Document:

Form of Global Security

 Exhibit 4.01 
 LEHMAN BROTHERS HOLDINGS INC. 
 Form of Bearish Reverse Exchangeable Notes Linked to the Common Stock of [Reference Stock
Issuer] 
  

			
	Number R-1	 	$[                    ]
	ISIN [                    ]	 	CUSIP [                    ]

 See Reverse for Certain Definitions 
 THIS SECURITY (THIS “SECURITY”) IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 LEHMAN BROTHERS
HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company”), for value received, hereby promises to pay to CEDE & CO. or registered assigns, at the
office or agency of the Company in the Borough of Manhattan, The City of New York, on the Maturity Date, in such coin or currency of the United States of America at the time of payment shall be legal tender for the payment of public and private
debts, for each $1,000 principal amount of the Securities represented hereby, an amount equal to the Payment at Maturity and to make coupon payments on the principal amount hereof, as provided below under “Coupon Payments.” 
 Any amount payable on the Maturity Date hereon will be paid only upon presentation and surrender of this Security. 
 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. 

 IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be signed by its Chairman
of the Board, its President, its Vice Chairman, its Chief Financial Officer, one of its Vice Presidents or its Treasurer, by manual or facsimile signature under its corporate seal, attested by its Secretary or one of its Assistant Secretaries by
manual or facsimile signature. 
  

							
	Dated: [                    ]	 	LEHMAN BROTHERS HOLDINGS INC.	 	
				
	[SEAL]	 		 		 	
				
		 	By:	 	  
	 	
		 		 	Vice President	 	
				
		 	Attest:	 	  
	 	
		 		 	Assistant Secretary	 	

  
 TRUSTEE’S CERTIFICATE OF
AUTHENTICATION 
 This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 
  

			
	CITIBANK, N.A.
	as Trustee
		
	By:	 	  

		 	    Authorized Officer

  

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 Reverse of Security 
 This Security is one of a duly authorized series of Securities of the Company designated as [            ]% Bearish Reverse Exchangeable Notes Linked to the
Common Stock of [Reference Stock Issuer] (herein called the “Securities”). The Company may, without the consent of the holders of the Securities, create and issue additional notes ranking equally with the Securities and otherwise
similar in all respects so that such further notes shall be consolidated and form a single series with the Securities; provided that no additional notes can be issued if an Event of Default has occurred with respect to the Securities. This series of
Securities is one of an indefinite number of series of debt securities of the Company, issued and to be issued under an indenture, dated as of September 1, 1987, as amended (herein called the “Indenture”), duly executed and
delivered by the Company and Citibank, N.A., as trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities. 
 The Payment at Maturity and the amount to be paid on each Coupon Payment Date, at the request of the Trustee, shall be determined by the Calculation Agent pursuant to the Calculation Agency Agreement. The Trustee
shall fully rely on the determination by the Calculation Agent of the Payment at Maturity and the amount to be paid on each Coupon Payment Date and shall have no duty to make any such determination. The Calculation Agent will provide written notice
to the Trustee at its New York office, on which notice the Trustee may conclusively rely, of the Payment at Maturity and the amount to be paid on each Coupon Payment Date on or prior to 11:00 a.m. on the Business Day preceding the Maturity Date and
each Coupon Payment Date. 
 All calculations with respect to the Initial Share Price, the Price or Closing Price, as applicable, of the
Reference Stock during the Monitoring Period, the Final Share Price and the Payment at Maturity will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up to .7655); and
all dollar amounts paid on the aggregate principal amount of Securities per Holder will be rounded to the nearest cent, with one-half cent rounded upward. 
 This Security is not subject to any sinking fund. 
 If an Event of Default with respect to the Securities
shall occur and be continuing, the amounts payable on all of the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The amount payable to the Holder hereof upon any acceleration permitted under
the Indenture will be equal to the Payment at Maturity calculated as though the date of acceleration were the Maturity Date, and the
[                    ] Business Day immediately preceding the date of acceleration were the Observation Date, plus, if applicable, any accrued and
unpaid coupon payments on the Securities. Upon any acceleration of the Securities, any coupon payment will be calculated on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed from and including the previous
Coupon Payment Date for which a coupon payment was made. If the maturity of the Securities is accelerated because of an 

 
Event of Default, the Company shall, or shall cause the Calculation Agent to, provide written notice to the Trustee at its New York office, on which notice
the Trustee may conclusively rely, and to The Depository Trust Company of the cash amount due with respect to the Securities as promptly as possible and in no event later than two Business Days after the date of acceleration. 
 The Indenture contains provisions permitting the Company and the Trustee, with the consent of the
holders of not less than 66 2/3% in aggregate principal amount of each series of Securities at the time
Outstanding to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture or of
any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) change the fixed
maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, if any, or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or
interest thereon, if any, payable in any coin or currency other than that hereinabove provided, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to
institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is
also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of
all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, or the principal of, or premium, if any, on any
of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future holders and owners of this Security and any Securities which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon this Security or such other Securities.

 No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the Payment at Maturity and coupon payments with respect to this Security. 
 The
Securities are issuable in denominations of $1,000 and any whole multiples of $1,000. 
 The Company, the Trustee, and any agent of the
Company or of the Trustee may deem and treat the registered holder (the “Holder”) hereof as the absolute owner of this Security (whether or not this Security shall be overdue and notwithstanding any notation of ownership or other
writing hereon), for the purpose of receiving payment hereof, or on account hereof, and for all other purposes and neither the Company nor the Trustee nor any agent of the Company or of the Trustee shall be affected by any notice to the contrary.
All such payments made to or upon the order of such registered holder shall, to the extent of the sum or sums paid, effectually satisfy and discharge liability for moneys payable on this Security. 
  

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 No recourse for the payment of the principal of, premium, if any, or interest on this Security, or for
any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released. 
 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this
Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Corporate Trust Office or agency in a Place of Payment for this Security, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Securities of this series or of like tenor and of
authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 The
Company intends to treat, and by purchasing this Security, the Holder agrees to treat, for all tax purposes, this Security as a financial contract, rather than as a debt instrument. 
 THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 Definitions 
 Set forth below are definitions of the
terms used in this Security. 
 “Business Day”, notwithstanding any provision in the Indenture, shall mean any day that is
not a Saturday or Sunday and that is not a day on which banking institutions in the City of New York are authorized or obligated by law to close. 
 “Calculation Agency Agreement” shall mean the Calculation Agency Agreement, dated as of December 21, 2006 between the Company and the Calculation Agent, as amended from time to time, or any successor calculation agency
agreement. 
 “Calculation Agent” shall mean the person that has entered into an agreement with the Company providing for,
among other things, the determination of the Payment at Maturity, which term shall, unless the context otherwise requires, include its successors and assigns. The initial Calculation Agent shall be Lehman Brothers Inc. 
  

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 “Cash Value” shall mean the amount in cash equal to the greater of (i) zero and
(ii) the product of (A) $,1000 and (B) (1 – the Underlying Return). 
 “Closing Price” of one share of
the Reference Stock (or one unit of any other security for which a Closing Price must be determined) on any Trading Day means: 
  

	 	•	 	 if the Reference Stock (or any such other security) is listed or admitted to trading on a national securities exchange, the last reported sale price, regular way,
of the principal trading session on such day on the principal United States securities exchange registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on which the Reference Stock (or any such other
security) is listed or admitted to trading, 

  

	 	•	 	 if the Reference Stock (or any such other security) is listed or admitted to trading on any national securities exchange but the last reported sale price is not
available pursuant to the preceding bullet point, the last reported sale price of the principal trading session on the over-the-counter market as reported on the OTC Bulletin Board Service (the “OTC Bulletin Board”) operated by the
National Association of Securities Dealers, Inc. (“NASD”) on such day; 

  

	 	•	 	 if the Reference Stock (or any such other security) is not listed or admitted to trading on any national securities exchange but is included in the OTC Bulletin
Board, the last reported sale price of the principal trading session on the OTC Bulletin Board on such day; or 

  

	 	•	 	 if, because of a Market Disruption Event or otherwise, the last reported sale price for the Reference Stock (or any such other security) is not available pursuant
to the preceding bullet points, the mean, as determined by the Calculation Agent, of the bid prices for the Reference Stock (or any such other security) obtained from as many recognized dealers in such security, but not exceeding three, as will make
such bid prices available to the Calculation Agent. Bids of any of the Company’s affiliates may be included in the calculation of such mean, but only to the extent that any such bid is not the highest or the lowest of the bids obtained.

