VIE Clause Samples
The VIE (Variable Interest Entity) clause defines the framework for identifying and managing entities in which a party holds a controlling interest through contractual arrangements rather than direct ownership. In practice, this clause applies to situations where a company consolidates the financial results of another entity, even if it does not own a majority of its voting shares, such as in certain joint ventures or foreign investment structures. The core function of the VIE clause is to ensure transparency and compliance with accounting standards by clarifying when and how such entities should be included in consolidated financial statements, thereby addressing issues of control and financial reporting accuracy.
VIE. The Company shall procure that:
(a) each wholly-owned Group Member party to a VIE Structure shall not amend, vary, novate, supplement, supersede, waive or terminate any term of any VIE Documents;
(b) without the prior written consent of the Agent (acting on the instructions of the Majority Lenders), no Group Member party to a VIE Structure shall terminate, revoke, unwind or allow to expire any VIE Documents; and
(c) each Group Member party to a VIE Structure shall comply with the terms of VIE Documents to which it is a party, where doing so, in the case of paragraphs (a) and (b) above, or in the case of paragraph (c) above, where such failure to do so, is reasonably likely to have a Material Adverse Effect.
VIE. (a) The Company has made available to the Investors all material information in relation to the VIE Structure of the Company, including true and complete copies of each of the material contracts made between the VIE Entities on the one hand, and the wholly-owned Subsidiaries of the Company that are not VIE Entities on the other hand (the “VIE Contracts”). Each VIE Contract is valid, in full force and effect, and constitutes the legal, valid and binding obligations of the contracting party, enforceable against such party in accordance with its terms, subject to the Enforceability Carveouts.
(b) The financial statements of each VIE Entity are consolidated into the Financial Statements of the Company.
(c) There has been no material breach of the terms of any VIE Contracts.
(d) All material Authorizations necessary for the conduct of the business, trade and ordinary activities of each VIE Entity have been obtained or effected and are in full force and effect.
(e) Each Subsidiary under any VIE Structure has been conducting its business within its approved business scope in all material respects.
VIE. (a) At any time, the financial statements of any VIE are not or cease to be consolidated into the Company’s consolidated financial statements;
(b) any event or circumstance occurs which adversely affects the rights of any Group Member (other than a VIE) under or in respect of the VIE Documents;
(c) it is or becomes unlawful for any party to perform any of its obligations under any VIE Documents;
(d) any party to a VIE Structure rescinds or purports to rescind or repudiates or purports to repudiate a VIE Document to which it is a party;
(e) any VIE Structure becomes or is declared or determined as being illegal, invalid or not in compliance with any PRC law, regulation or policy; and/or
(f) any of the events referred to in Clause 22.6 (Insolvency), Clause 22.7 (Insolvency proceedings) or Clause 22.8 (Creditors’ process) occurs in relation to a party to a VIE Structure, and, in each case, such event or circumstance has or is reasonably likely to have a Material Adverse Effect.
VIE. At any time prior to the VIE Termination:
VIE. (a) The financial statements of each VIE Entities are consolidated in the Original Financial Statements.
(b) All material information in relation to the VIE Entities and the VIE Documents have been provided to PRC counsel to the Lender for the purposes of preparing its legal due diligence report.
(c) All material Authorisations necessary for the conduct of the business, trade and ordinary activities of each VIE Entity have been obtained or effected and are in full force and effect.
VIE. (a) The financial statements of each VIE Entities are consolidated in the Original Financial Statements.
(b) All material Authorisations necessary for the conduct of the business, trade and ordinary activities of each VIE Entity have been obtained or effected and are in full force and effect.
VIE. (i) As soon as reasonably practicable and in any event within sixty (60) days following the Closing, the Company shall cause each of Zhejiang Finance Credit Network Technology Co., Ltd. and Hangzhou Ali Venture Capital Co., Ltd. to enter into a technical support or consulting services agreement or other similar arrangements with Zhejiang Alibaba Finance Credit Network Technology Co., Ltd. on customary terms for such transactions.
(ii) As soon as reasonably practicable and in any event within thirty (30) days following the Closing, Alisoft (Shanghai) Co., Ltd. shall submit registration of its pledge over the equity interest of Alicloud Computing Co., Ltd. with the applicable local Administration of Industry and Commerce, and thereafter shall use its commercially reasonable efforts to obtain such registration.
(iii) As soon as reasonably practicable and in any event within sixty (60) days following the Closing, the Company shall cause Zhejiang Zhile Network Co., Ltd. to enter into VIE Contracts on customary terms with a wholly-owned subsidiary of the Company.
VIE. (a) At any time, the financial statements of any VIE Entity are not or cease to be consolidated into the Target’s consolidated financial statements or, after the Acquisition Effective Time, the Borrower’s consolidated financial statements.
(b) It is or becomes unlawful for any party to perform any of its obligations under any VIE Document which has or might reasonably likely to have a Material Adverse Effect.
(c) Any VIE Structure becomes or is declared or determined as being illegal, invalid or not in compliance with any PRC law, regulation or policy, and the Lender determines that the same is materially adverse to the interests of the Finance Parties under the Finance Documents.
(d) Any VIE Document ceases to be in full force and effect.