REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Title of each class) |
(Trading Symbol(s)) |
(Name of each exchange on which registered) | ||
Large accelerated filer |
☐ |
☒ |
Non-accelerated filer |
☐ |
Emerging growth company |
International Financial Reporting Standards as issued | Other ☐ | |||||||
by the International Accounting Standards Board ☐ |
4 |
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5 |
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PART I |
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Item 1. |
6 |
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Item 2. |
6 |
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Item 3. |
6 |
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Item 4. |
66 |
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Item 4A. |
113 |
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Item 5. |
114 |
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Item 6. |
147 |
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Item 7. |
156 |
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Item 8. |
161 |
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Item 9. |
161 |
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Item 10. |
161 |
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Item 11. |
171 |
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Item 12. |
172 |
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PART II |
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Item 13. |
173 |
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Item 14. |
173 |
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Item 15. |
174 |
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Item 16A. |
174 |
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Item 16B. |
174 |
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Item 16C. |
175 |
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Item 16D. |
175 |
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Item 16E. |
175 |
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Item 16F. |
175 |
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Item 16G. |
175 |
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Item 16H. |
175 |
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PART III |
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Item 17. |
175 |
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Item 18. |
176 |
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Item 19. |
177 |
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184 |
• | “we,” “us,” “our,” “our company,” “our Group,” the “Sohu Group,” the “Group,” and “Sohu” refer to Sohu.com Limited (or our predecessor Sohu.com Inc., as applicable), and unless the context requires otherwise, include its subsidiaries and variable interest entities. Sohu.com Inc., a Delaware corporation, was dissolved on May 31, 2018 and Sohu.com Limited, which before then was a direct wholly-owned subsidiary of Sohu.com Inc., replaced Sohu.com Inc. as the top-tier, publicly-traded holding company of the Sohu Group. See “Information on the Company-History and Development of the Company” in Item 4 of this annual report. |
• | “ADSs” refers to our American depositary shares, each of which represents one ordinary share, par value $0.001 per share; |
• | “Changyou” refers to Changyou.com Limited, a Cayman Islands company, and unless the context requires otherwise, includes its subsidiaries and variable interest entities, or VIEs; |
• | “China” or “PRC” refers to the People’s Republic of China, and for the purpose of this annual report, excludes Hong Kong, Macau and Taiwan; |
• | “DAU,” for active users quoted from iResearch, for any given month, refers to the average number of active users per day during that month. A user who uses the applicable product more than once in a day is counted as one active user for that day. Each distinguishable device or application is treated as a separate user for purposes of calculating such DAU; |
• | “HNTE” refers to high and new technology enterprises; |
• | “IVAS” refers to our Internet value-added services; |
• | “IPO” refers to an initial public offering; |
• | “KNSE” refers to key national software enterprises; |
• | “Legacy TLBB Mobile” refers to a mobile game that Changyou developed based on the title and characters of Tian Long Ba Bu, which is operated by Tencent under license from Changyou and was launched in May 2017; |
• | “MAU,” for active users quoted from iResearch, for any given month, refers to the number of active users during that month. A user who uses the applicable product more than once in a month is counted as one active user for that month. Each distinguishable device or application is treated as a separate user for purposes of calculating such MAU; |
• | “Memorandum and Articles of Association” refers to our Amended and Restated Memorandum of Association and our Amended and Restated Articles of Association; |
• | “MMORPGs” refers to massively multiplayer online role-playing games; |
• | “Offshore” refers to nations and territories outside of Mainland China, and for this purpose includes Hong Kong, Macau, and Taiwan; |
• | “Paid clicks” refers to the number of paid clicks, including clicks by users on advertisers’ promotional links displayed on Sogou’s search result pages and other Internet properties and third parties’ Internet properties; |
• | “PC games” refers to interactive online games that may be accessed and played simultaneously by hundreds of thousands of game players through personal computers with local game client-end access software installation requirements. In previous annual reports, we have sometimes used the terms “MMOGs” and “MMORPGs” when referring to these client-end installed games played through personal computers; |
• | “PRC GAAP” refers to generally accepted accounting principles of the PRC; |
• | “RMB” refers to the Renminbi, which is the legal currency of China; |
• | “Sogou” refers to Sogou Inc., a Cayman Islands company, and unless the context requires otherwise, includes its subsidiaries and variable interest entities, or VIEs; |
• | “Sogou Pre-IPO Class A Ordinary Shares” refers to the Sogou Class A ordinary shares that were authorized and outstanding prior to the completion of Sogou’s IPO; |
• | “Sogou Pre-IPO Series A Preferred Shares” refers to the Sogou Series A Preferred Shares that were authorized and outstanding prior to the completion of Sogou’s IPO; |
• | “Sogou Class A Ordinary Shares” refers to the Sogou Class A Ordinary Shares, which carry one vote per share; |
• | “Sogou Class B Ordinary Shares” refers to the Sogou Class B Ordinary Shares which carry ten votes per share; |
• | “Tencent” refers to Tencent Holdings Limited and its subsidiaries under International Financial Reporting Standards; |
• | “Tian Long Ba Bu,” refers to the popular novel of that name by the famous Chinese writer Louis Cha; |
• | “TLBB” refers to the PC game developed based on the title and characters of Tian Long Ba Bu; |
• | “TLBB 3D” refers to a mobile game that was developed based on the title and characters of Tian Long Ba Bu; |
• | “TLBB Honor” refers to another mobile game that was developed based on the title and characters of Tian Long Ba Bu, which adopts an innovative portrait interface; |
• | “U.S. GAAP” refers to generally accepted accounting principles in the United States; |
• | “U.S. TCJA” refers to the U.S. Tax Cuts and Jobs Act signed into law on December 22, 2017; and |
• | “VIE” refers to an entity that is a variable interest entity under U.S. GAAP, including a subsidiary of an entity that is a variable interest entity under U.S. GAAP. |
• | our ability to maintain and strengthen our position as a leading Chinese online media, game and search service group in China; |
• | our expected development, launch and market acceptance of our products and services; |
• | our various initiatives to implement our business strategies to expand our business; |
• | our future business development, results of operations and financial condition; |
• | the expected growth of and change in the online media, search and game industries in China |
• | the impact of the completion or termination of the currently pending Tencent/Sohu Sogou Share Purchase and Sogou Merger described in “Item 4. Information on the Company-History and Development of the Company;” and |
• | the PRC government policies relating to the Internet and Internet content providers, including online media, search and game developers and operators. |
ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. |
KEY INFORMATION |
Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(In thousands, except per ADS data) |
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Statements of Comprehensive Income Data: |
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Revenues: |
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Brand advertising |
$ | 450,448 | $ | 315,235 | $ | 232,339 | $ | 175,056 | $ | 146,526 | ||||||||||
Online games |
395,709 | 449,533 | 389,788 | 440,902 | 536,684 | |||||||||||||||
Others |
77,905 | 97,937 | 68,048 | 57,845 | 66,680 | |||||||||||||||
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Total revenues |
924,062 | 862,705 | 690,175 | 673,803 | 749,890 | |||||||||||||||
Cost of revenues (1): |
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Brand advertising |
371,066 | 363,624 | 184,473 | 126,406 | 105,604 | |||||||||||||||
Online games |
96,168 | 62,775 | 60,981 | 88,992 | 91,526 | |||||||||||||||
Others |
43,879 | 66,467 | 43,562 | 28,249 | 20,307 | |||||||||||||||
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Total cost of revenues |
511,113 | 492,866 | 289,016 | 243,647 | 217,437 | |||||||||||||||
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Gross profit |
412,949 | 369,839 | 401,159 | 430,156 | 532,453 | |||||||||||||||
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Operating expenses: |
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Product development (1) |
219,121 | 245,536 | 246,155 | 234,852 | 241,941 | |||||||||||||||
Sales and marketing (1) |
299,020 | 237,252 | 236,898 | 204,665 | 159,787 | |||||||||||||||
General and administrative (1) |
94,964 | 86,448 | 70,129 | 54,591 | 57,354 | |||||||||||||||
Goodwill impairment and impairment of intangible assets acquired as part of business acquisitions |
0 | 86,882 | 16,369 | 7,245 | 0 | |||||||||||||||
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Total operating expenses |
613,105 | 656,118 | 569,551 | 501,353 | 459,082 | |||||||||||||||
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Operating profit/(loss) |
(200,156 | ) | (286,279 | ) | (168,392 | ) | (71,197 | ) | 73,371 | |||||||||||
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Other income/(expense), net |
19,832 | 13,207 | 30,701 | 7,963 | 25,993 | |||||||||||||||
Interest income |
17,302 | 15,012 | 16,036 | 6,103 | 7,369 | |||||||||||||||
Interest expense |
(1,356 | ) | (4,088 | ) | (17,538 | ) | (14,370 | ) | (6,234 | ) | ||||||||||
Exchange difference |
7,456 | (7,303 | ) | 3,301 | 1,430 | (3,800 | ) | |||||||||||||
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Income/(loss) before income tax expense/(benefit) |
(156,922 | ) | (269,451 | ) | (135,892 | ) | (70,071 | ) | 96,699 | |||||||||||
Income tax expense/(benefit) |
23,311 | 258,214 | (14,586 | ) | 28,428 | 133,226 | ||||||||||||||
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Net loss from continuing operations |
(180,233 | ) | (527,665 | ) | (121,306 | ) | (98,499 | ) | (36,527 | ) | ||||||||||
Net income/(loss) from discontinued operations, net of tax |
65,260 | 57,662 | 53,947 | 55,108 | (91,793 | ) | ||||||||||||||
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Net loss |
(114,973 | ) | (470,003 | ) | (67,359 | ) | (43,391 | ) | (128,320 | ) | ||||||||||
Less: Net income from continuing operations attributable to the noncontrolling interest shareholders |
46,031 | 14,050 | 41,732 | 58,223 | 18,448 | |||||||||||||||
Less: Net income/(loss) from discontinued operations attributable to the noncontrolling interest shareholders |
63,017 | 70,473 | 50,991 | 47,722 | (60,656 | ) | ||||||||||||||
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Net loss from continuing operations attributable to Sohu.com Limited |
$ | (226,264 | ) | $ | (541,715 | ) | $ | (163,038 | ) | $ | (156,722 | ) | $ | (54,975 | ) | |||||
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Net income/(loss) from discontinued operations attributable to Sohu.com Limited |
2,243 | (12,811 | ) | 2,956 | 7,386 | (31,137 | ) | |||||||||||||
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Net loss attributable to Sohu.com Limited |
$ | (224,021 | ) | $ | (554,526 | ) | $ | (160,082 | ) | $ | (149,336 | ) | $ | (86,112 | ) | |||||
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Net loss |
$ | (114,973 | ) | $ | (470,003 | ) | $ | (67,359 | ) | $ | (43,391 | ) | $ | (128,320 | ) | |||||
Other comprehensive income/(loss) |
(77,155 | ) | 68,429 | (37,339 | ) | (13,069 | ) | 11,972 | ||||||||||||
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Comprehensive loss |
(192,128 | ) | (401,574 | ) | (104,698 | ) | (56,460 | ) | (116,348 | ) | ||||||||||
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Less: Comprehensive income attributable to noncontrolling interest shareholders |
78,824 | 117,960 | 61,376 | 93,244 | (35,074 | ) | ||||||||||||||
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Comprehensive loss attributable to Sohu.com Limited. |
(270,952 | ) | (519,534 | ) | (166,074 | ) | (149,704 | ) | (81,274 | ) | ||||||||||
Basic net (loss)/income per ADS |
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Continuing operations |
$ | (5.85 | ) | $ | (13.94 | ) | $ | (4.18 | ) | $ | (3.99 | ) | $ | (1.39 | ) | |||||
Discontinued operations |
0.06 | (0.33 | ) | 0.07 | 0.19 | (0.79 | ) | |||||||||||||
Net loss per share |
(5.79 | ) | (14.27 | ) | (4.11 | ) | (3.80 | ) | (2.18 | ) | ||||||||||
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Shares used in computing basic net (loss)/income per ADS |
38,706 | 38,858 | 38,959 | 39,249 | 39,452 | |||||||||||||||
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Diluted net (loss)/income per ADS |
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Continuing operations |
$ | (5.89 | ) | $ | (13.98 | ) | $ | (4.20 | ) | $ | (4.01 | ) | $ | (1.40 | ) | |||||
Discontinued operations |
0.06 | (0.32 | ) | 0.07 | 0.18 | (0.79 | ) | |||||||||||||
Net loss per share |
(5.83 | ) | (14.30 | ) | (4.13 | ) | (3.83 | ) | (2.19 | ) | ||||||||||
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Shares used in computing diluted net (loss)/income per ADS |
38,706 | 38,858 | 38,959 | 39,249 | 39,452 | |||||||||||||||
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(1) | Share-based compensation expenses are included in the following financial statements line items: |
Year Ended December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(In thousands) |
||||||||||||||||||||
Cost of revenues |
$ | 195 | $ | (342 | ) | $ | (739 | ) | $ | 142 | $ | 720 | ||||||||
Product development expenses |
3,570 | 7,078 | (4,182 | ) | 1,364 | 7,325 | ||||||||||||||
Sales and marketing expenses |
578 | 1,614 | (920 | ) | (326 | ) | 460 | |||||||||||||
General and administrative expenses |
5,927 | 13,404 | (6,267 | ) | 1,170 | 5,975 |
As of December 31, |
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2016 |
2017 |
2018 |
2019 |
2020 |
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(In thousands) |
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Balance Sheets Data: |
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Cash and cash equivalents |
$ | 764,731 | $ | 669,646 | $ | 634,310 | $ | 162,662 | $ | 217,057 | ||||||||||
Restricted cash |
0 | 3,928 | 3,539 | 3,290 | 330,791 | |||||||||||||||
Restricted time deposits |
240 | 240 | 244,150 | 240 | 101,519 | |||||||||||||||
Working capital |
918,522 | 1,472,485 | 1,131,571 | 914,801 | 970,142 | |||||||||||||||
Total assets |
2,592,450 | 3,442,985 | 3,372,956 | 2,691,864 | 2,822,121 | |||||||||||||||
Short-term bank loans |
0 | 61,216 | 129,677 | 114,528 | 315,550 | |||||||||||||||
Long-term bank loans |
0 | 122,433 | 302,323 | 0 | 92,000 | |||||||||||||||
Total liabilities |
1,034,655 | 1,625,748 | 1,820,005 | 1,384,947 | 1,790,140 | |||||||||||||||
Ordinary Shares: $0.001 par value per share (75,400 shares authorized; 38,742 shares, 38,898 shares, 39,229 shares, 39,269 shares, and 39,306 shares, respectively, issued and outstanding as of December 31, 2016, 2017, 2018, 2019, and 2020) |
45 | 45 | 39 | 39 | 39 | |||||||||||||||
Total Sohu.com Limited shareholders’ equity |
993,580 | 750,634 | 588,840 | 428,454 | 347,369 | |||||||||||||||
Noncontrolling interest |
564,215 | 1,066,603 | 964,111 | 878,463 | 684,612 | |||||||||||||||
Total shareholders’ equity |
1,557,795 | 1,817,237 | 1,552,951 | 1,306,917 | 1,031,981 |
• | continue to attract users to remain with us and use our products and services as the primary means of surfing the Internet switches from traditional PCs to mobile phones and other portable devices; |
• | continue to attract a large audience to our matrices of Chinese language content and services by expanding the type and technical sophistication of the content and services we offer; |
• | maintain and develop a sufficiently large advertiser base for our brand advertising and search and search-related advertising businesses; |
• | maintain and attract online game users by periodically updating our existing online games and developing and launching new online games; |
• | increase the revenues derived from our fee-based services and products we offer online; |
• | build our businesses such as Sohu Media Portal, Sohu Video, Focus, online games, search and search-related, and other businesses successfully; |
• | attract and retain qualified personnel; and |
• | effectively control our increased costs and expenses. |
• | access to financial resources; |
• | gateway to a host of Internet user activities; |
• | technological advancements; |
• | attractiveness of products; |
• | brand recognition; |
• | volume of traffic and users; |
• | quality of Internet platforms and content; |
• | strategic relationships; |
• | quality of services; |
• | effectiveness of sales and marketing efforts; |
• | talent of staff; and |
• | pricing; |
• | greater brand recognition among Internet users and clients; |
• | better products and services; |
• | larger user and advertiser bases; |
• | more extensive and well -developed marketing and sales networks; and |
• | substantially greater financial and technical resources. |
• | access financial resources; |
• | adapt our services and maintain and improve the quality of our services; |
• | protect our Internet platforms from hackers and unauthorized access; |
• | continue training, motivating and retaining our existing employees and attract and integrate new employees; and |
• | maintain and improve our operational, financial, accounting and other internal systems and controls. |
• | unsolicited e-mail; |
• | lost or misdirected messages; |
• | illegal or fraudulent use of e-mail; or |
• | interruptions or delays in e-mail service. |
• | The advertising market is still evolving in China. Our current and potential advertising clients may not devote a significant portion of their advertising budgets to Internet-based advertising in general, or to us in particular; |
• | Changes in government policy could restrict or curtail our brand advertising services. For example, during the last several years, the PRC government enacted a series of regulations, administrative instructions and policies to restrict online medical advertising. As a result of these regulations, we may lose some of our existing medical advertising clients. For another example, see “Government Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Other Services - Real Estate Services” for a description of the Beijing Measures and other regulations affecting Focus’s business; |
• | Advertising clients may adopt new methods and strategies other than brand advertising to promote their brand and therefore our advertising revenue would be negatively affected; |
• | The acceptance of the Internet as a medium for advertising depends on the development of standards for measuring the effectiveness of advertisements disseminated over the Internet, and no standards have been widely accepted for the measurement of the effectiveness of brand advertising over the Internet. Industry-wide standards may not develop that are sufficient to support the Internet as an effective advertising medium. If these standards do not develop, advertisers may choose not to advertise on the Internet in general or through our portals or search engines; |
• | We may not have systems that are sufficiently well-developed to support our brand advertising business, and as a result, we may suffer system bugs that cause bad user experiences errors or omission in publishing our client’s advertisements, which could have a negative impact on our brand advertising business. |
• | the development of a large base of users possessing demographic characteristics attractive to advertising clients; |
• | the acceptance of brand advertisement as an effective way for business marketing by advertising clients; |
• | the effectiveness of our advertising delivery, tracking and reporting systems; |
• | the resistance pressure on brand advertising prices and limitations on inventory; and |
• | the establishment of a successful business model to make our new products adaptable to portable devices, which has required, and will continue to require us, to make significant expenditures for research, development, promotion and operations. |
• | structure; |
• | level of government involvement; |
• | level of development; |
• | level of capital reinvestment; |
• | growth rate; |
• | control of foreign exchange; and |
• | methods of allocating resources. |
• | raise Changyou’s brand recognition and game players’ loyalty; |
• | develop, license or operate new games that are appealing to game players; adapt to new trends and game player tastes; meet Changyou’s expected timetables for their launch; and, if they are successful, have acceptably long lifespans and result in an acceptable level of profit for Changyou; |
• | successfully adapt to evolving business models, industry trends and market environments by developing and investing in new business strategies, products, services and technologies, including, in particular, virtual reality, or VR, technology, for Changyou’s new games; |
• | arrange for its mobile games to be distributed through popular mobile application stores with commercial terms, including revenue-sharing arrangements, that are favorable enough to Changyou and allow it to achieve an acceptable level of profit from the games; |
• | integrate new technologies, businesses and personnel of acquired entities, and generate sufficient revenues to offset the costs and expenses of such acquisitions; and |
• | maintain or expand Changyou’s marketing efforts to attract more game players to its games and to the game information portal of the 17173.com Website in a rapidly changing and increasingly competitive business environment, and generate sufficient revenues to offset the costs and expenses of such marketing efforts; and reverse the recent decline in Changyou’s revenues from the 17173.com Website, particularly in view of the rapid emergence of mobile games and the decline in the relative popularity of PC games and Web games as users switched to mobile devices. |
• | greater financial and technical resources; |
• | more aggressive and effective strategies for hiring talent for game development, which may make it difficult for Changyou to retain its existing employees and attract new employees, which are necessary for Changyou to be able to grow its business; |
• | substantially greater financial resources and more effective methods for acquiring exclusive license rights to the titles, characters, themes and story lines of popular works in order to adapt online games from such works (which has become increasingly important for new online games to be successful); |
• | more aggressive and effective marketing strategies for promoting their online games and penetrating the mobile game market; and |
• | more capability for developing and releasing new software for mobile devices to attract a growing number of game players that access Internet products and services through mobile devices. |
• | greater brand recognition among game players and advertising clients; |
• | larger user and customer bases; |
• | more extensive and well -developed marketing and sales networks; |
• | more attractive mobile versions of their game information portals and more extensive mobile game-related products and services, such as mobile game discussion forums, in response to the rapid migration of users of Internet services from PCs to mobile devices such as tablets and mobile phones, and the unique preferences and demands of mobile users and mobile game players; and |
• | substantially greater financial and technical resources. |
• | whether the online game industry, particularly in China and the rest of the Asia-Pacific region, continues to grow and the rate of any such growth; |
• | the availability and popularity of other forms of entertainment, particularly games on console systems, which are already popular in developed countries and may gain popularity in China; |
• | growth in users of the Internet and broadband and penetration in China and other markets in which Changyou offers its games, and the rate of any such growth; |
• | whether recent declines in the use of personal computers and growth in users of mobile devices such as smart phones and tablets in general, and for purposes of accessing online games in particular, continue or accelerate in China and other markets in which Changyou offers its games; |
• | changes in consumer demographics and public tastes and preferences; and |
• | general economic conditions in China, particularly economic conditions adversely affecting discretionary consumer spending, such as the slowdown in China’s economic growth that occurred between the first quarter of 2010 and the third quarter of 2012 and from 2014 through 2020. |
• | expand the portfolio of mobile games, and particularly high -quality games, in a variety of genres that Changyou develops in-house and licenses from third-party developers; |
• | effectively develop new mobile games for multiple mobile operating systems and mobile devices; |
• | anticipate and effectively respond to the growing number of players switching to mobile games, the changing mobile landscape and the interests of players; |
• | attract, retain and motivate talented game designers, product managers and engineers with experience in developing games for mobile devices; |
• | minimize launch delays and cost overruns on the development of new games; |
• | effectively monetize mobile games without degrading the social game experience for its players; |
• | develop games that provide for a compelling and optimal user experience through existing and developing third-party technologies, including third-party software and middleware utilized by its players; and |
• | acquire and successfully integrate high- quality mobile game assets, personnel, and companies. |
• | have an adverse impact on the way Changyou designs its games and game features, which may make the games less attractive to game players; |
• | have an adverse impact on Changyou’s ability to achieve an acceptable level of revenues and profit from its mobile games; |
• | make it harder to access Changyou’s mobile games and cause a decrease in its player base; |
• | increase the cost of the development and operation of Changyou’s mobile games; and |
• | require substantial management attention and effort in monitoring the development of, and ensuring Changyou’s compliance with, existing and future PRC laws and regulations affecting the mobile games business. |
• | difficulties in identifying appropriate markets; |
• | difficulties in identifying, negotiating and maintaining good relationships with licensees or joint operators who are knowledgeable about, and can effectively operate Changyou’s games in, particular markets; |
• | difficulties in maintaining Changyou’s reputation and the reputation of its games when its games are operated by licensees or joint operators pursuant to their own standards; and |
• | difficulties in protecting Changyou’s intellectual property. |
• | difficulties and significant costs in protecting Changyou’s intellectual property in overseas markets; |
• | difficulties in retaining and maintaining local management and key development and technical personnel who are experienced and knowledgeable about, and can effectively operate Changyou’s games in, particular markets; |
• | uncertainties relating to Changyou’s ability to develop its games and/or expansion packs catering to particular overseas markets; |
• | uncertainties relating to Changyou’s ability to renew its license and joint operation agreements with licensees and joint operators upon their expiration; |
• | for Changyou’s direct operation of its games overseas, interruptions in the operation of the games due to cross-border Internet connection or other system failures; |
• | significant costs for translation of its games into the local languages of, or customization of its games for, the overseas markets in which Changyou plans to license or jointly operate its games; |
• | limited choices of third-party Internet platforms to distribute Changyou’s mobile games in certain overseas markets; |
• | difficulty for Changyou’s management to exercise timely and effective supervision and administration of local management and employees in general, and their interactions with local third-party Internet platforms or other service providers in particular, in order to identify and prevent any sloppy, dishonest or illegal activities, which could harm Changyou’s business and reputation or subject Changyou to penalties; |
• | significant marketing costs to promote Changyou’s games in certain overseas markets where third-party Internet platforms do not include marketing services as part of the revenue-sharing arrangements; |
• | different game player preferences in certain overseas markets; |
• | difficulties and significant costs relating to compliance with the different legal requirements and commercial terms, such as game export regulatory procedures, taxes and other restrictions and expenses, in the overseas markets in which Changyou licenses or directly or jointly operates its games; |
• | exposure to different regulatory systems governing the protection of intellectual property and the regulation of online games, the Internet and the export of technology; |
• | costs for compliance with different legal requirements and commercial terms in overseas markets; |
• | difficulties in verifying revenues generated from Changyou’s games by its licensees for purposes of determining royalties payable to Changyou; |
• | difficulties and delays in contract enforcement and collection of receivables through the use of foreign legal systems; |
• | changes in the political, regulatory or economic conditions, or public policy, affecting online games in particular foreign countries or regions; |
• | the risk that regulatory authorities in foreign countries or administrative regions may impose withholding taxes, or place restrictions on repatriation of Changyou’s profits; and |
• | fluctuations in currency exchange rates. |
• | Changyou may fail to provide game updates, expansion packs and other enhancements in a timely manner due to technological or resource limitations, or other factors; |
• | Changyou’s game updates, expansion packs and new versions may contain programming errors, and their installation may create other unforeseen issues that adversely affect the game-playing experience; |
• | Changyou may fail to timely respond and/or resolve complaints from its game players; |
• | Changyou may fail to eliminate computer “bots” which can disrupt its games’ smooth operation and reduce the attractiveness of its games; and |
• | Changyou’s game updates, expansion packs and other enhancements may change rules or other aspects of its games that its game players do not welcome, resulting in a reduction in the active accounts or active paying accounts of its online games. |
• | Changes in government policy could restrict or curtail Changyou’s online advertising services; |
• | The decline in the demand for online advertising services from developers and operators of PC games, as the relative popularity of such games continues to decline; |
• | Advertising clients may adopt new methods and strategies other than online advertising to promote their brands, which would have an adverse impact on Changyou’s advertising revenues; and |
• | The acceptance of the Internet as a medium for advertising depends on the development of a measurement standard. No standards for the measurement of the effectiveness of online advertising have been widely accepted. Industry-wide standards may not develop sufficiently to support the Internet as an effective advertising medium. If these standards do not develop, advertisers may choose not to advertise on the Internet in general, or through Changyou’s Websites. |
• | the development of a large base of users possessing demographic characteristics attractive to advertising clients; |
• | the development of successful mobile versions of the 17173.com Website and the provision of extensive mobile game-related products and services in response to the rapid migration of users of Internet services from PCs to mobile devices, such as tablets and mobile phone; |
• | the acceptance of online advertisements, either through PCs or mobile devices, as an effective method of business marketing; |
• | the effectiveness of Changyou’s advertising delivery, tracking and reporting systems; |
• | the extent of resistance from existing or potential customers to online advertising prices; and |
• | the development of new formats for online advertising, such as streaming video. |
ITEM 4. |
INFORMATION ON THE COMPANY |
• | $134.9 million in brand advertising revenues, of which $86.3 million was from Sohu Media Portal, $25.3 million was from Sohu Video, and $23.3 million was from Focus; and |
• | $66.6 million in other revenues, mainly attributable to revenues from paid subscription services, interactive broadcasting services, and sub-licensing of purchased video content to third parties. |
• | $536.7 million in online game revenues, of which $353.7 million was from PC games, and $183.0 million was from mobile games; and |
• | $11.6 million in brand advertising revenues, mainly attributable to Changyou’s 17173.com Website. |
• | Sohu Media Portal. |
• | Sohu Video. |
• | Focus. |
(i) | Sohu.com Limited: 127,200,000 Sogou Class B Ordinary Shares held by Sohu for its own account, and 3,717,250 Sogou Class A Ordinary Shares held by Sohu for the purpose of issuance upon the exercise of outstanding share-based awards and future share-based awards; |
(ii) | Tencent: 151,557,875 Sogou Class B Ordinary Shares; |
(iii) | Photon, an investment vehicle of the Sohu Group’s Chairman and Chief Executive Officer Charles Zhang: 24,686,863 Sogou Class A Ordinary Shares; and |
(iv) | Shareholders other than Sohu, Tencent, and Photon: 80,428,928 Sogou Class A Ordinary Shares, including Sogou Class A Ordinary Shares represented by Sogou ADSs. |
• | access to financial resources; |
• | gateway to host of Internet users’ activities; |
• | technological advancements; |
• | attractiveness of products; |
• | brand recognition; |
• | volume of traffic and users; |
• | quality of Internet platforms and content; |
• | quality and quantity of purchased video content, self-developed video content, and user-generated content; |
• | strategic relationships; |
• | quality of services; |
• | effectiveness of sales and marketing efforts; |
• | talent of staff; and |
• | pricing. |
• | greater brand recognition among Internet users and clients; |
• | better products and services; |
• | larger user and advertiser bases; |
• | more extensive and well -developed marketing and sales networks; and |
• | substantially greater financial and technical resources. |
• | online game developers and/or operators in China that are publicly traded in the United States and in Hong Kong, including IGG Inc., Kingsoft Corporation Limited, NetEase, Inc., and Tencent; |
• | other companies in China devoted to game development and/or operation that are publicly traded in China, such as Beijing Kunlun Tech Co., Ltd., Giant Network Group Co., Ltd., Perfect World Co., Ltd., Wuhu 37 Interactive Entertainment Network Technology Group Co., Ltd., YOOZOO Games Co., Ltd., and Zhejiang Century Huatong Group Co., Ltd. (formerly known as Shanda Games Limited); and |
• | international competitors. |
• | Duowan.com, operated by JOYY Inc.; and |
• | Game.sina.com.cn, operated by Sina Corporation. |
• | the Ministry of Industry and Information Technology (the “MIIT”), which resulted from the merger of the former Ministry of Information Industry and other governmental departments; |
• | the Ministry of Culture and Tourism of the People’s Republic of China (the “MCT”), which was established in March 2018 and resulted from the merger of the former Ministry of Culture (the “MOC”), and the former China National Tourism Administration (the “CNTA”). The “MCT” as used in this report refers to the governmental authority that resulted from the merger, as well as to the MOC and the CNTA separately for periods prior to the merger; |
• | the Ministry of Public Security (“MPS”); |
• | the Ministry of Commerce (“MOFCOM”); |