 The term OTC Bulletin Board will include any successor service thereto. 
 “Company” shall have the meaning set forth on the face of this Security. 
 “Coupon Payment Date” shall mean the
[                    ] day of each
[                    ], commencing on
[                    ] to, and including, the Maturity Date. If any Coupon Payment Date falls on a day that is not a Business Day, then any payment
required to be made on such Coupon Payment Date will instead be made on the next succeeding Business Day following such scheduled Coupon Payment Date, unless that day falls in the next calendar month, in which case the Coupon Payment Date will be
the first preceding day that is a Business Day. 
  

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 “Coupon Period” is the period beginning on, and including, the issue date of the
Securities and ending on, but excluding, the first Coupon Payment Date, and each successive period beginning on, and including, a Coupon Payment Date and ending on, but excluding, the next succeeding Coupon Payment Date. 
 “Coupon Rate” shall mean [        ]% per annum. 
 “Final Share Price” shall equal the Closing Price of the Reference Stock on the Observation Date. 
 “Holder” shall have the meaning set forth on the reverse of this Security. 
 “Indenture” shall have the meaning set forth on the reverse of this Security. 
 “Initial Share Price” shall equal the Closing Price of the Reference Stock on the Pricing Date, divided by the Stock Adjustment Factor.
The Initial Share Price of the Reference Stock shall initially be $[            ]. 
 “Market Disruption Event” means, with respect to the Reference Stock (or any other security for which a Closing Price must be determined): 
 (1)    the occurrence or existence of a suspension, absence or material limitation of trading of the Reference Stock (or such security) on the primary market for the Reference Stock (or such
security) at any time during the one hour period preceding the close of the principal trading session in such market; 
 (2)    a breakdown or failure in the price and trade reporting systems of the primary market for the Reference Stock (or such security) as a result of which the reported trading prices for the Reference Stock (or such
security) during the last one hour period preceding the close of the principal trading session in such market are materially inaccurate; 
 (3)    the occurrence or existence of a suspension, absence or material limitation of trading on the primary market for trading in futures or options contracts related to the Reference Stock (or such security), if
available, at any time during the last one hour period preceding the close of the principal trading session in the applicable market; or 
 (4)    a decision to permanently discontinue trading in the relevant futures or options contracts, 
 in each case as determined
by the Calculation Agent in its sole discretion. 
 For the purpose of determining whether a Market Disruption Event has occurred:

 (1)    a limitation on the hours or number of days of trading will not constitute a Market Disruption Event if it
results from an announced change in the regular business hours of the Relevant Exchange or market for the Reference Stock, 
  

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 (2)    limitations pursuant to the rules of any Relevant Exchange similar to NYSE
Rule 80B (or any applicable rule or regulation enacted or promulgated by the NYSE, any other U.S. self-regulatory organization, the Securities Exchange Commission or any other relevant authority of scope similar to NYSE Rule 80B as determined by the
Calculation Agent in its sole discretion) on trading during significant market fluctuations will constitute a suspension, absence or material limitation of trading, 
 (3)    a suspension of trading in futures or options contracts on the Reference Stock (or such security) by the primary securities market trading in such contracts, if available, by reason of:

  

	 	•	 	 a price change exceeding limits set by such securities exchange or market, 

  

	 	•	 	 an imbalance of orders relating to such contracts, or 

  

	 	•	 	 a disparity in bid and ask quotes relating to such contracts 

 will, in each such case, constitute a suspension, absence or material limitation of trading in futures or options contracts related to the Reference Stock (or such security); and 
 (4)    a “suspension, absence or material limitation of trading” on the primary securities market on which futures or
options contracts related to the Reference Stock (or such other security) are traded will not include any time when such securities market is itself closed for trading under ordinary circumstances. 
 “Maturity Date” shall mean
[                    ], unless that day is not a Business Day, in which case the amount equal to the Payment at Maturity will be made on the next
succeeding Business Day following [                    ]; provided, that if due to a non-Trading Day or a Market Disruption Event, the
Observation Date is postponed so that it falls less than three Business Days prior to the scheduled Maturity Date, the Maturity Date will be the third Business Day following the Observation Date, as postponed. 
 “Monitoring Period” shall mean the period from, and including, the Pricing Date to, and including, the Observation Date. 
 “NYSE” shall mean The New York Stock Exchange, Inc. 
 “Observation Date” shall mean [                    ], provided, that if the Observation Date
is not a Trading Day or if there is a Market Disruption Event on such day, the Calculation Agent will determine the Final Share Price by reference to the Closing Price of the Reference Stock on the next Trading Day for the Reference Stock on which
there is not a Market Disruption Event; provided, however, if a Market Disruption Event with respect to the Reference Stock occurs on each of the eight Trading Days following the originally scheduled Observation Date, then the Calculation
Agent shall determine the Final Share Price based upon the mean, as determined by the Calculation Agent, of three bid prices for the Reference Stock obtained from recognized dealers in such security on that eighth Trading Day. 
  

 6 

 “Payment at Maturity”, as calculated by the Calculation Agent, for each $1,000 principal
amount Security shall equal $1,000 plus any accrued and unpaid coupon payments unless: 
 (i) the Final Share Price is greater than
the Initial Share Price; and 
 (ii) a Trigger Event has occurred. 
 If the conditions described in (i) and (ii) are both satisfied, the Payment at Maturity shall be, instead of $1,000 for each $1,000 principal
amount Security, the Cash Value, plus any accrued and unpaid coupon payments. However, the Company may elect, in lieu of paying the Cash Value, to deliver the number of shares of the Reference Stock equal to the Physical Delivery Amount plus any
cash that the Company will pay in lieu of fractional shares in an amount equal to the product of the Final Share Price multiplied by such fractional amount. 
 The Company may designate any of its affiliates to deliver any shares of the Reference Stock pursuant to the terms of the Securities and the Company shall be discharged of any obligation to deliver such shares of the
Reference Stock to the extent of such performance by its affiliates. 
 “Physical Delivery Amount” shall mean the number of
shares of the Reference Stock, per $1,000 principal amount of the Securities, equal to the Cash Value divided by the Final Share Price. 
 “Place of Payment” shall mean the place or places where the Payment at Maturity on the Securities is payable. 
 “Price” of one share of the Reference Stock (or one unit of any other security for which a Price must be determined) on any Trading Day means: 
  

	 	•	 	 if the Reference Stock (or any such other security) is listed or admitted to trading on a national securities exchange, the highest intraday bid price on such day
on the principal United States securities exchange registered under the Exchange Act, on which the Reference Stock (or any such other security) is listed or admitted to trading; 

  

	 	•	 	 if the Reference Stock (or any such other security) is not listed or admitted to trading on any national securities exchange but is included in the OTC Bulletin
Board, the highest reported bid price reported on the OTC Bulletin Board on such day; or 

  

	 	•	 	 if a bid price is not available pursuant to the preceding bullet points, the mean, as determined by the Calculation Agent, of the bid prices for the Reference Stock
(or any such other security) obtained from as many recognized dealers in such security, but not exceeding three, as will make such bid prices available to the Calculation Agent. Bids of any of the Company’s affiliates may be included in the
calculation of such mean, but only to the extent that any such bid is not the highest of the bids obtained. 

  

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 The term OTC Bulletin Board will include any successor service thereto. 
 “Pricing Date” shall mean
[                    ]. 
 “Reference Stock” shall be the common stock of [                    ]. 
 “Relevant Exchange” for the Reference Stock shall mean the primary U.S. exchange or market for trading for the Reference Stock.

