction hereunder shall be borne by the Transferor and the Transferee respectively in accordance with the related law.

 

8.2 Governing law

 

This Agreement shall be executed, governed by and interpreted solely in accordance with the laws of China.

 

8.3 Dispute resolution

 

Any dispute arising from or in connection with this Agreement shall be submitted to the China International Economic and Trade Arbitration Commission Shanghai Sub-Commission for arbitration which shall be conducted in accordance with the Commission’s arbitration rules in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties. The address of arbitration is Shanghai. Costs and expenses for the arbitration shall be paid by the Party decided by the arbitrator or allocated between the Parties.

 

 

8.4 Amendment
 unless as otherwise permitted herein, the Parties hereto may amend, modify, cancel or terminate any terms of this Agreement in writing.

 

8.5 Completeness

 

This Agreement shall constitute full and complete understanding and agreement among the Parties concerning the subject matter of the consultation. Any other written or oral agreement on such subject matter among the Parties shall be cancelled.

 

8.6 Severability

 

Any invalidity or unexercisability of any term hereof shall not affect the legal force and exercisability of any other terms hereof.

 

8.9 Counterpart
 This Agreement shall have six counterparts, with each party holding one. The rest four counterparts shall be submitted to relevant governmental departments for purpose of examination and approval.

 

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<No Text on this Page, only for Signature.>

 

 

This Agreement shall be executed upon legitimate authorization to the following Parties:

 

 

	
Transferor: Vimicro   International Corporation
    	
 
    
	
 
    	
 
    
	
Legal representative:
    	
 
    
	
 
    	
 
    
	
(Authorized   representative)
    	
 
    
	
 
    	
 
    
	
[Company   Seal Affixed]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Transferee: Vimicro   Xingguang Corporation
    	
 
    
	
 
    	
 
    
	
Legal representative:
    	
 
    
	
 
    	
 
    
	
(Authorized   representative)
    	
 
    
	
 
    	
 
    
	
[Company   Seal Affixed]

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