• | the State Administration of Market Regulation (the “SAMR”), which resulted from the merger of, and assumed the responsibilities previously held by, the State Administration for Industry and Commerce (the “SAIC”), the General Administration of Quality Supervision, Inspection and Quarantine (the “AQSIQ”) the Certification and Accreditation Administration, the Standardization Administration of China (the “SAC”), and the State Food and Drug Administration (the “SFDA”). The “SAMR” as used in this report refers to the governmental authority that resulted from the merger, as well as to the SAIC, the AQSIQ, the SAC, and the SFDA separately for periods prior to the merger; |
• | the State Administration of Press, Publication, Radio, Film and Television (the “SAPPRFT”) was reorganized into three separate governmental authorities, the National Radio and Television Administration (“NRTA”), the National Film Administration (the “NFA”), and the State Press Publication Administration (the “SPPA”), in March 2018. The SAPPRFT had resulted from the merger of the former General Administration of Press and Publication (the “GAPP”) with the former State Administration of Radio, Film and Television (the “SARFT”) in March 2013. The “NRTA,” the “NFA” and the “SPPA” as used in this report refer to the respective governmental authorities after the reorganization; the “SAPPRFT” as used in this report refers to the governmental authority that resulted from the merger for the period after the merger and prior to the reorganization, as well as to the GAPP and the SARFT separately for periods prior to the merger; |
• | the PRC State Council Information Office (the “SCIO”); |
• | the Cyberspace Administration of China (the “CAOC”); |
• | the State Administration of Foreign Exchange (the “SAFE”); and |
• | the China Banking and Insurance Regulatory Commission (the “CBIRC”), which resulted from the merger of, and assumed the responsibilities previously held by, the China Banking Regulatory Commission (the “CBRC”) and the China Insurance Regulatory Commission (the “CIRC”). The “CBIRC” as used in this report refers to the governmental authority that resulted from the merger, as well as to the CBRC and the CIRC separately for periods prior to the merger. |
• | Internet news information service providers must be entities duly incorporated within the territory of the PRC; |
• | Managers and chief editors of Internet news information service providers must be Chinese citizens; |
• | Internet news information service providers must have personnel who have appropriate qualification and professional training; |
• | Internet news information service providers must have sound Internet news information service management systems; |
• | Internet news information service providers must have rigorous information security management systems; |
• | Internet news information service providers must have facilities that are suitable for their proposed services, and must be adequately funded; and |
• | Internet news information service providers may only republish news published by governmental news agencies and must ensure the original sources are traceable. |
• | the production, duplication, importation, release or broadcasting of Internet cultural products; |
• | the dissemination of online cultural products on the Internet or transmission thereof via Internet or mobile phone networks to users’ terminals such as computers, fixed-line or mobile phones, television sets, gaming consoles and Internet surfing service sites such as Internet cafés for the purpose of browsing, using or downloading such products; or |
• | the exhibition or holding of contests related to Internet cultural products. |
• | Provisional Regulations of the People’s Republic of China for the Administration of International Connections to Computer Information Networks |
• | Administrative Measures for International Communications Gateways . |
• | be a PRC legal person; |
• | have the appropriate equipment, facilities and technical and administrative personnel; |
• | have implemented and registered a system of information security and censorship; and |
• | effect all international connections through an international communications gateway established with the approval of the MIIT. |
• | The Law of the People’s Republic of China on the Preservation of State Secrets |
• | The Law of the People’s Republic of China Regarding Anti-spy |
• | Rules of the People’s Republic of China for Protecting the Security of Computer Information Systems |
• | Administrative Regulations for the Protection of Secrecy on Railway Computer Information Systems Connected to International Networks |
• | Regulations for the Protection of State Secrets for Computer Information Systems on the Internet |
• | Notice issued by the Ministry of Public Security of the People’s Republic of China Regarding Issues Relating to the Implementation of the Administrative Measure for the Security Protection of International Connections to Computer Information Networks |
• | The Decision of the Standing Committee of the National People’s Congress Regarding the Safeguarding of Internet Security |
• | “A breach of public security” |
• | “Socially destabilizing content” |
• | “State secrets” |
• | filing with the Beijing AMR and obtain electronic registration marks for the Websites; |
• | placing the registration marks on the Websites’ homepages; and |
• | registering the Website names with the Beijing AMR. |
• | unauthorized use of marks that are the same as or similar to the names, packaging, or decoration of another party’s products; |
• | unauthorized use of another party’s organizational name or the name of an individual; |
• | unauthorized use of another party’s domain name, website name, or webpage; and |
• | other actions causing a third party to mistakenly believe that another party’s product is that of the business operator. |
• | the combined worldwide turnover of all of the subject enterprises in the preceding financial year is more than RMB10.00 billion (or approximately $1.45 billion), and the nationwide turnover within China of each of at least two of the subject enterprises in the preceding financial year is more than RMB400.0 million (or approximately $58.0 million); or |
• | the combined nationwide turnover within China of all the subject enterprises in the preceding financial year is more than RMB2.00 billion (or approximately $289.8 million), and the nationwide turnover within China of each of at least two of the subject enterprises in the preceding financial year is more than RMB400.0 million (or approximately $58.0 million). |
• | Sohu.com (Hong Kong) Ltd., or Sohu HK, established in 2000; |
• | Beijing Sohu New Era Information Technology Co., Ltd., or Sohu Era, established in 2003; |
• | Sohu.com (Search) Limited, or Sohu Search, established in 2005; |
• | Beijing Sohu New Media Information Technology Co., Ltd., or Sohu Media, established in 2006; |
• | Sohu.com (Game) Limited, or Sohu Game, established in 2008; |
• | Beijing Sohu New Momentum Information Technology Co., Ltd., or Sohu New Momentum, established in 2010; |
• | Fox Video Limited, or Sohu Video, established in 2011; |
• | Fox Information Technology (Tianjin) Limited, or Video Tianjin, established in 2011; and |
• | Sohu Focus Limited, or Sohu Focus, established in 2013. |
• | Changyou.com Limited, or Changyou, established in 2007; |
• | Changyou.com (HK) Limited, or Changyou HK, established in 2007; |
• | Beijing AmazGame Age Internet Technology Co., Ltd., or AmazGame, established in 2007; |
• | Beijing Changyou Gamespace Software Technology Co., Ltd., or Gamespace, established in 2009; |
• | Changyou.com Korea LLC, or Changyou Korea, established in 2010; and |
• | Beijing Changyou Chuangxiang Software Technology Co., Ltd., or Changyou Chuangxiang, established in 2016. |
• | Sogou Inc., or Sogou, established in 2005; |
• | Sogou (BVI) Limited, or Sogou BVI, established in 2005; |
• | Beijing Sogou Technology Development Co., Ltd., or Sogou Technology, established in 2006; |
• | Sogou Hong Kong Limited, or Sogou HK, established in 2007; |
• | Vast Creation Advertising Media Services Limited, or Vast Creation, established in 2004 and acquired by Sogou in 2011; |
• | Beijing Sogou Network Technology Co., Ltd., or Sogou Network, established in 2012; |
• | Sogou (Shantou) Internet Microcredit Co., Ltd., or Sogou Microcredit, established in 2017; |
• | Sogou (Hangzhou) Intelligent Technology Co., Ltd., or Sogou Hangzhou, established in 2018; and |
• | Shantou Ying Zhong Bai Fu Financing Guarantee Co., Ltd., or Sogou Financing Guarantee, established in 2019. |
• | Beijing Century High-Tech Investment Co., Ltd., or High Century, a PRC company that was incorporated in 2001. As of December 31, 2020, Dr. Charles Zhang, our Chairman of the Board and Chief Executive Officer, and Wei Li, one of our employees, held 80% and 20% interests, respectively, in this entity; |
• | Beijing Heng Da Yi Tong Information Technology Co., Ltd., or Heng Da Yi Tong, a PRC company that was incorporated in 2002. As of December 31, 2020, Dr. Charles Zhang and Wei Li held 80% and 20% interests, respectively, in this entity; |
• | Beijing Sohu Internet Information Service Co., Ltd., or Sohu Internet, a PRC company that was incorporated in 2003. As of December 31, 2020, High Century held a 100% interest in this entity; |
• | Beijing Sohu Donglin Advertising Co., Ltd., or Donglin, a PRC company that was incorporated in 2010. As of December 31, 2020, Sohu Internet held a 100% interest in this entity; |
• | Tianjin Jinhu Culture Development Co., Ltd, or Tianjin Jinhu, a PRC company that was incorporated in 2011. As of December 31, 2020, Xiufeng Deng and Xuemei Zhang, both of whom are our employees, each held a 50% interest in this entity; and |
• | Beijing Focus Interactive Information Service Co., Ltd., or Focus Interactive, a PRC company that was incorporated in July 2014. As of December 31, 2020, Heng Da Yi Tong held a 100% interest in this entity. |
• | Beijing Gamease Age Digital Technology Co., Ltd., or Gamease, a PRC company that was incorporated in 2007. As of December 31, 2020, High Century held a 100% interest in this entity; |
• | Shanghai ICE Information Technology Co., Ltd., or Shanghai ICE, a PRC company that was acquired by Changyou in 2010. As of December 31, 2020, Gamease held a 100% interest in this entity; and |
• | Beijing Guanyou Gamespace Digital Technology Co., Ltd., or Guanyou Gamespace, a PRC company that was incorporated in 2010. As of December 31, 2020, Beijing Changyou Star Digital Technology Co., Ltd (“Changyou Star”) held a 100% interest in this entity. |
• | Beijing Sogou Information Service Co., Ltd., or Sogou Information, a PRC company that was incorporated in 2005. As of December 31, 2020, Xiaochuan Wang, Sogou’s Chief Executive Officer, High Century and Tencent held 10%, 45% and 45% interests, respectively, in this entity; and |
• | Chengdu Easypay Technology Co., Ltd., or Chengdu Easypay, was incorporated in January 2015. As of December 31, 2020, Sogou Information held 100% of the equity interests in this entity. |
ITEM 4A. |
UNRESOLVED STAFF COMMENTS |
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
Year Ended December 31, 2018 (in thousands) |
||||||||||||
Sohu |
Changyou |
Total |
||||||||||
Brand advertising: |
||||||||||||
Sohu Media Portal |
$ | 127,612 | 0 | 127,612 | ||||||||
Sohu Video |
53,886 | 0 | 53,886 | |||||||||
Focus |
31,144 | 0 | 31,144 | |||||||||
17173.com Website |
0 | 19,697 | 19,697 | |||||||||
Online games: |
||||||||||||
PC games |
0 | 236,743 | 236,743 | |||||||||
Mobile games |
0 | 151,737 | 151,737 | |||||||||
Other games |
0 | 1,308 | 1,308 | |||||||||
Others |
61,974 | 6,074 | 68,048 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 274,616 | 415,559 | 690,175 | ||||||||
|
|
|
|
|
|
Year Ended December 31, 2019 (in thousands) |
||||||||||||
Sohu |
Changyou |
Total |
||||||||||
Brand advertising: |
||||||||||||
Sohu Media Portal |
$ | 94,692 | 0 | 94,692 | ||||||||
Sohu Video |
34,529 | 0 | 34,529 | |||||||||
Focus |
32,120 | 0 | 32,120 | |||||||||
17173.com Website |
0 | 13,715 | 13,715 | |||||||||
Online games: |
||||||||||||
PC games |
0 | 267,752 | 267,752 | |||||||||
Mobile games |
0 | 172,718 | 172,718 | |||||||||
Other games |
0 | 432 | 432 | |||||||||
Others |
57,082 | 763 | 57,845 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 218,423 | 455,380 | 673,803 | ||||||||
|
|
|
|
|
|
Year Ended December 31, 2020 (in thousands) |
||||||||||||
Sohu |
Changyou |
Total |
||||||||||
Brand advertising: |
||||||||||||
Sohu Media Portal |
$ | 86,293 | 0 | 86,293 | ||||||||
Sohu Video |
25,312 | 0 | 25,312 | |||||||||
Focus |
23,281 | 0 | 23,281 | |||||||||
17173.com Website |
0 | 11,640 | 11,640 | |||||||||
Online games: |
||||||||||||
PC games |
0 | 353,737 | 353,737 | |||||||||
Mobile games |
0 | 182,947 | 182,947 | |||||||||
Other games |
0 | 0 | 0 | |||||||||
Others |
66,658 | 22 | 66,680 | |||||||||
|
|
|
|
|
|
|||||||
Total |
$ | 201,544 | 548,346 | 749,890 | ||||||||
|
|
|
|
|
|
(i) | Fixed Price model |
(ii) | CPM model |
(iii) | CPC model |
• | Sohu New Momentum. Sohu New Momentum qualified as an HNTE for the years 2019 through 2021, and will need to re-apply for HNTE qualification in 2022. |
• | Sohu Internet and Video Tianjin. Sohu Internet and Video Tianjin qualified as HNTEs for the years 2018 through 2020, and will need to re-apply for HNTE qualification in 2021. |
• | Sohu Media. Sohu Media re-applied for HNTE qualification and received approval in December 2020. Sohu Media is entitled to continue to enjoy the beneficial tax rate as an HNTE for the years 2020 through 2022, and will need to re-apply for HNTE qualification in 2023. |
• | Gamespace and Changyou Chuangxiang. Gamespace and Changyou Chuangxiang qualified as HNTEs for the years 2019 through 2021, and will need to re-apply for HNTE qualification in 2022. |
• | Gamease and AmazGame. Gamease and AmazGame re-applied for HNTE qualification and received approval in October 2020. Gamease and AmazGame are entitled to continue to enjoy the beneficial tax rate as HNTEs for the years 2020 through 2022, and will need to re-apply for HNTE qualification in 2023. |
• | Sogou Network. Sogou Network qualified as an HNTE for the years 2019 through 2021, and will need to re-apply for HNTE qualification in 2022. |
• | Sogou Information. Sogou Information qualified as an HNTE for the years 2018 through 2020, and will need to re-apply for HNTE qualification in 2021. |
• | Sogou Technology. Sogou Technology re-applied for HNTE qualification and received approval in December 2020. Sogou Technology is entitled to continue to enjoy the beneficial tax rate as an HNTE for the years 2020 through 2022, and will need to re-apply for HNTE qualification in 2023. |
• | AmazGame. In 2020, AmazGame completed a self-assessment and filed required supporting documents for KNSE status for 2019. Also in 2020, AmazGame was qualified as a KNSE after the relevant government authorities’ assessment and became entitled to a preferential income tax rate of 10% for 2019. AmazGame will follow the appropriate rules and procedures of the relevant government authorities in order to maintain its KNSE status for 2020. |
• | Changyou Chuangxiang. In 2020, Changyou Chuangxiang completed a self-assessment and filed required supporting documents for KNSE status for 2019. Also in 2020, Changyou Chuangxiang was qualified as a KNSE after the relevant government authorities’ assessment and became entitled to a preferential income tax rate of 10% for 2019. Changyou Chuangxiang will follow the appropriate rules and procedures of the relevant government authorities in order to maintain its KNSE status for 2020. |
December 31, 2019 |
ASU 2016-13 adjustment |
January 1, 2020 |
||||||||||
Allowance for credit losses |
||||||||||||
Accounts receivable, net |
$ | 126,081 | $ | (3,383 | ) | $ | 122,698 | |||||
Accounts receivable and financing receivables, net classified as assets held for sale (1) |
134,635 | (3,273 | ) | 131,362 | ||||||||
|
|
|
|
|
|
|||||||
Total assets |
2,691,864 | (6,656 | ) | 2,685,208 | ||||||||
Shareholders’ equity |
||||||||||||
Accumulated deficit |
(544,137 | ) | (6,656 | ) | (550,793 | ) |
Note | (1): Of the total adjustment of $3.3 million, $2.5 million was related to financing receivables. |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Accounts receivable, net |
||||||||
Accounts receivable |
$ | 130,037 | $ | 94,528 | ||||
Less: Allowance for credit losses |
(3,956 | ) | (7,007 | ) | ||||
|
|
|
|
|||||
$ | 126,081 | $ | 87,521 |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Less than 179 days |
$ | 113,173 | $ | 78,805 | ||||
180-359 days |
6,516 | 7,569 | ||||||
360 days and greater |
10,348 | 8,154 | ||||||
|
|
|
|
|||||
Total |
130,037 | 94,528 |
For the year ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Balance at the beginning of year |
$ | 4,487 | $ | 7,574 | $ | 3,956 | ||||||
Changes on initial application of ASU 2016-13 (1) |
0 | 0 | 3,383 | |||||||||
Additional allowance for credit losses, net of recoveries |
5,449 | 4,724 | 2,419 | |||||||||
Write-offs |
(1,940 | ) | (8,237 | ) | (3,231 | ) | ||||||
Exchange difference |
(422 | ) | (105 | ) | 480 | |||||||
|
|
|
|
|
|
|||||||
Balance at the end of year |
7,574 | 3,956 | 7,007 |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Accounts receivable |
$ | 77,210 | $ | 35,975 | ||||
Financing receivables |
66,858 | 41,911 | ||||||
Less: Allowance for credit losses (1) |
(12,255 | ) | (6,700 | ) | ||||
|
|
|
|
|||||
$ | 131,813 | $ | 71,186 |
Note | (1): The allowance for credit losses related to financing receivables was $6.4 million as of December 31, 2020. |
December 31, 2019 |
1 -30 Days Past Due |
31 -60 Days Past Due |
61 -90 Days Past Due |
Greater than 90 Days Past Due |
Total Past Due |
Current |
Total |
|||||||||||||||||||||
Financing receivables by origination year |
||||||||||||||||||||||||||||
2018 |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,744 | $ | 1,744 | ||||||||||||||
2019 |
10,606 | 1,635 | 1,176 | 1,709 | 15,126 | 49,988 | 65,114 | |||||||||||||||||||||
Total |
10,606 | 1,635 | 1,176 | 1,709 | 15,126 | 51,732 | 66,858 | |||||||||||||||||||||
December 31, 2020 |
||||||||||||||||||||||||||||
Financing receivables by origination year |
||||||||||||||||||||||||||||
2018 |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 1,081 | $ | 1,081 | ||||||||||||||
2019 |
1 | 1 | 2 | 0 | 4 | 182 | 186 | |||||||||||||||||||||
2020 |
7,037 | 576 | 548 | 501 | 8,662 | 31,982 | 40,644 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | 7,038 | $ | 577 | $ | 550 | $ | 501 | $ | 8,666 | $ | 33,245 | $ | 41,911 |
For the year ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Beginning balance |
$ | 384 | $ | 7,511 | $ | 12,255 | ||||||
Change on initial application of ASU 2016-13 (1) |
0 | 0 | 3,273 | |||||||||
Additional allowance for credit losses, net of recoveries |
9,119 | 15,620 | 3,049 | |||||||||
Write-offs |
(1,908 | ) | (11,741 | ) | (12,517 | ) | ||||||
Exchange difference |
(84 | ) | 865 | 640 | ||||||||
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Balance at the end of year |
$ | 7,511 | $ | 12,255 | $ | 6,700 |
Note | (1): We adopted ASU 2016-13 using the modified retrospective transition approach. The adjustments arising from the new CECL model are recognized in the opening consolidated balance sheet on January 1, 2020. |
Fixed Assets |
Estimated Useful Lives (years) | |
Office buildings | 36-47 | |
Leasehold improvements | Lesser of term of the lease or the estimated useful lives of the assets | |
Vehicles | 4-10 | |
Office furniture | 5 | |
Computer equipment and hardware | 2-5 |
Intangible Assets |
Estimated Useful Lives (years) | |
Purchased video content | 1 month to 2 years | |
Computer software | 1-5 | |
Developed technologies | 3-10 | |
Domain names and trademarks | 4-30 | |
Operating rights for licensed games | over the contract terms |
Year ended December 31, |
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2018 |
2019 |
2020 |
2019 VS 2018 |
2020 VS 2019 |
||||||||||||||||||||||||||||||||||||
Amount | Percentage | Amount | Percentage | Amount | Percentage | Amount | Incremental ratio |
Amount | Incremental ratio |
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Revenues: |
||||||||||||||||||||||||||||||||||||||||
Brand advertising |
$ | 232,339 | 34 | % | $ | 175,056 | 26 | % | $ | 146,526 | 20 | % | $ | (57,283 | ) | (25 | )% | $ | (28,530 | ) | (16 | )% | ||||||||||||||||||
Online games |
389,788 | 56 | % | 440,902 | 65 | % | 536,684 | 72 | % | 51,114 | 13 | % | 95,782 | 22 | % | |||||||||||||||||||||||||
Others |
68,048 | 10 | % | 57,845 | 9 | % | 66,680 | 8 | % | (10,203 | ) | (15 | )% | 8,835 | 15 | % | ||||||||||||||||||||||||
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Total revenues |
$ | 690,175 | 100 | % | $ | 673,803 | 100 | % | $ | 749,890 | 100 | % | $ | (16,372 | ) | (2 | )% | $ | 76,087 | 11 | % | |||||||||||||||||||
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• | Sohu Media Portal |
• | Sohu Video |
• | Focus |
• | 17173.com Website |
Average Monthly Active Accounts (1) |
Three Months Ended March 31 |
Three Months Ended June 30 |
Three Months Ended September 30 |
Three Months Ended December 31 |
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(in millions) | PC games | Mobile games |
PC games | Mobile games |
PC games | Mobile games |
PC games | Mobile games |
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2018 |
2.5 | 2.6 | 2.3 | 3.2 | 2.3 | 3.7 | 2.0 | 2.9 | ||||||||||||||||||||||||
2019 |
1.9 | 2.7 | 2.0 | 2.7 | 2.1 | 3.5 | 2.2 | 3.7 | ||||||||||||||||||||||||
2020 |
2.1 | 3.4 | 1.9 | 3.1 | 2.0 | 3.8 | 2.3 | 2.4 | ||||||||||||||||||||||||
Quarterly Aggregate Active Paying Accounts (2) |
Three Months Ended March 31 |
Three Months Ended June 30 |
Three Months Ended September 30 |
Three Months Ended December 31 |
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(in millions) | PC games | Mobile games |
PC games | Mobile games |
PC games | Mobile games |
PC games | Mobile games |
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2018 |
0.8 | 0.8 | 0.7 | 0.7 | 0.8 | 0.7 | 0.9 | 0.7 | ||||||||||||||||||||||||
2019 |
0.9 | 0.6 | 0.9 | 0.6 | 1.0 | 1.1 | 1.0 | 1.1 | ||||||||||||||||||||||||
2020 |
1.0 | 1.0 | 0.9 | 0.6 | 1.0 | 0.6 | 0.9 | 0.6 |
(1) | Average Monthly Active Accounts for a given period refers to the number of registered accounts that were logged in to these games at least once during the period. |
(2) | Quarterly Aggregate Active Paying Accounts for a given quarter refers to the number of accounts from which game points are used at least once during the quarter. |
Year ended December 31, |
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2018 |
2019 |
2020 |
2019 VS 2018 |
2020 VS 2019 |
||||||||||||||||||||||||||||||||||||
Amount | Percentage | Amount | Percentage | Amount | Percentage | Amount | Incremental ratio |
Amount | Incremental ratio |
|||||||||||||||||||||||||||||||
Cost of revenues: |
||||||||||||||||||||||||||||||||||||||||
Brand advertising |
$ | 184,473 | 64 | % | $ | 126,406 | 52 | % | $ | 105,604 | 49 | % | $ | (58,067 | ) | (31 | )% | $ | (20,802 | ) | (16 | )% | ||||||||||||||||||
Online games |
60,981 | 21 | % | 88,992 | 37 | % | 91,526 | 42 | % | 28,011 | 46 | % | 2,534 | 3 | % | |||||||||||||||||||||||||
Others |
43,562 | 15 | % | 28,249 | 11 | % | 20,307 | 9 | % | (15,313 | ) | (35 | )% | (7,942 | ) | (28 | )% | |||||||||||||||||||||||
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Total cost of revenues |
$ | 289,016 | 100 | % | $ | 243,647 | 100 | % | $ | 217,437 | 100 | % | $ | (45,369 | ) | (16 | )% | $ | (26,210 | ) | (11 | )% | ||||||||||||||||||
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Year ended December 31, |
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2018 |
2019 |
2020 |
2019 VS 2018 |
2020 VS 2019 |
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Amount | Percentage | Amount | Percentage | Amount | Percentage | Amount | Incremental ratio |
Amount | Incremental ratio |
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Operating expenses: |
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Product development |
$ | 246,155 | 43 | % | $ | 234,852 | 47 | % | $ | 241,941 | 53 | % | $ | (11,303 | ) | (5 | )% | $ | 7,089 | 3 | % | |||||||||||||||||||
Sales and marketing |
236,898 | 42 | % | 204,665 | 41 | % | 159,787 | 35 | % | (32,233 | ) | (14 | )% | (44,878 | ) | (22 | )% | |||||||||||||||||||||||
General and administrative |
70,129 | 12 | % | 54,591 | 11 | % | 57,354 | 12 | % | (15,538 | ) | (22 | )% | 2,763 | 5 | % | ||||||||||||||||||||||||
Goodwill impairment and impairment of intangible assets acquired as part of business acquisitions |
16,369 | 3 | % | 7,245 | 1 | % | 0 | 0 | % | (9,124 | ) | (56 | )% | (7,245 | ) | (100 | )% | |||||||||||||||||||||||
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Total operating expenses |
$ | 569,551 | 100 | % | $ | 501,353 | 100 | % | $ | 459,082 | 100 | % | $ | (68,198 | ) | (12 | )% | $ | (42,271 | ) | (8 | )% | ||||||||||||||||||
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Year Ended December 31, |
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Share-based compensation expense |
2018 |
2019 |
2020 |
|||||||||
Cost of revenues |
$ | (739 | ) | $ | 142 | $ | 720 | |||||
Product development expenses |
(4,182 | ) | 1,364 | 7,325 | ||||||||
Sales and marketing expenses |
(920 | ) | (326 | ) | 460 | |||||||
General and administrative expenses |
(6,267 | ) | 1,170 | 5,975 | ||||||||
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$ | (12,108 | ) | $ | 2,350 | $ | 14,480 | ||||||
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Year Ended December 31, |
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Share-based compensation expense |
2018 |
2019 |
2020 |
|||||||||
For Sohu (excluding Sohu Video) share-based awards |
$ | (5,100 | ) | $ | 1,940 | $ | 2,633 | |||||
For Changyou share-based awards |
(6,461 | ) | 1,305 | 12,544 | ||||||||
For Sohu Video share-based awards |
(547 | ) | (895 | ) | (697 | ) | ||||||
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$ | (12,108 | ) | $ | 2,350 | $ | 14,480 | ||||||
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Year Ended December 31, |
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2018 |
2019 |
2020 |
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Net cash provided by/(used in) continuing operating activities |
$ | (52,143 | ) | $ | (18,267 | ) | $ | 163,394 | ||||
Net cash provided by/(used in) discontinued operating activities |
136,168 | 228,857 | (68,187 | ) | ||||||||
Net cash provided by operating activities |
84,025 | 210,590 | 95,207 | |||||||||
Net cash provided by/(used in) continuing investing activities |
180,146 | (214,814 | ) | 184,393 | ||||||||
Net cash provided by/(used in) discontinued investing activities |
(639,390 | ) | (228,406 | ) | 235,374 | |||||||
Net cash provided by/(used in) investing activities |
(459,244 | ) | (443,220 | ) | 419,767 | |||||||
Net cash provided by/(used in) continuing financing activities |
96,333 | (479,748 | ) | 101,795 | ||||||||
Net cash provided by/(used in) discontinued financing activities |
1 | (33,415 | ) | (8,209 | ) | |||||||
Net cash provided by/(used in) financing activities |
96,334 | (513,163 | ) | 93,586 | ||||||||
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted time deposits |
(19,544 | ) | (10,047 | ) | 36,984 | |||||||
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Net increase/(decrease) in cash, cash equivalents, restricted cash and restricted time deposits |
(298,429 | ) | (755,840 | ) | 645,544 | |||||||
Cash, cash equivalents, restricted cash and restricted time deposits at beginning of period |
1,368,295 | 1,069,866 | 314,026 | |||||||||
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Cash, cash equivalents, restricted cash and restricted time deposits at end of period |
$ | 1,069,866 | $ | 314,026 | $ | 959,570 | ||||||
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Less: Cash, cash equivalents, restricted cash and restricted time deposits of discontinued operations, end of year |
187,867 | 147,834 | 310,203 | |||||||||
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Cash, cash equivalents, restricted cash and restricted time deposits of continuing operations, end of year |
881,999 | 166,192 | 649,367 | |||||||||
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2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total |
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Repayment of principal of bank loans related to Changyou Merger |
$ | 0 | 7,500 | 7,500 | 77,000 | 0 | 0 | 92,000 | ||||||||||||||||||||
Royalties and expenditures for licensed content of games |
28,423 | 7,870 | 0 | 0 | 0 | 0 | 36,293 | |||||||||||||||||||||
Operating lease obligations |
6,101 | 5,432 | 2,586 | 264 | 132 | 0 | 14,515 | |||||||||||||||||||||
Purchase of bandwidth |
14,084 | 150 | 102 | 0 | 0 | 0 | 14,336 | |||||||||||||||||||||
Interest payment commitment |
6,623 | 1,458 | 1,334 | 628 | 0 | 0 | 10,043 | |||||||||||||||||||||
Purchase of content and services - others |
6,715 | 236 | 19 | 0 | 0 | 0 | 6,970 | |||||||||||||||||||||
Purchase of content and services - video |
5,398 | 1,006 | 0 | 0 | 0 | 0 | 6,404 | |||||||||||||||||||||
Others |
518 | 24 | 0 | 0 | 0 | 0 | 542 | |||||||||||||||||||||
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Total Payments Required |
$ | 67,862 | 23,676 | 11,541 | 77,892 | 132 | 0 | 181,103 | ||||||||||||||||||||
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ITEM 6. |
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
Directors and Executive Officers |
Age |
Position | ||
Charles Zhang | 56 | Chairman of the Board and Chief Executive Officer | ||
Dewen Chen | 45 | Chief Executive Officer of Changyou |
Directors and Executive Officers |
Age |
Position | ||
Xiaochuan Wang | 42 | Chief Executive Officer of Sogou | ||
Joanna Lv | 50 | Chief Financial Officer | ||
Charles Huang | 51 | Director | ||
Zhonghan Deng (1) (2) (3) |
53 | Independent Director | ||
Dave De Yang (1) |
55 | Independent Director | ||
Dave Qi (1) (2) (3) |
57 | Independent Director | ||
Shi Wang (3) |
70 | Independent Director |
(1) | Member of the audit committee of our Board of Directors. |
(2) | Member of the compensation committee of our Board of Directors. |
(3) | Member of the nominating committee of our Board of Directors. |
• | selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
• | overseeing our accounting and financial reporting processes and audits of the financial statements of our company; |
• | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
• | reviewing and approving all proposed related party transactions, as defined in the NASDAQ Listing Rules; |
• | discussing the annual audited financial statements with management and the independent auditors; |
• | reviewing major issues as to the adequacy of our internal controls over financial reporting and any special audit steps adopted in the light of any significant deficiencies or materially weakness in our internal controls; and |
• | meeting separately and periodically with management and the independent auditors. |
Directors and Executive Officers |
Ordinary Shares underlying outstanding options |
Exercise price |
Date of grant |
Expiration date |
||||||||||||
Charles Zhang |
75,000 | (1) |
$ | 0.001 | 2/16/2015 | 2/15/2025 | ||||||||||
Charles Zhang |
70,000 | (2) |
$ | 0.001 | 7/1/2019 | 6/30/2029 | ||||||||||
Joanna Lv |
7,500 | (3) |
$ | 0.001 | 2/16/2015 | 2/15/2025 | ||||||||||
Joanna Lv |
40,000 | (4) |
$ | 0.001 | 7/1/2019 | 6/30/2029 | ||||||||||
Joanna Lv |
10,000 | (5) |
$ | 0.001 | 9/1/2020 | 8/31/2030 |
(1) | Consists of options to purchase our ordinary shares at a nominal exercise price, of which 75,000 options are vested and exercisable as of February 26, 2021. |
(2) | Consists of options to purchase our ordinary shares at a nominal exercise price, of which 17,500 options are vested and exercisable as of February 26, 2021. |
(3) | Consists of options to purchase our ordinary shares at a nominal exercise price, of which 7,500 options are vested and exercisable as of February 26, 2021. |
(4) | Consists of options to purchase our ordinary shares at a nominal exercise price, of which 10,000 options are vested and exercisable as of February 26, 2021. |
(5) | Consists of options exercisable for the purchase of our ordinary shares that are subject to vesting in equal annual installments over a four-year period. |
Directors and Executive Officers |
Ordinary Shares underlying outstanding options |
Exercise price |
Date of grant |
Expiration date |
||||||||||||
Dewen Chen |
1,288,000 | (1) |
$ | 0.01 | 8/26/2019 | 9/30/2029 |
(1) | Consists of options, granted on August 26, 2019 and effective as of October 1, 2019, that are subject to vesting in equal annual installments over a four-year period commencing on October 1, 2019. |
Directors and Executive Officers |
Restricted Sogou Class A Ordinary Shares |
Exercise price |
Date of grant |
Expiration date |
||||||||||||
Xiaochuan Wang |
1,440,000 | (1) |
$ | 0.625 | 1/31/2013 | N/A |
(1) | Consists of Sogou Class A Ordinary Shares beneficially held by Mr. Wang that were issued in 2013 upon Mr. Wang’s early exercise of share options granted under the Sogou 2010 Share Incentive Plan and are still subject to vesting. Such Sogou Class A Ordinary Shares are subject to vesting upon the fourth anniversary of the completion of Sogou’s IPO, which took place on November 13, 2017. |
Directors and Executive Officers |
Ordinary Shares underlying outstanding options |
Exercise price |
Date of grant |
Expiration date |
||||||||||||
Joanna Lv |
110,000 | (1) |
$ | 0.01 | 1/4/2012 | 1/3/2022 | ||||||||||
Xiaochuan Wang |
50,000 | (2) |
$ | 0.01 | 1/4/2012 | 1/3/2022 |
(1) | Consists of options to purchase Sohu Video’s ordinary shares at a nominal exercise price, vesting in equal annual installments over a four-year period, but vesting for each year will also be subject to the achievement of annual performance milestones related to Sohu Video that our Board of Directors establishes in its discretion. As of February 26, 2021, 27,500 options are fully vested and exercisable. |
(2) | Consists of options to purchase Sohu Video’s ordinary shares at a nominal exercise price, vesting in equal annual installments over a four-year period, but vesting for each year will also be subject to the achievement of annual performance milestones related to Sohu Video that our Board of Directors establishes in its discretion. As of February 26, 2021, 12,500 options are fully vested and exercisable. |
ITEM 7. |
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership (1) |
Percent of Class (1) |
||||||
Charles Zhang |
10,282,029 | (2) |
26.09 | % | ||||
Charles Huang (3) |
76,265 | * | ||||||
Shi Wang (4) |
34,132 | * | ||||||
Dave Qi (5) |
28,940 | * | ||||||
Zhonghan Deng (6) |
14,514 | * | ||||||
Dave De Yang (7) |
— | — | ||||||
Joanna Lv |
20,500 | (8) |
* | |||||
Xiaochuan Wang (9) |
69,258 | * | ||||||
Dewen Chen (10) |
— | — | ||||||
All directors, nominees and executive officers as a group (9 persons) |
10,525,638 | (11) |
26.70 | % | ||||
Photon Group Limited (12) |
9,920,829 | 25.23 | % | |||||
Macquarie Investment Management Business Trust (13) |
3,618,481 | 9.21 | % | |||||
Renaissance Technologies LLC. (14) |
2,699,355 | 7.30 | % |
* | Less than 1%. |
(1) | Includes the number of shares and percentage ownership represented by such shares determined to be beneficially owned by a person in accordance with the rules of the SEC. The number of shares beneficially owned by a person includes the number of ordinary shares subject to options or restricted stock units held by that person that are currently exercisable or settleable or that are exercisable or settleable within 60 days of February 26, 2021. Such shares are deemed outstanding for the purpose of computing the percentage of outstanding shares owned by that person. Such shares are not deemed outstanding, however, for the purpose of computing the percentage ownership of each other person. |
(2) | Includes (i) 92,500 ordinary shares subject to options exercisable within 60 days of February 26, 2021 and (ii) 9,920,829 ordinary shares beneficially owned by Photon Group Limited. Dr. Charles Zhang is a Director of Photon Group Limited, and may be deemed to be a beneficial owner of shares owned by it. Dr. Charles Zhang disclaims beneficial ownership of such shares except to the extent of his pecuniary interest in such shares. Dr. Charles Zhang’s address is c/o Sohu.com Limited., Level 18, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. |
(3) | Mr. Charles Huang’s address is Suite 5206, Central Plaza, Wanchai, Hong Kong. |
(4) | Mr. Shi Wang’s address is Vanke Architecture Research Center, No. 68 Meilin Road, Futian District, Shenzhen 518049, People’s Republic of China. |
(5) | Dr. Dave Qi’s address is 3/F, Tower E3, Oriental Plaza, 1 East Chang An Avenue, Beijing 100005, People’s Republic of China. |
(6) | Dr. Zhonghan Deng’s address is 16/F, Shining Tower, No. 35, Xueyuan Road, Haidian District, Beijing 100191, People’s Republic of China. |
(7) | Mr. Dave De Yang’s address is 24W435 Arrow Ct. Naperville, IL 60540, the United States. |
(8) | Includes 17,500 ordinary shares subject to options exercisable within 60 days of February 26, 2021. Ms. Joanna Lv’s address is c/o Sohu.com Limited., Level 18, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. |
(9) | Mr. Xiaochuan Wang’s address is c/o Sogou Inc., Level 15, Sohu.com Internet Plaza, No. 1 Unit, Zhongguancun East Road, Haidian District, Beijing 100084, People’s Republic of China. |
(10) | Mr. Dewen Chen’s address is c/o Changyou.com Limited, Changyou Tower, No. 65 East Bajiao Road, Shijingshan District, Beijing 100043, People’s Republic of China. |
(11) | Includes 110,000 ordinary shares that such persons have the right to acquire pursuant to currently exercisable options or options that may be exercised within 60 days of February 26, 2021. |
(12) | Photon Group Limited’s address is c/o Sohu.com Limited., Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. |