 “Securities” shall have the meaning set forth on the reverse of this Security. 
 “Security” shall have the meaning set forth on the face of this Security. 
 “Stock Adjustment Factor” for the Reference Stock shall initially equal 1.0, subject to adjustment under certain circumstances as
described under “Anti-dilution Adjustments” below. 
 “Trading Day” means a day, as determined by the Calculation
Agent, on which trading is generally conducted on the NYSE, the American Stock Exchange (the “AMEX”), the Nasdaq Global Select Market, the Nasdaq Global Market, the Chicago Mercantile Inc., the Chicago Board Options Exchange, Incorporated
and in the over-the-counter market for equity securities in the United States. 
 “Trigger Event” shall occur if, on any
Trading Day during the Monitoring Period, the Closing Price of the Reference Stock is above the Trigger Price. 
 “Trigger
Price” shall equal a dollar amount that represents [        ]% of the applicable Initial Share Price in effect on such Trading Day. The Trigger Price of the Reference Stock shall initially be
$[            ]. 
 “Trustee” shall have the meaning set forth
on the reverse of this Security. 
 “Underlying Return” as calculated by the Calculation Agent, shall equal the following:

  

					
		  	 Final Share Price – Initial Share Price
 Initial Share Price
	 	

 All terms used but not defined in this Security are used herein as defined in the Calculation
Agency Agreement or the Indenture. 
  

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 Calculation Agent 
 The Calculation Agent will determine, among other things, the Initial Share Price, the Trigger Price, the Closing Price of the Reference Stock on any Trading Day during the Monitoring Period, the Stock Adjustment
Factor, anti-dilution adjustments and reorganization events, the selection of any Successor Reference Stock, the Final Share Price, the amount of any coupon payment payable on any Coupon Payment Date and the Payment at Maturity, as well as, in
determining whether a Trigger Event has occurred and whether the Final Share Price is above the Initial Share Price. In addition, the Calculation Agent will determine whether there has been a Market Disruption Event and whether a day is a Coupon
Payment Date. All determinations made by the Calculation Agent will be at the sole discretion of the Calculation Agent and will, in the absence of manifest error, be conclusive for all purposes and binding on Holders and the Company. The Company may
appoint a different Calculation Agent from time to time after the date of the original issue of the Securities without the Holders’ consent and without notifying Holders. 
 Anti-dilution Adjustments 
 The Stock Adjustment Factor is subject to adjustment by the Calculation
Agent as a result of the anti-dilution and reorganization adjustments described in this section. 
 No adjustments to the Stock Adjustment
Factor will be required unless the Stock Adjustment Factor adjustment would require a change of at least 0.1% in the Stock Adjustment Factor then in effect. A Stock Adjustment Factor resulting from any of the adjustments specified in this section
will be rounded to the nearest one ten-thousandth with five one hundred-thousandths being rounded upward. The Calculation Agent will not be required to make any adjustments to the Stock Adjustment Factor after the close of business on the Business
Day immediately preceding the Maturity Date. 
 No adjustments to the Stock Adjustment Factor will be required other than those specified
below. 
 The Calculation Agent shall be solely responsible for (1) the determination and calculation of any adjustments to the Stock
Adjustment Factor and of any related determinations and calculations with respect to any distributions of stock, other securities or other property or assets, including cash, in connection with any corporate event described in this section, and
(2) the determination of the Successor Reference Stock, and its determinations and calculations shall be conclusive absent manifest error. 
 The Company will, within ten Business Days following the occurrence of an event that requires an adjustment to the Stock Adjustment Factor (other than as a result of a Reorganization Event as described below), or if the Company is not aware
of this occurrence, as soon as practicable after becoming so aware, provide notice to the Calculation Agent, which shall provide written notice to the trustee, which shall provide notice to Holders of the occurrence of this event and, if applicable,
a statement in reasonable detail setting forth such adjusted Stock Adjustment Factor. 
  

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 Stock Splits and Reverse Stock Splits 
 If the Reference Stock is subject to a stock split or reverse stock split, then once any split has become effective, the Stock Adjustment Factor relating
to the Reference Stock will be adjusted so that the new Stock Adjustment Factor shall equal the product of: 
  

	 	•	 	 the prior Stock Adjustment Factor for the Reference Stock, and 

  

	 	•	 	 the number of shares which a holder of one share of the Reference Stock before the effective date of that stock split or reverse stock split would have owned or
been entitled to receive immediately following the applicable effective date. 

 Stock Dividends or Distributions

 If the Reference Stock is subject to a (i) stock dividend, i.e., issuance of additional shares of the Reference Stock, that is given
ratably to all holders of shares of the Reference Stock, or (ii) distribution of shares of the Reference Stock as a result of the triggering of any provision of the corporate charter of the issuer of the Reference Stock, then, once the dividend
has become effective and the shares are trading ex-dividend, the Stock Adjustment Factor for the Reference Stock will be adjusted so that the new Stock Adjustment Factor for the Reference Stock shall equal the prior Stock Adjustment Factor for the
Reference Stock plus the product of: 
  

	 	•	 	 the prior Stock Adjustment Factor for the Reference Stock, and 

  

	 	•	 	 the number of additional shares issued in the stock dividend with respect to one share of the Reference Stock. 

 Non-cash Distributions 
 If the
issuer of the Reference Stock distributes shares of capital stock, evidences of indebtedness or other assets or property of the issuer of the Reference Stock to holders of the Reference Stock (other than (i) dividends, distributions and rights
or warrants referred to under “—Stock Splits and Reverse Stock Splits” and “—Stock Dividends or Distributions” above and (ii) cash distributions or dividends referred under “—Cash Dividends or
Distributions” below), then, once the distribution has become effective and the shares are trading ex-dividend, the Stock Adjustment Factor for the Reference Stock will be adjusted so that the new Stock Adjustment Factor for the Reference Stock
shall equal the product of: 
  

	 	•	 	 the prior Stock Adjustment Factor for the Reference Stock, and 

  

	 	•	 	 a fraction, the numerator of which is the Current Market Price of the Reference Stock and the denominator of which is the amount by which such 

  

 10 

	 	 
Current Market Price exceeds the Fair Market Value of such distribution; provided that if the Fair Market Value of such distribution equals or exceeds the
Current Market Price of such Reference Stock, the Calculation Agent shall determine in its sole discretion the appropriate adjustment to the Stock Adjustment Factor for such Reference Stock. 

 The “Current Market Price” of the Reference Stock means the arithmetic average of the Closing Price of the Reference Stock for the ten Trading
Days prior to the Trading Day immediately preceding the ex-dividend date of the distribution requiring an adjustment to the Stock Adjustment Factor for the Reference Stock. 
 The “ex-dividend date” shall mean the first Trading Day on which transactions in the Reference Stock trade on the Relevant Exchange without the
right to receive that distribution. 
 The “Fair Market Value” of any such distribution means the value of such distribution on the
ex-dividend date for such distribution, as determined by the Calculation Agent. If such distribution consists of property traded on the ex-dividend date on a U.S. national securities exchange, the Fair Market Value will equal the Closing Price of
such distributed property on such ex-dividend date. 
 Notwithstanding the foregoing, a distribution on the Reference Stock described in
clause (a), (d) or (e) of the section entitled “—Reorganization Events” below that also would require an adjustment under this section shall not cause an adjustment to the Stock Adjustment Factor of the Reference Stock and
shall only be treated as a Reorganization Event (as defined below) pursuant to clause (a), (d) or (e) under the section entitled “—Reorganization Events.” A distribution on the Reference Stock described in the section
entitled “—Issuance of Transferable Rights or Warrants” that also would require an adjustment under this section shall only cause an adjustment pursuant to the section entitled “—Issuance of Transferable Rights or
Warrants.” 
 Cash Dividends or Distributions 
 If the issuer of the Reference Stock pays dividends or makes other distributions consisting exclusively of cash to all holders of the Reference Stock during any fiscal quarter during the term of the notes, in an
aggregate amount that, together with other such dividends or distributions made during such quarterly fiscal period, exceeds the Dividend Threshold, then, once the dividend or distribution has become effective and the shares are trading ex-dividend,
the Stock Adjustment Factor for the Reference Stock will be adjusted so that the new Stock Adjustment Factor for the Reference Stock shall equal the product of: 
  

	 	•	 	 the prior Stock Adjustment Factor for the Reference Stock, and 

  

	 	•	 	 a fraction, the numerator of which is the Current Market Price of the Reference Stock and the denominator of which is the amount by which such Current Market Price
exceeds the amount in cash per share the issuer of the Reference Stock distributes to holders of Reference Stock in excess of the Dividend Threshold; provided that if the amount in cash per share of such 

  

 11 

	 	 
dividend or distribution equals or exceeds the Current Market Price of the Reference Stock, the Calculation Agent shall determine in its sole discretion the
appropriate adjustment to the Stock Adjustment Factor for the Reference Stock. 

