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Electronics Production | January 04, 2011

Vimicro divests non-core business lines

Vimicro International has entered into definitive business restructuring agreements to divest certain non-core business lines and land use rights.

Under the terms of the agreement, Vimicro will divest the non-core businesses and associated land use rights. Dr. Xiaodong (Dave) Yang, a director and the former CTO of the Company, will take over the divested businesses and assets. The non-core businesses include analog integrated circuit, MP4, advanced multimedia and Bluetooth products. Based on an independent third-party valuation, Vimicro will receive USD 1.6 million from Vimicro Management Foundation (VMF), managed by Dr. Yang, for the transfer of these non-core businesses. Additionally, Vimicro will receive USD 11.1 million from VMF for its land use rights in Jiangsu, Shenzhen and Shanghai to recover the original cash use in purchasing these rights. Vimico will hold 5% equity interest in the new non-core business entity. The company's audit committee and a special independent committee, each comprised entirely of independent directors, have approved the transactions and transactional agreements. In addition, the completion of the transactions will be subject to the necessary approvals from local governmental authorities in China.
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