(13) | Data based on a Schedule 13G/A filed with the SEC on February 12, 2021. The principal business address of Macquarie Investment Management Business Trust is 2005 Market Street, Philadelphia, PA 19103. |
(14) | Data based on a Schedule 13G/A filed with the SEC on February 11, 2021. The principal business address of Renaissance Technologies LLC is 800 Third Avenue, New York, New York 10022. |
ITEM 8. |
FINANCIAL INFORMATION |
ITEM 9. |
THE OFFER AND LISTING |
ITEM 10. |
ADDITIONAL INFORMATION |
• | the statutory provisions as to the required majority vote have been met; |
• | the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority shareholders or creditors to promote interests adverse to those of the class; |
• | the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
• | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act. |
• | a company acts or proposes to act illegally or ultra vires; |
• | the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote of our shareholders and this has not been obtained; and |
• | those who control the company are perpetrating a “fraud on the minority.” |
• | banks or certain financial institutions; |
• | insurance companies; |
• | broker dealers; |
• | traders that elect to mark to market; |
• | tax-exempt entities; |
• | persons liable for alternative minimum tax; |
• | persons holding ADSs or ordinary shares as part of a straddle, hedging, conversion transaction or other integrated investment; |
• | regulated investments companies; |
• | persons who acquired ADSs or ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation; |
• | persons who actually or constructively own 10% or more of the total combined voting power of all classes of our shares entitled to vote or 10% or more of the total value of all classes of our shares; or |
• | partnerships or other pass-through entities for United States federal income tax purposes or persons holding ADSs or ordinary shares through partnerships or other pass-through entities. |
• | a citizen or individual resident of the United States; |
• | a corporation (or other entity taxable as a corporation for United States federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate whose income is subject to United States federal income taxation regardless of its source; or |
• | a trust (1) whose administration is subject to the primary supervision of a court within the United States and one or more United States persons have the authority to control all substantial decisions of the trust, or (2) that has a valid election in effect under applicable United States Treasury regulations to be treated as a United States person. |
• | at least 75% of its gross income is passive income (such as certain dividends, interest or royalties) (the “income test”), or |
• | at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the “asset test”). |
• | the excess distribution or gain will be allocated ratably over the U.S. holder’s holding period for the ADSs or ordinary shares; |
• | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income; and |
• | the amount allocated to each other taxable year will be subject to the highest tax rate in effect for that taxable year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such taxable year. |
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
Persons depositing or withdrawing shares or ADS holders must pay: |
For: | |
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | • Issuance of ADSs, including issuances resulting from a distribution of shares or rights or other property | |
• Cancellation of ADSs for the purpose of withdrawal, including if the Deposit Agreement terminates | ||
$0.05 (or less) per ADS | • Any cash distribution to ADS holders | |
A fee equivalent to the fee that would be payable if securities distributed to you had been shares and the shares had been deposited for issuance of ADSs |
• Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS holders | |
$0.05 (or less) per ADSs per calendar year | • Depositary services | |
Registration or transfer fees | • Transfer and registration of shares on our share register to or from the name of the depositary or its agent when you deposit or withdraw shares |
Persons depositing or withdrawing shares or ADS holders must pay: |
For: | |
Expenses of the depositary | • Cable, telex and facsimile transmissions (when expressly provided in the Deposit Agreement) | |
• converting foreign currency to U.S. dollars | ||
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes |
• As necessary | |
Any charges incurred by the depositary or its agents for servicing the deposited securities |
• As necessary |
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ITEM 15. |
CONTROLS AND PROCEDURES |
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. |
CODE OF ETHICS |
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
For the year ended December 31, |
||||||||
2019 |
2020 |
|||||||
(in thousands) |
||||||||
Audit fees (1) |
$ | 2,654 | $ | 2,304 | ||||
Tax fees (2) |
567 | 487 | ||||||
Audit related fees (3) |
142 | 67 | ||||||
All other fees |
2 | 2 | ||||||
|
|
|
|
|||||
Total |
$ | 3,365 | $ | 2,860 |
(1) | “Audit fees” means the aggregate fees incurred in each of the fiscal years listed for professional services rendered by our principal auditors for the audit of our annual financial statements and our internal controls over financial reporting. |
(2) | “Tax fees” means the aggregate fees incurred in each of the fiscal years listed for professional services rendered by our principal auditors for tax compliance and tax advice. |
(3) | “Audit-related fees” means the aggregate fees incurred in each of the fiscal years listed for professional services rendered by our principal auditors related to the audit of our financial statements and our internal controls over financial reporting that are not reported under “Audit Fees” and consultation on accounting standards or transactions. |
• | Any audit or non-audit service to be provided to us by the independent accountant must be submitted to the audit committee for review and approval, with a description of the services to be performed and the fees to be charged. |
• | The audit committee in its sole discretion then approves or disapproves the proposed services and documents such approval, if given, through written resolutions or in the minutes of meetings, as the case may be. |
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
ITEM 16G. |
CORPORATE GOVERNANCE |
ITEM 16H. |
MINE SAFETY DISCLOSURE |
ITEM 17. |
FINANCIAL STATEMENTS |
ITEM 18. |
FINANCIAL STATEMENTS |
ITEM 19. |
EXHIBITS |
(1) | Incorporated herein by reference to Sohu.com Limited’s Registration Statement on Form F-4 (File No. 333-224069) filed with the SEC on April 19, 2018. |
(2) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on March 15, 2002. |
(3) | Incorporated herein by reference to Sohu.com Inc.’s Quarterly Report on Form 10-Q filed on May 8, 2007. |
(4) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on February 26, 2010. |
(5) | Incorporated herein by reference to Sohu.com Inc.’s Quarterly Report on Form 10-Q filed on May 7, 2010. |
(6) | Incorporated herein by reference to Sohu.com Inc.’s Quarterly Report on Form 10-Q filed on November 8, 2010. |
(7) | Incorporated herein by reference to Sohu.com Inc.’s Current Report on Form 8-K filed on December 1, 2011. |
(8) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on February 28, 2013. |
(9) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on February 28, 2014. |
(10) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on March 2, 2015. |
(11) | Incorporated herein by reference to Sohu.com Inc.’s Quarterly Report on Form 10-Q filed on August 7, 2015. |
(12) | Incorporated herein by reference to Sohu.com Inc.’s Quarterly Report on Form 10-Q filed on November 6, 2015. |
(13) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on February 26, 2016. |
(14) | Incorporated herein by reference to Sohu.com Inc.’s Current Report on Form 8-K filed on October 24, 2016. |
(15) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on February 27, 2017. |
(16) | Incorporated herein by reference to Sohu.com Inc.’s Current Report on Form 8-K filed on May 19, 2017. |
(17) | Incorporated herein by reference to Sohu.com Inc.’s Current Report on Form 8-K filed on September 7, 2017. |
(18) | Incorporated herein by reference to Sohu.com Inc.’s Quarterly Report on Form 10-Q filed on November 3, 2017. |
(19) | Incorporated herein by reference to Sohu.com Inc.’s Annual Report on Form 10-K filed on February 28, 2018. |
(20) | Incorporated herein by reference to Sohu.com Inc.’s Current Report on Form 8-K filed on April 16, 2018. |
(21) | Incorporated herein by reference to Sohu.com Limited’s Registration Statement on Form S-8 POS filed on June 1, 2018. |
(22) | Incorporated herein by reference to Sohu.com Limited’s Annual Report on Form 20-F filed on March 28, 2019. |
(23) | Incorporated herein by reference to Sohu.com Limited’s Annual Report on Form 20-F filed on April 21, 2020. |
(24) | Incorporated herein by reference to Sohu.com Limited’s Report of Foreign Private Issuer on Form 6-K furnished to the SEC on September 29, 2020. |
(25) | Incorporated herein by reference to Amendment No. 1 to Schedule 13E-3 filed by Sogou Inc., Tencent Holdings Limited, THL A21 Limited, TitanSupernova Limited, Tencent Mobility Limited, Sohu.com Limited and Sohu.com (Search) Limited on December 1, 2020. |
(26) | Filed herewith. |
SOHU.COM LIMITED | ||
By | /s/ Charles Zhang | |
Name: | Charles Zhang | |
Title: | Chief Executive Officer | |
By | /s/ Joanna Lv | |
Name: | Joanna Lv | |
Title: | Chief Financial Officer |
SOHU.COM LIMITED |
||||
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS |
||||
CONSOLIDATED FINANCIAL STATEMENTS: |
Page |
|||
F-2 | ||||
F-5 |
||||
F-7 |
||||
F-9 | ||||
F-11 |
||||
F-14 |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
Short-term investments |
||||||||
Accounts receivable, net (including $ |
||||||||
Prepaid and other current assets (including $ |
||||||||
Assets held for sale (current) |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
|
|
|
|
|||||
Fixed assets, net |
||||||||
Goodwill |
||||||||
Long-term investments, net |
||||||||
Intangible assets, net |
||||||||
Restricted time deposits |
||||||||
Prepaid non-current assets |
||||||||
Other assets |
||||||||
Assets held for sale (non-current) |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES |
||||||||
Current liabilities: |
||||||||
Accounts payable (including accounts payable of consolidated variable interest entities (“VIEs”) without recourse to the Company of $ |
$ | $ | ||||||
Accrued liabilities (including accrued liabilities of consolidated VIEs without recourse to the Company of $ |
||||||||
Receipts in advance and deferred revenue (including receipts in advance and deferred revenue of consolidated VIEs without recourse to the Company of $ |
||||||||
Accrued salary and benefits (including accrued salary and benefits of consolidated VIEs without recourse to the Company of $ |
||||||||
Tax payables (including tax payables of consolidated VIEs without recourse to the Company of $ |
||||||||
Short-term bank loans (including short-term bank loans of consolidated VIEs without recourse to the Company of |
Other short-term liabilities (including other short-term liabilities of consolidated VIEs without recourse to the Company of $ |
||||||||
Liabilities held for sale (current) (including liabilities held for sale (current) of consolidated VIEs without recourse to the Company of $ |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
|
|
|
|
|||||
Long-term accounts payable (including long-term accounts payable of consolidated VIEs without recourse to the Company of |
||||||||
Long-term bank loans (including long-term bank loans of consolidated VIEs without recourse to the Company of |
||||||||
Long-term tax liabilities (including long-term tax liabilities of consolidated VIEs without recourse to the Company of $ |
||||||||
Deferred tax liabilities (including deferred tax liabilities of consolidated VIEs without recourse to the Company of $ |
||||||||
Other long-term liabilities (including other long-term liabilities of consolidated VIEs without recourse to the Company of |
||||||||
Liabilities held for sale (non-current) (including liabilities held for sale (non-current) of consolidated VIEs without recourse to the Company of $ |
||||||||
|
|
|
|
|||||
Total long-term liabilities |
||||||||
|
|
|
|
|||||
Total liabilities |
$ | $ | ||||||
|
|
|
|
|||||
Commitments and contingencies |
||||||||
SHAREHOLDERS’ EQUITY |
||||||||
Sohu.com Limited shareholders’ equity: |
||||||||
Ordinary Shares: $ |
$ | $ | ||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive income |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Sohu.com Limited shareholders’ equity |
||||||||
Noncontrolling interest |
||||||||
|
|
|
|
|||||
Total shareholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and shareholders’ equity |
$ | $ | ||||||
|
|
|
|
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Revenues: |
||||||||||||
Brand advertising (including revenues generated from a related party of $ |
$ | $ | $ | |||||||||
Online games |
||||||||||||
Others (including revenues generated from a related party of $ |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Cost of revenues: |
||||||||||||
Brand advertising |
||||||||||||
Online games |
||||||||||||
Others (including cost generated from a related party of $ |
||||||||||||
|
|
|
|
|
|
|||||||
Total cost of revenues |
||||||||||||
|
|
|
|
|
|
|||||||
Gross profit |
||||||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Product development |
||||||||||||
Sales and marketing |
||||||||||||
General and administrative |
||||||||||||
Goodwill impairment and impairment of intangible assets acquired as part of business acquisitions |
||||||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
||||||||||||
|
|
|
|
|
|
|||||||
Operating profit/(loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Other income, net |
||||||||||||
Interest income (including interest income generated from a related party of $ |
||||||||||||
Interest expense (including interest expense generated from a related party of $ |
( |
) | ( |
) | ( |
) | ||||||
Exchange difference |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Income/(loss) before income tax expense /(benefit) |
( |
) | ( |
) | ||||||||
Income tax expense /(benefit) |
( |
) | ||||||||||
Net loss from continuing operations |
( |
) | ( |
) | ( |
) | ||||||
Net income/(loss) from discontinued operations, net of tax |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net loss |
( |
) | ( |
) | ( |
) | ||||||
Less: Net income from continuing operations attributable to the noncontrolling interest shareholders |
||||||||||||
Less: Net income/(loss) from discontinued operations attributable to the noncontrolling interest shareholders |
( |
) | ||||||||||
Net loss from continuing operations attributable to Sohu.com Limited |
( |
) | ( |
) | ( |
) | ||||||
Net income/(loss) from discontinued operations attributable to Sohu.com Limited |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net loss attributable to Sohu.com Limited |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Foreign currency translation adjustments |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Other comprehensive income/(loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Less: Comprehensive income/(loss) attributable to noncontrolling interest shareholders |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Comprehensive loss attributable to Sohu.com Limited |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Basic net (loss)/income per share attributable to Sohu.com Limited |
||||||||||||
Continuing operations |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Discontinued operations |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net loss per share |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Shares used in computing basic net (loss)/income per share attributable to Sohu.com Limited |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted net (loss)/income per share attributable to Sohu.com Limited |
||||||||||||
Continuing operations |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Discontinued operations |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net loss per share |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Shares used in computing diluted net (loss)/income per share attributable to Sohu.com Limited |
||||||||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Net income/(loss) from discontinued operations, net of tax |
( |
) | ||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||
Amortization of intangible assets and purchased video content in prepaid expense |
||||||||||||
Depreciation |
||||||||||||
Goodwill impairment and impairment of intangible assets acquired as part of business acquisitions |
||||||||||||
Share-based compensation expense |
( |
) | ||||||||||
Impairment of long-term investment |
||||||||||||
Impairment of other intangible assets and other assets |
||||||||||||
Research and development expense allocation |
( |
) | ||||||||||
Investment loss/(gain) from equity investments |
( |
) | ||||||||||
Allowance for credit losses |
||||||||||||
Gain from sale of equity investments |
( |
) | ||||||||||
Change in fair value of financial instruments |
( |
) | ||||||||||
Others |
( |
) | ( |
) | ||||||||
Changes in assets and liabilities: |
||||||||||||
Accounts receivable |
( |
) | ||||||||||
Prepaid and other assets |
( |
) | ||||||||||
Accounts payable |
( |
) | ( |
) | ( |
) | ||||||
Receipts in advance and deferred revenue |
( |
) | ( |
) | ( |
) | ||||||
Tax liabilities |
( |
) | ( |
) | ||||||||
Deferred tax |
||||||||||||
Accrued liabilities and other short-term liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by/(used in) continuing operating activities |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by/(used in) discontinued operating activities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
||||||||||||
Cash flows from investing activities: |
||||||||||||
Purchase of fixed assets |
( |
) | ( |
) | ( |
) | ||||||
Purchase of intangible and other assets |
( |
) | ( |
) | ( |
) | ||||||
Purchase of long-term investments |
( |
) | ( |
) | ( |
) | ||||||
Return of funds from a third party |
||||||||||||
Proceeds from financial instruments |
||||||||||||
Purchase of financial instruments |
( |
) | ( |
) | ( |
) | ||||||
Proceeds received from sale of equity investment |
||||||||||||
Other cash proceeds related to investing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by/(used in) continuing investing activities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by/(used in) discontinued investing activities |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
Net cash provided by/(used in) investing activities |
( |
) | ( |
) | ||||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from long-term bank loans |
||||||||||||
Proceeds from short-term bank loans |
||||||||||||
Exercise of share-based awards in subsidiaries |
||||||||||||
Repayments of loans from banks |
( |
) | ( |
) | ( |
) | ||||||
Acquisition of noncontrolling interests in Changyou Merger |
( |
) | ||||||||||
Distribution of Changyou dividend to noncontrolling interest shareholders |
( |
( |
) | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by/(used in) continuing financing activities |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by/(used in) discontinued financing activities |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by/(used in) financing activities |
( |
) | ||||||||||
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted time deposits |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net increase/(decrease) in cash, cash equivalents, restricted cash, and restricted time deposits |
( |
) | ( |
) | ||||||||
Cash, cash equivalents, restricted cash and restricted time deposits at beginning of year |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents, restricted cash and restricted time deposits at end of year |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Less: Cash, cash equivalents, restricted cash and restricted time deposits of discontinued operations, end of year |
||||||||||||
|
|
|
|
|
|
|||||||
Cash, cash equivalents, restricted cash and restricted time deposits of continuing operations, end of year |
||||||||||||
|
|
|
|
|
|
|||||||
Supplemental cash flow disclosures from continuing operations: |
||||||||||||
Cash paid for income taxes |
( |
) | ( |
) | ( |
) | ||||||
Cash paid for interest expense |
( |
) | ( |
) | ( |
) | ||||||
Barter transactions |
||||||||||||
Supplemental schedule of non-cash investing activity from continuing operations: |
||||||||||||
Changes in payables and other liabilities related to fixed assets and intangible assets additions |
( |
) | ( |
) | ( |
) |
Sohu.com Limited Shareholders’ Equity |
||||||||||||||||||||||||||||
Total |
Ordinary Shares |
Additional Paid-in Capital |
Treasury Stock |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Noncontrolling Interest |
||||||||||||||||||||||
Beginning balance |
$ | ( |
) | ( |
) | |||||||||||||||||||||||
Impact of adoption of new accounting standards* |
( |
) | ||||||||||||||||||||||||||
Share-based compensation expense |
( |
) | ||||||||||||||||||||||||||
Settlement/Adjustment of share-based awards in subsidiary |
( |
) | ||||||||||||||||||||||||||
Distribution of Changyou dividend to noncontrolling interest shareholders |
( |
) | ( |
) | ||||||||||||||||||||||||
Disposal of a majority-owned subsidiary |
( |
) | ( |
) | ||||||||||||||||||||||||
Liquidation of Sohu.com Inc. |
( |
) | ( |
) | ||||||||||||||||||||||||
Net income/(loss) attributable to Sohu.com Limited and noncontrolling interest shareholders |
( |
) | ( |
) | ||||||||||||||||||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Others |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ending balance |
$ | ( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | For details see Note 10 - Fair Value Measurements - Financial Instruments Measured at Fair Value - Equity Investments. |
Sohu.com Limited Shareholders’ Equity |
||||||||||||||||||||||||||||
Total |
Ordinary Shares |
Additional Paid-in Capital |
Treasury Stock |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Noncontrolling Interest |
||||||||||||||||||||||
Beginning balance |
$ | ( |
) | |||||||||||||||||||||||||
Share-based compensation expense |
||||||||||||||||||||||||||||
Settlement/Adjustment of share-based awards in subsidiary |
( |
) | ||||||||||||||||||||||||||
Distribution of Changyou dividend to noncontrolling interest shareholders |
( |
) | ( |
) | ||||||||||||||||||||||||
Net income/(loss) attributable to Sohu.com Limited and noncontrolling interest shareholders |
( |
) | ( |
) | ||||||||||||||||||||||||
Repurchase of Sogou Class A Ordinary Shares from noncontrolling shareholders |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ending balance |
$ | ( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sohu.com Limited Shareholders’ Equity |
||||||||||||||||||||||||||||
Total |
Ordinary Shares |
Additional Paid-in Capital |
Treasury Stock |
Accumulated Other Comprehensive Income |
Accumulated Deficit |
Noncontrolling Interest |
||||||||||||||||||||||
Beginning balance |
$ | ( |
) | |||||||||||||||||||||||||
Share-based compensation expense |
||||||||||||||||||||||||||||
Settlement/Adjustment of share-based awards in subsidiary |
( |
) | ||||||||||||||||||||||||||
Modification of share-based awards in Changyou |
( |
) | ( |
) | ||||||||||||||||||||||||
Net loss attributable to Sohu.com Limited and noncontrolling interest shareholders |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Repurchase of Sogou Class A Ordinary Shares from noncontrolling shareholders |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Acquisition of a partially-held subsidiary |
||||||||||||||||||||||||||||
Impact of adoption of new accounting standards* |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Acquisition of noncontrolling interests in Changyou Merger |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
Accumulated other comprehensive loss |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ending balance |
$ | ( |
) | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | For details see Note 2 – Summary of Significant Accounting Policies – Accounts Receivable, Net – Allowance of credit losses. |
1. |
THE COMPANY AND NATURE OF OPERATIONS |
Name of Entity |
Date of Incorporation/Acquisition |
Place of Incorporation/ Acquisition |
Effective Interest held |
|||||
Subsidiaries: |
||||||||
For Sohu: |
||||||||
Sohu.com (Hong Kong) Limited (“Sohu HK”) |
Incorporated on |
% | ||||||
Beijing Sohu New Era Information Technology Co., Ltd. (“Sohu Era”) |
Incorporated on |
% | ||||||
Sohu.com (Search) Limited (“Sohu Search”) |
Incorporated on |
% | ||||||
Beijing Sohu New Media Information Technology Co., Ltd. (“Sohu Media”) |
Incorporated on |
% | ||||||
Sohu.com (Game) Limited (“Sohu Game”) |
Incorporated on |
% | ||||||
Beijing Sohu New Momentum Information Technology Co., Ltd. (“Sohu New Momentum”) |
Incorporated on |
% | ||||||
Fox Video Limited (“Sohu Video”) |
Incorporated on |
% | ||||||
Fox Information Technology (Tianjin) Limited (“Video Tianjin”) |
Incorporated on |
% | ||||||
Sohu Focus Limited (“Sohu Focus”) |
Incorporated on |
% | ||||||
For Changyou: |
||||||||
Changyou.com Limited (“Changyou”) |
Incorporated on |
% | ||||||
Changyou.com (HK) Limited (“Changyou HK”) |
Incorporated on |
% | ||||||
Beijing AmazGame Age Internet Technology Co., Ltd. (“AmazGame”) |
Incorporated on |
% | ||||||
Beijing Changyou Gamespace Software Technology Co., Ltd. (“Gamespace”) |
Incorporated on |
% | ||||||
Changyou.com Korea LLC (“Changyou Korea”) |
Incorporated on |
% | ||||||
Beijing Changyou Chuangxiang Software Technology Co., Ltd. (“Changyou Chuangxiang”) |
Incorporated on |
% | ||||||
For Sogou: |
||||||||
Sogou Inc. (“Sogou”) |
Incorporated on |
% | ||||||
Sogou (BVI) Limited (“Sogou BVI”) |
Incorporated on |
% | ||||||
Beijing Sogou Technology Development Co., Ltd. (“Sogou Technology”) |
Incorporated on |
% | ||||||
Sogou Hong Kong Limited (“Sogou HK”) |
Incorporated on |
% | ||||||
Vast Creation Advertising Media Services Limited (“Vast Creation”) |
Acquired on |
% | ||||||
Beijing Sogou Network Technology Co., Ltd (“Sogou Network”) |
Incorporated on |
% |
Sogou (Shantou) Internet Microcredit Co., Ltd. (“Sogou Microcredit”) |
Incorporated on |
% | ||||||
Sogou (Hangzhou) Intelligent Technology Co., Ltd. (“Sogou Hangzhou”) |
Incorporated on |
% | ||||||
Shantou Ying Zhong Bai Fu Financing Guarantee Co., Ltd. (“Sogou Financing Guarantee”) |
Incorporated on |
% | ||||||
VIEs: |
||||||||
For Sohu: |
||||||||
Beijing Century High-Tech Investment Co., Ltd. (“High Century”) |
Incorporated on |
% | ||||||
Beijing Heng Da Yi Tong Information Technology Co., Ltd. (“Heng Da Yi Tong”) |
Incorporated on |
% | ||||||
Beijing Sohu Internet Information Service Co., Ltd. (“Sohu Internet”) |
Incorporated on |
% | ||||||
Beijing Sohu Donglin Advertising Co., Ltd. (“Donglin”) |
Incorporated on |
% | ||||||
Tianjin Jinhu Culture Development Co., Ltd (“Tianjin Jinhu”) |
Incorporated on |
% | ||||||
Beijing Focus Interactive Information Service Co., Ltd. (“Focus Interactive”) |
Incorporated on |
% | ||||||
For Changyou: |
||||||||
Beijing Gamease Age Digital Technology Co., Ltd. (“Gamease”) |
Incorporated on |
% | ||||||
Shanghai ICE Information Technology Co., Ltd. (“Shanghai ICE”) |
Acquired on |
% | ||||||
Beijing Guanyou Gamespace Digital Technology Co., Ltd. (“Guanyou Gamespace”) |
Incorporated on |
% | ||||||
For Sogou: |
||||||||
Beijing Sogou Information Service Co., Ltd.(“Sogou Information”) |
Incorporated on |
% | ||||||
Chengdu Easypay Technology Co., Ltd. (“Chengdu Easypay”) |
Incorporated on |
% |
• |
Sohu Media Portal. |
• |
Sohu Video. |
• |
Focus. |
(i) | Sohu: |
(ii) | Tencent: |
(iii) | Photon: |
(iv) | Shareholders other than Sohu, Tencent, and Photon: |
2. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Year Ended December 31, 2018 (in thousands) |
||||||||||||
Sohu |
Changyou |
Total |
||||||||||
Brand advertising: |
||||||||||||
Sohu Media Portal |
$ | |||||||||||
Sohu Video |
||||||||||||
Focus |
||||||||||||
17173.com Website |
||||||||||||
Online games: |
||||||||||||
PC games |
||||||||||||
Mobile games |
||||||||||||
Other games |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | |||||||||||
|
|
|
|
|
|
Year Ended December 31, 2019 (in thousands) |
||||||||||||
Sohu |
Changyou |
Total |
||||||||||
Brand advertising: |
||||||||||||
Sohu Media Portal |
$ | |||||||||||
Sohu Video |
||||||||||||
Focus |
||||||||||||
17173.com Website |
||||||||||||
Online games: |
||||||||||||
PC games |
||||||||||||
Mobile games |
||||||||||||
Other games |
||||||||||||
Others |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | |||||||||||
|
|
|
|
|
|
Year Ended December 31, 2020 (in thousands) |
||||||||||||
Sohu |
Changyou |
Total |
||||||||||
Brand advertising: |
||||||||||||
Sohu Media Portal |
$ | |||||||||||
Sohu Video |
||||||||||||
Focus |
||||||||||||
17173.com Website |
||||||||||||
Online games: |
||||||||||||
PC games |
||||||||||||
Mobile games |
||||||||||||
Other games |
||||||||||||
Others |
||||||||||||
Total |
$ |
(i) | Fixed Price model |
(ii) | CPM model |
(iii) | CPC model |
December 31, 2019 |
ASU 2016-13 adjustment |
January 1, 2020 |
||||||||||
Allowance for credit losses |
||||||||||||
Accounts receivable, net |
$ | $ | ( |
) | $ | |||||||
Accounts receivable and financing receivables, net classified as assets held for sale (1) |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total assets |
( |
) | ||||||||||
Shareholders’ equity |
||||||||||||
Accumulated deficit |
( |
) | ( |
) | ( |
) |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Accounts receivable, net |
||||||||
Accounts receivable |
$ | $ | ||||||
Less: Allowance for credit losses |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | $ |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Less than 179 days |
$ | $ | ||||||
180-359 days |
||||||||
360 days and greater |
||||||||
|
|
|
|
|||||
Total |
For the year ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Balance at the beginning of year |
$ | $ | $ | |||||||||
Changes on initial application of ASU 2016-13 (1) |
||||||||||||
Additional allowance for credit losses, net of recoveries |
||||||||||||
Write-offs |
( |
) | ( |
) | ( |
) | ||||||
Exchange difference |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Balance at the end of year |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Accounts receivable |
$ | $ | ||||||
Financing receivables |
||||||||
Less: Allowance for credit losses (1) |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | $ |
1 - 30 DaysPast Due |
31 Days- Past |
6 1 -9 Days0 Past Due |
Greater Past |
Total Past Due |
Current |
Total |
||||||||||||||||||||||
December 31, 2019 |
||||||||||||||||||||||||||||
Financing receivables by origination year |
||||||||||||||||||||||||||||
2018 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
2019 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
||||||||||||||||||||||||||||
December 31, 2020 |
||||||||||||||||||||||||||||
Financing receivables by origination year |
||||||||||||||||||||||||||||
2018 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
2019 |
||||||||||||||||||||||||||||
2020 |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | $ |
For the year ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Beginning balance |
$ | $ | $ | |||||||||
Change on initial application of ASU 2016-13 (1) |
||||||||||||
Additional allowance for credit losses, net of recoveries |
||||||||||||
Write-offs |
( |
) | ( |
) | ( |
) | ||||||
Exchange difference |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Balance at the end of year |
$ | $ | $ |
Fixed Assets |
Estimated Useful Lives (years) | |
Office buildings |
||
Leasehold improvements |
||
Vehicles |
||
Office furniture |
||
Computer equipment and hardware |
Intangible Assets |
Estimated Useful Lives (years) | |
Purchased video content |
||
Computer software |
||
Developed technologies |
||
Domain names and trademarks |
||
Operating rights for licensed games |
As of December 31, 2019 |
As of December 31, 2020 |
|||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Restricted cash |
||||||||
Short-term investments |
||||||||
Account and financing receivables, net |
||||||||
Prepaid and other current assets |
||||||||
Long-term investments, ne t |
||||||||
Fixed assets, net |
||||||||
Goodwill |
||||||||
Intangible assets, net |
||||||||
Other assets |
||||||||
Total assets associated with discontinued operations |
$ |
$ |
||||||
LIABILITIES |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued liabilities |
||||||||
Receipts in advance |
||||||||
Accrued salary and benefits |
||||||||
Taxes payable |
||||||||
Other short-term liabilities |
||||||||
Long-term liabilities |
||||||||
Total liabilities associated with discontinued operations |
$ |
$ |
||||||
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues |
||||||||||||
Gross profit |
||||||||||||
Operating expenses: |
||||||||||||
Research and development (1) |
||||||||||||
Sales and marketing (1) |
||||||||||||
General and administrative (1) |
||||||||||||
Total operating expenses |
||||||||||||
Operating profit/(loss) |
( |
) | ||||||||||
Interest income |
||||||||||||
Foreign currency exchange gain/(loss) |
( |
) | ||||||||||
Other income, net (1) |
||||||||||||
Income/(loss) before income tax expense |
( |
) | ||||||||||
Income tax expense |
||||||||||||
Net income/(loss) from discontinued operations, net of tax |
( |
) | ||||||||||
(1) | Expenses generated from marketing services among the Sohu and Sogou, and leasing expenses generated from a building that Sohu leases to Sogou are not eliminated because those expenses are considered to continue after the disposal of the discontinued operations. |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net cash provided by/(used in) discontinued operating activities |
$ | $ | $ | ( |
) | |||||||
Net cash provided by/(used in) discontinued investing activities |
( |
) | ( |
) | ||||||||
Net cash provided by/(used in) discontinued financing activities |
( |
) | ( |
) |
Year Ended December 31, |
||||||||
2018 |
2019 (1) |
|||||||
Revenues |
$ | $ | ||||||
Cost of revenues |
||||||||
Gross loss |
( |
) | ( |
) | ||||
Operating expenses: |
||||||||
Sales and marketing |
||||||||
General and administrative |
||||||||
Total operating expenses |
||||||||
Operating loss |
( |
) | ( |
) | ||||
Interest income |
||||||||
Other income/(expense), net |
( |
) | ||||||
Loss before income tax expense |
( |
) | ( |
) | ||||
Income tax expense |
||||||||
Net loss from discontinued operations, net of tax |
( |
) |
( |
) | ||||
|
Year Ended December 31, |
|||||||
2018 |
2019 (1) |
|||||||
Net cash provided by discontinued operating activities |
$ | $ | ||||||
Net cash used in discontinued investing activities |
( |
) | ( |
) | ||||
Net cash provided by/(used in) discontinued financing activities |
Year Ended December 31, 2018 |
||||||||||||||||
Sohu |
Changyou |
Eliminations |
Consolidated |
|||||||||||||
Revenues |
$ | $ | $ | ( |
) | $ | ||||||||||
Segment cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment gross profit |
||||||||||||||||
SBC (1) in cost of revenues |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
||||||||||||||||
Product development |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Sales and marketing |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
General and administrative |
( |
) | ( |
) | ( |
) | ||||||||||
Goodwill impairment and impairment of intangible assets acquired as part of business acquisitions |
( |
) | ( |
) | ||||||||||||
SBC (1) in operating expenses |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit/(loss) |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
||||||||||||||||
Interest income |
||||||||||||||||
Interest expense |
( |
) | ||||||||||||||
Exchange difference |
||||||||||||||||
|
|
|||||||||||||||
Loss before income tax expense |
( |
) | ||||||||||||||
Income tax benefit |
||||||||||||||||
|
|
|||||||||||||||
Net loss from continuing operations |
( |
) | ||||||||||||||
Net income from discontinued operations |
||||||||||||||||
|
|
|||||||||||||||
Net loss |
$ | ( |
) | |||||||||||||
|
|
Year Ended December 31, 2019 |
||||||||||||||||
Sohu |
Changyou |
Eliminations |
Consolidated |
|||||||||||||
Revenues |
$ | $ | $ | ( |
) | $ | ||||||||||
Segment cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
Segment gross profit |
||||||||||||||||
SBC (1) in cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
Gross profit |
||||||||||||||||
Operating expenses: |
||||||||||||||||
Product development |
( |
) | ( |
) | ( |
) | ||||||||||
Sales and marketing |
( |
) | ( |
) | ( |
) | ||||||||||
General and administrative |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Goodwill impairment and impairment of intangible assets acquired as part of business acquisitions |
( |
) | ( |
) | ||||||||||||
SBC (1) in operating expenses |
( |
) | ( |
) | ( |
) | ||||||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Operating profit/(loss) |
( |
) | ( |
) | ( |
) | ||||||||||
Other income |
||||||||||||||||
Interest income |
||||||||||||||||
Interest expense |
( |
) | ||||||||||||||
Exchange difference |
||||||||||||||||
Loss before income tax expense |
( |
) | ||||||||||||||
Income tax expense |
( |
) | ||||||||||||||
Net loss from continuing operations |
( |
) | ||||||||||||||
Net income from discontinued operations |
||||||||||||||||
Net loss |
$ | ( |
) | |||||||||||||
|
|
Year Ended December 31, 2020 |
||||||||||||||||
Sohu |
Changyou |
Eliminations |
Consolidated |
|||||||||||||
Revenues |
$ | $ | $ | $ | ||||||||||||