 “Dividend Threshold” shall mean
the amount of any cash dividend or cash distribution distributed per share of the Reference Stock that exceeds the immediately preceding cash dividend or other cash distribution, if any, per share of the Reference Stock by more than 10% of the
Closing Price of the Reference Stock on the Trading Day immediately preceding the ex-dividend date. 
 Issuance of Transferable Rights or
Warrants 
 If the issuer of the Reference Stock issues transferable rights or warrants to all holders of the Reference Stock to
subscribe for or purchase the Reference Stock, including new or existing rights to purchase the Reference Stock at an exercise price per share less than the closing price of the Reference Stock on both (i) the date the exercise price of such
rights or warrants is determined and (ii) the expiration date of such rights and warrants pursuant to a shareholder’s rights plan or arrangement, and if the expiration date of such rights or warrants precedes the Maturity Date, then the
Stock Adjustment Factor for the Reference Stock will be adjusted on the business day immediately following the issuance of such transferable rights or warrants so that the new Stock Adjustment Factor for the Reference Stock shall equal the prior
Stock Adjustment Factor for the Reference Stock plus the product of: 
  

	 	•	 	 the prior Stock Adjustment Factor for the Reference Stock, and 

  

	 	•	 	 the number of shares of the Reference Stock that can be purchased with the cash value of such warrants or rights distributed on one share of the Reference Stock.

 The number of shares that can be purchased will be based on the Closing Price of the Reference Stock on the date the new
Stock Adjustment Factor for the Reference Stock is determined. The cash value of such warrants or rights, if the warrants or rights are traded on a U.S. national securities exchange, will equal the Closing Price of such warrant or right, or, if the
warrants or rights are not traded on a U.S. national securities exchange, will be determined by the Calculation Agent and will equal the average (mean) of the bid prices obtained from three dealers at 3:00 p.m., New York City time, on the date the
new Stock Adjustment Factor for the Reference Stock is determined, provided that if only two such bid prices are available, then the cash value of such warrants or rights will equal the average (mean) of such bids and if only one such bid is
available, then the cash value of such warrants or rights will equal such bid. 
 Reorganization Events 
 If prior to the maturity date, 
  

 12 

	 	(a)	there occurs any reclassification or change of the Reference Stock, including, without limitation, as a result of the issuance of tracking stock by the issuer of the Reference
Stock, 

  

	 	(b)	the issuer of the Reference Stock, or any surviving entity or subsequent surviving entity of the issuer of the Reference Stock (a “Successor Entity”), has been subject to
a merger, combination or consolidation and is not the surviving entity, 

  

	 	(c)	any statutory exchange of securities of the issuer of the Reference Stock or any Successor Entity with another corporation occurs, other than pursuant to clause (b) above,

  

	 	(d)	the issuer of the Reference Stock is liquidated or is subject to a proceeding under any applicable bankruptcy, insolvency or other similar law, 

  

	 	(e)	the issuer of the Reference Stock issues to all of its shareholders equity securities of an issuer other than the issuer of the Reference Stock, other than in a transaction
described in clauses (b), (c) or (d) above (a “Spin-off Event”), or 

  

	 	(f)	a tender or exchange offer or going-private transaction is commenced for all the outstanding shares of the issuer of the Reference Stock and is consummated for all or substantially
all of such shares, as determined by the Calculation Agent in its sole discretion (an event in clauses (a) through (f), a “Reorganization Event”), 

 then, instead of adjusting the Stock Adjustment Factor for the Reference Stock, the Calculation Agent, in its sole discretion without consideration for the interests of investors, shall either: 
  

	 	(A)	determine a Successor Reference Stock (as defined below) to the Reference Stock that experiences any such Reorganization Event (the “Original Reference Stock”) after the
close of the principal trading session on the Trading Day immediately prior to the effective date of such Reorganization Event in accordance with the following paragraph (each successor reference stock as so determined, a “Successor Reference
Stock” and such successor reference stock issuer, a “Successor Reference Stock Issuer”); or 

  

	 	(B)	deem the Closing Price and the Stock Adjustment Factor of the Original Reference Stock on the Trading Day immediately prior to the effective date of such Reorganization Event to be
the Closing Price (in the case of daily monitoring) or Price (in the case of continuous monitoring) and Stock Adjustment Factor of the Original Reference Stock on every remaining Trading Day to, and including, the last Trading Day in the Monitoring
Period. 

  

 13 

 Upon the determination by the Calculation Agent of the Successor Reference Stock pursuant to clause
(A) of the preceding sentence, references in this Security to such “Reference Stock” shall no longer be deemed to refer to the Original Reference Stock and shall be deemed instead to refer to any such Successor Reference Stock for all
purposes, and references in Security to “issuer” of the Original Reference Stock shall be deemed to be to the Successor Reference Stock Issuer. 
 Upon the selection of the Successor Reference Stock by the Calculation Agent pursuant to clause (A) of the preceding sentence: 
  

	 	(i)	the Initial Share Price for the Successor Reference Stock will be the Closing Price of the Successor Reference Stock on the Trading Day immediately following the effective date of
the Reorganization Event multiplied by the Initial Share Price of the Original Reference Stock and divided by the Closing Price of the Original Reference Stock on the Trading Day immediately prior to the effective date of such Reorganization Event;

  

	 	(ii)	the Trigger Price for the Successor Reference Stock will be an amount that represents the same percentage of the Initial Share Price for the Successor Reference Stock as the
percentage of the Initial Share Price of the Original Reference Stock represented by the Trigger Price of the Original Reference Stock, as determined by the Calculation Agent; and 

  

	 	(iii)	the Stock Adjustment Factor for the Successor Reference Stock shall be 1.0, subject to adjustment for certain corporate events related to the Successor Reference Stock in accordance
with “— Anti-dilution Adjustments.” 

 For the avoidance of doubt, in the case of an issuance by the issuer of
the Reference Stock to all of its shareholders of equity securities of an issuer other than the issuer of the Reference Stock as described in clause (e) above, if the Closing Price of the Reference Stock as of the effective date of such
issuance does not increase or decline by at least 50% from the Initial Share Price of the Reference Stock, such issuance shall not constitute a Reorganization Event and no adjustments shall be made under this “— Reorganization Events”
section. Instead, the Reference Stock will be subject to adjustments as described under “— Non-cash Distributions” above. 
 The “Successor Reference Stock” will be the common stock of a U.S. company selected by the Calculation Agent from among the common stocks of U.S. companies then registered to trade on the NYSE, Nasdaq Global Select Market or
Nasdaq Global Market that is not already the Reference Stock, with the same primary Standard Industrial Classification Code (“SIC Code”) as the Original Reference Stock that, in the sole discretion of the Calculation Agent, is the most
comparable to the Original Reference Stock, taking into account such factors as the Calculation Agent deems relevant, including, without limitation, market capitalization, dividend history and stock price volatility; provided,
however, that a Successor Reference Stock will not be any stock that is subject to a trading restriction under the trading restriction policies of the Company or any of its affiliates that would materially limit the ability of the Company or

  

