(v) the capital guarantee agreement concluded by and between the WFOE, the persons of the PRC and the national enterprise, where by which the persons of the PRC mortgage their holdings in the national company in the WFOE in order to ensure the performance of their obligations and the obligations of the national company arising from other agreements concluded between the three (3) parts of the VIE structure; and Equity Pledge Agreement. The founders entered into a private equity guarantee agreement with Dangdang Information that mortgages their shares in Dangdang Kewen as collateral under the loan agreement and other agreements. Power of attorney. The founders give Dangdang Information power giving it all normal shareholder rights, including voting, participation in shareholder meetings, and execution of the call option agreement. (vi) the loan agreement concluded by and between the WFOE and individuals in the PRC, in which the WFOE provides persons in the PRC with a loan to be used for the capitalisation of the domestic enterprise. Reforms in the wake of the global financial crisis are expected to implement some of the pre-crisis practices of the asset-backed security industry. But thanks to lobbying by banks, which had warned of serious consequences, they had to reinstate sub-pre-prime securities in their accounts, the Financial Accounting Standards Board (FASB) relaxed the rules applicable to VIEs and allowed banks to keep loans in off-balance-sheet companies. (iii) foreign investors set up enterprises that invest abroad and acquire assets of domestic enterprises through agreements of such foreign investment enterprises, and then exploit those assets or acquire stakes in domestic enterprises through the acquisition of shareholdings of such enterprises that have been invested abroad; and agreement on the appeal option. The founders undertake to sell Dangdang Kewen to Dangdang Information at any time for the initial capital contribution. The payment price can be deducted from the credit. From a practical point of view, the option cannot be exercised unless China at some point allows foreign investment in companies such as Dangdang Kewen.
Article 9 of the Rules recalls public concerns about whether the M&A transaction falls within the scope of the National Security Investigation with respect to mergers and acquisitions (“M&A”) of the domestic enterprise by foreign investors, based on the material content and actual influences of the transaction; and foreign investors should in no way escape national security screening, including but not limited to mandated equity interests, trusts, multi-stage investments, leases, loans, contractual control, foreign transactions, etc. It is clear that more and more Chinese companies have adopted the VIE structure since the issuance of M&A rules. In the initial phase, the VIE structure was only used for light asset companies. However, after 2006, these wealth-intensive enterprises also opted for the use of the VIE structure. One of the reasons for the increasing use of the life structure is that the VIE structure can avoid MOFCOM approval. Indeed, it is inconceivable and unreasonable that such asset-intensive enterprises can only relocate huge assets from China through multiple agreements without state authorization or other legal procedures. . . .