Segment cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment gross profit |
||||||||||||||||
SBC (1) in cost of revenues |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating expenses: |
||||||||||||||||
Product development |
( |
) | ( |
) | ( |
) | ||||||||||
Sales and marketing |
( |
) | ( |
) | ( |
) | ||||||||||
General and administrative |
( |
) | ( |
) | ( |
) | ||||||||||
SBC (1) in operating expenses |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit/(loss) |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income |
||||||||||||||||
Interest income |
||||||||||||||||
Interest expense |
( |
) | ||||||||||||||
Exchange difference |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Income before income tax expense |
||||||||||||||||
Income tax expense |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Net loss from continuing operations |
( |
) | ||||||||||||||
Net loss from discontinued operations |
( |
) | ||||||||||||||
|
|
|||||||||||||||
Net loss |
$ | ( |
) | |||||||||||||
|
|
As of December 31, 2019 |
||||||||||||||||
Sohu |
Changyou |
Eliminations |
Consolidated |
|||||||||||||
Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
Accounts receivable, net |
||||||||||||||||
Fixed assets, net |
( |
) | ||||||||||||||
Total assets (1) |
$ | $ | $ | ( |
) | $ |
As of December 31, 2020 |
||||||||||||||||
Sohu |
Changyou |
Eliminations |
Consolidated |
|||||||||||||
Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||
Accounts receivable, net |
||||||||||||||||
Fixed assets, net |
( |
) | ||||||||||||||
Total assets (1) |
$ | $ | $ | ( |
) | $ |
Year Ended December 31, |
||||||||||||
Share-based compensation expense |
2018 |
2019 |
2020 |
|||||||||
Cost of revenues |
$ | ( |
) | $ | $ | |||||||
Product development expenses |
( |
) | ||||||||||
Sales and marketing expenses |
( |
) | ( |
) | ||||||||
General and administrative expenses |
( |
) | ||||||||||
$ | ( |
) | $ | $ | ||||||||
Year Ended December 31, |
||||||||||||
Share-based compensation expense |
2018 |
2019 |
2020 |
|||||||||
For Sohu (excluding Sohu Video) share-based awards |
$ |
( |
) |
$ |
$ |
|||||||
For Changyou share-based awards |
( |
) |
||||||||||
For Sohu Video share-based awards |
( |
) |
( |
) |
( |
) | ||||||
$ |
( |
) |
$ |
$ |
||||||||
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Rental income from Sogou (1) |
||||||||||||
Individual tax refund and additional deduction of PRC value-added tax (2) |
||||||||||||
Government grant |
||||||||||||
Gain from the changes in fair value of financial instruments (3) |
||||||||||||
Write-off of unpaid long-term accounts payable |
||||||||||||
Investment income/(expense) |
( |
) |
||||||||||
Impairment loss on equity investments (4) |
( |
) |
( |
) | ||||||||
Donations |
( |
) |
( |
) | ||||||||
Others |
||||||||||||
$ |
$ |
$ |
||||||||||
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Accounts receivable, net |
||||||||
Accounts receivable |
$ | |||||||
Allowance for credit losses |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | ||||||||
|
|
|
|
Balance at the beginning of year |
Changes on initial application of ASU 2016-13 |
Additional allowance for credit losses, net of recoveries |
Write-offs |
Exchange difference |
Balance at the end of year |
|||||||||||||||||||
2018 |
( |
) | ( |
) | ||||||||||||||||||||
2019 |
( |
) | ( |
) | ||||||||||||||||||||
2020 |
( |
) |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Prepaid and other current assets |
||||||||
Matching loan due from a related party (See Note 9) |
$ | $ | ||||||
Prepaid taxes |
||||||||
Prepaid content and license |
||||||||
Prepaid cost of revenue |
||||||||
Receivables from third party payment platforms |
||||||||
Interest receivable from bank deposits with original maturities of three months or less |
||||||||
Prepaid professional fees |
||||||||
Prepaid rental deposit |
||||||||
Prepaid office rent and facilities expenses |
||||||||
Employee advances |
||||||||
Others |
||||||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
|||||
Prepaid non-current assets |
||||||||
Prepaid PRC income tax for the sale of assets associated with 17173.com by Sohu to Changyou |
$ | $ | ||||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
|||||
Other short-term liabilities |
||||||||
Matching loans due to a related party (See Note 9) |
||||||||
Contingent liability related to Shanghai Jingmao liquidation (1) |
||||||||
Deposits related to Focus |
||||||||
Share-based awards in Changyou |
||||||||
Contract deposits from advertisers |
||||||||
|
||||||||
Consideration payable for equity investment |
||||||||
Others |
||||||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
Receipts in advance relating to: |
||||||||
brand advertising business |
$ | $ | ||||||
online game business |
||||||||
other business |
||||||||
|
|
|
|
|||||
Total receipts in advance |
||||||||
Deferred revenue |
||||||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
10. |
FAIR VALUE MEASUREMENTS |
Fair value measurements at reporting date using |
||||||||||||||||
Items |
As of December 31, 2019 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Cash equivalents |
$ | $ | $ | $ | ||||||||||||
Restricted cash |
||||||||||||||||
Restricted time deposits |
||||||||||||||||
Short-term investments |
||||||||||||||||
Equity investments with readily determinable fair values |
Fair value measurements at reporting date using |
||||||||||||||||
Items |
As of December 31, 2020 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Cash equivalents |
$ | $ | $ | $ | ||||||||||||
Restricted cash |
||||||||||||||||
Restricted time deposits |
||||||||||||||||
Short-term investments |
||||||||||||||||
Equity investments with readily determinable fair values |
• | Factoring contract with recourse with HongKong and Shanghai Banking Corporation Limited (“HSBC”) |
• | Credit agreements with Industrial and Commercial Bank of China Limited (“ICBC”) |
• | Credit agreements with the China Merchants Bank Co., Ltd. (“CMB”) |
• | Credit agreement with Industrial and Commercial Bank of China Limited, Tokyo Branch (“ICBC Tokyo”) |
Fair value measurements at reporting date using |
||||||||||||||||
Items |
As of December 31, 2019 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Purchased video content recorded in prepaid and other assets |
$ | $ | $ | $ | ||||||||||||
Intangible assets, net |
||||||||||||||||
Goodwill |
Fair value measurements at reporting date using |
||||||||||||||||
Items |
As of December 31, 2020 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
||||||||||||
Purchased video content recorded in prepaid and other assets |
$ | $ | $ | $ | ||||||||||||
Intangible assets, net |
||||||||||||||||
Goodwill |
11. |
LEASE |
Year ended December 31, |
||||||||
2019 |
2020 |
|||||||
Operating lease expense |
$ | $ | ||||||
Short-term lease expense |
||||||||
Total operating lease expense |
$ | $ | ||||||
Year ended December 31, |
||||||||
2019 |
2020 |
|||||||
Cash paid for amounts included in the measurement of lease liabilities |
||||||||
Operating cash flows from operating leases |
$ | $ |
Year ended December 31, |
||||||||
2019 |
2020 |
|||||||
Right-of-use |
||||||||
Operating leases |
$ | $ |
Year ended December 31, |
||||||||
2019 |
2020 |
|||||||
Assets: |
||||||||
Operating lease right-of-use |
$ | $ | ||||||
Liabilities: |
||||||||
Current lease liabilities |
||||||||
Non-current lease liabilities |
||||||||
Total operating lease liabilities |
$ | $ | ||||||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
Total future lease payments |
||||
Less: imputed interest |
( |
) | ||
Total present value of lease liabilities |
$ | |||
12. |
FIXED ASSETS |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Office buildings |
$ | $ | ||||||
Computer equipment and hardware |
||||||||
Leasehold and building improvements |
||||||||
Office furniture |
||||||||
Vehicles |
||||||||
Fixed assets, gross |
||||||||
Accumulated depreciation |
( |
) | ( |
) | ||||
Fixed assets, net |
$ | $ | ||||||
13. |
GOODWILL |
Sohu |
Changyou |
Total |
||||||||||
Balance as of December 31, 2018 |
||||||||||||
Goodwill |
||||||||||||
Accumulated impairment losses |
( |
) | ( |
) | ( |
) | ||||||
$ | $ | $ | ||||||||||
Transactions in 2019 |
||||||||||||
Foreign currency translation adjustment |
( |
) | ( |
) | ||||||||
Impairment losses |
||||||||||||
Balance as of December 31, 2019 |
$ | $ | $ | |||||||||
Balance as of December 31, 2019 |
||||||||||||
Goodwill |
||||||||||||
Accumulated impairment losses |
( |
) | ( |
) | ( |
) | ||||||
$ | $ | $ | ||||||||||
Transactions in 2020 |
||||||||||||
Foreign currency translation adjustment |
||||||||||||
Impairment losses |
||||||||||||
Balance as of December 31, 2020 |
$ | $ | $ | |||||||||
Balance as of December 31, 2020 |
||||||||||||
Goodwill |
||||||||||||
Accumulated impairment losses |
( |
) | ( |
) | ( |
) | ||||||
$ | $ | $ | ||||||||||
14. |
INTANGIBLE ASSETS, NET |
As of December 31, 2019 |
||||||||||||||||
Items |
Gross Carrying Amount |
Accumulated Amortization |
Impairment |
Net Carrying Amount |
||||||||||||
Purchased video content |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Operating rights for licensed games |
( |
) | ( |
) | ||||||||||||
Domain names and trademarks |
( |
) | ( |
) | ||||||||||||
Computer software |
( |
) | ||||||||||||||
Developed technologies |
( |
) | ( |
) | ||||||||||||
Others |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
|
|
|
|
|
|
|
|
As of December 31, 2020 |
||||||||||||||||
Items |
Gross Carrying Amount |
Accumulated Amortization |
Impairment |
Net Carrying Amount |
||||||||||||
Purchased video content |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
Operating rights for licensed games |
( |
) | ( |
) | ||||||||||||
Domain names and trademarks |
( |
) | ( |
) | ||||||||||||
Computer software |
( |
) | ||||||||||||||
Developed technologies |
( |
) | ( |
) | ||||||||||||
Others |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
|
|
|
|
|
|
|
|
For the year ended December 31, |
(in thousands) |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
|
|
|||
Thereafter |
||||
|
|
|||
Total expected amortization expense |
$ | |||
|
|
15. |
TAXATION |
• | Sohu New Momentum. Sohu New Momentum qualified as an HNTE for the years 2019 through 2021, and will need to re-apply for HNTE qualification in 2022. |
• | Sohu Internet and Video Tianjin. Sohu Internet and Video Tianjin qualified as HNTEs for the years 2018 through 2020, and will need to re-apply for HNTE qualification in 2021. |
• | Sohu Media. Sohu Media re-applied for HNTE qualification and received approval in December 2020. Sohu Media is entitled to continue to enjoy the beneficial tax rate as an HNTE for the years 2020 through 2022, and will need to re-apply for HNTE qualification in 2023. |
• | Gamespace and Changyou Chuangxiang. Gamespace and Changyou Chuangxiang qualified as HNTEs for the years 2019 through 2021, and will need to re-apply for HNTE qualification in 2022. |
• | Gamease and AmazGame. Gamease and AmazGame re-applied for HNTE qualification and received approval in October 2020. Gamease and AmazGame are entitled to continue to enjoy the beneficial tax rate as HNTEs for the years 2020 through 2022, and will need to re-apply for HNTE qualification in 2023. |
• | Sogou Network. Sogou Network qualified as an HNTE for the years 2019 through 2021, and will need to re-apply for HNTE qualification in 2022. |
• | Sogou Information. Sogou Information qualified as an HNTE for the years 2018 through 2020, and will need to re-apply for HNTE qualification in 2021. |
• | Sogou Technology. Sogou Technology re-applied for HNTE qualification and received approval in December 2020. Sogou Technology is entitled to continue to enjoy the beneficial tax rate as an HNTE for the years 2020 through 2022, and will need to re-apply for HNTE qualification in 2023. |
• | AmazGame. In 2020, AmazGame completed a self-assessment and filed required supporting documents for KNSE status for 2019. Also in 2020, AmazGame was qualified as a KNSE after the relevant government authorities’ assessment and became entitled to a preferential income tax rate of |
• | Changyou Chuangxiang. In 2020, Changyou Chuangxiang completed a self-assessment and filed required supporting documents for KNSE status for 2019. In 2020, Changyou Chuangxiang was qualified as a KNSE after the relevant government authorities’ assessment and became entitled to a preferential income tax rate of |
Year ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Income/(loss) before income tax expense |
||||||||||||
Income/(loss) from China operations |
$ | ( |
) | $ | ( |
) | $ | |||||
Income/(loss) from non-China operations |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total income/(loss) before income tax expense from continuing operations |
$ | ( |
) | $ | ( |
) | $ | |||||
|
|
|
|
|
|
|||||||
Income tax expense applicable to China operations |
||||||||||||
Current tax |
$ | $ | $ | |||||||||
Deferred tax |
||||||||||||
|
|
|
|
|
|
|||||||
Subtotal income tax expense applicable to China operations |
||||||||||||
Non-China income tax expense/(benefit) |
( |
) | ||||||||||
Non-China withholding tax expense |
||||||||||||
|
|
|
|
|
|
|||||||
Total income tax expense/(benefit) from continuing operations |
$ | ( |
) | $ | $ | |||||||
|
|
|
|
|
|
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Tax holiday effect |
$ | $ | $ | |||||||||
Basic net income per share effect |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Statutory Rate: |
% | % | % | |||||||||
Effect of tax holidays applicable to subsidiaries and consolidated VIEs (1) |
% | % | ( |
%) | ||||||||
Tax differential from statutory rate applicable to subsidiaries and consolidated VIEs |
( |
%) | % | % | ||||||||
Effect of withholding taxes (2) |
( |
%) | ( |
%) | % | |||||||
Changes in valuation allowance for deferred tax assets |
( |
%) | ( |
%) | % | |||||||
Research and development super-deduction |
% | % | ( |
%) | ||||||||
Others |
( |
%) | ( |
%) | ( |
%) | ||||||
|
|
|
|
|
|
|||||||
( |
%) | ( |
%) | % | ||||||||
|
|
|
|
|
|
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Net operating loss from operations |
$ | $ | ||||||
Accrued bonus and commissions |
||||||||
Intangible assets transfer |
||||||||
Others |
||||||||
|
|
|
|
|||||
Total deferred tax assets |
||||||||
Less: Valuation allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net deferred tax asset s |
$ | $ | ||||||
|
|
|
|
|||||
Deferred tax liabilities |
||||||||
Withholding tax for dividend |
$ | ( |
) | $ | ( |
) | ||
Others |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
For the Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Beginning balance |
$ | |||||||||||
Provision for the year |
||||||||||||
Reversal for the year |
( |
) | ( |
) | ( |
) | ||||||
Foreign currency translation adjustment |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Ending balance |
$ | |||||||||||
|
|
|
|
|
|
As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Beginning balance |
$ | $ | $ | |||||||||
Increases /(decreases) related to prior year tax positions |
( |
) | ||||||||||
Increases related to current year tax positions |
||||||||||||
|
|
|
|
|
|
|||||||
Ending balance |
$ | $ | $ | |||||||||
|
|
|
|
|
|
16. |
COMMITMENTS AND CONTINGENCIES |
2021 |
2022 |
2023 |
2024 |
2025 |
Thereafter |
Total Payments Required |
||||||||||||||||||||||
Royalties and expenditures for licensed content of games |
$ | |||||||||||||||||||||||||||
Purchase of bandwidth |
||||||||||||||||||||||||||||
Interest payment commitment |
||||||||||||||||||||||||||||
Operating lease obligations |
||||||||||||||||||||||||||||
Purchase of content and services — others |
||||||||||||||||||||||||||||
Purchase of content and services — video |
||||||||||||||||||||||||||||
Others |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total Payments Required |
$ | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17. |
VIEs |
• | High Century |
• | Heng Da Yi Tong |
• | Sohu Internet |
• | Donglin |
• | Tianjin Jinhu |
• | Focus Interactive |
• | Gamease |
• | Shanghai ICE |
• | Guanyou Gamespace |
• | Sogou Information |
• | Chengdu Easypay |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
ASSETS: |
||||||||
Cash and cash equivalent s |
$ | $ | ||||||
Restricted cash |
||||||||
Accounts receivable, net |
||||||||
Prepaid and other current assets |
||||||||
Short-term investments |
||||||||
Intra-Group receivables due from the Company’s subsidiaries |
||||||||
Assets held for sale (current) |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
|
|
|
|
|||||
Long-term investments, net |
||||||||
Fixed assets, net |
||||||||
Intangible assets, net |
||||||||
Goodwill |
||||||||
Other non-current assets |
||||||||
Assets held for sale (non-current) |
||||||||
|
|
|
|
|||||
Total assets |
$ | $ | ||||||
|
|
|
|
|||||
LIABILITIES: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued liabilities |
||||||||
Receipts in advance and deferred revenue |
||||||||
Other current liabilities |
||||||||
Intra-Group payables due to the Company’s subsidiaries |
||||||||
Liabilities held for sale (current) |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
|
|
|
|
|||||
Long-term tax liabilities |
||||||||
Deferred tax liabilities |
||||||||
Intra-Group payables due to the Company’s subsidiaries |
||||||||
Other long-term liabilities |
||||||||
Liabilities held for sale (non-current) |
||||||||
|
|
|
|
|||||
Total liabilities |
$ | $ | ||||||
|
|
|
|
As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net revenue |
$ | $ | $ | |||||||||
Net income from continuing operations |
||||||||||||
Net loss from discontinued operations |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
Year ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net cash provided by/(used in) continuing operating activities |
$ | $ | ( |
) | $ | |||||||
Net cash provided by/(used in) discontinued operating activities |
( |
) | ( |
) | ||||||||
Net cash provided by/(used in) operating activities |
( |
) | ( |
) | ||||||||
Net cash provided by/(used in) investing activities |
( |
) | ( |
) | ||||||||
Net cash provided by/(used in) discontinued investing activities |
( |
) | ( |
) | ||||||||
Net cash provided by/(used in) investing activities |
( |
) | ( |
) | ||||||||
Net cash provided by continuing financing activities |
||||||||||||
Net cash provided by discontinued financing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
$ | $ | $ | |||||||||
|
|
|
|
|
|
18. |
SOHU.COM LIMITED SHAREHOLDERS’ EQUITY |
Number of Outstanding Shares As of December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Balance, beginning of year |
||||||||||||
Issuance: |
||||||||||||
Balance, end of year |
||||||||||||
Options |
Number Of Shares (in thousands) |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (1) (in thousands) |
||||||||||||
Outstanding as of January 1, 2020 |
$ | $ | ||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) | ||||||||||||||
Forfeited or expired |
||||||||||||||||
Outstanding as of December 31, 2020 |
||||||||||||||||
Vested as of December 31, 2020 |
||||||||||||||||
Exercisable as of December 31, 2020 |
||||||||||||||||
(i) | Performance-based options, which vest and become exercisable either in |
(ii) | Service-based options, which vest and become exercisable either in |
(iii) | IPO-based options, which were subject to completion of an IPO and vesting/ exercisability in |
Contractually Granted |
Granted (For Purposes of Share- based Compensation Expense) |
Vested and Exercisable |
Exercised |
|||||||||||||
Performance-based options |
||||||||||||||||
Service-based options |
||||||||||||||||
IPO-based options |
||||||||||||||||
Total |
||||||||||||||||
Options |
Number Of Shares (in thousands) |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (1) (in thousands) |
||||||||||||
Outstanding as of January 1, 2020 |
$ |
$ |
||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) |
||||||||||||||
Forfeited or expired |
( |
) |
||||||||||||||
Outstanding as of December 31, 2020 |
||||||||||||||||
Vested as of December 31, 2020 and expected to vest thereafter |
||||||||||||||||
Exercisable as of December 31, 2020 |
||||||||||||||||
Assumptions Adopted |
2018 |
2019 |
2020 |
|||||||||
Average risk-free interest rate |
||||||||||||
Exercise multiple |
||||||||||||
Expected forfeiture rate (post-vesting) |
||||||||||||
Weighted average expected option life |
||||||||||||
Volatility rate |
||||||||||||
Dividend yield |
||||||||||||
Weighted average fair value of share options |
(i) | Performance-based options, which vest and become exercisable in |
(ii) | Service-based options, which vest and become exercisable in |
Contractually Granted |
Granted (For Purposes of Share- based Compensation Expense) |
Vested and Exercisable |
Exercised |
|||||||||||||
Performance-based options |
||||||||||||||||
Service-based options |
||||||||||||||||
Total |
||||||||||||||||
Options |
Number Of Shares (in thousands) |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (1) (in thousands) |
||||||||||||
Outstanding as of January 1, 2020 |
$ |
$ |
||||||||||||||
Granted |
||||||||||||||||
Exercised |
( |
) |
||||||||||||||
Forfeited or expired |
( |
) |
||||||||||||||
Outstanding as of December 31, 2020 |
||||||||||||||||
Vested as of December 31, 2020 and expected to vest thereafter |
||||||||||||||||
Exercisable as of December 31, 2020 |
||||||||||||||||
Assumptions Adopted |
2018 |
2019 |
2020 |
|||||||||
Average risk-free interest rate |
||||||||||||
Exercise multiple |
||||||||||||
Expected forfeiture rate (post-vesting) |
||||||||||||
Weighted average expected option life |
||||||||||||
Volatility rate |
||||||||||||
Dividend yield |
||||||||||||
Weighted average fair value of share options |
(i) | Performance-based options, which vest and become exercisable in |
(ii) | Service-based options, which were granted to members of Sohu’s Board of Directors. All of these share options vested and became exercisable in 2015, as the service period requirement had been met. |
Contractually Granted |
Granted (For Purposes of Share- based Compensation Expense) |
Vested and Exercisable |
Exercised |
|||||||||||||
Performance-based options |
||||||||||||||||
Service-based options |
||||||||||||||||
Total |
||||||||||||||||
Number Of Shares (in thousands) |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value (1) (in thousands) |
|||||||||||||
Outstanding as of January 1, 2020 |
$ | $ | ||||||||||||||
Granted |
||||||||||||||||
Exercised |
||||||||||||||||
Forfeited or expired |
||||||||||||||||
Outstanding as of December 31, 2020 |
||||||||||||||||
Vested as of December 31, 2020 |
||||||||||||||||
Exercisable as of December 31, 2020 |
||||||||||||||||
Assumptions Adopted |
2019 |
2020 |
||||||
Average risk-free interest rate |
% | % | ||||||
Exercise multiple |
||||||||
Expected forfeiture rate (post-vesting) |
% | % | ||||||
Weighted average expected option life |
||||||||
Volatility rate |
% | % | ||||||
Dividend yield |
||||||||
Fair value |
19. |
NONCONTROLLING INTEREST |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
Changyou |
$ | $ | ||||||
Sogou |
||||||||
Total |
$ | $ | ||||||
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Changyou |
$ | $ | $ | |||||||||
Sogou |
( |
) | ||||||||||
Total |
$ | $ | $ | ( |
) | |||||||
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Net income from continuing operations attributable to noncontrolling shareholders |
$ | $ | $ | |||||||||
Net income/(loss) from discontinued operations attributable to noncontrolling shareholders |
( |
) | ||||||||||
Net income/(loss) attributable to noncontrolling interest shareholders |
$ | $ | $ | ( |
) | |||||||
20. |
NET INCOME/(LOSS) PER SHARE |
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Numerator: |
||||||||||||
Net loss from continuing operations attributable to Sohu.com Limited, basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Net income/(loss) from discontinued operations attributable to Sohu.com Limited, basic |
( |
) | ||||||||||
Net loss attributable to Sohu.com Limited, basic |
( |
) | $ | ( |
) | ( |
) | |||||
Effect of dilutive securities: |
||||||||||||
Incremental dilution from Changyou |
( |
) | ( |
) | ( |
) | ||||||
Incremental dilution from Sogou |
( |
) | ( |
) | ||||||||
Net loss from continuing operations attributable to Sohu.com Limited, diluted |
( |
) | ( |
) | ( |
) | ||||||
Net income/(loss) from discontinued operations attributable to Sohu.com Limited, diluted |
( |
) | ||||||||||
Net loss attributable to Sohu.com Limited, diluted |
$ | ( |
) | $ | ( |
) | ( |
) | ||||
Denominator: |
||||||||||||
Weighted average basic ordinary shares outstanding |
||||||||||||
Effect of dilutive securities: |
||||||||||||
Share options and restricted share units |
||||||||||||
Weighted average diluted ordinary shares outstanding |
$ | $ | $ | |||||||||
Basic net loss per share attributable to Sohu.com Limited |
||||||||||||
Continuing operations |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Discontinued operations |
( |
) | ||||||||||
Net loss per share |
( |
) | ( |
) | ( |
) | ||||||
Diluted net loss per share attributable to Sohu.com Limited |
||||||||||||
Continuing operations |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Discontinued operations |
( |
) | ||||||||||
Net loss per share |
( |
) | ( |
) | ( |
) | ||||||
21. |
CHINA CONTRIBUTION PLAN |
22. |
PROFIT APPROPRIATION |
23. |
CONCENTRATION RISKS |
24. |
RESTRICTED NET ASSETS |
25. |
ADDITIONAL INFORMATION — CONDENSED FINANCIAL STATEMENTS |
As of December 31, |
||||||||
2019 |
2020 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Prepaid and other current assets |
||||||||
Due from subsidiaries and VIEs |
||||||||
Total current assets |
||||||||
Interests in subsidiaries and VIEs |
||||||||
Other assets, net |
||||||||
Total assets |
$ |
$ |
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
Current liabilities |
||||||||
Deficit of investment in subsidiaries and VIEs |
||||||||
Long-term liabilities |
||||||||
Total liabilities |
||||||||
Shareholders’ equity: |
||||||||
Ordinary Shares: $ |
||||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive income |
||||||||
Accumulated deficit |
( |
) |
( |
) | ||||
Total shareholders’ equity |
||||||||
Total liabilities and shareholders’ equity |
$ |
$ |
||||||
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Revenues |
$ | $ | $ | |||||||||
Cost of revenues |
||||||||||||
Gross profit |
||||||||||||
Operating expenses: |
||||||||||||
General and administrative |
||||||||||||
Operating loss |
( |
) | ( |
) | ( |
) | ||||||
Share of loss of subsidiaries and VIEs |
( |
) | ( |
) | ( |
) | ||||||
Other income/(expense) |
( |
) | ||||||||||
Interest income |
||||||||||||
Loss before income tax expense/(benefit) |
( |
) | ( |
) | ( |
) | ||||||
Income tax expense/(benefit) |
( |
) | ||||||||||
Net loss |
( |
) | ( |
) | ( |
) | ||||||
Other comprehensive income/(loss) |
( |
) | ||||||||||
Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Year Ended December 31, |
||||||||||||
2018 |
2019 |
2020 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||
Investment loss from subsidiaries and VIEs |
||||||||||||
Share-based compensation expense/(benefit) |
( |
) | ||||||||||
Others |
( |
) | ||||||||||
Changes in current assets and liabilities: |
||||||||||||
Due from subsidiaries and VIEs |
( |
) | ( |
) | ||||||||
Prepaid and other current assets |
( |
) | ( |
) | ||||||||
Tax liabilities |
( |
) | ||||||||||
Accrued liabilities |
( |
) | ( |
) | ||||||||
Net cash used in operating activities |
( |
) | ( |
) | ( |
) | ||||||
Cash flows from investing activities: |
||||||||||||
Dividend received |
||||||||||||
Net cash used in operating activities |
||||||||||||
Net decrease in cash, cash equivalents, restricted cash and restricted time deposits |
( |
) | ( |
) | ( |
) | ||||||
Cash, cash equivalents, restricted cash and restricted time deposits at beginning of year |
||||||||||||
Cash and cash equivalents, restricted cash and restricted time deposits of Sohu.com Limited at the date of the liquidation of Sohu.com Inc. |
||||||||||||
Cash, cash equivalents, restricted cash and restricted time deposits at end of year |
$ | $ | $ | |||||||||
Reconciliation of cash, cash equivalents, and restricted time deposits to the condensed balance sheets: |
||||||||||||
Cash and cash equivalents |
$ | $ | $ | |||||||||
Restricted time deposits included in other assets |
||||||||||||
Total cash, cash equivalents, restricted cash and restricted time deposits at end of year |
$ | $ | $ | |||||||||
Exhibit 4.70C
The Third Supplemental Agreement to the Amended and Restated Business Development and Resource Sharing Agreement
This Third Supplemental Agreement to the Amended and Restated Business Development and Resource Sharing Agreement (Third Supplemental Agreement) is made by the following parties on February 14, 2021:
(1) Shenzhen Tencent Computer Systems Co., Ltd., a corporation duly established and validly existing under the laws of the Peoples Republic of China, with its legal address at 35/F, Tencent Building, Kejizhongyi Road, Maling Community, Yuehai Street, Nanshan District, Shenzhen (Tencent);
(2) Sohu.com Limited, a corporation duly established and validly existing under the laws of Cayman Islands, with its legal address at PO Box 309, Ugland House, Grand Cayman, KY 1-1104, Cayman Islands (Sohu);
(3) Sogou Inc., a corporation duly established and validly existing under the laws of the Cayman Islands, with its legal address at P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205 Cayman Islands (Sogou Inc.);
(4) Beijing Sogou Technology Development Co., Ltd., a corporation duly established and validly existing under the laws of the Peoples Republic of China, with its legal address at Room 01, 9/F Sohu.com Internet Plaza, No. 1 Park Zhongguancun East Road, Haidian District, Beijing (Sogou China);
(5) Beijing Sogou Network Technology Co., Ltd., a corporation duly established and validly existing under the laws of the Peoples Republic of China, with legal address at Room 03, 10/F, Building 9, No. 1 Park Zhongguancun East Road, Haidian District, Beijing (Sogou Network);
(6) Beijing Sogou Information Service Co., Ltd., a corporation duly established and validly existing under the laws of the Peoples Republic of China, with its legal address at Room 02, 9/F Sohu.com Internet Plaza, No. 1 Park Zhongguancun East Road, Haidian District, Beijing (Sogou Information);
(7) Shenzhen Shi Ji Guang Su Information Technology Co., Ltd., a corporation duly established and validly existing under the laws of the Peoples Republic of China, with its legal address at 16/F, Tencent Building, Kejizhongyi Road, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province, China (Shi Ji Guang Su).
The parties mentioned above shall hereinafter be referred to individually as a Party, and collectively as the Parties. In particular, Sogou Inc., Sogou China, Sogou Network, Sogou Information and Shi Ji Guang Su are collectively referred to as Sogou.
1
Whereas,
The Parties entered into the Amended and Restated Business Development and Resource Sharing Agreement (the Agreement) on September 25, 2017, and Supplemental Agreement to the Amended and Restated Business Development and Resource Sharing Agreement (Supplemental Agreement), the First Supplemental Agreement to the Amended and Restated Business Development and Resource Sharing Agreement (First Supplemental Agreement), and the Second Supplemental Agreement to the Amended and Restated Business Development and Resource Sharing Agreement (Second Supplemental Agreement, together with the Agreement, the Supplemental Agreement and the First Supplemental Agreement collectively as the Original Agreements) on October 13, 2017, September 20, 2018 and October 24, 2019 respectively.
Upon amicable consultation, the Parties amend the Original Agreements as follows:
1. The Parties agree to extend the validity period of Subparagraph (3) of Paragraph 1 of Clause 2 Amendment to the Strategic Principles of Business Development and Resource Sharing of the First Supplementary Agreement for one year to September 15, 2021, i.e. the Subparagraph is modified as follows: The search function inside Weixin/WeChat is not the above- mentioned general search engine, and is not subject to the above provision that such default general search engine shall be the search engine powered by Sogou. However, from September 16, 2020 to September 15, 2021, under equivalent conditions and subject to Tencents requirements for user experience, Sogou Search will be the preferred third-party search function to power such a Weixin/WeChat search function that allows Weixin/WeChat users to access Internet information outside Weixin/WeChat for that period. Without prejudice to user experience, the cooperation herein may be extended for additional successive one-year periods during the Cooperation Period.
2. Miscellaneous
2.1 Effectiveness. This Third Supplemental Agreement shall become effective when the Parties sign or seal on the date first written above.
2.2 Validity. This Third Supplemental Agreement shall become an integral part of the Original Agreement when it becomes effective, and shall have the same legal force as the Original Agreement. If there is any discrepancy between the provisions of this Third Supplemental Agreement and the Original Agreement, this Third Supplemental Agreement shall prevail, and the other provisions of the Original Agreement shall remain fully effective.
2.3 Definition and Interpretation. Unless otherwise stated, the words used herein shall have the same meanings set forth in the Original Agreement.
2.4 Counterparts. This Third Supplemental Agreement may be made in multiple counterparts. All counterparts shall be originals when they are signed and delivered, and together constitute the same one agreement.
(The remainder of this page is intentionally left blank.)
[Signature Page]
IN WITNESS WHEREOF, the Parties hereto have caused this Third Supplemental Agreement to be executed by their respective authorized representatives on the date and year first written above.
Shenzhen Tencent Computer Systems Co., Ltd. | Sohu.com Limited | |||||||
(Seal) | (Seal) | |||||||
Signature: | Signature: | |||||||
Name: | Name: | |||||||
Title: | Title: | |||||||
Sogou Inc. | Beijing Sogou Technology Development Co., Ltd. | |||||||
(Seal) | (Seal) | |||||||
Signature: | Signature: | |||||||
Name: | Name: | |||||||
Title: | Title: | |||||||
Beijing Sogou Network Technology Co., Ltd. | Shenzhen Shi Ji Guang Su Information Technology Co., Ltd. | |||||||
(Seal) | (Seal) | |||||||
Signature: | Signature: | |||||||
Name: | Name: | |||||||
Title: | Title: | |||||||
Beijing Sogou Information Service Co., Ltd. | ||||||||
(Seal) | ||||||||
Signature: | ||||||||
Name: | ||||||||
Title: |
Exhibit 4.88
Offshore Credit Agreement
No.: 2020 Offshore No. 091502
Creditor: China Merchants Bank Co., Ltd. (hereinafter referred to as Party A)
Debtor: Changyou.com HK Limited (hereinafter referred to as Party B)
Upon application of Party B, Party A hereby agrees to provide Party B with a line of credit for its use through Party As offshore financial center according to the Agreement. Party A and Party B have reached consensus on the following terms and have entered into the Offshore Credit Agreement (the Agreement) through full consultation in accordance with the relevant laws and regulations.
Article 1 Line of Credit
1.1 Party A shall provide Party B with a line of credit of USD 370 million [☑The actual available amount of the line of credit shall be subject to the amount of the qualified standby letter of credit/letter of guarantee received by Party A (Please tick Ö in ☐ if terms of the Agreement apply)]. In which (Please tick Ö):
☐ Revolving line of credit (currency and amount)
☑ One-time line of credit USD 370 million .
The varieties of credit business under the line of credit include but are not limited to loans, trade financing, bills, letters of guarantee, corporation overdraft, derivative transactions and other types of credit business.
Revolving line of credit refers to the maximum amount of the sum of the principal and the balance of one or more type(s) of credit business mentioned in the preceding paragraph and provided by Party A to Party B during the credit period, which can be used continuously and circularly.
1
One-time line of credit refers to the cumulative amount of various types of credit business mentioned in the preceding paragraph and provided by Party A to Party B during the credit period, which shall not exceed the one-time line of credit amount approved by the Agreement. Party B shall not use the one-time line of credit circularly. The amount of multiple types of credit business applied by Party B shall start using the one-time line of credit amount until it is fully exhausted.
Trade financing includes but is not limited to letter of credit, import/export bill purchase, delivery guarantee, inward bills purchased under collection, packing credit, outward bills purchased under collection, export negotiation, import/export remittance financing, credit and insurance financing, factoring, commercial paper guarantees etc.
1.2 During the credit period, all the specific credit businesses, which have been applied by Party B and approved by Party A, will be incorporated into the Agreement automatically and occupy the line of credit hereunder.
1.3 If Party A handles the factoring business with Party B as the payer (debtor of accounts receivable), the creditors rights of accounts receivable transferred to Party A from a third party shall occupy the above line of credit. If Party B applies to Party A for the factoring business with Party B as the payee (creditor of accounts receivable), then Party As own funds or other legitimate sources of funds which are paid to Party B in the aforesaid business for the purpose of purchasing the creditors rights of accounts receivable/underwriting amount held by Party B shall occupy the aforesaid line of credit.