 14 

 
any of its affiliates to hedge the notes with respect to such stock (a “Hedging Restriction”); provided further that if the Successor
Reference Stock cannot be identified as set forth above for which a Hedging Restriction does not exist, the Successor Reference Stock will be selected by the Calculation Agent from the largest market capitalization stock of a U.S. company within the
same Division and Major Group classification (as defined by the Office of Management and Budget) as the primary SIC Code for the Original Reference Stock. 
 Following a Reorganization Event in which a Successor Reference Stock is selected, the Stock Adjustment Factor of the Successor Reference Stock will be subject to adjustment as described above under this
“Anti-dilution Adjustments” section, and, if no Successor Reference Stock is selected, the Original Reference Stock Issuer will, upon a subsequent Reorganization Event, be subject to the election by the Calculation Agent described in
clause (A) and (B) of the first paragraph under “— Anti-dilution Adjustments — Reorganization Events.” 
 The
Company will, or will cause the Calculation Agent to, provide written notice to the Trustee, to the Company and to The Depository Trust Company (“DTC”) within thirty business days immediately following the effective date of any
Reorganization Event, of the Successor Reference Stock Issuer, the Successor Reference Stock, the Trigger Price and the Initial Share Price for such Successor Reference Stock, as well as the Original Reference Stock so replaced. The Company expects
that such notice will be passed on to Holders in accordance with the standard rules and procedures of DTC and its direct and indirect participants. 
 Coupon Payments 
 For each Coupon Period for each $1,000 principal amount Security, the coupon payment for each Coupon
Period will be calculated as follows: 
 $1,000 x Coupon Rate x (number of days in the Coupon Period / 360), 
 where the number of days will be calculated on the basis of a year of 360 days with twelve months of thirty days each. 
 Coupon payments will be made at the Coupon Rate. Coupon payments will accrue from, and including, the issue date of the Securities to, but excluding, the
Maturity Date. Coupon payments will be paid in arrears on each Coupon Payment Date to, and including, the Maturity Date, to the Holders at the close of business on the date 15 calendar days prior to that Coupon Payment Date, whether or not such
fifteenth calendar day is a Business Day. If the Maturity Date is adjusted as the result of a Market Disruption Event, the coupon payment due on the Maturity Date will be made on the Maturity Date as adjusted, with the same force and effect as if
the Maturity Date had not been adjusted, but no additional coupon payment will accrue or be payable as a result of the delayed payment. 
  

 15 

 The following abbreviations, when used in the inscription on the face of the within Security, shall be
construed as though they were written out in full according to applicable laws or regulations: 
  

							
	TEN COM -	    	as tenants in common	    	UNIF GIFT MIN ACT - _________ Custodian  _________
		    		    	                          (Cust)             
     (Minor)

	TEN ENT -	    	as tenants by the entireties	    	under Uniform Gifts to Minors
	JT TEN -	    	as joint tenants with right of	    	Act	  	  

		    	Survivorship and not as tenants in common	    		  	( State)

 Additional abbreviations may also be used though not in the above list. 
                                       
                   
 FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto 
 PLEASE INSERT SOCIAL SECURITY OR OTHER 
 IDENTIFYING NUMBER OF ASSIGNEE 
  

			
	  	 	 
	  	 	 

  
  
  

	
	 

 (Name and Address of Assignee, including zip code, must be printed or typewritten.) 
  

	
	 

 the within Security, and all rights thereunder, hereby irrevocably constituting and appointing 
  

	
	 

 to transfer the said Security on the books of the Company, with full power of substitution in the premises.

 Dated: 
 __________________________________________ 
 NOTICE: The signature to this assignment must correspond with the name as it appears
upon the face of the within Security in every particular, without alteration or enlargement or any change whatever. 
 Signature(s) Guaranteed: 

_____________________________ 
 THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. 
  

 16Cooperation Agreement, dated December 22, 2006

 Exhibit 4.9 
 Beijing Haidian Xinhua Agricultural Industrial
 & Commercial Co. 
 and 
 Vimicro Corporation

 AGREEMENT 
 on
Cooperation for the Project of Vimicro Tower 
  

 1 

 AGREEMENT 
 THIS AGREEMENT is made on December 22, 2006 
 BETWEEN: 
 Party A: Beijing Haidian Xinhua Agricultural Industrial & Commercial Co. 
 Legal representative: Gao Xiaoyi

 Registered office: F2 Huayuan Road, Haidian District, Beijing 
 Tel: 6201 0812 
 Fax: 6202 5486; and 
 Party B:
Vimicro Corporation 
 Legal Representative: Deng Zhonghan 
 Registered office: No. 35, Xueyuan Road, Haidian District, Beijing 
 Tel: 6894 8888 
 Fax: 6894 4075. 
 Whereas Party A and Party B have agreed to cooperate in the
construction of Vimicro Tower (temporary name) (“the Project”), now it is hereby agreed as follows: 
 1. Location of the Project

 The Project is to be located in northwest of intersection of Jingchang Highway and North
4th Ring Middle Road (Jianxiang Overpass), Haidian District, Beijing. 
 2. Nature, Scale of and Total Investment for the Project 
 The Project
will contain Party B’s self-built R&D building and related public facilities, and occupy an area of 17,300 square meters, with an construction area of 11,000 square meters and a total floor area of 62,000 square meters, in which, the total
aboveground area will be 42,000 square meters and the total underground area 20,000 square meters. The total investment for the Project will be 240 million RMB yuan. 
  

 2 

 (The abovementioned purpose and numbers are subject to the final approval of the authorities concerned.) 
 3. Cooperation 
 3.1. Party A shall provide land for the use of the
Project, which includes a plot for the purpose of ancillary commercial facilities on which Party A’s former cooperative partner was to construct such facilities and deliver them to Party A as a compensation (2,920 square meters, see Annex 1),
and the plot A immediately next to the cuneiform greenbelt along Jingchang Highway (5,300 square meters, see Annex 2). The land requisition and relocation shall be carried out in the name of Party B. The procedures for assignment of land-use right
shall be handled for the Project as one for R&D office or industrial use (subject to the approval of the government), and the Project shall be submitted for government approval as Party B’s self-built R&D building. Party A shall assist
Party B in applying for construction permits. 
 3.2. Party B shall be responsible for all funds required for the construction of and pay all taxes and fees
relating to the Project. 
 3.3. It is agreed that the expenses of land requisition, demolition and resettlement payable by Party B to Party A shall be paid
by Party B by allocating certain area of the Project to Party A. 
 4. Allocation of Area of the Project 
 4.1. It is agreed that both aboveground and underground areas of the Project shall be divided based on the longitudinal axis in the ratio of 3.5 : 6.5. Party A shall have
35% and Party B 65%. The parties shall make the division within 10 working days from the approval of the amplified preliminary design drawing. The Parties shall make adjustment through consultation in the case of any error in the allocation.

 The allocation of the Project shall be made according to the principle of making Party B’ the main user, maintaining the integrity of the elevation
of the building and guaranteeing convenience in the management and use of the same, and the principle of relative independence in each party’s use of the building. 
  

 3 

 4.2. The Project shall be designed and constructed according to the principle of guaranteeing Party B the main user. That
is to say, the Project shall be designed in a manner that it may be used either jointly or independently. 
 4.3. The Project shall be designed and
constructed according to the relevant national standards and norms and the standards agreed upon by the parties. The exterior decoration and fitting-up of the public parts or spaces shall be unified and be complete and ready for use. The interior of
the part allocated to Party A shall be with preliminary fitting-up, with water, power and gas supplies and toilet, elevator and firefight facilities being complete and ready for use, provided that it should be possible for Party A to independently
measure its water, power and gas consumption. 
 4.4. After the completion of the Project, the final acceptance procedures shall be handled and certificates
of title obtained according to the relevant laws and regulations, and the transfer procedures shall be handled for area allocated to Party A. Party A need not pay Party B any price for such transfer, provided that Party A shall pay taxes and duties
that should be paid by a transferee according the relevant laws, regulations or policies of the state or Beijing Municipality. 
 It is agreed that if Party
B obtains a state-owned land use certificate for the two plots for the Project before June 30, 2007, it shall complete the completion submission-for-the-record procedures for the Project before June 30, 2009, unless the Project is delayed
for any reason not attributable to Party B. Party B shall deliver to Party A the part of the Project allocated to the latter within three months and go through necessary procedures so that Party A will obtain title certificates for such part within
18 months after the completion of the Project. 
 4.5. It is agreed that the parties shall jointly choose a property management company with a good
reputation to manage the Project. The Parties shall bear the property management fees and other taxes and charges according to their respective areas of the property. 
  

