Call option agreement. The founders agree to sell Dangdang Kewen to Dangdang Information at any time for the initial capital allocation. The payment price can be deducted from the loan. From a practical point of view, this option can only be exercised if, at one time or another, China authorizes foreign investment in companies such as Dangdang Kewen. (vi) the loan agreement between WFOEs and prC persons, in which WFOE extends a loan to CPP individuals who are used for the capitalization of the domestic enterprise. Examples of agreements granting effective control over LIFE: appeal option agreements, voting rights or agents, loan contracts. It is clear that more and more Chinese companies have adopted the LIFE structure since the issuance of the rules of the L-A. In the initial phase, the life structure was used almost exclusively for asset-light companies. However, after 2006, these heritage companies also opted for the use of the life structure. It is thought that one of the reasons for the increasing use of the LIFE structure is that the LIFE structure can avoid MOFCOM`s accreditation. Indeed, it is inconceivable and unreasonable that such assets are only able to relocate huge assets from China through several agreements without state authorization or other legal procedures.

Chinese authorities may also be on high alert due to the misuse of the life structure in heritage industries. There are a few cases where the life structure has been taken over in the heritage industry and successfully listed abroad, but unfortunately we also understand that there are cases that were rejected at the time of the IPO to use the life structure in the heritage industry. Article 9 of the Internal Regulation once again raises public concern that, with respect to the merger and acquisition (“ATM”) of the domestic company by foreign investors, the question of whether the merger is within the scope of the national security investigation is assessed on the basis of the material content and the actual influence of the transaction; foreign investors cannot evade national security verification by any means, including, but not limited to, order-taking, trusts, multi-level investments, leases, loans, contractual control, foreign transactions, etc. the capital agreement. The founders entered into a share concession agreement with Dangdang Information, which mortgaged its shares in Dangdang Kewen as collateral under the loan agreement and other agreements. Reforms following the global financial crisis should avoid some of the asset-backed security industry practices that were sustained before the crisis.