1.4 If Party A, after issuing a letter of credit (L/C), entrusts other financial institutions to transfer the L/C to the beneficiary in accordance with its internal procedures, such issuance as well as the bill purchase and delivery guarantee business that occurs under such issuance shall occupy the above line of credit;
When handling the import L/C business, if import bill purchase is actually incurred under the same L/C afterwards, the import L/C and the import bill purchase shall occupy the same line of credit at different stages. In other words, when the import bill purchase business occurs, the amount recovered after the L/C is paid out will be used for the import bill purchase, with the same line of credit used by the original import L/C.
2
☐ 1.5 If Party A and Party B have signed an Offshore Credit Agreement numbered / (hereinafter referred to as the Original Agreement), from the effective date of the Agreement, the unliquidated balance of specific business that has occurred under the Original Agreement (the specific amount of such balance shall be subject to Party As records and determination) shall be automatically included in the Agreement and directly use the line of credit hereunder, and the unused line of credit of Party B under the Original Agreement shall be abolished automatically. (please tick Ö in ☐ if this clause is applicable)
Article 2 Credit Period
The credit period is 12 months, which starts from December 14, 2020 and ends on December 13, 2021. Party B shall submit an application to Party A for use of the line of credit during the credit period, and unless otherwise provided herein or by the Parties, Party A will not accept Party Bs line of credit use applications that are submitted beyond the credit period.
Article 3 Use of the Line of Credit
3.1 Category and scope of the line of credit
The line of credit under the Agreement is (please tick Ö in either of the following two options):
( / ) 3.1.1 Comprehensive line of credit, the Parties agree on the specific business type and amount to be used by the line of credit as follows:
/ , /
(Ö) 3.1.2 Single line of credit of working capital loan: It is used to repay the RMB loan of cross-border trade between Party B and Guangfa Bank Co., Ltd. (hereinafter referred to as Guangfa Bank) & Bank of East Asia(China) Co., Ltd. (hereinafter referred to as Bank of East Asia).
The loan hereunder shall be issued in installments: the first loan withdrew shall not exceed the US dollar equivalent to RMB 1.4 billion yuan to repay the RMB loan of cross-border trade received by Party B with Guangfa Bank and Bank of East Asia; the remaining loan withdrew shall not exceed the US dollar equivalent to RMB 1 billion yuan to repay the RMB loan of cross-border trade received by Party B with Bank of East Asia.
3
3.2 The category of the line of credit under the Agreement (revolving line of credit or one-time line of credit), the type of applicable Credit Business, the specific amount of line of credit for various types of Credit Business, whether various types of credit business are reversible, and the specific conditions of use shall be subject to the approval of Party A. If Party A adjusts its original approval opinions as required by Party B through application during the credit period, the subsequent approval opinions issued by Party A shall constitute the supplementation and changes to the original or preceding approval opinions, and so on.
3.3 Party B shall submit an application each time it plans to use the line of credit and submit the materials as required by Party A, and Party A shall approve and conduct applications on a case-by-case basis. Party A is entitled to decide whether to approve the application in accordance with its internal management and Party Bs operation conditions, or to unilaterally reject Party Bs application without assuming any legal liability. In case of any discrepancy between this clause and the remaining provisions hereof, the former shall prevail.
3.4 When Party A approves and agrees to the specific credit business to be conducted, the concrete business documents (including but not limited to a single-withdrawal agreement/application, framework agreement, offshore loan contract, specific business document, etc.) signed and concluded by and between Party A and Party B for the credit business shall constitute an integral part of the Offshore Credit Agreement. The specific amount, interest rate, length of maturity, use and expenses and other business elements for each loan or other credit businesses shall be jointly determined by the concrete business documents, business vouchers confirmed by Party A (including but not limited to loan receipt) and business records of Party As system.
In case that Party B applies for loans within the line of credit, Party A and Party B do not need to sign an Offshore Loan Contract for each loan, but Party B shall submit to Party A an offshore withdrawal application and the materials required by Party A for each time of applying a loan. Party A shall approve applications on a case-by-case basis. If Party A approves a loan, the specific contents shall be subject to the corresponding loan notes and the business records in Party As system. The contents not stated in the loan notes or Party As system shall be subject to the provisions hereof.
4
The offshore withdrawal applications, loan notes and Party As system business records shall constitute an integral part of the Agreement. In the event that the offshore withdrawal application is inconsistent with the loan notes and the business records in Party As system, the Parties hereto agree that the loan notes and the business records in Party As system shall prevail.
3.5 Every loan or other credits granted within the line of credit shall specifically determine their period for use according to Party Bs operation requirements and Party As regulations on business management. The due date of specific business shall not (shall or shall not) be later than that of the credit period. If such loan or other credits are guaranteed by a standby letter of credit/letter of guarantee, its due date shall not be later than five working days prior to the due date of corresponding standby letter of credit/letter of guarantee.
3.6 Credit review and adjustment. Party A is entitled to review the credits independently during the credit period and may, by notifying Party B in writing at any time, unilaterally modify the amount and other terms and conditions of the original credit, including cancellation of the credit.
Article 4 Interest and Expenses
4.1 The financing adopts (please tick Ö in either of the following two options):
☐ Fixed interest rate ☑ Floating interest rate
4.2 Determination of interest rate during the contract period (please tick Ö in ☐ if applicable):
4.2.1 The interest rate takes the ☑ monthly/☐/daily Libor on the pricing day or one or two working days before the pricing day in the same currency as the loan as the benchmark to ☑add or ☐ subtract 95 basis points (BPs). Party A shall determinate the date of interest rate determination as the pricing date, or one or two working days before the pricing date in accordance with international practices. The pricing date refers to the reference date used to determine the benchmark interest rate in the loan term or floating period. If the loan adopts fixed interest rate, the pricing date shall be the actual loan issuing date; if the loan adopts floating interest rate, the pricing date shall be determined in accordance with Article 4.2.2.
5
4.2.2 The floating interest rate shall float monthly/ / daily, and the applicable benchmark interest rate in each floating period shall be determined as agreed herein. The actual issuance date of the loan is the pricing date of the first floating cycle, and then ☐ the first day of each floating cycle thereafter shall be the pricing date of such floating cycle; or ☑ the interest collection date of each floating cycle is the pricing date of the next floating cycle (please tick Ö in either of the following two options)
4.2.3 Party A is entitled to adjust such basis points, regularly or irregularly, in combination with changes in relevant national policies, international credit loan market prices or Party As own credit loan policies. Such adjustment shall take effect as from the date of notification from Party A to Party B (The notice shall be made through announcement at Party As outlets or on the official website of CMBC, or by sending to any contact address/method reserved by Party B herein); If Party B does not accept such adjustment, Party B shall have the right to make early repayment as agreed herein. Otherwise, it shall be deemed that it agrees to implement the benchmark interest rate and/or interest rate pricing method as adjusted by Party A.
Whenever the benchmark interest rate (applicable LIBOR or HIBOR) is less than 0, the benchmark interest rate (applicable LIBOR or HIBOR) shall be taken as 0.
In case of any discrepancy between this clause and the remaining provisions hereof, the former shall prevail.
4.3 Party A charges Party B a loan management fee of 0.65% per annum based on the average daily financing balance, which is charged ☐ one-time for the first use of line of credit, or ☑ in the way of payment with interest (please tick Ö in either of the two options).
6
4.4 If the loan term is less than 3 months (including 3 months), the loan interest shall be collected at the time of repaying the principal. If the loan term is more than 3 months, the charging dates of interest are March 21, June 21, September 21, December 21 of each year and the due date of loan, and the interest shall be charged to the date one day before the interest charging date. The loan interest shall be calculated according to the actual loan amount and the number of days actually occupied from the date when the loan is transferred into the borrowing account. Party B shall pay the interest on each charging date of interest and Party A may deduct the interest payable by Party B from any of its bank accounts. In case that Party B fails to pay the interest on time, the compound interest stipulated herein will be calculated for the unpaid interest (penalty interest included), according to the overdue loan interest rate.
If the loan is due on a holiday, the due date shall be automatically extended to the first working day after the holiday and the interest shall be charged in accordance with the number of days actually occupied.
4.5 In paying off the loan, the principal, the rest interest and the loan management fee (if any) must be paid off simultaneously.
4.6 If Party B fails to repay the loan on schedule, a penalty interest of 2%/year (overdue loan interest rate) will be charged on the basis of the original interest rate for the unpaid part of the loan from the date of overdue payment (penalty interest). The original interest rate is the applicable interest rate before the due date of the loan (including the acceleration of the due date) (In case of a floating interest rate, it shall continue to float before the overdue payment of the loan).
If Party B fails to use the loan as agreed herein, a penalty interest of 2%/year will be charged on the basis of the original interest rate for the part that is not used for the purpose as agreed herein as from the date when the purpose is changed. The original interest rate refers to the applicable rate before the change in the loans intended use.
If there are the overdue loans or use without conforming to the provisions of the Agreement, the interest accrual is calculated according to the higher rate in the above regulations.
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4.7 The loan principal and interest, loan management fee and other relevant fees payable by Party B under the Agreement shall be exempted from any existing or future taxes, levies, fines, duties, fees or deductions of any nature collected by any tax authorities or other competent authorities, and shall neither be used for any offset, nor be the subject of any counterclaim, limitation or deduction. In the event that Party B is required to deduct any taxes, levies, fines, duties or fees from the payment according to any laws or regulations, Party B promises to undertake the above deductions or taxes, and warrants to pay such deductions or taxes in full amount to relevant tax or other competent authorities within the legal term, so as to ensure that the actual mount received by Party A equals to the amount before the deductions or taxes are deducted.
4.8 The actual amount of each loan/withdrawal, its starting and ending date, purpose, interest rate and other matters shall be subject to the loan notes (or record of Party As system). The contents not stated in the loan notes or Party As system shall be subject to the provisions hereof.
Article 5 Provisions on Guarantee
5.1 Where Party B or any third party accepted by Party A provides mortgage or pledge guarantee or joint guarantee with its property for all debts owed by Party B to Party A hereunder, Party B or the third party shall, as a guarantor, separately issue or sign a letter of guarantee upon the request of Party A as below:
5.1.1 For all debts that Party B owes to Party A hereunder, Beijing Branch of China Merchants Bank Co., Ltd. shall act as its joint and several guarantor and must provide Party A with a standby letter of credit/letter of guarantee in the same currency.
5.1.2 All debts that Party B owes to Party A hereunder shall be collateralized (pledged) by / with the property owned by it or legally entitled to disposition, and the Parties shall sign a separate guarantee contract.
5.2 If the guarantor fails to issue or sign the letter of guarantee or complete other procedures according to this clause (for example, the debtor of an account receivable raises objections before the account receivable is pledged), Party A shall have the right to reject Party Bs credit granting application.
5.3 Provided that the mortgagor has provided real estate mortgage guarantee for all debts that Party B owes to Party A hereunder, if Party B knows that the collateral has been or may be included in the scope of government demolition and expropriation, it shall notify Party A immediately and urge the mortgagor to continue using the governments compensation to provide guarantee for Party Bs debts in accordance with the mortgage contract, to complete the corresponding guarantee procedures in a timely manner, or to provide other safeguard measures accepted by Party A in accordance with Party As requirements.
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When it is necessary to reset the guarantee or take other safeguard measures as the collateral is involved in the aforesaid circumstances, the mortgagor shall assume the relevant expenses incurred and Party B shall be held jointly and severally liable for the expenses. Party A is entitled to deduct such expenses directly from Party Bs account.
Article 6 Rights and Obligations of Party B
6.1 Party B has the right:
6.1.1 To request Party A to provide loans or other credits within the line of credit in accordance with the requirements stipulated herein;
6.1.2 To use the line of credit in accordance with the provisions hereof;
6.1.3 To request Party A to keep confidential the production, operation, finance and accounts and other information provided by Party B, except as otherwise stipulated by laws, regulations, or as otherwise required by regulatory authorities, or as otherwise provided by the Agreement; and
6.1.4 To transfer the debt to a third party after obtaining the written consent of Party A.
6.2 Party B shall undertake the following obligations:
6.2.1 Party B shall provide the documents, as required by Party A, (including but not limited to its authentic quarterly financial report; annual financial report, major decisions and changes in the aspect of its production, operation and management, information about withdrawal and fund using, and collateral related information during the periods designated by Party A), and information about all the opening banks, accounts, deposit and loan balances. Besides, Party B shall coordinate with Party As investigation, review and check;
6.2.2 Party B shall accept the supervision by Party A in relation to its use of credit funds and production, operation and finance activities;
6.2.3 Party B shall use loans and/or other lines of credit in accordance with the arrangements under the Agreement and each concrete business document and/or usage commitments;
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6.2.4 Party B shall repay principal, interest, and expenses of the loan, advance and other credit debt in full and on time in accordance with the Agreement and each concrete business document;
6.2.5 Transfer all or part of the debts hereunder to a third party after obtaining the written consent of Party A;
6.2.6 In any one of the following circumstances, Party B shall promptly inform, and actively cooperate with Party A to implement security measures for safe repayment of loans, advances and principal and interest of other credit debts as well as all related expenses under the Agreement:
6.2.6.1 Party B encounters a major financial loss, asset loss, or other financial crises;
6.2.6.2 Party B provides any third party with loan or surety bond, or mortgage (pledge) guarantee with its own property (right);
6.2.6.3 Party B suspends its business, has its business license revoked or canceled, files for or is filed for bankruptcy, dissolution, etc.;
6.2.6.4 A major crisis occurring in the operation or finance of Party Bs controlling shareholder, its other affiliated companies, or actual controller, or a personnel change in legal representative/principals, directors or important senior management, or Party B, its controlling shareholder, actual controller or senior management of its affiliated companies being punished by the competent authorities of the State/their personal freedom being restricted/being imposed of coercive measures, or missing for over 7 days, which may affect its normal operation;
6.2.6.5 Party B incurs any litigation, arbitration or criminal or administrative penalties, which have material adverse consequences on operations or property status of Party B;
6.2.6.6 Party B has changes in important enterprise information, such as the company name, registered address, place of business, and beneficial owners;
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6.2.6.7 Party B or its actual controller is engaged in a large amount of private usury; or has adverse records such as borrowing new debts to repay old ones, overdue records, debit interest in other financial institutions; or is involved in a debt crisis due to the internal capital chain rupture of Party Bs affiliated enterprise; or Party Bs project is suspended, delayed or encounters a major investment failure.
6.2.6.8 Party B encounters other significant matters that might affect its solvency.
6.2.7 Party B shall not slacken off management and recourse to its due creditors rights, or dispose of any existing main property for free or in any other inappropriate manner.
6.2.8 Party As consent is necessary for Party Bs major matters such as merging (consolidation), separation, reorganization, joint venture (cooperation), transfer of property (share) rights, shareholding reform, investment in a foreign country, increased debt financing.
6.2.9 Party B shall do the following checked affairs as required by Party A (please tick Ö in the applicable ☐):
☐ Insure its core assets and designate Party A as the first in line beneficiary;
☐ Not sell or mortgage the / assets designated by Party A prior to the settlement of credit debts;
☐ Impose the following restrictions on dividends distributed to its shareholders as required by Party A prior to the settlement of credit debts:
/ ☐ Other: /
6.2.10 Where the accounts receivable is pledged dynamically, Party B shall guarantee that the undrawn credit granting amount, at any time during the credit period, shall be less than 80% of the amount of pledged accounts receivable. If the undrawn amount is higher than the point, Party B is required to have new accounts receivable pledged to the satisfaction of Party A or have additional amount deposited into the margin account until the amount of pledged accounts receivable × 80% + effective margin > the undrawn credit granting amount.
6.2.11 Provided that Party B has pledged the margin deposit, if the balance of the margin account is less than / of the amount of specific business due to exchange rate fluctuations, Party B is obliged to increase the corresponding amount of deposit or provide other guarantees in accordance with Party As request.
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6.2.12 The payment for sales under import account shall be recovered from the account designated by Party A. For export negotiation, the bills and/or invoices under L/C shall be transferred to Party A.
6.2.13 Party B shall guarantee that any settlement, payment and other balancing transactions will be accounted in its bank settlement account opened with Party A. The amount of settlement transactions of Party B in the designated account during the credit period shall not be less than the proportion of Party Bs financing amount with Party A to its total financing amount with all the banks.
Article 7 Rights and Obligations of Party A
7.1 Party A has the right:
7.1.1 To request Party B to repay in full and on time the principal and the interest of loans, advances, and other debts under the Agreement and the specific business documents;
7.1.2 To require Party B to provide information related to the use of its line of credit;
7.1.3 To know about Party Bs production, operation and financial activities;
7.1.4 To supervise Party B to use loans and/or other line of credits for the purpose as agreed in the Agreement and each specific business document; where necessary, to directly suspend or restrict the enterprise E-bank function/enterprise App/other online functions (including but not limited to the shutdown of E-bank function/enterprise App/other online functions and presetting payment objects/limit of single pay amount/limit of stage pay amount, and other restrictive measures) of Party Bs account, restrict other electronic payment channels and the selling of settlement vouchers, or restrict the counter payment and transfer of Party Bs account, and the payment and universal withdrawing function of the non-counter channel, such as telephone banking and mobile banking;
7.1.5 To entrust other branches of China Merchants Bank in the locality of the beneficiary to open the overriding letter of credit in accordance with its internal procedures after the acceptance of Party Bs application to open a L/C;
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7.1.6 To deduct money directly from or through Party As domestic branches, the accounts opened by Party B for the purpose of repaying debts owed by Party B under the Agreement and specific business documents (when the credit debt is not in RMB, Party A has the right to deduct a corresponding amount from Party Bs RMB account in accordance with the foreign exchange rate published upon the deduction to purchase foreign currencies to repay the principal, interest and expenses of the credit) under the premise that the margin account of Party B cannot be deducted in full;
7.1.7 To transfer Party Bs debt and take such measures as deemed appropriate, including but not limited to fax, mail, personal delivery, announcements on the public media, etc., to notify Party B of the transfer matters, and conduct collection from Party B;
7.1.8 To supervise Party Bs accounts by itself or by entrusting other institutions of China Merchants Bank other than Party A, and control the payment of the loan funds according to the intended use of the loan and the payment range as agreed by the Parties;
7.1.9 When Party A discovers that Party B has violated any of the provisions specified herein, Party A shall be entitled to require Party B to implement the security measures for repayment of principal, interest and all expenses of the credit debts hereunder as required by Party A and Party B shall actively cooperate with this respect. Party A has the right to adopt one or several default remedy measures stipulated in the article Default Event and Treatment in the Agreement if Party B fails to cooperate with Party A; and
7.1.10 To exercise other rights stipulated herein.
7.2 Party A shall undertake the following obligations:
7.2.1 Party A shall grant loans and provide other lines of credit to Party B within the limit of line of credit in accordance with the Agreement and terms and conditions in each specific business document; and
7.2.2 Party A shall keep confidential the assets, finance, production and operation of Party B, except as otherwise specified by laws, regulations, regulators, or the information provided to Party As affiliated companies, external auditing, accounting or lawyers and other professional institutions, which bear the same obligation of confidentiality.
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Article 8 Special Undertakings of Party B
8.1 Party B is a legal entity duly incorporated and validly existing under the laws of the place of registration, and Party B has a full civil capacity to sign and fulfill the Agreement;
8.2 The execution and fulfillment of the Agreement has been fully authorized by the Board of Directors or other competent authorities.
8.3 Documents, data and certificates of Party B, guarantor, mortgagor (pledgee), mortgage (pledge) and so on as provided by Party B are authentic, accurate, complete and valid, and do not contain any major faults at variance with facts or miss out any material fact;
8.4 Party B will strictly conform to the concrete business documents, and the various letters and related documents issued to Party A;
8.5 There is no litigation, arbitration or criminal and administrative penalty that may have a significant adverse impact on Party B or its major property, and no such things shall occur during the performance of the Agreement. In case of such occurrences, Party B shall notify Party A immediately.
8.6 Party B shall strictly abide by laws and regulations of the place of registration, the principal place of business and China in its business activities, carry out all sorts of business activities in strict accordance with the business scope stipulated in Party Bs articles of association or that approved according to law, and handle registration and annual inspection procedures in a timely manner;
8.7 Party B undertakes to keep or improve current business operating and management level, and ensure the maintenance and appreciation of current assets. It shall not abandon any creditors rights expired. Nor shall it dispose of current property for free or in any other inappropriate ways.
8.8 Party B shall not pay off other long-term debts ahead of time without Party As permission.
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8.9 When using the loans or other granted credit hereunder, Party B shall not violate the relevant provisions in the Anti-Money Laundering Law of the Peoples Republic of China and in other laws, regulations and of Party A relating to anti-money laundering; the laws and regulations relating to anti-money laundering of Party Bs place of registration, office, site for business operation and the place where business occurred; or any other applicable laws and regulations concerning anti-money laundering. The source of the loan funds or other granted credit, and repayment funds hereunder shall not involve any high-risk countries and regions, or any industries that do not conform to Chinese laws and regulations, such as gambling, or any money laundering activities, terrorist financing activities or diffuse financing activities, or any activities belong to the sanction projects of the United Nations, the Peoples Republic of China and other international organizations or countries. If Party A finds that Party Bs account has abnormal transactions or involved in money laundering, terrorist financing or diffuse financing activities, or other activities in violation of the aforesaid regulations or other sanction programs, or Party B fails to provide documents proving the legitimacy and rationality of the business and business background in time, Party A shall have the right to require repayment in advance with immediate effect, take control measures to terminate relevant business relationships and freeze relevant funds in accordance with laws and regulations.
In order to understand the purposes of Party Bs loan or other granted credit and the source and nature of the repayment funds, Party B shall, as requested by Party A, promptly provide documents and materials that can prove the purposes of the loan or other granted credit, and the source and nature of the repayment funds.
8.10 The loan project applied under the credit shall conform to the requirements of all applicable laws and regulations. The loan shall not be used for speculation in negotiable securities, futures or real estate in violation of regulations. In addition, the loan shall not be used to conduct debit and credit to obtain illegal incomes, in the production and operation field and for purpose that are forbidden by the State or for other purposes except as stipulated in the Agreement and each concrete business document;
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If the payment for loan fund is made by the borrower itself, Party B shall summarize and report fund payment to Party A periodically (at least on a monthly basis), and Party A has the right to verify whether loan payment accords with the Agreement by means of account analysis, certificate verification, and on-site investigation.
8.11 Party B shall not be involved in any other major events that affect the performance of its obligations hereunder at the time of signing and fulfilling the Agreement.
8.12 Within one week after each loan hereunder is issued, Party B shall provide Party A with the certificate of RMB loan of cross-border trade repayment to Beijing AmazGame Age Internet Technology Co., Ltd. in Bank of East Asia or China Guangfa Bank (including but not limited to remittance record, repayment certificate, etc.). Meanwhile, Party B shall guarantee and urge Beijing AmazGame Age Internet Technology Co., Ltd. to transfer amount corresponding to the deposit to be pledged in full to the account opened with Party A by Beijing AmazGame Age Internet Technology Co., Ltd. within one week after each loan hereunder is issued.
8.13 In the event that the term of the loan hereunder exceeds one year, Party B shall complete the recordation of medium and long-term foreign debts before the withdrawal with the National Development and Reform Commission as required in the document No. 2044 [2015] of the National Development and Reform Commission issued by the National Development and Reform Commission, and provide relevant evidential materials.
8.14 Upon issuance of the loan hereunder, Party B shall submit relevant materials such as fund use certificate as required by Party A.
8.15 Prior to the settlement of all business hereunder, the accumulated undistributed profit amount of Beijing AmazGame Age Internet Technology Co., Ltd. shall not be less than the total amount of all financing principal and interest issued by Party A to Party B, and the dividends of Beijing AmazGame Age Internet Technology Co., Ltd. shall first be used to repay the financing of Party A.
8.16 Beijing AmazGame Age Internet Technology Co., Ltd. shall pledge the deposit of no less than RMB 1.4 billion yuan at Beijing Branch of China Merchants Bank Co., Ltd. within 7 natural days after the first loan issued by Party A to Party B.
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8.17 After Party A completes the issuance of all loans to Party B, Beijing AmazGame Age Internet Technology Co., Ltd. shall add pledge of deposit of no less than RMB 1 billion yuan at Beijing Branch of China Merchants Bank Co., Ltd. within 7 natural days after the date of the last loan issued by Party A, so as to ensure that the total amount of the pledged deposit is not less than RMB 2.4 billion yuan.
8.18 Before the settlement of all business hereunder, if (the loan principal issued by Party A to Party B *110% + interest per period) *real-time exchange rate ³ (deposit pledge amount of Beijing AmazGame Age Internet Technology Co., Ltd. at Beijing Branch of China Merchants Bank Co., Ltd.*92% + appraisal alue of house mortgage*45%), Beijing AmazGame Age Internet Technology Co., Ltd. will increase the total amount of the above deposit pledge within 5 working days as required by Beijing Branch of China Merchants Bank Co., Ltd., so that (the loan principal issued by Party A to Party B*110% + interest per period) *real-time exchange rate< (the above deposit pledge amount * 92% + appraisal value of house mortgage*45%).
Article 9 Other Expenses
Due to the expenses for credit investigation, inspection, notarization in connection with the Agreement, and in case that Party B fails or is unable to repay the debts owed to Party A on time under the Agreement, all costs incurred by Party A to execute the creditors right, such as attorney fees, legal costs, travel expenses, announcing fees and service fees, shall be borne by Party B in full, which shall be deducted by Party A from Party Bs bank account opened with Party A as authorized by Party B. In case of any shortfall, Party B undertakes to pay back the exact amount upon receipt of Party As notice.
Article 10 Default Event and Treatment
10.1 Party B shall be regarded as in default in case of any of following situations:
10.1.1 Party B fails to perform or violate the obligations hereof;
10.1.2 The relevant representations and undertakings hereunder are untrue or incomplete, or Party B violates the provisions thereof;
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10.1.3 Party B fails to withdraw and disburse the loan as agreed herein, fails to repay the principal, interest or expenses of the loan in full and on time as stipulated herein, fails to use the funds in the withdrawal account, or does not accept Party As surveillance and fails to make any rectifications as required by Party A;
10.1.4 Party B has a material breach of the contract legally signed with other creditors, and such breach has not resolved completely within three months as of the date of the breach.
The foregoing material breach of the contract means that Party Bs creditors are entitled to claim a sum of more than RMB 20 million yuan from Party B due to its breach.
10.1.5 Where Party B is a listed enterprise or plans to be listed, its listing encounters significant impediment or its listing application is suspended, it is imposed with self-discipline supervision measures by the stock exchange for more than three times in total such as warning letter, order to correct, limitation on transaction of stock account, or is given disciplinary punishment, or its listing is terminated, etc.;
10.1.6 Where Party B is a supplier of governments procurement department, the risk information released against Party As credit repayment appears, such as the governments procurement departments delaying payment continuously or accumulatively for three installments, or Party Bs being canceled as a supplier (listed into the blacklist of government procurement), untimely goods supply, instable product quality, operational difficulty, significant financial deterioration (insolvency), and project shutdown, etc.
10.1.7 Party Bs financial indices fail to continuously conform to the requirements as stipulated in the Agreement/concrete business document, or any preconditions (if any) for Party A to grant credit/financing to Party B as stipulated in the Agreement/concrete business document are not met continuously.
10.1.8 Party B uses the loan in the form of breaking up the whole into parts to avoid the payment of loan funds entrusted by Party B to Party A according to the provisions hereof.
10.1.9 Party Bs business activities may bring risks of anti-money laundering or sanctions compliance to Party A.
10.1.10 Other circumstances in which Party A believes that its legitimate rights and interests are damaged.
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10.2 Where one of the following situations involving the guarantor occurs, and Party A believes that its guarantee capacity may be influenced and requires the guarantor to eliminate the detrimental effect thereof or requires Party B to increase or change the guarantee conditions, but the guarantor and Party B do not cooperate, it shall be regarded as default event.
10.2.1 The guarantor fails to immediately notify Party A and to actively cooperate with Party A to implement relevant safeguard measures in occurrence of one of similar situations as described in clause 6.2.6, or fails to obtain the consent of Party A in occurrence of the situations as described in clause 6.2.8;
10.2.2 The guarantor conceals its actual capacity to assume the guarantee liability, or fails to obtain authorization from the board of directors or any competent authority when issuing standby letter of credit or irrevocable letter of guarantee;
10.2.3 The guarantor fails to go through the annual inspection registration procedures and the business term extension/prolonging procedures on time;
10.2.4 The guarantor is slack to manage and claim its due debts, or dispose of existing major assets in a non-reimbursable and other improper manner.
10.2.5 The guarantor fails to perform or violate the obligations of the letter of guarantee/guarantee text;
10.3 In case of any of the following circumstances where Party A considers that it may make mortgage (pledge) ineffective or mortgage (pledge) insufficient to the mortgagor (pledgor) and that Party A requires the mortgagor (pledgor) to eliminates the relevant adverse impact or requires Party B to add or exchange warrant conditions, the mortgagors (pledgors) and Party Bs rejections for cooperation shall be deemed as a default event.
10.3.1 The mortgagor (pledger) does not possess the ownership or right of disposition of the collateral (pledge), or there is any dispute over the ownership;
10.3.2 The mortgage/pledge registration formalities concerning the collateral (pledge) have not been completed or the collateral (pledge) has been sealed up, detained, supervised, has shared/statutory priority (including but not limited to the priority of construction project funds), and/or such circumstances that have occurred are concealed;
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10.3.3 Without the prior written consent of Party A, the mortgagor shall not transfer, lease, remortgage, or dispose of the collateral in any other improper manner; or the mortgagors earnings from disposing of the collateral with the prior written consent of Party A are not used to repay Party Bs debts owed to Party A as required;
10.3.4 The mortgagor fails to properly keep, maintain, and repair the collateral, and as a result the collateral significantly depreciates; or the mortgagors behavior directly damages the collateral, resulting in a decrease in the value of the collateral; or the mortgagor fails to insure/renew the insurance for the collateral during the mortgage period according to Party As request;
10.3.5 The collateral has been or may be included in the scope of government demolition and expropriation, but the mortgagor fails to immediately notify Party A or to fulfill its relevant obligations as stipulated in the mortgage contract;
10.3.6 If the mortgagor uses its mortgaged property in China Merchants Bank to provide second mortgage guarantee for the business hereunder, the mortgagor settles his personal mortgage loan in advance without Party As consent before Party B pays off the credit granted hereunder.
10.3.7 The pledgor uses its financial products as the pledge, and the source of the subscription fund is illegal or illegitimate;
10.3.8 There is any event or potential event that may impact the mortgage (or pledge) value or the mortgage (or pledge) right of Party A.
10.3.9 Party B fails to perform or violate the obligations of the guarantee text;
10.4 In case that the guarantee hereunder includes the pledge of accounts receivable, if the debtor of the accounts receivable involves in significant deterioration in business, transfer of properties/flight of capital to avoid its debts, or collaborated with the pledger of the accounts receivable to change the payment path resulting in no payment of the accounts receivable entering the payment account, loss of commercial reputation, loss or possible loss of the capacity for fulfilling the contract or other major events that affect its debt paying ability, Party A has the right to require Party B to provide relevant guarantees or new effective accounts receivable for pledge; if Party B fails to do so, it shall be deemed as a breach of contract.
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10.5 If any above-mentioned event of default occurs, Party A is entitled to take the following measures respectively or jointly:
10.5.1 Reduce the line of credit under the Agreement, or cease the use of the remaining line of credit;
10.5.2 Recover the financing principal, interest and pertinent expenses that have been issued within the line of credit;
10.5.3 With respect to the bill of exchange that has been accepted or the letter of credit, letter of guarantee, letter of guarantee for delivery that has been opened by Party A (including the entrusted overriding ones) during the credit period, whether Party A has advanced or not, Party A may require Party B to post margin or meet margin calls as the guarantee money for repaying the subsequent advances of Party A under the Agreement, or to hand over the corresponding amount to a third party for drawing as the margin of Party A for its future advances for Party B;
10.5.4 With respect to the creditors rights for the unliquidated accounts receivable transferred by Party B to Party A under the business of factoring, Party A shall have the right to require Party B to immediately fulfill the repurchase obligation and pursue other recovery measures; for Party As creditors rights to Party B for accounts receivable which are transferred to Party A under the business of factoring, Party A shall have the right to recourse against Party B with immediate effect.
10.5.5 Freeze/deduct the deposit in Party Bs settlement account and/or other accounts directly or through the domestic institutions of Party A to pay off all debts of Party B under the Agreement and each concrete business document; stop opening new settlement account for Party B, stop processing new credit card of Party Bs legal representative;
10.5.6 Directly require Party B to provide other property acceptable by Party A as the new guarantee, as appropriate, and where Party B fails to provide new guarantee as required, it shall pay liquidated damages equal to 30% of the amount of line of credit hereunder.
10.5.7 Report Party Bs default and unfaithful acts to credit reporting institutions and China Banking Association;
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10.5.8 Dispose of the mortgage and pledge and/or make recovery from the guarantor according to the stipulations in the guarantee document;
10.5.9 Party A may recourse as per the stipulations herein.
10.6 The funds claimed by Party A shall be reimbursed in accordance with the sequence of first later and then earlier actual maturity dates of the granted credits. The liquidation order for each concrete granted credit shall be as per the sequence of first expenses, penalty, compound interest, penalty interest, interest and finally the credit principal, until the entire principal and interest and their related expenses are paid off.
Party A shall be entitled to unilaterally adjust the aforementioned repayment sequence, unless otherwise required by the laws and regulations.
Article 11 Repayment and Repayment in Advance
Party B shall repay the loan principal, the remaining unpaid interest and the loan management fee in a lump sum at the due date of each loan. If Party B applies for early repayment, the first repayment date of any loan shall not be earlier than 6 months after the withdrawal of the loan, and the repayment shall be made only on the interest collection date with the single repayment amount no less than USD 10 million. Party B shall submit a written application to Party A no later than 14 working days prior to the planned early repayment date and pay Party A liquidated damages for early repayment. The liquidated damages for repayment in advance = amount to be repaid in advance * ratio of the liquidated damages (0%). If Party A agrees Party Bs application for repayment in advance after review, Party B shall pay Party A the liquidated damages for the repayment in advance in full within the period required by Party A, otherwise, Party A still has the right to refuse Party Bs application for repayment in advance. Party A has the right but is not obliged to reduce the amount of Party Bs liquidated damages for repayment in advance on its own discretion according to the factors, such as Party Bs remaining term of the loan when it repays in advance.
In the event that Party B repays the loan in advance, the interest rate shall still be subject to the Agreement and the interest payable shall be calculated based on the actual loan term.
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Article 12 Miscellaneous
12.1 During the term hereof, Party As tolerant, postponed or delayed exercise of its interests or rights hereunder for any default or delay of Party B shall not impair, impact, or restrict any and all rights and interests that Party A is entitled to as a creditor in accordance with the relevant laws and regulations and the Agreement, nor shall it be deemed as Party As permission or acceptance of any breach of the Agreement or be deemed as Party As waiver of its right to take actions against existing or future defaults.