 4 

 4.6. To avoid being adversely affected by the 2008 Olympic Games, the parties shall be cooperative and try to have the
land requisition and the early-stage preparation work completed by the end of March 2007, the construction carried out from 2007 to 2008 and the decoration and fitting-up completed and ready for use in 2009. 
 5. Rights and Obligations of the Parties 
 5.1. Rights and Obligations
of Party A 
 5.1.1. Party A shall provide the relevant land documents relating to the Project and support Party B in going through required examination and
approval procedures, and in cadastral survey, sunlight analysis, project completion submission for the record and obtaining title certificates. 
 Party A
shall resolve by itself the problems relating to its former cooperation with its former cooperative partner (relevant certification is required for such resolution), provide relevant documents to the government as required, and assist Party B in
going through the procedures for the consolidated assignment of the right to use the plots under Annexes 1 and 2. 
 5.1.2. Party A shall be responsible for
the demolition and removing of the structures and objects on and leveling of the land for the construction of the Project and the authorized requisitioned land concerned and, within 45 days from Party B’s obtaining project planning
recommendations, deliver to Party B the land for the Project in the conditions of “three supplies and one leveling”. 
 5.1.3. Party A shall assist
Party B in coordinating the relations with the residents in the place of the Project and in eliminating any obstacle from any third party against the construction of the Project. 
 5.1.4. Party A has the right to make acceptance check and acquire the part of the Project as agreed and shall pay relevant taxes, charges and property management fees as agreed. 
  

 5 

 5.1.5. Party A shall allow Party B to use during the construction period of the Project the existing water and power
supply facilities on the land for the Project. The expenses for such supplies occurring in the construction period shall be borne by Party B. 
 5.2. Rights
and Obligations of Party B 
 5.2.1. As an independent subject of the Project, Party B has the right to precede the name of the Project with its own name and
the right to use the external walls and roofing of the Project. 
 5.2.2. Party B shall be responsible for obtaining all approvals and all funds and expenses
required for the Project. If the state-owned land use certificate is obtained before June 30, 2007, Party B shall complete the Project completion submission-for-the-record procedures by the end of June 2009, unless the Project is delayed for
any reason not attributable to Party B. 
 5.2.3. Party B shall construct the Project according to the standards provided for in Clause 4.3 and be
responsible for the design of the Project (Party B shall seek Party A’s comments on the plane layout, purposes and functions of the part allocated to Party A, so as to optimize the design) and the selection of the constructing company and the
construction supervision for the Project and responsible for completing the construction of the Project. 
 5.2.4. Party B shall inform Party A in writing of
the schedule for the construction of the Project in a timely manner, so that Party A may give timely and necessary support. 
 5.2.5. If the unified
planning, land requisition and demolition procedures have been completed and Party B has obtained the state-owned land use certificate by the end of June 2007, Party B shall go through the project completion submission-for-the-record procedures by
the end of June 2009, and make the initial registration and title transfer with the cooperation of Party A as agreed. 
 5.2.6. If during the period from the
delivery to Party A of the part of the Project allocated to it to Party A’s obtaining the title 

  

 6 

 
certificate, Party A needs any relevant certification, which should be provided by Party B, to use the part allocated to Party A, Party B shall provide such
certification in a timely manner. 
 5.2.7. Party B shall go through necessary procedures as agreed so that Party A will obtain title certificates for the
part of the Project allocated to Party A. Taxes and duties that should be paid by a transferee according the relevant laws, regulations or policies of the state or Beijing Municipality shall be borne by Party A. 
 5.2.8. Party B should not transfer, create any mortgage on or provide otherwise for any third party’s use any of the part of the Project allocated to Party A.

 6. Liabilities 
 6.1. No party shall bear any
liabilities for breach of contract in the case of nonperformance due to force majeure. 
 6.2. In the case of nonperformance or delay in performance due to
the implementation of any policy or administrative order of the state during the performance of this Agreement, the performance may be resumed after the elimination of the cause of the delay, or the Agreement may be terminated through consultation,
and no party shall bear any liability therefor. 
 6.3. If any party fails to perform any of its obligations hereunder without justification and refuses to
make corrections after the non-defaulting party has given notice to that effect, the defaulting party shall be liable for damages thus incurred by the non-defaulting party. 
 6.4. In the case of any delay in delivering the part of the Project allocated to Party A due to any reason attributable to Party B, Party B shall be liable for damages thus incurred by Party A. The damages shall be
determined by referring to the rents of comparable office buildings and ancillary facilities under the same conditions. 
 6.5. If Party B fails to go
through procedures within the agreed period to make Party A obtain title certificates for the part of the Project allocated to Party A, Party B shall be liable for damages thus incurred by Party A. 
  

 7 

 6.6. If Party A fails to perform any of its obligations hereunder without justification and refuses to make corrections
after Party B has given notice to that effect, Party A shall be liable for damages thus incurred by Party B. The damages shall be determined by referring to the rents of comparable office buildings and ancillary facilities under the same conditions.

 7. Modification and Termination of the Agreement 
 7.1.
This Agreement may not be modified except by written agreement duly executed by the parties. 
 7.2. After the Agreement has come into force, if any party
fails to perform any of its obligations hereunder and fails to make corrections within a reasonable period (a month) after notice, or if the Agreement cannot be performed due to any party’s default, the non-defaulting party may terminate the
Agreement according the relevant laws and regulations, and the defaulting party shall be liable for damages thus incurred by the non-defaulting party. 
 7.3. If any part or the whole of the Agreement cannot be performed due to force majeure or any government prohibition, such part or the whole of the Agreement shall be automatically terminated, and no party shall be liable for such
termination. 
 8. Settlement of Disputes 
 8.1. If any
part of the Agreement cannot be performed due to any reason not attributable to any party, the problems concerned shall be resolved by the parties through consultation. 
 8.2. In the case of any dispute arising from or in connection with this Agreement, the parties shall settle the dispute through consultation. If the dispute cannot be resolved through consultation, either party may
institute legal proceedings in the people’s court in the place of the Project. 
  

 8 

 9. Miscellaneous 
 9.1. Matters not covered herein shall be decided by the parties through supplementary agreements. Such supplementary agreements and this Agreement shall have the same legal force. 
 9.2. This Agreement shall come into force on the date on which it is signed and sealed by the duly authorized representatives of both parties. 
 9.3. This Agreement shall be in Octuplicate, which have the same legal force. Each party shall hold four of them. 
 Annexes: 
 Annex 1: Contract for Assignment of the Right to Use the
Plot for Commercial Purpose and the Plot Plan 
 Annex 2: Plot Plan in the Approval for the Use of Plot A Immediately Next to the Cuneiform Greenbelt along
Jingchang Highway 
 IN WITNESS whereof this Agreement has been duly executed on the date first above written. 
  

					
	Signed by	 	)	 	
	for and on behalf of	 	)	 	
	Beijing Haidian Xinhua Agricultural Industrial & Commercial Co.	 	)	 	
			
	Signed by	 	)	 	
	for and on behalf of	 	)	 	

							
	Vimicro Corporation 	 		 	)	 	

  

 9 

 Annex 1: 
 Contract for Assignment of the Right to Use 
 the Plot for Commercial Purpose and the Plot Plan

  

 10 

 Contract for Granting of the User of State-owned Land 
 Beijing Municipal Administration of State Land, Resources and Housing 
  

 11 

 Parties to the Contract: 
 The Grantor: Beijing Municipal Administration of State Land, Resources and Housing 
 Legal address: No. 1 Nanwanzi Hutong, Nanheyan Avenue,
Dongcheng District, Beijing 
 Postal address: No. 1 Nanwanzi Hutong, Nanheyan Avenue, Dongcheng District, Beijing 
 Postal code: 100006 
 Legal representative: Miao Leru 
 Title: Director 
 The Grantee: Beijing Economic Development &
Investment Corporation 
 Legal address: 15th Floor, Office Building of Jade Palace Hotel, No. 76 Zhichun Road, Haidian District 
 Postal address: 15th Floor, Office Building of Jade Palace Hotel, No. 76 Zhichun Road, Haidian District 
 Postal code:
100086 
 Legal representative: Zhang Shuhui 
 Title: General
Manager 
 Chapter I General Provisions 
  

	1.	With a view to defining the rights and obligations of the Grantor and Grantee, this Contract is entered into by and between the two parties in accordance with the Land
Administration Law of the People’s Republic of China (“Land Administration Law”), Law of the People’s Republic of China on Urban Real Estate Administration (“Real Estate Administration Law”), Interim Regulations of the
People’s Republic of China Concerning the Granting and Transfer of the Right to the Use of the State-owned Land in Urban Areas (“Interim Regulations”), Measures of Beijing Municipality for Implementing the Interim Regulations of the
People’s Republic of China Concerning the Granting and Transfer of the Right to the Use of the State-owned Land in Urban Areas (“Implementing Measures”), and other relevant laws, regulations and rules of the state and Beijing
Municipality, and in line with the principles of equality, voluntariness and compensation. 