12.2 If the Agreement becomes legally invalid in full or in part for whatever reason, Party B shall still be liable for repayment of all debts that it owes to Party A hereunder. If that happens, Party A is entitled to terminate the performance of the Agreement and may immediately claim all debts owed by Party B hereunder.
If Party A faces a cost increase during the performance of its obligations hereunder due to any change to the applicable laws and policy requirements, Party B shall compensate Party A for the increased cost as required.
12.3 The notifications, requirements or other documents, etc. of the Parties related to the Agreement shall be sent in writing (including but not limited to letter, fax, email, E-bank function/enterprise App and other E-platforms, SMS or WeChat, etc.)
Party As Contact Address: Building 3 of South Main Building, No.65 Courtyard, Bajiaodong Street, Shijingshan District, Beijing | ||
Corporate Email: zhangjingjing@cyou-inc.com | Fax No.:/ | |
Mobile Phone No. of Contact Person: 61927559 | Corporate WeChat ID:/ | |
Party Bs Contact Address of Party A: 7/F, Tower D, Global Trade Center, 36 Beisanhuandong Lu, Dongcheng District, Beijing, P.R. China | ||
Corporate Email: synthesis@cmbchina.com | Fax No.: 59575087 | |
Mobile Phone No. of Contact Person: 17600355610 | Corporate WeChat ID:/ |
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12.3.1 Any notice, request, or other document that is delivered by a specially assigned person (including but not limited to by a lawyer, notary, or courier) shall be deemed to have been served when the recipient signs on it (if the recipient refuses to accept it, it shall be deemed to have been served seven days after the date of rejection, return, or delivery (whichever is earlier)). Any notice, request, or other document that is delivered by postal service shall be deemed to have been served seven days after the date of posting. Any notice, request, or other document that is delivered by fax, email, Party As E-platforms, SMS, WeChat, or other electronic means shall be deemed to have been served on the date when the senders corresponding system shows successful delivery.
Where Party A notifies Party B of assignment of debts or collects funds from Party B via the announcement on the public media, the announcing date shall be regarded as the service date.
Where either party changes own contact address, email, fax number, mobile phone number or WeChat account, it shall notify the other party within five working days from the date of change, or the other party shall be entitled to send the documents as per the original contact address or information. Where the service fails due to change in contact address or contact information, the returning date or seven days after posting (whichever is earlier) shall be regarded as the service date. The changing Party shall assume the possible losses resulted therefrom, and the legal validity of service shall not be prejudiced.
12.3.2 The foregoing contact address, email address, fax number, mobile phone number, and WeChat ID of the Parties listed herein shall be used as their respective address for service of notary documents and judicial documents (including but not limited to the indictment/arbitration application, evidence, subpoena, notice of appearance, notice of adducing evidence, notice of court session, notice of hearing, written judgment/arbitration award, written verdict, mediation agreement, notice of time-limited performance, and legal instruments at the hearing and execution stages). Such documents shall be deemed to have been served when the court or the notary office has delivered them in written form to the address prescribed herein (refer to the preceding paragraph 12.3.1 for specific service provisions).
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12.4 The Parties agree that for business applications under the trade financing business, Party B shall stamp the reserved seal according to the Seal Card provided by it to Party A on such applications, and the Parties shall recognize the validity of the seal. Party B may submit all business applications to Party A by fax with a payment password in accordance with the Authorization and Compensation Guarantee Concerning Verified Fax Instructions signed with Party A. The Parties acknowledge that the business applications submitted by fax with a payment password shall be equally authentic as those submitted in written form.
12.5 Special Terms on Business of Derivatives Transaction
12.5.1 The derivatives transaction operated by Party A upon Party Bs application may occupy the line of credit in accordance with a certain percentage of transactions nominal principal/transaction amount, or in the case of floating loss of derivatives transaction, Party A may increase Party Bs line of credit occupied by the transaction as per the concrete stipulations made by and between the Parties (When each transaction occurs concretely, Party A determines the concretely occupied amount of line of credit as per the variety, term, risk level, risk degree coefficient of the business corresponding to the deducted line of credit, etc.). The actually occupied amount of line of credit shall be subject to the transaction files issued by Party A, such as notice of occupying of line of credit and/or transaction confirmation letter/letter of confirmation, etc.
12.5.2 The derivatives transaction with balance or suffering from loss during the credit period shall occupy the line of credit as per the preceding clause regardless of whether the transaction date is within the credit period.
12.6 The Parties hereto acknowledge that where Party B submits an online credit granting application or a business voucher through Party As E-platform (including but not limited to enterprise banking/enterprise App), an electronic signature produced in the form of digital certificate shall be deemed as Party Bs valid stamp and signature substantiating Party Bs true intention. Party A shall rely on the application information submitted on the online banking system to produce and issue relevant certificates. Party B shall admit the truthfulness, accuracy and legality of, and agree to be bound by, these certificates.
12.7 The written supplementary agreement with respect to any outstanding matter not covered herein and changes hereto reached and concluded by the Parties through consultation and the specific documents hereunder shall constitute an integral part of the Agreement.
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12.8 For the convenience of businesses, all operations of Party A involved in the transaction (including but not limited to accepting the application, auditing the materials, granting loan, confirming transaction, withholding money, query, printing receipt, collecting, deducting and recalling funds, etc. and various notifications) may be processed by any outlets of Party A, and these outlets may generate, sign off or issue related letters. The business operations and letters of the outlets of Party A shall be regarded as made by Party A and shall be binding upon Party B.
12.9 The appendixes hereto (if any) shall constitute integral parts hereof and be automatically applicable to the specific business that actually occurs between the Parties.
12.10. The Agreement may be modified or terminated upon consultation and consensus by both Parties. The Agreement shall remain in force before the conclusion of a written agreement. Neither Party shall unilaterally modify, alter or terminate the Agreement without the consent of the other Party.
Article 13 Governing Law and Dispute Resolution
13.1 The conclusion, interpretation and dispute resolution of the Agreement shall be governed by the laws of the Peoples Republic of China (for the purpose of the Agreement, excluding the laws and regulations of Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan Region, the same as below) and the rights and interests of the Parties shall be protected by the laws of the Peoples Republic of China.
13.2 The disputes arising from performance of the Agreement between the Parties shall be settled through consultation. If no agreement can be reached through such consultation, either Party may (please tick Ö in ☐ among any of the following three options):
☐ 13.2.1 Institute legal proceedings to a competent peoples court;
☐ 13.2.2 Bring a lawsuit to a competent peoples court at the place where the Agreement is signed; The Agreement is signed and concluded at / ;
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☑ 13.2.3 Apply to China International Economic and Trade Arbitration Commission for arbitration in Beijing.
13.3 Party A may, in order to recover Party Bs debts, directly apply to a competent peoples court for enforcement of the debts owed by Party B under the Agreement and the concrete business documents to which a notary public has legally granted the effectiveness of forcible execution upon application by the Parties.
Article 14 Effectiveness
The Agreement shall take effect as of the date of Party As special seal for contract and the signature of Party B authorized signatory, and shall automatically become null and void on the date when all debts owed by Party B to Party A and all other related expenses are paid off.
Article 15 Supplementary Provisions
The Agreement is made in duplicate, with one copy for Party A and Party B and / , and each being equally authentic.
Special Reminder:
All terms hereof have been fully consulted by the Parties. Party B has been reminded by Party A to pay special attention to and make full and good understanding of the terms with regard to the exemption or limitation on Party As liabilities, the rights owned by Party A unilaterally, the increase of Party Bs liabilities, and the limitation on Party Bs rights. Party A has explained the above terms as required by Party B. The Parties hereto have the same understanding of the terms of the Agreement.
(The remainder of this page is intentionally left blank)
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(This is the signature page of the Offshore Credit Agreement numbered 2020 Offshore No. 091502)
Party A: China Merchants Bank Co., Ltd.
Authorized Signatory (signature): /s/ China Merchants Bank Co., Ltd.
Date of Signing: December 4, 2020 |
Party B: Changyou.com HK Limited
Authorized Signatory (signature):/s/ Tsan Hing HUI
Date of Signing: December 4, 2020 | ||
Place of Signing: China |
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Exhibit 4.89
Version August 2018
Appendix 6
Pledge Agreement
(Applicable to Counter Guarantee Under Bank Guarantee)
No.: 2020 Asian Games Village External Guarantee Cooperation Agreement No. 016- Pledge 01
Pledgee: Beijing Branch of China Merchants Bank Co., Ltd. (hereinafter referred to as Party A)
Person in charge: Kai XIONG
Pledgor: Beijing AmazGame Age Internet Technology Co., Ltd. (hereinafter referred to as Party B)
Legal representative/Principal in charge: Xiaojian HONG
or
Pledgor: /
ID Card No.: /
Whereas,
1. According to the application of Party B (also as the Client), Party A signed and entered into the Guarantee Cooperation Agreement with 2020 Asian Games Village External Guarantee Cooperation Agreement No. 016 (hereinafter referred to as the Master Agreement) with Party B on December 21, 2020. Or
Upon application of / (also the Client), Party A signed and entered into the Guarantee Cooperation Agreement with No.: / (hereinafter referred to as the Master Agreement) with the Client on / .
2. According to the Master Agreement, Party B or the Client has submitted the Application to Issue an Irrevocable Guarantee letter/Standby Letter of Credit with 2020 Asian Games Village External Guarantee Cooperation Agreement No. 016 (hereinafter referred to as the application) to Party A, and the aforesaid application shall constitute an integral part of the Master Agreement.
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Party A hereby agrees to issue a guarantee letter with No.110LG2000016(hereinafter referred to as the guarantee letter) to the Offshore Financial Center of China Merchants Bank Co., Ltd. (hereinafter referred to as the beneficiary) in respect of the issuance of the financing guarantee letter, and shall bear the guarantee liability within the limit of USD 216.55 million .
In order to ensure Party B (or the Client) to timely repay all debts owed to Party A in full under the Master Agreement and the application, Party B is willing to take the property or rights it owns or has the right to dispose of in accordance with law as the pledge; as reviewed, Party A agrees Party B to take the property or right it owns or has the right to dispose of in accordance with law as the pledge; Party A and Party B have reached agreements on the following terms through equal consultation in accordance with relevant laws and regulations, and hereby make and enter into the Agreement:
Article 1 Pledge used by Party B for Pledging
S.N. |
Description |
Qty. | Value | Right (Ownership) No. | Certificate of Ownership | |||||
1 | fixed certificates of deposit | One | RMB 300 million | 11090274708200103 | self-owned | |||||
2 | fixed certificates of deposi | One | RMB 300 million | 11090274708200093 | self-owned | |||||
3 | fixed certificates of deposi | One | RMB 400 million | 11090274708200080 | self-owned | |||||
4 | fixed certificates of deposi | One | RMB 400 million | 11090274708200076 | self-owned |
(Columns and contents may be added or adjusted in accordance with the actual situation of pledges)
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Article 2 Scope of Pledge Guarantee
The guarantee scope of the Agreement covers all the payments made by Party B (or the Client) to Party A in accordance with the Master Agreement and the application, including but not limited to the principal, interest, penalty, compound interest, liquidated damages and the cost to realize the pledge right (including but not limited to litigation costs, arbitration fees, lawyers fees and other related expenses paid by Party A to realize the creditors right or pledge right, as well as the indemnification and/or compensation liability and related expenses incurred by Party As refusal to make the compensation) paid by Party A to the beneficiary for Party B (or the Client) to take payment liability under the guarantee letter, and related expenses such as the guarantee fees that Party B (or the Client) shall pay to Party A in accordance with the Master Agreement and the application. Before the expiration of the debt performance period specified in the Master Agreement and the application, Party B shall also undertake the guarantee liability with the pledge if Party A recovers to Party B (or the Client) ahead of the deadline in accordance with the provisions of the Master Agreement and the application.
If Party A and Party B (or the Client) agree on the extension of the debt performance period, interest rate and amount under the Master Agreement and the application or on the modification of relevant terms, or Party A adjusts the rate in accordance with the provisions of the Master Agreement and the application, the consent of or notice to Party B is not required and Party B shall recognize it, which shall not affect Party Bs pledge guarantee liability hereunder.
Article 3 Independent Agreement
The pledge guarantee is independent without being affected by the effectiveness of the Master Agreement and the application, the guarantee issued by a third party for Party B (or the Client), or any agreement or document signed with any entity. It shall not change due to the fraud, reorganization, acquisition, suspension, dissolution, liquidation, bankruptcy and other changes of Party B (or the Client), or be affected by any time of grace and extension granted to Party B (or the Client) by Party A or postponement of exercising the right to recover Party Bs (or the Clients) arrears by Party A in accordance with the relevant agreements.
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In the case that Party As creditors rights have mortgage, pledge guarantee or guarantor otherwise at the same time, Party A shall have the right to claim guarantee rights to each mortgagor/pledgor (including Party B) and guarantor respectively, successively or at the same time; Party Bs guarantee liability hereunder shall not be affected if Party A waivers its place in the order of mortgage rights, waives, changes or cancels other mortgage and pledge guarantees, changes or relieves the guarantors guarantee responsibility, or delays to claim its rights to any other mortgagor/pledgor/guarantor, and Party B is still obliged to bear the pledge guarantee liability for Party A as agreed herein.
Article 4 Party B fully accepts and recognizes the contents of the guarantee letter issued by Party A to the beneficiary, and agrees that Party A shall handle all matters under the guarantee letter in accordance with relevant regulations and international practices; during the validity period of the guarantee letter, any supplementary agreement reached by Party A and the client or the beneficiary on the extension of the validity period or any other matters, or the adjustment of interest rate by Party A in accordance with the provisions of the Master Agreement during the performance period of the debts under the Master Agreement shall not affect Party Bs pledge guarantee liability. Party B shall ratify it and Party A does not need to inform Party B, which does not affect Party Bs pledge guarantee liability hereunder.
Article 5 Transfer and Delivery of Pledge/Pledge Registration:
5.1 If the pledge hereunder is movable property, Party B shall hand over the pledge to Party A for possession on the signature date of the Agreement.
If the pledge is stored at a third party other than Party B, Party B shall issue a pledge notice to the third party on the signature date of the Agreement. The pledge shall be deemed to be handed over to Party A for possession when the pledge notice is delivered to the third party.
If Party B provides pledge for the business hereunder with the margin, Party B shall deposit the agreed margin to the account opened at Party A as required (Margin account No.: / ; or it shall be subject to the account number automatically generated by Party As system at the time of margin depositing), which shall be deemed to specialize the fund in the form of margin and hand it over to Party A for possession as the guarantee for the debts of Party B (or the Debtor) under the Master Agreement.
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5.2 If the pledge is a title hereunder, Party B shall deliver the certificate of title to Party A on the signature date of the Agreement, and make corresponding records on the certificate of title. Party A shall keep the certificate of title properly. In case of loss of the certificate of title due to improper storage, Party A shall bear the cost of certificate reissuance.
If Party B fails to hand over or deliver the pledge in time, it shall be liable for the losses suffered by Party A therefrom.
5.3 If the pledge hereunder must be registered in accordance with law for the establishment of its pledge right, Party B shall cooperate with Party A for pledge registration at the corresponding registration management institutions with the Agreement and relevant materials within the period required by Party A.
5.4 Party B shall actively support Party A in handling the relevant procedures in accordance with the above provisions in the principle of good faith, and Party B shall inform Party A in time of the change of registration information such as legal person information and company name or objection registration. If the registration becomes invalid as the relevant procedures are not completed in time or the registration information change are not informed due to the reason of Party B, Party B shall be liable for the losses suffered by Party A therefrom.
Article 6 Pledge Period
The pledge period is from the effective date of the Agreement to the expiration of the limitation of actions for the creditors right of the principal and interest of advance payment paid by Party A for Party B (or the Client) to the beneficiary under the Master Agreement and the guarantee letter, and other creditors right under the Master Agreement.
Article 7 Storage and Responsibility of Pledge:
7.1 During the pledge period, Party A shall keep the pledge properly. Party A shall assume civil liabilities for the loss or damage to the pledge resulted from improper storage;
7.2 If Party A fails to keep the pledge properly, causing possible loss or damage to the pledge, Party B may request Party A to withdraw and deposit the pledge, or request to pay off the debts and have the pledge returned.
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Article 8 Collection of Fructus
Party A shall enjoy the pledge right to the fructus of the pledge and collect the fructus of the pledge.
Article 9 Expenses Bearing
Where the Agreement involves notarization (except for mandatory notarization) or other matters of entrusting a third party to provide services, all relevant costs and expenses incurred therefrom shall be borne by the entrusting party. If the Parties jointly act as the Client, each shall bear 50% of such costs and expenses.
Article 10 During the validity period of the Agreement, if there is possibility of damage to the pledge or obvious reduction to its value, which may harm the rights of Party A, Party A may require Party B to provide guarantee accordingly; if Party B fails to provide, Party A shall have the right to auction or sell the pledge before expiration and deposit the proceeds into the margin account as the guarantee for the debts under the Master Agreement.
If Party B conceals the existence of co-ownership, dispute or the situation that Party B has no ownership or disposition right to the pledge, Party A can require Party B to provide a new guarantee. If Party B fails to provide a new guarantee as required by Party A, it shall bear the liquidated damages of / % of the amount of guarantee letter under the Master Agreement. Party B shall compensate Party A for any and all economic losses caused to Party A arising therefrom.
Article 11 During the validity period of the Agreement, in case of division or merger of Party B, the changed organization shall undertake or separately undertake the obligations hereunder; if Party B is declared to be dissolved or bankrupt, Party A shall have the right to dispose of the pledge before the expiration.
Article 12 If the pledge hereunder is the certificate of title (including but not limited to bills, bonds, certificates of deposit, warrants, bills of lading, etc.) or a financial product, and the maturity date of the certificate of title or financial product is earlier than that of the debts under the Master Agreement, Party A shall have the right to cash or withdraw for realization when the certificate of title or financial product matures, and deposit the recovered money into the margin account opened by Party B at Party A. Such funds shall be deemed to be specialized and transferred to Party A for possession from the date of entering into the margin account and continue to act as the pledge guarantee for the debts of Party B (or the Client) under the Master Agreement and the application. Or Party A negotiate with Party B to withdraw the goods under the certificate of title and deposit. Party B has no objection thereto and shall cooperate with Party A for relevant procedures.
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If the pledge hereunder is a deposit certificate, the validity of the pledge shall not be affected by the change of the number, amount or term of the deposit certificate caused by the automatic transfer of the deposit certificate, partial early repayment, change of term, inquiring, freezing and deduction by the competent authority during the pledge period. As a continuation of the original deposit certificate, the changed deposit certificate will continue to provide pledge guarantee for the debts under the Master Agreement and the application.
If the maturity date of relevant title certificate or financial product is later than that of debts under the Master Agreement and the application, Party A shall have the right to withdraw relevant funds, cash relevant bills or auction/sell off relevant goods before the expiration, and pay off the debts of Party B (or the Debtor) under the Master Agreement and the application with the recovered money. The losses of interest or income and expenses arising therefrom shall be borne by Party B at its own expenses.
If the pledge hereunder is a deposit certificate or warrant, and the maturity date of the deposit certificate or warrant is later than that of debts under the Master Agreement and the application, Party A shall have the right to withdraw the relevant funds or auction/sell off the relevant goods before the expiration, and pay off the debts of Party B (or the Client) under the Master Agreement and the application with the recovered money.
If the pledge hereunder is the margin, the margin can be deposited into the margin account in full at one time or one by one as required by Party A from time to time in accordance with the business situation as the guarantee for the debts under the Master Agreement and the application. Party B confirms that the deposit/deduction of margin in the same margin account from time to time and Party As partial release of the margin in accordance with Party Bs application will not affect the specialization of the margin. The deposit/deduction of a single margin and its corresponding relationship with the principal creditors rights guaranteed by the margin shall be subject to the business information/record kept by Party A. Party B recognizes the authenticity, accuracy and legality of such business information/records.
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Article 13 In case of any of the following circumstances, Party A may dispose of the pledge in accordance with law:
13.1 After Party A undertakes the payment liability under the guarantee letter, the principal and interest of Party As advance fail to be recovered in time as Party B or the Client fails to pay sufficient margin in accordance with the Master Agreement and the application, or the balance of the deposit account is insufficient or frozen or deducted by the judicial authorities;
13.2 Party B or the Clients business premises are seized or closed down by judicial or administrative authorities; or stop operation for more than 2 months without proper reasons, the business license is cancelled or revoked;
13.3 Party B or the Client is declared dissolved or bankrupt;
13.4 Party B, as a natural person, dies without any successor or bequest, or his/her successor or bequest waives the inheritance or legacy and refuses to perform the Agreement;
13.5 The causes specified in Article 11 and 12 herein occur;
13.6 Other causes endangering the performance of the Master Agreement.
Article 14 Realization of Pledge Right
If Party B or the Client has deposited sufficient margin or the balance of its deposit account is sufficient as stipulated in the Master Agreement to enable Party A to undertake the payment liability under the guarantee letter without making advance payments; or after Party A advances, Party B or the Client raises sufficient funds to pay off the principal and interest of Party As advance and all other relevant expenses, the pledge right shall extinct, and Party A shall return the pledge.
In case of any of the circumstances specified in Articles 10, 11 and 13 of the Agreement, Party A may negotiate with Party B to discount, auction or sell off the pledge to repay the principal and interest of Party As advances and all other relevant expenses, or deposit into the margin account opened by Party B at Party A for payment of the amount payable under the guarantee letter. Such funds shall be deemed to be specialized and transferred to Party A for possession from the date of entering into the margin account as the pledge guarantee for the debts under the guarantee agreement.
After the pledge is discounted, auctioned or sold off, the part of its price exceeding the principal and interest of Party As advance and all other relevant expenses shall belong to Party B; if it is insufficient, Party A shall claim compensation separately.
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Article 15 Modification and Termination of the Agreement
Neither Party shall change or rescind the Agreement without the consent of the other Party after the Agreement becomes effective. If the Agreement needs to be changed or rescinded, it shall be changed or rescinded in written agreement through consultation between the Parties hereto. The terms hereof shall not be invalidated until such agreement is reached.
Article 16 Notices
16.1 The notices, requests, or other documents given under the Agreement shall be made by the Parties in written forms (including but not limited to by correspondence, fax, email, Party As online banking, SMS, or WeChat).
Contact Address of Party A: 7/F, Tower D, Global Trade Center, 36 Beisanhuandong Lu, Dongcheng District, Beijing
Email: synthesis@cmbchina.com Fax No.: /
Mobile Phone No. of Contact Person: 17600355610 WeChat ID: /
Contact Address of Party B: Room 1007, 10/F, Building 3 of South Main Building, No.65 Courtyard, Bajiaodong Street, Shijingshan District, Beijing
Email: zhangjingjing@cyou-inc.com Fax No.: /
Mobile Phone No. of Contact Person: 13511091262 Company WeChat ID: / (Party B shall leave the email/WeChat account of the entity when it is an entity, and leave the email/WeChat account of the individual when it is an individual)
16.2 Any notice, request, or other document that is delivered by a specially assigned person (including but not limited to by a lawyer, notary, or courier) shall be deemed to have been served when the recipient signs on it (if the recipient refuses to accept it, it shall be deemed to have been served seven days after the date of rejection, return, or delivery (whichever is earlier)). Any notice, request, or other document that is delivered by postal service shall be deemed to have been served seven days after the date of posting. Any notice, request, or other document that is delivered by fax, email, Party As E-bank notice, SMS, WeChat, or other electronic means shall be deemed to have been served on the date when the Party As corresponding system shows successful delivery.
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Where Party A notifies Party B of assignment of debts or collects funds from Party B via the announcement on the public media, the announcing date shall be regarded as the service date.
In case of change to either Partys contact address, email, fax number, mobile phone number or WeChat account, it shall notify the other Party within five working days as from the date of such change. Otherwise, the other Party shall have the right to use the original contact address or information. Where the service fails due to change in contact address, the returning date or seven days after posting (whichever is earlier) shall be regarded as the service date. The changing Party shall assume the possible losses resulted therefrom, and the legal validity of service shall not be prejudiced.
16.3 The foregoing contact address, email address, fax number, mobile phone number, and WeChat ID of the Parties listed herein shall be used as Party Bs address for service of notary documents and judicial documents (including but not limited to the indictment/arbitration application, evidence, subpoena, notice of appearance, notice of adducing evidence, notice of court session, notice of hearing, written judgment/arbitration award, written verdict, mediation agreement, notice of time-limited performance, and legal instruments at the hearing and execution stages). Such documents shall be deemed to have been served when the court or the notary office has delivered them in written form to the address prescribed herein (refer to the preceding paragraph 17.2. for specific service provisions).
Article 17 Terms and Expressions
Unless otherwise expressly stated, the terms and expressions referred to herein shall have the same meaning as those in the Master Agreement.
Article 18 Non-waiver
During the term hereof, Party As tolerant, postponed or delayed exercise of its interests or rights under the Master Agreement or the Agreement for any default or delay of the Debtor and Party B shall not impair, impact, or restrict any and all rights and interests that Party A is entitled to as a creditor in accordance with the relevant laws and regulations and the Agreement, nor shall it be deemed as Party As permission or acceptance of any breach of the Agreement or be deemed as Party As waiver of its right to take actions against existing or future defaults.
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Article 19 Disputes Resolution
The disputes arising out of the performance of the Agreement between the Parties shall be settled through consultation. If no agreement can be reached through such consultation, it is agreed by the Parties hereto to solve it as per the dispute resolution method stipulated in the Master Agreement.
Article 20 Effectiveness of Pledge Agreement
The Agreement shall come into force from the date when the legal representatives/principal persons in charge of both Parties or their authorized agents sign/seal and affix their official seals/special seals for Agreements (if Party B is a natural person, the Agreement shall come into force from the date when Party As legal representative/principal person in charge or their authorized agent signs/seals and affix the official seal/special seal for Agreements and Party B signs) and expire on the date when all the principal and interest of Party As advances under the Master Agreement and the guarantee letter and all other related expenses are paid off.
Article 21 Other Supplementary Terms
21.1 Party B confirms that all operations of Party A in handling specific business for Party B (or the Debtor) and Party As operations related to the Agreement can be handled at any branch of Party A, and relevant correspondence can be generated, signed or issued. The business operation and correspondence of the branches of Party A shall be deemed as acts of Party A and shall be binding on both Parties.
21.2 If the debt under the Master Agreement is not in RMB, Party A shall have the right to directly use the amount recovered as agreed herein to purchase foreign exchange/make foreign exchange transactions at the exchange rate announced by Party A at the time of settlement, so as to pay off the debts under the Master Agreement. The calculation of non-Renminbi debt amount under the Master Agreement shall be subject to the converted amount at the exchange rate (purchase price) announced by Party A at the time of settlement.
21.3 |
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Article 22 Supplementary Provisions
The Agreement is made in duplicate, with Party A, Party B, / and / holding each.
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Special Reminder:
All terms hereof have been fully consulted by the Parties. The other Parties have been reminded by the Bank to pay special attention to and make full and good understanding of the terms with regard to the exemption or limitation on the Banks liabilities, the rights owned by the Bank unilaterally, the increase of the other Parties liabilities, and the limitation on the other Parties rights. The Bank has explained the above terms as required by the other Parties concerned the other Parties. The Parties hereto have the same understanding of the terms of the Agreement.
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(This is a signature page)
Party A: Beijing Branch of China Merchants Bank Co., Ltd.
Principal or authorized agent (signature/stamped name seal): /s/ Kai XIONG
Please sign below if the Pledger is concurrently a legal person:
Party B: Beijing AmazGame Age Internet Technology Co., Ltd.
Legal representative/principal or authorized agent (signature/stamped name seal): /s/ Xiaojian HONG
Please sign below if the Pledger is concurrently a natural person:
Party B (signature)
ID Card No.:
Date of Signing: December 28, 2020
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Exhibit 4.90
Version August 2018
Appendix 6
Pledge Agreement
(Applicable to Counter Guarantee Under Bank Guarantee)
No.: 2020 Asian Games Village External Guarantee Cooperation Agreement No. 017- Pledge 01
Pledgee: Beijing Branch of China Merchants Bank Co., Ltd. (hereinafter referred to as Party A)
Person in charge: Kai XIONG
Pledgor: Beijing AmazGame Age Internet Technology Co., Ltd. (hereinafter referred to as Party B)
Legal representative/Principal in charge: Xiaojian HONG
or
Pledgor: /
ID Card No.: /
Whereas,
1. According to the application of Party B (also as the Client), Party A signed and entered into the Guarantee Cooperation Agreement with 2020 Asian Games Village External Guarantee Cooperation Agreement No. 017 (hereinafter referred to as the Master Agreement) with Party B on January 6, 2021. Or
Upon application of / (also the Client), Party A signed and entered into the Guarantee Cooperation Agreement with No.: / (hereinafter referred to as the Master Agreement) with the Client on / .
2. According to the Master Agreement, Party B or the Client has submitted the Application to Issue an Irrevocable Guarantee letter/Standby Letter of Credit with 2020 Asian Games Village External Guarantee Cooperation Agreement No. 017 (hereinafter referred to as the application) to Party A, and the aforesaid application shall constitute an integral part of the Master Agreement.
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Party A hereby agrees to issue a guarantee letter with No. 110LG2100001_(hereinafter referred to as the guarantee letter) to the Offshore Financial Center of China Merchants Bank Co., Ltd. (hereinafter referred to as the beneficiary) in respect of the issuance of the financing guarantee letter, and shall bear the guarantee liability within the limit of USD153.45 million .
In order to ensure Party B (or the Client) to timely repay all debts owed to Party A in full under the Master Agreement and the application, Party B is willing to take the property or rights it owns or has the right to dispose of in accordance with law as the pledge; as reviewed, Party A agrees Party B to take the property or right it owns or has the right to dispose of in accordance with law as the pledge; Party A and Party B have reached agreements on the following terms through equal consultation in accordance with relevant laws and regulations, and hereby make and enter into the Agreement:
Article 1 Pledge used by Party B for Pledging
S.N. |
Description |
Qty. | Value | Right (Ownership) No. | Certificate of Ownership | |||||
1 | fixed certificates of deposit | One | RMB 300 million | 11090274708200120 | self-owned | |||||
2 | fixed certificates of deposit | One | RMB 300 million | 11090274708200134 | self-owned | |||||
3 | fixed certificates of deposit | One | RMB 400 million | 11090274708200117 | self-owned |
(Columns and contents may be added or adjusted in accordance with the actual situation of pledges)
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Article 2 Scope of Pledge Guarantee
The guarantee scope of the Agreement covers all the payments made by Party B (or the Client) to Party A in accordance with the Master Agreement and the application, including but not limited to the principal, interest, penalty, compound interest, liquidated damages and the cost to realize the pledge right (including but not limited to litigation costs, arbitration fees, lawyers fees and other related expenses paid by Party A to realize the creditors right or pledge right, as well as the indemnification and/or compensation liability and related expenses incurred by Party As refusal to make the compensation) paid by Party A to the beneficiary for Party B (or the Client) to take payment liability under the guarantee letter, and related expenses such as the guarantee fees that Party B (or the Client) shall pay to Party A in accordance with the Master Agreement and the application. Before the expiration of the debt performance period specified in the Master Agreement and the application, Party B shall also undertake the guarantee liability with the pledge if Party A recovers to Party B (or the Client) ahead of the deadline in accordance with the provisions of the Master Agreement and the application.
If Party A and Party B (or the Client) agree on the extension of the debt performance period, interest rate and amount under the Master Agreement and the application or on the modification of relevant terms, or Party A adjusts the rate in accordance with the provisions of the Master Agreement and the application, the consent of or notice to Party B is not required and Party B shall recognize it, which shall not affect Party Bs pledge guarantee liability hereunder.
Article 3 Independent Agreement
The pledge guarantee is independent without being affected by the effectiveness of the Master Agreement and the application, the guarantee issued by a third party for Party B (or the Client), or any agreement or document signed with any entity. It shall not change due to the fraud, reorganization, acquisition, suspension, dissolution, liquidation, bankruptcy and other changes of Party B (or the Client), or be affected by any time of grace and extension granted to Party B (or the Client) by Party A or postponement of exercising the right to recover Party Bs (or the Clients) arrears by Party A in accordance with the relevant agreements.
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In the case that Party As creditors rights have mortgage, pledge guarantee or guarantor otherwise at the same time, Party A shall have the right to claim guarantee rights to each mortgagor/pledgor (including Party B) and guarantor respectively, successively or at the same time; Party Bs guarantee liability hereunder shall not be affected if Party A waivers its place in the order of mortgage rights, waives, changes or cancels other mortgage and pledge guarantees, changes or relieves the guarantors guarantee responsibility, or delays to claim its rights to any other mortgagor/pledgor/guarantor, and Party B is still obliged to bear the pledge guarantee liability for Party A as agreed herein.
Article 4 Party B fully accepts and recognizes the contents of the guarantee letter issued by Party A to the beneficiary, and agrees that Party A shall handle all matters under the guarantee letter in accordance with relevant regulations and international practices; during the validity period of the guarantee letter, any supplementary agreement reached by Party A and the client or the beneficiary on the extension of the validity period or any other matters, or the adjustment of interest rate by Party A in accordance with the provisions of the Master Agreement during the performance period of the debts under the Master Agreement shall not affect Party Bs pledge guarantee liability. Party B shall ratify it and Party A does not need to inform Party B, which does not affect Party Bs pledge guarantee liability hereunder.
Article 5 Transfer and Delivery of Pledge/Pledge Registration:
5.1 If the pledge hereunder is movable property, Party B shall hand over the pledge to Party A for possession on the signature date of the Agreement.
If the pledge is stored at a third party other than Party B, Party B shall issue a pledge notice to the third party on the signature date of the Agreement. The pledge shall be deemed to be handed over to Party A for possession when the pledge notice is delivered to the third party.
If Party B provides pledge for the business hereunder with the margin, Party B shall deposit the agreed margin to the account opened at Party A as required (Margin account No.: / ; or it shall be subject to the account number automatically generated by Party As system at the time of margin depositing), which shall be deemed to specialize the fund in the form of margin and hand it over to Party A for possession as the guarantee for the debts of Party B (or the Debtor) under the Master Agreement.
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5.2 If the pledge is a title hereunder, Party B shall deliver the certificate of title to Party A on the signature date of the Agreement, and make corresponding records on the certificate of title. Party A shall keep the certificate of title properly. In case of loss of the certificate of title due to improper storage, Party A shall bear the cost of certificate reissuance.
If Party B fails to hand over or deliver the pledge in time, it shall be liable for the losses suffered by Party A therefrom.
5.3 If the pledge hereunder must be registered in accordance with law for the establishment of its pledge right, Party B shall cooperate with Party A for pledge registration at the corresponding registration management institutions with the Agreement and relevant materials within the period required by Party A.
5.4 Party B shall actively support Party A in handling the relevant procedures in accordance with the above provisions in the principle of good faith, and Party B shall inform Party A in time of the change of registration information such as legal person information and company name or objection registration. If the registration becomes invalid as the relevant procedures are not completed in time or the registration information change are not informed due to the reason of Party B, Party B shall be liable for the losses suffered by Party A therefrom.
Article 6 Pledge Period
The pledge period is from the effective date of the Agreement to the expiration of the limitation of actions for the creditors right of the principal and interest of advance payment paid by Party A for Party B (or the Client) to the beneficiary under the Master Agreement and the guarantee letter, and other creditors right under the Master Agreement.
Article 7 Storage and Responsibility of Pledge:
7.1 During the pledge period, Party A shall keep the pledge properly. Party A shall assume civil liabilities for the loss or damage to the pledge resulted from improper storage;
7.2 If Party A fails to keep the pledge properly, causing possible loss or damage to the pledge, Party B may request Party A to withdraw and deposit the pledge, or request to pay off the debts and have the pledge returned.
Article 8 Collection of Fructus
Party A shall enjoy the pledge right to the fructus of the pledge and collect the fructus of the pledge.
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Article 9 Expenses Bearing
Where the Agreement involves notarization (except for mandatory notarization) or other matters of entrusting a third party to provide services, all relevant costs and expenses incurred therefrom shall be borne by the entrusting party. If the Parties jointly act as the Client, each shall bear 50% of such costs and expenses.
Article 10 During the validity period of the Agreement, if there is possibility of damage to the pledge or obvious reduction to its value, which may harm the rights of Party A, Party A may require Party B to provide guarantee accordingly; if Party B fails to provide, Party A shall have the right to auction or sell the pledge before expiration and deposit the proceeds into the margin account as the guarantee for the debts under the Master Agreement.
If Party B conceals the existence of co-ownership, dispute or the situation that Party B has no ownership or disposition right to the pledge, Party A can require Party B to provide a new guarantee. If Party B fails to provide a new guarantee as required by Party A, it shall bear the liquidated damages of / % of the amount of guarantee letter under the Master Agreement. Party B shall compensate Party A for any and all economic losses caused to Party A arising therefrom.
Article 11 During the validity period of the Agreement, in case of division or merger of Party B, the changed organization shall undertake or separately undertake the obligations hereunder; if Party B is declared to be dissolved or bankrupt, Party A shall have the right to dispose of the pledge before the expiration.
Article 12 If the pledge hereunder is the certificate of title (including but not limited to bills, bonds, certificates of deposit, warrants, bills of lading, etc.) or a financial product, and the maturity date of the certificate of title or financial product is earlier than that of the debts under the Master Agreement, Party A shall have the right to cash or withdraw for realization when the certificate of title or financial product matures, and deposit the recovered money into the margin account opened by Party B at Party A. Such funds shall be deemed to be specialized and transferred to Party A for possession from the date of entering into the margin account and continue to act as the pledge guarantee for the debts of Party B (or the Client) under the Master Agreement and the application. Or Party A negotiate with Party B to withdraw the goods under the certificate of title and deposit. Party B has no objection thereto and shall cooperate with Party A for relevant procedures.
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If the pledge hereunder is a deposit certificate, the validity of the pledge shall not be affected by the change of the number, amount or term of the deposit certificate caused by the automatic transfer of the deposit certificate, partial early repayment, change of term, inquiring, freezing and deduction by the competent authority during the pledge period. As a continuation of the original deposit certificate, the changed deposit certificate will continue to provide pledge guarantee for the debts under the Master Agreement and the application.
If the maturity date of relevant title certificate or financial product is later than that of debts under the Master Agreement and the application, Party A shall have the right to withdraw relevant funds, cash relevant bills or auction/sell off relevant goods before the expiration, and pay off the debts of Party B (or the Debtor) under the Master Agreement and the application with the recovered money. The losses of interest or income and expenses arising therefrom shall be borne by Party B at its own expenses.
If the pledge hereunder is a deposit certificate or warrant, and the maturity date of the deposit certificate or warrant is later than that of debts under the Master Agreement and the application, Party A shall have the right to withdraw the relevant funds or auction/sell off the relevant goods before the expiration, and pay off the debts of Party B (or the Client) under the Master Agreement and the application with the recovered money.
If the pledge hereunder is the margin, the margin can be deposited into the margin account in full at one time or one by one as required by Party A from time to time in accordance with the business situation as the guarantee for the debts under the Master Agreement and the application. Party B confirms that the deposit/deduction of margin in the same margin account from time to time and Party As partial release of the margin in accordance with Party Bs application will not affect the specialization of the margin. The deposit/deduction of a single margin and its corresponding relationship with the principal creditors rights guaranteed by the margin shall be subject to the business information/record kept by Party A. Party B recognizes the authenticity, accuracy and legality of such business information/records.
Article 13 In case of any of the following circumstances, Party A may dispose of the pledge in accordance with law:
13.1 After Party A undertakes the payment liability under the guarantee letter, the principal and interest of Party As advance fail to be recovered in time as Party B or the Client fails to pay sufficient margin in accordance with the Master Agreement and the application, or the balance of the deposit account is insufficient or frozen or deducted by the judicial authorities;
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13.2 Party B or the Clients business premises are seized or closed down by judicial or administrative authorities; or stop operation for more than 2 months without proper reasons, the business license is cancelled or revoked;
13.3 Party B or the Client is declared dissolved or bankrupt;
13.4 Party B, as a natural person, dies without any successor or bequest, or his/her successor or bequest waives the inheritance or legacy and refuses to perform the Agreement;
13.5 The causes specified in Article 11 and 12 herein occur;
13.6 Other causes endangering the performance of the Master Agreement.
Article 14 Realization of Pledge Right
If Party B or the Client has deposited sufficient margin or the balance of its deposit account is sufficient as stipulated in the Master Agreement to enable Party A to undertake the payment liability under the guarantee letter without making advance payments; or after Party A advances, Party B or the Client raises sufficient funds to pay off the principal and interest of Party As advance and all other relevant expenses, the pledge right shall extinct, and Party A shall return the pledge.
In case of any of the circumstances specified in Articles 10, 11 and 13 of the Agreement, Party A may negotiate with Party B to discount, auction or sell off the pledge to repay the principal and interest of Party As advances and all other relevant expenses, or deposit into the margin account opened by Party B at Party A for payment of the amount payable under the guarantee letter. Such funds shall be deemed to be specialized and transferred to Party A for possession from the date of entering into the margin account as the pledge guarantee for the debts under the guarantee agreement.
After the pledge is discounted, auctioned or sold off, the part of its price exceeding the principal and interest of Party As advance and all other relevant expenses shall belong to Party B; if it is insufficient, Party A shall claim compensation separately.
Article 15 Modification and Termination of the Agreement
Neither Party shall change or rescind the Agreement without the consent of the other Party after the Agreement becomes effective. If the Agreement needs to be changed or rescinded, it shall be changed or rescinded in written agreement through consultation between the Parties hereto. The terms hereof shall not be invalidated until such agreement is reached.
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Article 16 Notices
16.1 The notices, requests, or other documents given under the Agreement shall be made by the Parties in written forms (including but not limited to by correspondence, fax, email, Party As online banking, SMS, or WeChat).
Contact Address of Party A: 7/F, Tower D, Global Trade Center, 36 Beisanhuandong Lu, Dongcheng District, Beijing
Email: synthesis@cmbchina.com Fax No.: /
Mobile Phone No. of Contact Person: 17600355610 WeChat ID: /
Contact Address of Party B: Room 1007, 10/F, Building 3 of South Main Building, No.65 Courtyard, Bajiaodong Street, Shijingshan District, Beijing
Email: zhangjingjing@cyou-inc.com Fax No.: /
Mobile Phone No. of Contact Person: 13511091262 Company WeChat ID: /
(Party B shall leave the email/WeChat account of the entity when it is an entity, and leave the email/WeChat account of the individual when it is an individual)
16.2 Any notice, request, or other document that is delivered by a specially assigned person (including but not limited to by a lawyer, notary, or courier) shall be deemed to have been served when the recipient signs on it (if the recipient refuses to accept it, it shall be deemed to have been served seven days after the date of rejection, return, or delivery (whichever is earlier)). Any notice, request, or other document that is delivered by postal service shall be deemed to have been served seven days after the date of posting. Any notice, request, or other document that is delivered by fax, email, Party As E-bank notice, SMS, WeChat, or other electronic means shall be deemed to have been served on the date when the Party As corresponding system shows successful delivery.
Where Party A notifies Party B of assignment of debts or collects funds from Party B via the announcement on the public media, the announcing date shall be regarded as the service date.
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In case of change to either Partys contact address, email, fax number, mobile phone number or WeChat account, it shall notify the other Party within five working days as from the date of such change. Otherwise, the other Party shall have the right to use the original contact address or information. Where the service fails due to change in contact address, the returning date or seven days after posting (whichever is earlier) shall be regarded as the service date. The changing Party shall assume the possible losses resulted therefrom, and the legal validity of service shall not be prejudiced.
16.3 The foregoing contact address, email address, fax number, mobile phone number, and WeChat ID of the Parties listed herein shall be used as Party Bs address for service of notary documents and judicial documents (including but not limited to the indictment/arbitration application, evidence, subpoena, notice of appearance, notice of adducing evidence, notice of court session, notice of hearing, written judgment/arbitration award, written verdict, mediation agreement, notice of time-limited performance, and legal instruments at the hearing and execution stages). Such documents shall be deemed to have been served when the court or the notary office has delivered them in written form to the address prescribed herein (refer to the preceding paragraph 17.2. for specific service provisions).
Article 17 Terms and Expressions
Unless otherwise expressly stated, the terms and expressions referred to herein shall have the same meaning as those in the Master Agreement.
Article 18 Non-waiver
During the term hereof, Party As tolerant, postponed or delayed exercise of its interests or rights under the Master Agreement or the Agreement for any default or delay of the Debtor and Party B shall not impair, impact, or restrict any and all rights and interests that Party A is entitled to as a creditor in accordance with the relevant laws and regulations and the Agreement, nor shall it be deemed as Party As permission or acceptance of any breach of the Agreement or be deemed as Party As waiver of its right to take actions against existing or future defaults.
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Article 19 Disputes Resolution
The disputes arising out of the performance of the Agreement between the Parties shall be settled through consultation. If no agreement can be reached through such consultation, it is agreed by the Parties hereto to solve it as per the dispute resolution method stipulated in the Master Agreement.
Article 20 Effectiveness of Pledge Agreement
The Agreement shall come into force from the date when the legal representatives/principal persons in charge of both Parties or their authorized agents sign/seal and affix their official seals/special seals for Agreements (if Party B is a natural person, the Agreement shall come into force from the date when Party As legal representative/principal person in charge or their authorized agent signs/seals and affix the official seal/special seal for Agreements and Party B signs) and expire on the date when all the principal and interest of Party As advances under the Master Agreement and the guarantee letter and all other related expenses are paid off.
Article 21 Other Supplementary Terms
21.1 Party B confirms that all operations of Party A in handling specific business for Party B (or the Debtor) and Party As operations related to the Agreement can be handled at any branch of Party A, and relevant correspondence can be generated, signed or issued. The business operation and correspondence of the branches of Party A shall be deemed as acts of Party A and shall be binding on both Parties.
21.2 If the debt under the Master Agreement is not in RMB, Party A shall have the right to directly use the amount recovered as agreed herein to purchase foreign exchange/make foreign exchange transactions at the exchange rate announced by Party A at the time of settlement, so as to pay off the debts under the Master Agreement. The calculation of non-RMB debt amount under the Master Agreement shall be subject to the converted amount at the exchange rate (purchase price) announced by Party A at the time of settlement.
21.3
Article 22 Supplementary Provisions
The Agreement is made in duplicate, with Party A, Party B, / and / holding each.
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Special Reminder:
All terms hereof have been fully consulted by the Parties. The other Parties have been reminded by the Bank to pay special attention to and make full and good understanding of the terms with regard to the exemption or limitation on the Banks liabilities, the rights owned by the Bank unilaterally, the increase of the other Parties liabilities, and the limitation on the other Parties rights. The Bank has explained the above terms as required by the other Parties concerned the other Parties. The Parties hereto have the same understanding of the terms of the Agreement.
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(This is a signature page)
Party A: Beijing Branch of China Merchants Bank Co., Ltd.
Principal or authorized agent (signature/stamped name seal): /s/ Kai XIONG
Please sign below if the Pledger is concurrently a legal person:
Party B: Beijing AmazGame Age Internet Technology Co., Ltd.
Legal representative/principal or authorized agent (signature/stamped name seal): /s/ Xiaojian HONG
Please sign below if the Pledger is concurrently a natural person:
Party B (signature)
ID Card No.:
Date of Signing: January 15, 2021
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Exhibit 4.91
February 2020 Beijing Branch Legal Review Version
Appendix 3
Maximum Mortgage Agreement
No.: 2020 Asian Games Village Credit Granting 1154-Pledge 01
Mortgagee: Beijing Branch of China Merchants Bank Co., Ltd. (hereinafter referred to as Party A)
Mortgagor: Beijing Sohu New Momentum Information Technology Co., Ltd. (hereinafter referred to as Party B)
Whereas Party A (or Party As subsidiary) has signed or will sign a Credit Agreement with No. 2020 Asian Games Village Credit Granting 1154 (hereinafter referred to as the Credit Agreement) with Party B or the Credit Applicant Beijing AmazGame Age Internet Technology Co., Ltd. (fill in the specific name), and agrees to provide the line of credit of USD (in words) 370 million (including the equivalent amount in other currencies)(hereinafter referred to as line of credit) to Party B (or the Credit Applicant) during the credit period (i.e. the determination period of creditors rights) as agreed in the Credit Agreement.
☐ According to the Credit Agreement, subsidiaries or/and other affiliated enterprises (including / company, / company and / company (as the case may be), hereinafter collectively referred to as designated enterprises of the Credit Applicant) as designated by the Credit Applicant can apply to your bank for financing as required by their business needs and such financing lines shall occupy the line of credits provided by your bank to the Credit Applicant. The available line of credit is / (currency) / yuan only. (please tick Ö in ☐ if this clause is applicable).
In order to guarantee that all debts owed to Party A by Party B (or the Credit Applicant and the enterprise designated by the Credit Applicant (if any) (the Credit Applicant and the enterprise designated by the Credit Applicant are hereinafter collectively referred to as Credit Applicant)) under the Credit Agreement can be repaid in full and in time, Party B is willing to use its property owned or legally entitled to be disposed of by it as mortgage. After examination, Party A agrees to accept the property owned or legally entitled to be disposed of by Party B as mortgage. Party A and Party B have hereby reached consensus on the following terms and have made and entered into the Agreement (the Agreement) through equal consultation in accordance with the relevant laws and regulations.
1. Mortgage Used by Party B for Mortgaging
S.N. |
Description |
Qty. or Area |
Address |
Evaluate value (RMB) |
Ownership No. |
Certificate | ||||||
1 | 301, 3/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,208.63m2 | 301, 3/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 114,655,098.46 | Beijing (2017) Haidian Real Property Right Certificate No. 0042996 | Real Property Right Certificate | ||||||
2 | 401, 4/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,280.31m2 | 401, 4/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 118,376,173.27 | Beijing (2017) Haidian Real Property Right Certificate No. 0043004 | Real Property Right Certificate | ||||||
3 | 501, 5/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,280.31m2 | 501, 5/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 118,376,173.27 | Beijing (2017) Haidian Real Property Right Certificate No. 0043000 | Real Property Right Certificate |
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4 | 601, 6/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,208.59m2 | 601, 6/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 114,653,021.97 | Beijing (2017) Haidian Real Property Right Certificate No. 0043001 | Real Property Right Certificate | ||||||
5 | 701, 7/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,280.31m2 | 701, 7/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 124,607,371.91 | Beijing (2017) Haidian Real Property Right Certificate No. 0043002 | Real Property Right Certificate | ||||||
6 | 801, 8/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,280.31m2 | 801, 8/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 124,608,348.44 | Beijing (2017) Haidian Real Property Right Certificate No. 0043003 | Real Property Right Certificate |
(Columns and contents can be added or adjusted in accordance with the actual situation of mortgage)
In case that Party B provides guarantee for the credit debt with movable property, when the market value of the mortgage during the mortgage period declines to less than _/_% of the principal of the total amount of the credit debt, Party B shall provide the margin as required by Party A (the margin account number shall be subject to that generated or recorded by Party As system at the time of deposit, the same below), or add/replace new mortgage/pledge to make up for the gap caused by the decline in the market value of the mortgage. Otherwise, Party A shall have the right to dispose of the mortgage as agreed herein in addition to deeming it as the event of default under the Credit Agreement and taking corresponding measures.
☐ Party B undertakes that if the mortgage is the right to use the land , the buildings built on the land subsequently will be mortgaged to Party A after obtaining the property right certificate and Party B shall cooperate with Party A for the mortgage registration at the corresponding mortgage registration institutions.
2. Scope of Mortgage Guarantee
2.1 The mortgage guarantee scope of the Agreement is the sum of the principal balance of the loan and other credits provided by Party A to Party B (or the Credit Applicant) within the line of credit in accordance with the Credit Agreement (the maximum amount is USD (in words) 370 million), as well as interest, penalty, compound interest, liquidated damages, delay penalty, factoring fee, the cost to realize mortgage and creditors rights and other related costs, including but not limited to:
2.1.1 The outstanding balance in the specific businesses under ___/_____(fill in the name of the agreements here) with No. ___ /____ between Party A (or Party As subsidiaries) and Party B (or the Credit Applicant);
2.1.2 The principal balance of loans issued by Party A in accordance with the specific business texts under the Credit Agreement and corresponding interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.3 The principal balance of the external payment made by Party A in the trade financing business under the Credit Agreement and corresponding interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.4 The creditors rights of accounts receivable, the corresponding overdue penalty (overdue fine) and delay penalty of Party B (or the Credit Applicant) transferred by Party A under the factoring business, and/or the basic purchase money (basic underwriting money) and relevant factoring fees paid by Party A with its own funds or other funds from legitimate sources to Party B (or the Credit Applicant);
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2.1.5 When Party A entrusts other branches of China Merchants Bank to transfer the letter of credit to the beneficiary after the letter of credit is issued by Party A upon the request of Party B (or the Credit Applicant), the advance payment made by Party A for Party B (or the Credit Applicant) to perform the obligations of the issuing bank under the letter of credit, and the debt principal balance of import bill advance and delivery against bank guarantee incurred from the letter of credit issuance and interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.6 All debts of Party B (or the Credit Applicant) to Party A under derivatives trading business, gold leasing and other businesses;
2.1.7 When Party A handles cross-border linkage trade financing business for Party B (or the Credit Applicant) such as handling entrusted letter of credit, entrusted overseas financing or cross-border trade one-stop service under the Credit Agreement, bill advances or advance payments (whether occurred during the credit period or not) made to return the linkage platform financing as agreed in specific business text and interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.8 The principal balance of advanced payment made by Party A for Party B (or the Credit Applicant) to perform its payment obligation of commercial draft, letter of credit, guarantee letter/customs tax payment guarantee/bill guarantee, delivery guarantee letter under the Credit Agreement and interest, penalty, compound interest, liquidated damages and delay penalty, as well as the debts of Party B (or the Credit Applicant) to Party A generated from providing discount guarantee for commercial bills accepted by Party B (or the Credit Applicant);
2.1.9 Expenses incurred by Party A in recovering debts from Party B (or the Credit Applicant) and realizing mortgage right (including but not limited to litigation fees, attorney fees, announcement fees, service fees, travel expenses, etc.), as well as all other relevant expenses.
2.1.10 Special Provisions for Secondary Mortgage (Please check Ö in ☐ if applicable)
☐ Party A (or Party As subsidiary, i.e., China Merchants Bank Co., Ltd. Beijing___ /____) and Party B (or the Credit Applicant) signed the Credit Agreement with No. ___ /____ originally (i.e., the original Credit Agreement). Since the mortgage registration under __/____ (name of the newly signed agreement) with No. ___ /____ is completed, the outstanding balance of the specific business under the original Credit Agreement (see Appendix 1 for the list of specific outstanding business) will be automatically incorporated into the Agreement and directly occupy the line of credit hereunder.
2.2 With regard to the revolving line of credit, if the principal balance of the loan or other credit provided by Party A to Party B (or the Credit Applicant) exceeds the amount of the line of credit, Party B shall not take guarantee liability for the part of credit principal balance exceeding the line of credit amount, but only take guarantee liability for the part of the principal balance of the loan or other credit not exceeding the amount of the line of credit and its interest, penalty, compound interest, liquidated damages, delay penalty, the cost to realize the mortgage and creditors rights and other related expenses (subject to the scope specified in the preceding paragraph, the same below).
Notwithstanding the provisions above, both Parties make it clear that even if the principal balance of the loan or other credit provided by Party A to the Credit Applicant exceeds the amount of the line of credit at a certain point in the credit period, but if the sum of the principal balance of various line of credits does not exceed that of the line of credit when Party A requires Party B to undertake the mortgage guarantee liability, Party B shall not raise any defense with the above-mentioned agreement as the reason, but shall bear the mortgage guarantee liability with the balance of all credit principal and its interest, penalty, compound interest, liquidated damages, delay penalty, the cost to realize mortgage and creditors rights and other related expenses.
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2.3 If Party A releases new loans to repay or convert the old loans or debts under letter of credit, guarantee letter and bills for Party B (or the Credit Applicant) during the credit period, Party B confirms that debts arising therefrom shall be included in the scope of its guarantee liability.
2.4 When handling the import letter of credit business as applied by Party B (or Credit Applicant), if import bill purchase is actually incurred under the same letter of credit afterwards, the import letter of credit and the import bill purchase shall occupy the same line of credit at different stages. In other words, when the import bill purchase business occurs, the use of the amount recovered after the letter of credit is paid out for the import bill purchase shall be deemed as the same amount with the same line of credit used by the original import letter of credit. Party B confirms that the debts arising therefrom shall be included in the scope of its liability of guarantee.
3. Maximum Mortgage
3.1 During the credit period, Party A may issue loans or grand other line of credit to Party B (or the Credit Applicant) by installments. The specific category and amount of line of credit of credit business, whether various types of credit business are reversible, and the specific conditions of use shall be subject to the approval of Party A. If Party A adjusts its original approval opinions as required by Party B (or the Credit Applicant) through application during the credit period, the subsequent approval opinions issued by Party A shall constitute the supplementation and changes to the original or preceding approval opinions, and so on.
The maturity date of each specific business may be later than that of the credit period. Both Parties have no objection thereto.
3.2 Upon the expiration of the credit period, if there is still a balance in the loan, advance or other credit provided by Party A to Party B (or the Credit Applicant) under the Credit Agreement, Party B shall assume the guarantee liability with the mortgage within the scope of mortgage guarantee as determined herein; before the expiration of the credit period, if Party A recovers to Party B (or the Credit Applicant) in accordance with the Credit Agreement or the specific business texts, Party B shall also bear the guarantee liability with the mortgage within the scope of mortgage guarantee as determined herein.
3.3 During the credit period, Party A shall provide Party B (or the Credit Applicant) with credit business such as commercial draft acceptance, letter of credit (including entrusted and transferred letter of credit, the same below), guarantee letter, delivery guarantee, factoring, cross-border linkage trade financing, etc. Even if Party As advance/guarantee payment has not occurred before the expiration of the credit period, if Party A makes advance/guarantee payment under the above business after the expiration of the credit period, Party B shall also bear the guarantee liability with the mortgage within the scope of mortgage guarantee as determined herein.
In case that the derivative transaction occurs before the credit period but there is still a balance or loss during the credit period, and in case that the derivative transaction occurs during the credit period but there is still balance or loss after the expiration of the credit period, resulting in additional occupation of the line of credit, all debts incurred by Party B (or the Credit Applicant) shall be guaranteed by Party B with the mortgage within the scope of mortgage guarantee as determined herein.
3.4 If Party A and Party B (or the Credit Applicant) agree on the extension of the term, interest rate and amount of each specific business during the performance of specific business under the Credit Agreement or on the modification of relevant terms, or Party A adjusts the interest rate and pricing method in accordance with the Credit Agreement and/or the specific business during the mortgage guarantee period, the consent of or notice to Party B is not required and Party B shall recognize it, which shall not affect Party Bs mortgage guarantee liability hereunder.
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3.5 In case of discrepancies of the documents received by Party A in the letter of credit business under the Credit Agreement as reviewed by Party A, but the Credit Applicant accepts the discrepancies, Party B shall still bear the mortgage guarantee liability for the credit principal and interest arising from Party As acceptance or payment therefor, and shall not raise any defense to Party As acceptance of the discrepancies without consent of or notice to Party B.
3.6 The consent of or notice to Party B is not required for the amendment of letter of credit, guarantee letter (or standby letter of credit) under the Credit Agreement, the acceptance of the usance letter of credit, or the extension of the payment term after the promise of payment due, and Party B shall recognize it, which shall not affect Party Bs mortgage guarantee liability hereunder.
3.7 Party B confirms that each concrete business document (regardless of whether it is a single agreement/application, or framework agreement) signed and concluded by and between Party A and Party B (or the Credit Applicant) with respect to the specific businesses under the granting of the line of credit shall constitute an integral part of the Credit Agreement, and jointly stipulate the rights and obligations involved in specific businesses.
Party B confirms that the specific amount, length of maturity, use and other business elements for credit businesses conducted between Party A and Party B (or the Credit Applicant) shall be subject to the concrete business documents, business vouchers prepared by Party A and business records of Party As system.
3.8 With respect to the guarantee letter/customs tax payment guarantee/bill guarantee and other businesses handled by Party A as applied by Party B (or the Credit Applicant), the transfer arrangement of guarantee letter interest/bill interest shall not affect Party Bs guarantee obligation hereunder, and Party B undertakes not to raise any defense therefor.
4. Independence of the Agreement
4.1 The Agreement is independent and unconditional, and its validity is not affected by that of the Credit Agreement and the texts of each specific business, any agreement or document signed by Party B (or the Credit Applicant) and any entity/individual. It shall not change due to changes including fraud, reorganization, suspension, dissolution, liquidation, bankruptcy, integration (merger), division, reform or the expiration of the business term of Party B (or the Credit Applicant), or be affected by any time of grace and extension granted to Party B (or the Credit Applicant) by Party A or postponement of exercising the right to recover Party Bs (or the Credit Applicants) arrears by Party A in accordance with the relevant agreements.
4.2 In the case that Party As creditors rights have mortgage, pledge guarantee or guarantor otherwise at the same time, Party A shall have the right to claim guarantee rights to each mortgagor/pledger (including Party B) and guarantors respectively, successively or at the same time; Party Bs guarantee liability hereunder shall not be affected if Party A waives its place in the order of mortgage rights, waives, changes or cancels other mortgage and pledge guarantees, changes or relieves the guarantors guarantee responsibility, or delays to claim rights to any other mortgagor/pledgor/guarantor, and Party B is still obliged to bear the mortgage guarantee liability for Party A as agreed herein.
5. Mortgage Period
The mortgage period refers to the period from the effective date of the Agreement to the expiration of the limitation of actions for credit claims under the Credit Agreement.
6. Custody and Responsibility of Mortgage and Mortgage Ownership Certificate
6.1 During the mortgage period, the mortgage shall be kept by Party B or the agent entrusted by Party B. Party B and its agent shall keep the mortgage properly, bear the responsibility of repair, maintenance and guarantee its integrity during the mortgage period, and shall accept the inspection of Party A at any time.
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6.2 During the mortgage period, Party B shall not take any action to reduce the value of the mortgage. In case of such actions, Party A shall have the right to require Party B to stop and restore the value of the mortgage, or provide new mortgage approved by Party A. Party B shall bear expenses incurred for restoring the mortgage to its original state or establishing a new mortgage.
6.3 Party B shall deliver the title certificate and other relevant supporting documents of the mortgage to Party A on the signature date of the Agreement. Party A shall keep the mortgage ownership certificate properly. In case of loss of mortgage ownership certificate due to improper storage, Party A shall bear the expenses for certificate reissuance.
7. Mortgage Registration
7.1 Party B shall cooperate with Party A for mortgage registration at the mortgage registration authority with the Agreement and relevant materials within the period required by Party A.
7.2 Party B shall actively support Party A in handling the relevant procedures in accordance with the above provisions in the principle of good faith, and Party B shall inform Party A in time of the change of registration information such as legal person information and company name. If the registration becomes invalid as the relevant procedures are not completed in time or the registration information change are not informed due to the reason of Party B, Party B shall bear joint and several liability for compensation suffered by Party A therefrom to the extent of the value of the mortgage.
8. Insurance
8.1 Party B shall be obliged to purchase full property insurance for the mortgage with Party A as the first beneficiary and submit the insurance policy to Party A for storage. In principle, the insurance period should be longer than the credit period as agreed in the Credit Agreement. If the credit period is extended or the credit debt is not paid off after the maturity, Party B shall handle the procedures for the insurance period extension. In case of any loss of the insured property, Party A shall have the right to recover the principal and interest of all credit claims under the Credit Agreement and all other related expenses from the insurance compensation, or negotiate with Party B to deposit the insurance compensation into the margin account, so as to recover the corresponding funds/pay the accounts payable when the repayment period of the credit claims under the Credit Agreement expires.
8.2 If Party B fails to handle the insurance purchase or extension procedures for the mortgage in accordance with the above requirements, Party A shall have the right to directly handle the insurance purchase or extension procedures on behalf of Party B with the relevant expenses borne by Party B and shall have the right to deduct such expenses directly from any account of Party B.
8.3 If Party B (or the Credit Applicant) fails to pay off all debts under the Credit Agreement after the expiration of the insurance period, Party B must handle the procedures of mortgage insurance extension. If Party B fails to handle the procedures of mortgage insurance extension, Party A shall have the right to directly handle it on behalf of Party B with the relevant expenses borne by Party B and shall have the right to deduct such expenses directly from any account of Party B.
8.4 The insurance premium shall be borne by Party B as the Client unless otherwise stipulated in relevant national policies and other normative documents.
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9. Restrictions on the disposal of the mortgage during the mortgage period
9.1 During the mortgage period, Party B shall have no right to transfer the mortgage hereunder by selling, exchanging or donating without authorization; if Party B really needs to transfer the mortgage hereunder with compensation, it must meet the following conditions:
9.1.1 Party B shall obtain the written consent of Party A and inform the transferee of the mortgage of the transferred property; if Party B fails to obtain the written consent of Party A or fails to inform the transferee, the transfer shall be invalid.
9.1.2 If the price of the mortgage transferred by Party B is obviously lower than its value, so that the amount of line of credit and other expenses cannot be fully compensated, Party A shall have the right to require Party B to provide other properties as guarantee; if Party B fails to provide, the mortgage shall not be transferred;
9.1.3 The price obtained from Party Bs transfer of the mortgage must be directly transferred to the account as designated by Party A for early repayment of the principal and interest of all credit debts under the Credit Agreement and other related expenses; or the full amount of relevant funds shall be deposited into the margin account opened by Party B at Party A. Such funds shall be deemed to be specialized and transferred to Party A for possession from the date of entering the margin account and shall continue to be taken as the pledge guarantee of debts of Party B (or the Credit Applicant) under the Credit Agreement. Party B has no objection thereto and shall cooperate to handle relevant procedures as required by Party A.
After Party B transfers the full amount of the proceeds from the transfer of the mortgage into the account as designated by Party A, Party A may assist Party B for the mortgage registration cancellation procedures and return the mortgage ownership certificate to Party B.
9.2 Without the written consent of Party A, Party B shall not transfer, lease, remortgage or dispose of the mortgage hereunder in any other improper way.
9.3 Provided that the mortgagor has provided real estate mortgage guarantee for all debts that Party B (or the Credit Applicant) owes to Party A hereunder, if Party B knows that the collateral has been or may be included in the scope of government demolition and expropriation, it shall notify Party A immediately.
9.3.1 If the demolition party compensates the mortgagor by means of property right exchange, Party B shall mortgage the real estate acquired from the demolition party through the property right exchange to Party A;
9.3.2 If the demolition party pays Party B with demolition compensation, Party A shall have the right to require Party B to open an account in the institution designated by Party A, and deposit the full amount of compensation into the account as margin to provide guarantee for debts of Party B (or the Credit Applicant) under the Credit Agreement;
9.3.3 If the demolition party compensates Party B in the above two ways or in other ways, Party A may adopt the above two ways or other ways that Party A considers appropriate for different compensations, and require Party B to provide guarantee for the debts of Party B (or the Credit Applicant) under the Credit Agreement with compensations.
9.3.4 If the compensation of the demolition party has not been provided, or it has been provided but the guarantee procedures have not been completed in accordance with the requirements of Party A, Party B shall provide other sufficient guarantee approved by Party A.
9.3.5 Party A may also require Party B to provide new guarantee directly with other properties based on actual situations.
10. Expenses Bearing
10.1 Where the Agreement involves evaluation, notarization (except for mandatory notarization) or other matters of entrusting a third party to provide services, all relevant costs and expenses incurred therefrom shall be borne by the Client independently .If both Parties act as the Clients, each Party shall bear 50%. Except as otherwise stipulated by relevant national policies and other normative documents.
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10.2 If the mortgagee is required to bear the mortgage registration fee in accordance with the relevant national policies and other normative documents, the mortgage registration fee hereunder shall be borne by the mortgagee, unless otherwise specified in the relevant normative documents or due to the reasons of the registration authority.
11. Modification and Termination of the Agreement
Neither Party shall change or rescind the Agreement without the consent of the other Party after the Agreement becomes effective. If the Agreement needs to be changed or rescinded, it shall be changed or rescinded in written agreement through consultation between the Parties hereto. The terms hereof shall not be invalidated until such agreement is reached.
12. Special Undertaking of Party B
12.1 Party B is a legal person with guarantee qualification, or other organization with guarantee qualification, or Party B is a natural person with full civil capacity, willing to set up a guarantee with assets owned by Party B or legally entitled to dispose of, so as to guarantee the performance of obligations stipulated herein;
12.2 Party B is a legal person or other organization, and its signature of the Agreement has been fully authorized or approved by the superior department/board of directors and other authorities;
12.3 The signature of the Agreement is the true intention of Party B without fraud or coercion;
12.4 If Party B is an enterprise legal person or other organization, in case of division, integration (merger) and other situations of Party B during the validity period of the Agreement, the changed organization shall undertake or separately undertake the obligations hereunder. If Party B is declared to be dissolved or bankrupt, Party A shall have the right to dispose of its mortgaged property before the expiration.
If Party B is a natural person with a spouse, the letter of the spouse confirming mortgage guarantee shall be provided as required by Party A. If Party B has no spouse, Party B specially declares that by the signature of the Agreement, it has not legally married with anyone and/or has no spouse (or former spouse) with legal marriage relationship in Chinese mainland and abroad who enjoys co-ownership to the mortgage hereunder, and all the marital status information provided by Party B to Party A are true, complete and reliable. At the same time, Party B confirms that Party A can verify and investigate the martial status information provided by Party B when Party A considers it as necessary (without obtaining any further authorization), and guarantees to provide all convenience unconditionally.