  

	2.	The plot of land under this Contract is owned by the People’s Republic of China. The state and government have the lawfully conferred judicial jurisdiction, administrative
power, other powers that shall be exercised by the state according to the relevant laws, regulations and rules of the Peoples’ Republic of China, and rights and interests that may be necessary for the public interest over and in the plot. No
resources, buried or hidden object, or municipal public facilities under or on the plot are transferred under this Contract. 

  

 12 

 Chapter II Manner for Granting the User of the Plot 
  

	3.	Manner for granting: agreement 

 Chapter III Conditions of
the Parcel of Land 
  

	4.	Location of the parcel of land: F Jianxiang Sector, Wohuqiao, Haidian District. 

  

	5.	Type of the parcel of land: independent parcel of land. 

  

	6.	The area of the parcel of land is 2920 sqms. For its four boundaries, see the map attached hereto. The total planned building area for the parcel of land is 4902.42 sqms, of which,
the planned aboveground building area is 4093.83 sqms, and the planned underground building area is 808.59 sqms. The exact areas shall be subject to possible adjustment based on the survey to be made by the authorities for state land, resources and
housing administration after the completion of the project. The attached map has been confirmed by the Grantor and Grantee. 

  

	7.	Planned purpose of the plot: Accessory facilities. 

  

	8.	Term of the land user: forty years from the date on which this Contract is signed. 

 Chapter IV Land Expenses and Terms of Payment 
  

	9.	The price for the plot (undeveloped land) hereunder includes charge for land user and infrastructure fee. The unit prices for the granting of the user of the parcel of land are 870
yuan per sqm for the aboveground area and 290 yuan per sqm for the underground area, which are floor land gross prices, and the total price is ¥3796123. 

  

	10.	Terms of payment: 

 The Grantee shall, on the date on which
this Contract is signed, pay the Grantor 15% of the total price, i.e. ¥569418 as a performance bond, which may be treated as part of the total price. 
 The remaining price, ¥3226705, shall be paid within 180 days from the date on which the
Contract is signed. From the 61st to 180th day from the date on which the Contract is signed, the Grantee shall also pay a loan service fee for the unpaid amount at a monthly rate of 0.2%. 

 

	11.	The Grantee shall make the payments by transferring money to the bank account designated by the Grantor or by check. 

 Account bank of the Grantor: Bank of Communication Beijing Branch Dongdan Sub-branch 
  

 13 

	  	Account name: Beijing Municipal Administration of State Land, Resources and Housing 

	  	RMB account number: 06019401 2015050055 

  

	  	Account bank of the Grantee: Construction Bank Haidian Sub-branch 

	  	Account name: Beijing Economic Development and Investment Corporation 

	  	RMB account number: 6510005022610044967 

  

	  	Any change to the RMB account of the Grantor shall be notified to the Grantee within 10 days after the change; the Grantee shall not be liable for any delay in payment caused by
failure of the Grantor to give such notice. 

  

	12.	In addition to the land price hereunder, the Grantee shall also pay relevant taxes and fees according to law. 

 Chapter V Land User and Changes Thereto 
  

	13.	Within 30 days after the Grantee’s payment of ¥1518449, at the request of the Grantee, the Grantor may issue to the Grantee an interim State-owned Land User Certificate.

  

	14.	The Grantor shall, within 30 days after the Grantee has paid the total price, issue to the Grantee a State-owned Land User Certificate. 

  

	15.	After lawfully acquiring the state-owned land user and during the term of the land user, the Grantee may transfer (sell, exchange or donate), lease, mortgage or otherwise use the
user according to law. 

  

	16.	In the case of transfer by the Grantee of the buildings and other attachments on the plot, the land user, as well as the Grantee’s rights and obligations hereunder shall also
be transferred, and the term of the land user for the transferee shall be that fixed herein minus the period already used by the Grantee. The Grantee shall, within 60 days after the transfer contract has been signed, go through land user, building
and other attachment transfer registration formalities with the authorities for state land, resources and housing administration. 

  

	17.	If the Grantee is to transfer the land user, the following conditions must be met: 

  

	 	(1)	The Grantee shall have paid in full the total price hereunder and obtained a State-owned Land User Certificate; 

  

	 	(2)	The plot shall be developed and utilized according to the terms and conditions in this Contract; in the case of housing construction project, the investment for the development and
construction shall not be less than 25% of the total amount (not including land price) of the project; in the case of tract development, the plot must meet the conditions of land for industrial or other purposes. 

  

 14 

	18.	In the case of lease or mortgage of its real estate and land user, the Grantee shall enter into a written agreement therefor. Such agreement may not violate any relevant provisions
of this Contract. The Grantee shall, within 30 days after the agreement has been signed, go through the registration formalities accordingly with the authorities for state land, resources and housing administration; the Grantee shall nevertheless
perform this Contract after such lease or mortgage agreement has been signed. 

 Chapter VI Time Limits for Investment and
Development 
  

	19.	The Grantee shall commence the construction in accordance with the approved planning design drawings and construction design drawings within 180 days after the date on which this
Contract is signed, and complete the construction of at least 1225 sqms before November 30, 2003. 

  

	20.	The Grantee shall complete its construction before June 30, 2004. If it is unable to commence or complete the construction within the abovementioned time limits due to the
special conditions, complications or large scale of the project, the Grantee may apply to the Grantor for a postponement of the commencement or completion of the construction, provided that the period of postponement shall not exceed 360 days.

  

	21.	If the Grantee fails to commence the construction one year after the time limit hereunder, it shall pay the Grantor an idle land fee equal to 20% of the charge for land user; and if
the Grantee fails to commence the construction two years after the time limit hereunder, the Grantor shall regain the land user without compensation, unless the delay is caused by any force majeure event, any act of the government or government
agencies or any preliminary work required for the commencement of the construction. 

 Chapter VII Requirements for Urban
Planning and Municipal Infrastructure 
  

	22.	The Grantee shall use the plot in accordance with the land use and planning requirements set forth in Appendix 1 hereto. If the Grantee wishes to change the land purpose or the land
use requirements, it shall submit an application therefor. If the application is approved by the Grantor and the authorities for urban planning, the parties hereto shall enter into a modification agreement or a new land user granting contract,
adjust the land price and go through modification registration formalities. 

  

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	23.	Beijing municipal government reserves the power to decide on the urban planning design toward the parcel of land. Buildings already existing on the parcel of land may be without
being affected by any change in the land use planning. However, in the case of reconstruction during the term of the land user hereunder or the Grantee’s applying for a renewal upon the expiration of the term, the then current planning must be
carried out. The government shall not be liable for any effect caused by any such change in the planning on the Grantee. 

  

	24.	The disposition of the existing facilities in the plot shall be subject to the consent of the competent authorities concerned. For the construction of any infrastructure (such as
roads, water supply, power supply, gas supply, heating, communication, and sewage discharge facilities) involved outside the plot, the Grantee shall entrust various competent authorities with the construction plans, which shall be subject to the
comprehensive confirmation by the authorities for urban planning. 

  

	25.	The Grantee shall go through the application formalities for the connections of water, power, gas, heating, communication, sewage discharge and other pipes and lines in the plot to
the main pipes and lines outside the plot and pay relevant expenses therefor. 

  

	26.	The Grantee or the construction entity entrusted by the Grantee shall in a timely manner repair any sewer, water course, cable, any other pipe or line or any building in the
neighboring area that has been damaged by it during its construction or build new one and bear all expenses therefor. 

  

	27.	During the term of the land user, the Grantee shall properly protect the municipal facilities in the plot and those connected thereto from any damage, or it shall bear all expenses
required for repairing. 

 Chapter VIII Requirements for Urban Construction Administration 
  

	28.	In using the plot and conducting the construction, the Grantee shall comply with the laws and regulations of the state and Beijing Municipality concerning the landscape, general
appearance of the city, sanitation, environmental protection, fire control and transportation. 

  

	29.	The Grantee shall ensure that the government administrative officers, public security officers, firemen, rescuers and their machines and vehicles may enter the plot without a hitch.
The Grantee shall allow the pipes and lines laid with the approval of the government for public utilities to enter, go out of or pass through the green belts and other areas in the parcel of land hereunder. 

  

	30.	During the term of the land user, the Grantor is entitled to supervise the Grantee’s use of the parcel of land. The Grantee may not refuse or hinder such supervision.

  

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	31.	Without prior approval, the Grantee may not for any reason occupy (including stacking objects or equipment on) any area outside the red lines. Any such occupation shall be treated
as illegal occupation of land. 

 Chapter IX Termination of the Land User 
  

	32.	If the Grantee wishes to continue its use of the plot after the expiration of the term of the land user hereunder, it shall apply for a renewal of this Contract at least one year
before the expiration; if the Grantee does not apply for a renewal or the application is not approved, the Grantor shall regain the land user without compensation immediately after the expiration of the term of the land user hereunder.

  

	33.	The land user hereunder shall terminate upon the expiration of the term of the land user hereunder, if the Grantee has not applied for a renewal or the application is not approved,
or upon early regaining according to law or due to the loss of the plot. The formalities for the termination shall be handled in accordance with the then current relevant provisions of the state and Beijing Municipality. 

 Chapter X Legal Liabilities 
  

	34.	If the Grantee fails to pay the land price in accordance with Articles 9 and 10 hereof, it shall pay the Grantor a default penalty at 0.021% of the money in arrears for each day in
arrears; if the Grantee has delayed in payment for a period more than 60 days, the Grantor is entitled to dissolve the Contract without refunding the performance bond and may claim damages from the Grantee. 

  

	35.	If the Grantor fails to provide the land user in accordance with this Contract, it shall refund the performance bond to the Grantee, and the Grantee is entitled to dissolve the
Contract and claim damages from the Grantor. 

  

	36.	This Contract shall be governed by and construed in accordance with the laws of China. 

  

	37.	Each party shall perform its obligations hereunder, and comply with the relevant laws and regulations of the state and Beijing Municipality. Any dispute arising from or in
connection with this Contract shall be settled through consultations; if it cannot be settled through consultations, each party may bring a lawsuit in the competent peoples’ court. 

 Chapter XI Force Majeure 
  

	38.	Neither party shall be liable for its nonperformance in whole or in part as a result of any force majeure event, provided that the affected party shall take all possible measures
necessary to mitigate the damages caused by the force majeure event. 

  

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	39.	The party affected by a force majeure event shall give written notice (letter, telegraph, telex or fax) of the event to the other party within 3 days from the event end date, and,
within 10 days from the event end date, provide to the other party a report stating reasons for nonperformance in whole or in part. 

 Chapter XII Supplementary Provisions 
  

	40.	This Contract shall become effective immediately after it has been signed and sealed by the legal or authorized representatives of the parties. 

  

	41.	Matters not covered herein shall be governed by a separate agreement by and between the parties, which shall be an appendix hereto. 

  

	42.	The appendixes and attached drawings hereto are integral parts of the Contract and have the same legal force and effect as the text of the Contract. 

  

	43.	There are two originals of this Contract. Each party shall hold one original. There are three copies of this Contract. The parties and the authorities for housing and land
administration of the district where the plot is located shall each hold one copy. The two originals and three copies shall have the same legal force and effect. 

  

	44.	The power to interpret this Contract is vested in Beijing Municipal Administration of State Land, Resources and Housing. 

 The Grantor: Beijing Municipal Administration of State Land, Resources and Housing (seal) 
 Legal (or authorized) representative: 
 Date: July 27, 2003 
 The Grantee: Beijing Economic Development & Investment Corporation (seal) 
 Legal (or authorized) representative: 
 Date: July 27, 2003 
  

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 Appendix 1: Land Use and Planning Requirements 
  

	1.	Planned purpose of the plot: public facilities 

  

	2.	Planned land coverage: 2920 sqms 

 Building covering area:
2920 sqms 
 Total planned building area: 4902.42 sqms 
 Aboveground building area: 4093.83 sqms 
 Underground building area: 808.59 sqms 
  

	3.	Area of the parcel of land granted: 2920 sqms 

 Total
building area granted: 4902.42 sqms 
 Aboveground building area: 4093.83 sqms 
 Underground building area: 808.59 sqms 
  

	4.	Floor area ratio: (as fixed in the approved plan) 

  

	5.	Height of buildings: (as fixed in the approved plan) 

  

	6.	Building setback requirements: (as fixed in the approved plan) 

  

	7.	Distance between buildings: (as fixed in the approved plan) 

  

	8.	Green coverage ratio: (as fixed in the approved plan) 

  

	9.	Architecture art: (as fixed in the approved plan) 

  

	10.	Exit and entrance locations: (as fixed in the approved plan) 

  

	11.	Requirements for parking area construction: (as fixed in the approved plan) 

  

	12.	Ground height: (as fixed in the approved plan) 

  

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 The Plot Plan 
  

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 Annex 2 
 Approval for the Use of Plot A Immediately 
 Next to the Cuneiform Greenbelt Along 

Jingchang Highway and the Plot Plan Thereto 
  

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 Beijing Municipal Commission of Urban Planning 
 Shi Gui Fa No. 711 [2004] 
 Official
Reply Concerning the Urban Design Plan for the 
 Cuneiform Greenbelt Along Jingchang Highway 
 The People’s Government of Dongsheng Township: 
 Having
considered in conjunction with the Municipal Landscape Bureau, Municipal Institute of City Planning and Design and the relevant department of the People’s Government of Haidian District, and obtained the approval in principle of the Municipal
Government for, the Urban Design for the Cuneiform Greenbelt Along Jingchang Highway prepared by Beijing University of Civil Engineering and Architecture entrusted by you, this Commission hereby give an official reply as follows: 
 As one of the seven urban radiation greenbelts, the cuneiform greenbelt along Jingchang Highway is a planned urban greenbelt along Jingchang Highway and Xiaoyue River,
the total length of which is approximately 10 kms, from Bei San Huan Madianqiao in the south to Qinghe Xisanqi Roundabout in the north. The total area of this planned cuneiform greenbelt is approximately 229 hectares, of which 146 hectares are
currently covered by buildings, 83 hectares are greenbelts and water bodies; the building area of the existing buildings is approximately 710,000 sqms, of which the area of single-story houses is 610,000 sqms and the area of storied buildings is
100,000 sqms. The total number of residents there is 2702, of which, 1275 households live in the single-story houses, and in which, the number of mobile residents is three times that of local residents. 
 According to the Detailed Control Planning for Beijing Urban Central Areas, the planned total area of this cuneiform greenbelt is 229 hectares, of which, the area of the
planned greenbelt and water body is 200 hectares, the area of land for construction is 16 hectares, and the remaining area shall be used for roads. The planned building area is approximately 250,000 sqms. 
 In the Urban Design Plan for the Cuneiform Greenbelt Along Jingchang Highway prepared in the light of the relevant policies of the local government, the planned total
area of the cuneiform greenbelt is approximately 229 hectares, of which, the planned greenbelt and water body approximately cover 165 hectares, i.e. 72% of the total area (21 hectares less than the original planed area). The 

  

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reduced greenbelt area shall be made up in principle in the neighborhood within the administrative area of Dongsheng Township. The planned area for
construction is 64 hectares (including the area of 13 hectares for roads), representing 28% of the total area. The area for construction shall set back 100 meters from the west red line of Jingchang Highway and 30 meters from the east line of the
planned water course of Xiaoyue River. The planned total building area is approximately 530,000 sqms, of which 430,000 sqms are planned to be newly built and 100,000 sqms are the area of the existing storied buildings to be retained. The height of
the planned buildings shall generally not exceed 18 meters. 
 We agree to the Plan and the incorporation of the peripheral Plots A, B, C and D (12 hectares
of the total area) into the overall greenbelt plan, which shall be implemented in strict accordance with the relevant land laws and regulations of the state and the current relevant land regulations and policies of the State Council and Beijing
Municipal Government. In the implementation, the principle of greening-up before development shall be followed and the planned urban greening-up shall be ensured. 
 Those are the official reply. 
  

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	Appendix:	Urban Design Plan for the Cuneiform Greenbelt Along Jingchang Highway 

 Beijing Municipal Commission of Urban Planning (seal) 
 June 3, 2004 
  

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	Appendix:	Urban Design Plan for the Cuneiform Greenbelt Along Jingchang Highway 

  

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