13. In case of any of the following circumstances, Party A may dispose of the mortgage in accordance with law:
13.1 Party B (or the Credit Applicant) has one of the default events specified in the Credit Agreement or a specific Agreement under the Credit Agreement;
13.2 Party B or other mortgagor/guarantor has one of the default events specified in the Credit Agreement, or Party B fails to perform its obligations hereunder;
13.3 Party B, as a natural person, dies without any successor or devisee; or its successor or devisee waives the inheritance or legacy and refuses to perform the obligation to repay the principal and interest of credit debts;
13.4 Party B suspends its business, has its business license revoked or canceled, files for or is filed for bankruptcy, dissolution, etc. when Party B acts as a legal person or other organization;
13.5 The mortgage is damaged, or its value is reduced, which may endanger Party As rights;
13.6 Other causes that may endanger the realization of creditors rights under the Credit Agreement.
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14. Liability for Breach of Agreement
14.1 If Party B violates the Agreement and neglects the maintenance and management of the mortgage, resulting in the value reduction of the mortgage, or Party Bs behavior directly endangers the mortgage, leading to the value reduction of the mortgage, Party A has the right to require Party B to restore the value of the mortgage or provide other properties acceptable to Party A as guarantee. If Party B refuses to restore or provide, Party A shall have the right to dispose of the mortgage before the expiration in accordance with law.
14.2 If Party B violates the Agreement and disposes of the mortgaged property without authorization, the act shall be invalid; Party A shall have the right to require Party B to immediately stop the infringement of Party As mortgage right and restore the mortgage to its original state, and may require Party B to provide other properties acceptable to Party A as guarantee or dispose of the mortgage before the expiration in accordance with law based on the actual situation.
14.3 Party B undertakes that there are no legal and factual obstacles to the establishment and realization of the mortgage right. If Party B conceals that the mortgage is co-owned, disputed, seized, detained, has been or will be included in the expropriation or demolition, leased, has set with the mortgage, exists the legal priority (including but not limited to the priority of construction funds) or Party B has no ownership or disposition right to the mortgage, causing economic losses to Party A, a new guarantee shall be provided as required by Party A.
14.4 If Party B fails to provide new guarantee as required by Party A in case of any breach of Agreement mentioned above, Party B shall bear the penalty of 30% of the line of credit amount under the Credit Agreement. If any economic loss is caused to Party A therefrom, Party B shall also compensate Party A for all economic losses.
15. Collection of Relevant Fructus
If Party B (or the Credit Applicant) fails to pay off the principal and interest of the loan, advance payment and other credit debts owed by Party B (or the Credit Applicant) to Party A and all other relevant expenses, and Party A claims the mortgage right, causing the mortgage to be seized or detained by the peoples court in accordance with law, Party A shall have the right to collect the natural fructus separated from the mortgage and the legal fructus that Party B can collect from the mortgage since the date of seizure or detention.
16. Realization of Mortgage
16.1 In case of any single or multiple circumstances specified in Article 13 of the Agreement or the mortgage to be disposed of in accordance with the provisions of the liability for breach of Agreement, Party A may choose one of the following ways to realize the mortgage right:
16.1.1 Party A and Party B have reached an agreement to convert directly or auction or sell off the mortgage; if the two Parties fail to reach an agreement within 15 days after any of the circumstances specified in Article 13 of the Agreement or the date of Party As disposal of the mortgage in accordance with the provisions of liability for breach of Agreement, Party A shall have the right to directly request the peoples court to auction or sell off the mortgage;
16.1.2 The mortgage shall be disposed of by the legal procedures in accordance with the dispute settlement method agreed in the Credit Agreement;
16.1.3 Party A may directly apply to a competent peoples court for enforcement of the debts owed by Party B under the Agreement to which a notary public has legally granted the effectiveness of forcible execution upon application by the Parties.
16.2 Party A shall have the priority to be compensated for the price obtained from disposing of the mortgage in the above method. The part of the price exceeding the principal and interest of various loans, advances owed by Party B (or the Credit Applicant) under the Credit Agreement and other credit debts and all relevant expenses shall belong to Party B. Party A shall claim the insufficient part otherwise.
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17. Elimination of Mortgage
The mortgage right will be automatically eliminated when the principal and interest of all credit debts owed by Party B (or the Credit Applicant) to Party A under the Credit Agreement are paid off timely upon the expiration of the credit period. The property right certificates or evidence and property insurance policy of Party B kept by Party A shall be returned to Party B. Party A may assist Party B for mortgage registration cancellation procedures in accordance with the requirements of Party B.
18. Miscellaneous
18.1 Non-waiver
During the term hereof, Party As tolerant, postponed or delayed exercise of its interests or rights under the Credit Agreement for any default or delay of Party B (or Credit Applicant) shall not impair, impact, or restrict any and all rights and interests that Party A is entitled to as a creditor in accordance with the relevant laws and regulations and the Agreement, nor shall it be deemed as Party As permission or acceptance of any breach of the Agreement or be deemed as Party As waiver of its right to take actions against existing or future defaults.
18.2 Notices
18.2.1 The notifications, requirements or other documents, etc. of the Parties related to the Agreement shall be sent in writing (including but not limited to letter, fax, email, E-bank function/enterprise App and other E-platforms, SMS or WeChat, etc.)
18.2.2 Any notice, request, or other document that is delivered by a specially assigned person (including but not limited to by a lawyer, notary, or courier) shall be deemed to have been served when the recipient signs on it (if the recipient refuses to accept it, it shall be deemed to have been served seven days after the date of rejection, return, or delivery (whichever is earlier)). Any notice, request, or other document that is delivered by postal service shall be deemed to have been served seven days after the date of posting. Any notice, request, or other document that is delivered by fax, email, Party As E-platforms, SMS, WeChat, or other electronic means shall be deemed to have been served on the date when the senders corresponding system shows successful delivery.
Where Party A notifies Party B of assignment of debts or collects funds from Party B via the announcement on the public media, the announcing date shall be regarded as the service date.
18.2.3 In case of change to either Partys contact address, email, fax number, mobile phone number or WeChat account, it shall notify the other Party within five working days as from the date of such change. Otherwise, the other Party shall have the right to use the original contact address or information. Where the service fails due to change in contact address or contact information, the returning date or seven days after posting (whichever is earlier) shall be regarded as the service date. The changing Party shall assume the possible losses resulted therefrom, and the legal validity of service shall not be prejudiced.
18.2.4 The contact addresses, emails, fax numbers, mobile phone numbers, WeChat accounts as listed herein shall also serve as the addresses for service of respective notarization documents and judicial documents (including but not limited to indictment/claim of arbitration, evidence, summons, notice of respondence to action, notice to produce evidence, notice of court session, written judgment/award, written verdict, mediation document, notice of due performance, and other instruments during the trial and execution phases), and that the appellate court and notarization institution serve the instruments to the aforementioned service addresses in the writing mode as stipulated herein shall be regarded as duly served (The concrete service standard shall refer to the preceding clause for execution).
18.3 Unless otherwise expressly stated, the terms and expressions referred to herein shall have the same meaning as those in the Credit Agreement.
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18.4 Party B confirms that all operations of Party A in handling specific business for Party B (or the Credit Applicant) and Party As operations related to the Agreement can be handled at any branch of Party A, and relevant correspondence can be generated, signed or issued. The business operation and correspondence of the branches of Party A shall be deemed as acts of Party A and shall be binding on both Parties.
18.5 If the credit debt is not in RMB, Party A shall have the right to use the amount recovered to directly purchase foreign exchange at the exchange rate announced by Party A at the time of settlement as agreed herein, so as to pay off the credit debts. The calculation of non-RMB debt amount under the specific business texts shall be subject to the converted amount at the exchange rate (purchase price) announced by Party A at the time of settlement.
18.6 In case of division, integration (merger) and other situations of Party B during the validity period of the Agreement, the changed organization shall undertake or separately undertake the obligations hereunder. If Party B is declared to be dissolved or bankrupt, Party A shall have the right to dispose of its mortgaged property before the expiration.
18.7 Special Terms and Conditions of real estate mortgage (Please check Ö in ☐ if applicable)
☑ Principal Creditors Rights and Real Estate Maximum Mortgage Agreement(for Real Estate Registration only) (please fill in the Agreement name of the standard version required by the mortgage registration authority)with No. 2020 Asian Games Village Credit Granting 1154 signed by Party A and Party B is only for the purpose of handling the mortgage registration procedures. The specific rights and obligations of both Parties and the agreements on the Main Agreement and mortgage shall be subject to this Agreement. In particular, Party B shall provide guarantee within the scope of guarantee with the full value of the mortgage. At the request of the mortgage registration authority, ☐☐ Maximum amount and currency of creditors rights/☐ maximum amount of guaranteed creditors rights (please check the content in the standard Agreement version required by the corresponding mortgage registration authority) filled in at the time of registration is tentatively set as☑☑ 1.4 times of the line of credit/☐ the evaluated value of the mortgage when mortgage is set (please choose one of them), i.e., USD_518 million. The specific amount shall be subject to the total amount obtained when the mortgage is realized.
19. Transfer of Creditors Rights and Mortgage Right
19.1 If Party A transfers all the creditors rights under the Credit Agreement to a third party, the maximum mortgage right shall be transferred to the creditors right assignee all together, whether the creditors rights guaranteed by the maximum mortgage are determined or not.
19.2 After the creditors rights mortgaged hereunder are determined, if Party A transfers part of the creditors rights, part of the mortgage will also be transferred. Party A shall share the mortgage right of the mortgage in proportion to the amount of the creditors rights not transferred with the transferee; before the determination of the creditors rights guaranteed by the mortgage of the Agreement, if Party A transfers part of the creditors rights, part of the mortgage will also be transferred and the principal creditors rights of Party A guaranteed by the original maximum mortgage shall be reduced accordingly (i.e. the maximum amount of Party As principal creditors rights guaranteed by the original maximum mortgage amount minus the amount of transferred creditors rights). After the determination of Party As non-transferred principal creditors rights, Party A and the transferee shall jointly enjoy the mortgage right to the mortgage in proportion to the amount of creditors rights.
20. Applicable Laws and Dispute Resolution
20.1 The conclusion, interpretation and dispute resolution of the Agreement shall be governed by the laws of the Peoples Republic (excluding laws of Hong Kong, Macao and Taiwan).
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20.2 It is agreed by the Parties that any dispute arising out of the performance of the Agreement between the Parties shall be resolved as per the dispute resolution method stipulated in the Credit Agreement.
21. Effectiveness of Mortgage Agreement
The Agreement shall take effect as of the date when both Parties legal representatives/principals or their authorized agents sign (or stamp name seals) and stamp official seals/special seals for Agreement (If Party B is a natural person, the Agreement shall take effect as of the date when Party B signs and Party As legal representative/principal or its authorized agent signs (or stamp name seal) and stamps the official seal/special seal for Agreement) and shall be automatically nullified on the date of expiration of mortgage period or when the principal and interest of credit granting debt and all related expenses owed by Party B to Party A under the Credit Agreement are paid off (whichever is later).
22. Supplementary Provisions
22.1. The Agreement is made in duplicate, with Party A, Party B, _____/_____ and _____/_____ holding one copy and each copy being equally authentic.
22.2 Other agreed terms:____/__________________________________________________________________________ |
___________________________________________________________________________________________________ |
___________________________________________________________________________________________________ |
___________________________________________________________________________________________________ |
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Appendix 1
List of Specific Outstanding Businesses
Unit: Ten Thousand
S.N. |
Business No. |
Balance |
Starting Date |
Due Date | ||||
1 | ||||||||
2 | ||||||||
3 | ||||||||
4 | ||||||||
5 | ||||||||
6 | ||||||||
7 |
Special Reminder:
All terms hereof have been fully consulted by the Parties. Party B has been reminded by Party A to pay special attention to and make full and good understanding of the terms with regard to the exemption or restriction on Party As liabilities, the rights owned by Party A unilaterally, the increase of Party Bs liabilities, and the restriction on Party Bs rights. Party A has explained the above terms as required by Party B. The Parties hereto have the same understanding of the terms of the Agreement.
(The remainder of this page is intentionally left blank)
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(The following is the signature of the Maximum Mortgage Agreement with No. 2020 Asian Games Village
Credit Granting 1154-Pledge 01)
Party A: Beijing Branch of China Merchants Bank Co., Ltd.
Principal or authorized agent (signature or stamped name seal): /s/ Kai XIONG
Contact Address: No. 156 Fuxingmennei Avenue, Xicheng District, Beijing
Corporate Email: gujing0610@cmbchina.com
Corporate Fax: /
Mobile Phone No. of Contact Person: 17600355610
Corporate WeChat Account:/
Please sign and fill it out as below if the mortgagor acts as a legal person or other organization:
Party B: Beijing Sohu New Momentum Information Technology Co., Ltd.
Legal Representative/Principal or Authorized Agent (signature/stamped name seal):/s/ Xiufeng DENG
Contact Address: Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District, Beijing
Email: puhuang@sohu-inc.com
Fax: 56412828
Mobile phone number of contact person: 13811220840
Corporate WeChat Account: /
Please sign and fill it out as below if the mortgagor is a natural person:
Party B (signature): /
Nationality and ID Certificate:/
ID Certificate No.: /
Contact Address: /
Email: /
Fax No.: /
Mobile Phone Number: /
WeChat: /
Date of Signing: December 10, 2020
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Exhibit 4.92
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Appendix 3
Maximum Mortgage Agreement
No.: 2020 Asian Games Village Credit Granting 1154-Pledge 02
Mortgagee: Beijing Branch of China Merchants Bank Co., Ltd. (hereinafter referred to as Party A)
Mortgagor: Beijing Sohu New Media Information Technology Co., Ltd. (hereinafter referred to as Party B)
Whereas Party A (or Party As subsidiary) has signed or will sign a Credit Agreement with No. 2020 Asian Games Village Credit Granting 1154 (hereinafter referred to as the Credit Agreement) with Party B or the Credit Applicant Beijing AmazGame Age Internet Technology Co., Ltd. (fill in the specific name), and agrees to provide the line of credit of USD (in words) 370 million (including the equivalent amount in other currencies)(hereinafter referred to as line of credit) to Party B (or the Credit Applicant) during the credit period (i.e. the determination period of creditors rights) as agreed in the Credit Agreement.
☐According to the Credit Agreement, subsidiaries or/and other affiliated enterprises (including / company, / company and / company (as the case may be), hereinafter collectively referred to as designated enterprises of the Credit Applicant) as designated by the Credit Applicant can apply to your bank for financing as required by their business needs and such financing lines shall occupy the line of credits provided by your bank to the Credit Applicant. The available line of credit is / (currency) / yuan only. (please tick Ö in ☐ if this clause is applicable).
In order to guarantee that all debts owed to Party A by Party B (or the Credit Applicant and the enterprise designated by the Credit Applicant (if any) (the Credit Applicant and the enterprise designated by the Credit Applicant are hereinafter collectively referred to as Credit Applicant)) under the Credit Agreement can be repaid in full and in time, Party B is willing to use its property owned or legally entitled to be disposed of by it as mortgage. After examination, Party A agrees to accept the property owned or legally entitled to be disposed of by Party B as mortgage. Party A and Party B have hereby reached consensus on the following terms and have made and entered into the Agreement (the Agreement) through equal consultation in accordance with the relevant laws and regulations.
1. Mortgage Used by Party B for Mortgaging
S.N. |
Description |
Qty. or Area | Address |
Evaluate value RMB |
Ownership No. |
Certificate of Ownership | ||||||
1 | 201, 2/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 853.65m2 | 201, 2/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 44,314,948.54 | Beijing (2017) Haidian Real Property Right Certificate No. 0043019 | Real Property Right Certificate | ||||||
2 | 901, 9/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,208.59m2 | 901,9/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 120,689,183.61 | Beijing (2017) Haidian Real Property Right Certificate No. 0043020 | Real Property Right Certificate | ||||||
3 | 1001, 10/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,281.38m2 | 1001, 10/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 124,666,818.97 | Beijing (2017) Haidian Real Property Right Certificate No. 0043021 | Real Property Right Certificate |
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4 | 1101, 11/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,318.27m2 | 1101, 11/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 126,682,686.09 | Beijing (2017) Haidian Real Property Right Certificate No. 0043022 | Real Property Right Certificate | ||||||
5 | 1201, 12/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,246.31m2 | 1201, 12/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 128,887,734.31 | Beijing (2017) Haidian Real Property Right Certificate No. 0043023 | Real Property Right Certificate | ||||||
6 | 1301, 13/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,319.35m2 | 1301, 13/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 133,078,589.58 | Beijing (2017) Haidian Real Property Right Certificate No. 0043025 | Real Property Right Certificate | ||||||
7 | 1401, 14/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 2,247.36m2 | 1401, 14/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 128,947,980.72 | Beijing (2017) Haidian Real Property Right Certificate No. 0043026 | Real Property Right Certificate | ||||||
8 | 1501, 15/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 1,892.46m2 | 1501, 15/F, Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District | 108,584,692.97 | Beijing (2017) Haidian Real Property Right Certificate No. 0043024 | Real Property Right Certificate |
(Columns and contents can be added or adjusted in accordance with the actual situation of mortgage)
In case that Party B provides guarantee for the credit debt with movable property, when the market value of the mortgage during the mortgage period declines to less than _/_% of the principal of the total amount of the credit debt, Party B shall provide the margin as required by Party A (the margin account number shall be subject to that generated or recorded by Party As system at the time of deposit, the same below), or add/replace new mortgage/pledge to make up for the gap caused by the decline in the market value of the mortgage. Otherwise, Party A shall have the right to dispose of the mortgage as agreed herein in addition to deeming it as the event of default under the Credit Agreement and taking corresponding measures.
☐ Party B undertakes that if the mortgage is the right to use the land , the buildings built on the land subsequently will be mortgaged to Party A after obtaining the property right certificate and Party B shall cooperate with Party A for the mortgage registration at the corresponding mortgage registration institutions.
2. Scope of Mortgage Guarantee
2.1 The mortgage guarantee scope of the Agreement is the sum of the principal balance of the loan and other credits provided by Party A to Party B (or the Credit Applicant) within the line of credit in accordance with the Credit Agreement (the maximum amount is USD (in words) 370 million), as well as interest, penalty, compound interest, liquidated damages, delay penalty, factoring fee, the cost to realize mortgage and creditors rights and other related costs, including but not limited to:
2.1.1 The outstanding balance in the specific businesses under ___/_____(fill in the name of the agreements here) with No. ___ /____ between Party A (or Party As subsidiaries) and Party B (or the Credit Applicant);
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2.1.2 The principal balance of loans issued by Party A in accordance with the specific business texts under the Credit Agreement and corresponding interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.3 The principal balance of the external payment made by Party A in the trade financing business under the Credit Agreement and corresponding interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.4 The creditors rights of accounts receivable, the corresponding overdue penalty (overdue fine) and delay penalty of Party B (or the Credit Applicant) transferred by Party A under the factoring business, and/or the basic purchase money (basic underwriting money) and relevant factoring fees paid by Party A with its own funds or other funds from legitimate sources to Party B (or the Credit Applicant);
2.1.5 When Party A entrusts other branches of China Merchants Bank to transfer the letter of credit to the beneficiary after the letter of credit is issued by Party A upon the request of Party B (or the Credit Applicant), the advance payment made by Party A for Party B (or the Credit Applicant) to perform the obligations of the issuing bank under the letter of credit, and the debt principal balance of import bill advance and delivery against bank guarantee incurred from the letter of credit issuance and interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.6 All debts of Party B (or the Credit Applicant) to Party A under derivatives trading business, gold leasing and other businesses;
2.1.7 When Party A handles cross-border linkage trade financing business for Party B (or the Credit Applicant) such as handling entrusted letter of credit, entrusted overseas financing or cross-border trade one-stop service under the Credit Agreement, bill advances or advance payments (whether occurred during the credit period or not) made to return the linkage platform financing as agreed in specific business text and interest, penalty, compound interest, liquidated damages and delay penalty;
2.1.8 The principal balance of advanced payment made by Party A for Party B (or the Credit Applicant) to perform its payment obligation of commercial draft, letter of credit, guarantee letter/customs tax payment guarantee/bill guarantee, delivery guarantee letter under the Credit Agreement and interest, penalty, compound interest, liquidated damages and delay penalty, as well as the debts of Party B (or the Credit Applicant) to Party A generated from providing discount guarantee for commercial bills accepted by Party B (or the Credit Applicant);
2.1.9 Expenses incurred by Party A in recovering debts from Party B (or the Credit Applicant) and realizing mortgage right (including but not limited to litigation fees, attorney fees, announcement fees, service fees, travel expenses, etc.), as well as all other relevant expenses.
2.1.10 Special Provisions for Secondary Mortgage (Please check Ö in ☐ if applicable)
☐ Party A (or Party As subsidiary, i.e., China Merchants Bank Co., Ltd. Beijing___ /____) and Party B (or the Credit Applicant) signed the Credit Agreement with No. ___ /____ originally (i.e., the original Credit Agreement). Since the mortgage registration under __/____ (name of the newly signed agreement) with No. ___ /____ is completed, the outstanding balance of the specific business under the original Credit Agreement (see Appendix 1 for the list of specific outstanding business) will be automatically incorporated into the Agreement and directly occupy the line of credit hereunder.
2.2 With regard to the revolving line of credit, if the principal balance of the loan or other credit provided by Party A to Party B (or the Credit Applicant) exceeds the amount of the line of credit, Party B shall not take guarantee liability for the part of credit principal balance exceeding the line of credit amount, but only take guarantee liability for the part of the principal balance of the loan or other credit not exceeding the amount of the line of credit and its interest, penalty, compound interest, liquidated damages, delay penalty, the cost to realize the mortgage and creditors rights and other related expenses (subject to the scope specified in the preceding paragraph, the same below).
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Notwithstanding the provisions above, both Parties make it clear that even if the principal balance of the loan or other credit provided by Party A to the Credit Applicant exceeds the amount of the line of credit at a certain point in the credit period, but if the sum of the principal balance of various line of credits does not exceed that of the line of credit when Party A requires Party B to undertake the mortgage guarantee liability, Party B shall not raise any defense with the above-mentioned agreement as the reason, but shall bear the mortgage guarantee liability with the balance of all credit principal and its interest, penalty, compound interest, liquidated damages, delay penalty, the cost to realize mortgage and creditors rights and other related expenses.
2.3 If Party A releases new loans to repay or convert the old loans or debts under letter of credit, guarantee letter and bills for Party B (or the Credit Applicant) during the credit period, Party B confirms that debts arising therefrom shall be included in the scope of its guarantee liability.
2.4 When handling the import letter of credit business as applied by Party B (or Credit Applicant), if import bill purchase is actually incurred under the same letter of credit afterwards, the import letter of credit and the import bill purchase shall occupy the same line of credit at different stages. In other words, when the import bill purchase business occurs, the use of the amount recovered after the letter of credit is paid out for the import bill purchase shall be deemed as the same amount with the same line of credit used by the original import letter of credit. Party B confirms that the debts arising therefrom shall be included in the scope of its liability of guarantee.
3. Maximum Mortgage
3.1 During the credit period, Party A may issue loans or grand other line of credit to Party B (or the Credit Applicant) by installments. The specific category and amount of line of credit of credit business, whether various types of credit business are reversible, and the specific conditions of use shall be subject to the approval of Party A. If Party A adjusts its original approval opinions as required by Party B (or the Credit Applicant) through application during the credit period, the subsequent approval opinions issued by Party A shall constitute the supplementation and changes to the original or preceding approval opinions, and so on.
The maturity date of each specific business may be later than that of the credit period. Both Parties have no objection thereto.
3.2 Upon the expiration of the credit period, if there is still a balance in the loan, advance or other credit provided by Party A to Party B (or the Credit Applicant) under the Credit Agreement, Party B shall assume the guarantee liability with the mortgage within the scope of mortgage guarantee as determined herein; before the expiration of the credit period, if Party A recovers to Party B (or the Credit Applicant) in accordance with the Credit Agreement or the specific business texts, Party B shall also bear the guarantee liability with the mortgage within the scope of mortgage guarantee as determined herein.
3.3 During the credit period, Party A shall provide Party B (or the Credit Applicant) with credit business such as commercial draft acceptance, letter of credit (including entrusted and transferred letter of credit, the same below), guarantee letter, delivery guarantee, factoring, cross-border linkage trade financing, etc. Even if Party As advance/guarantee payment has not occurred before the expiration of the credit period, if Party A makes advance/guarantee payment under the above business after the expiration of the credit period, Party B shall also bear the guarantee liability with the mortgage within the scope of mortgage guarantee as determined herein.
In case that the derivative transaction occurs before the credit period but there is still a balance or loss during the credit period, and in case that the derivative transaction occurs during the credit period but there is still balance or loss after the expiration of the credit period, resulting in additional occupation of the line of credit, all debts incurred by Party B (or the Credit Applicant) shall be guaranteed by Party B with the mortgage within the scope of mortgage guarantee as determined herein.
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3.4 If Party A and Party B (or the Credit Applicant) agree on the extension of the term, interest rate and amount of each specific business during the performance of specific business under the Credit Agreement or on the modification of relevant terms, or Party A adjusts the interest rate and pricing method in accordance with the Credit Agreement and/or the specific business during the mortgage guarantee period, the consent of or notice to Party B is not required and Party B shall recognize it, which shall not affect Party Bs mortgage guarantee liability hereunder.
3.5 In case of discrepancies of the documents received by Party A in the letter of credit business under the Credit Agreement as reviewed by Party A, but the Credit Applicant accepts the discrepancies, Party B shall still bear the mortgage guarantee liability for the credit principal and interest arising from Party As acceptance or payment therefor, and shall not raise any defense to Party As acceptance of the discrepancies without consent of or notice to Party B.
3.6 The consent of or notice to Party B is not required for the amendment of letter of credit, guarantee letter (or standby letter of credit) under the Credit Agreement, the acceptance of the usance letter of credit, or the extension of the payment term after the promise of payment due, and Party B shall recognize it, which shall not affect Party Bs mortgage guarantee liability hereunder.
3.7 Party B confirms that each concrete business document (regardless of whether it is a single agreement/application, or framework agreement) signed and concluded by and between Party A and Party B (or the Credit Applicant) with respect to the specific businesses under the granting of the line of credit shall constitute an integral part of the Credit Agreement, and jointly stipulate the rights and obligations involved in specific businesses.
Party B confirms that the specific amount, length of maturity, use and other business elements for credit businesses conducted between Party A and Party B (or the Credit Applicant) shall be subject to the concrete business documents, business vouchers prepared by Party A and business records of Party As system.
3.8 With respect to the guarantee letter/customs tax payment guarantee/bill guarantee and other businesses handled by Party A as applied by Party B (or the Credit Applicant), the transfer arrangement of guarantee letter interest/bill interest shall not affect Party Bs guarantee obligation hereunder, and Party B undertakes not to raise any defense therefor.
4. Independence of the Agreement
4.1 The Agreement is independent and unconditional, and its validity is not affected by that of the Credit Agreement and the texts of each specific business, any agreement or document signed by Party B (or the Credit Applicant) and any entity/individual. It shall not change due to changes including fraud, reorganization, suspension, dissolution, liquidation, bankruptcy, integration (merger), division, reform or the expiration of the business term of Party B (or the Credit Applicant), or be affected by any time of grace and extension granted to Party B (or the Credit Applicant) by Party A or postponement of exercising the right to recover Party Bs (or the Credit Applicants) arrears by Party A in accordance with the relevant agreements.
4.2 In the case that Party As creditors rights have mortgage, pledge guarantee or guarantor otherwise at the same time, Party A shall have the right to claim guarantee rights to each mortgagor/pledger (including Party B) and guarantors respectively, successively or at the same time; Party Bs guarantee liability hereunder shall not be affected if Party A waives its place in the order of mortgage rights, waives, changes or cancels other mortgage and pledge guarantees, changes or relieves the guarantors guarantee responsibility, or delays to claim rights to any other mortgagor/pledgor/guarantor, and Party B is still obliged to bear the mortgage guarantee liability for Party A as agreed herein.
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5. Mortgage Period
The mortgage period refers to the period from the effective date of the Agreement to the expiration of the limitation of actions for credit claims under the Credit Agreement.
6. Custody and Responsibility of Mortgage and Mortgage Ownership Certificate
6.1 During the mortgage period, the mortgage shall be kept by Party B or the agent entrusted by Party B. Party B and its agent shall keep the mortgage properly, bear the responsibility of repair, maintenance and guarantee its integrity during the mortgage period, and shall accept the inspection of Party A at any time.
6.2 During the mortgage period, Party B shall not take any action to reduce the value of the mortgage. In case of such actions, Party A shall have the right to require Party B to stop and restore the value of the mortgage, or provide new mortgage approved by Party A. Party B shall bear expenses incurred for restoring the mortgage to its original state or establishing a new mortgage.
6.3 Party B shall deliver the title certificate and other relevant supporting documents of the mortgage to Party A on the signature date of the Agreement. Party A shall keep the mortgage ownership certificate properly. In case of loss of mortgage ownership certificate due to improper storage, Party A shall bear the expenses for certificate reissuance.
7. Mortgage Registration
7.1 Party B shall cooperate with Party A for mortgage registration at the mortgage registration authority with the Agreement and relevant materials within the period required by Party A.
7.2 Party B shall actively support Party A in handling the relevant procedures in accordance with the above provisions in the principle of good faith, and Party B shall inform Party A in time of the change of registration information such as legal person information and company name. If the registration becomes invalid as the relevant procedures are not completed in time or the registration information change are not informed due to the reason of Party B, Party B shall bear joint and several liability for compensation suffered by Party A therefrom to the extent of the value of the mortgage.
8. Insurance
8.1 Party B shall be obliged to purchase full property insurance for the mortgage with Party A as the first beneficiary and submit the insurance policy to Party A for storage. In principle, the insurance period should be longer than the credit period as agreed in the Credit Agreement. If the credit period is extended or the credit debt is not paid off after the maturity, Party B shall handle the procedures for the insurance period extension. In case of any loss of the insured property, Party A shall have the right to recover the principal and interest of all credit claims under the Credit Agreement and all other related expenses from the insurance compensation, or negotiate with Party B to deposit the insurance compensation into the margin account, so as to recover the corresponding funds/pay the accounts payable when the repayment period of the credit claims under the Credit Agreement expires.
8.2 If Party B fails to handle the insurance purchase or extension procedures for the mortgage in accordance with the above requirements, Party A shall have the right to directly handle the insurance purchase or extension procedures on behalf of Party B with the relevant expenses borne by Party B and shall have the right to deduct such expenses directly from any account of Party B.
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8.3 If Party B (or the Credit Applicant) fails to pay off all debts under the Credit Agreement after the expiration of the insurance period, Party B must handle the procedures of mortgage insurance extension. If Party B fails to handle the procedures of mortgage insurance extension, Party A shall have the right to directly handle it on behalf of Party B with the relevant expenses borne by Party B and shall have the right to deduct such expenses directly from any account of Party B.
8.4 The insurance premium shall be borne by Party B as the Client unless otherwise stipulated in relevant national policies and other normative documents.
9. Restrictions on the disposal of the mortgage during the mortgage period
9.1 During the mortgage period, Party B shall have no right to transfer the mortgage hereunder by selling, exchanging or donating without authorization; if Party B really needs to transfer the mortgage hereunder with compensation, it must meet the following conditions:
9.1.1 Party B shall obtain the written consent of Party A and inform the transferee of the mortgage of the transferred property; if Party B fails to obtain the written consent of Party A or fails to inform the transferee, the transfer shall be invalid.
9.1.2 If the price of the mortgage transferred by Party B is obviously lower than its value, so that the amount of line of credit and other expenses cannot be fully compensated, Party A shall have the right to require Party B to provide other properties as guarantee; if Party B fails to provide, the mortgage shall not be transferred;
9.1.3 The price obtained from Party Bs transfer of the mortgage must be directly transferred to the account as designated by Party A for early repayment of the principal and interest of all credit debts under the Credit Agreement and other related expenses; or the full amount of relevant funds shall be deposited into the margin account opened by Party B at Party A. Such funds shall be deemed to be specialized and transferred to Party A for possession from the date of entering the margin account and shall continue to be taken as the pledge guarantee of debts of Party B (or the Credit Applicant) under the Credit Agreement. Party B has no objection thereto and shall cooperate to handle relevant procedures as required by Party A.
After Party B transfers the full amount of the proceeds from the transfer of the mortgage into the account as designated by Party A, Party A may assist Party B for the mortgage registration cancellation procedures and return the mortgage ownership certificate to Party B.
9.2 Without the written consent of Party A, Party B shall not transfer, lease, remortgage or dispose of the mortgage hereunder in any other improper way.
9.3 Provided that the mortgagor has provided real estate mortgage guarantee for all debts that Party B (or the Credit Applicant) owes to Party A hereunder, if Party B knows that the collateral has been or may be included in the scope of government demolition and expropriation, it shall notify Party A immediately.
9.3.1 If the demolition party compensates the mortgagor by means of property right exchange, Party B shall mortgage the real estate acquired from the demolition party through the property right exchange to Party A;
9.3.2 If the demolition party pays Party B with demolition compensation, Party A shall have the right to require Party B to open an account in the institution designated by Party A, and deposit the full amount of compensation into the account as margin to provide guarantee for debts of Party B (or the Credit Applicant) under the Credit Agreement;
9.3.3 If the demolition party compensates Party B in the above two ways or in other ways, Party A may adopt the above two ways or other ways that Party A considers appropriate for different compensations, and require Party B to provide guarantee for the debts of Party B (or the Credit Applicant) under the Credit Agreement with compensations.
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9.3.4 If the compensation of the demolition party has not been provided, or it has been provided but the guarantee procedures have not been completed in accordance with the requirements of Party A, Party B shall provide other sufficient guarantee approved by Party A.
9.3.5 Party A may also require Party B to provide new guarantee directly with other properties based on actual situations.
10. Expenses Bearing
10.1 Where the Agreement involves evaluation, notarization (except for mandatory notarization) or other matters of entrusting a third party to provide services, all relevant costs and expenses incurred therefrom shall be borne by the Client independently .If both Parties act as the Clients,each Party shall bear 50%. Except as otherwise stipulated by relevant national policies and other normative documents.
10.2 If the mortgagee is required to bear the mortgage registration fee in accordance with the relevant national policies and other normative documents, the mortgage registration fee hereunder shall be borne by the mortgagee, unless otherwise specified in the relevant normative documents or due to the reasons of the registration authority.
11. Modification and Termination of the Agreement
Neither Party shall change or rescind the Agreement without the consent of the other Party after the Agreement becomes effective. If the Agreement needs to be changed or rescinded, it shall be changed or rescinded in written agreement through consultation between the Parties hereto. The terms hereof shall not be invalidated until such agreement is reached.
12. Special Undertaking of Party B
12.1 Party B is a legal person with guarantee qualification, or other organization with guarantee qualification, or Party B is a natural person with full civil capacity, willing to set up a guarantee with assets owned by Party B or legally entitled to dispose of, so as to guarantee the performance of obligations stipulated herein;
12.2 Party B is a legal person or other organization, and its signature of the Agreement has been fully authorized or approved by the superior department/board of directors and other authorities;
12.3 The signature of the Agreement is the true intention of Party B without fraud or coercion;
12.4 If Party B is an enterprise legal person or other organization, in case of division, integration (merger) and other situations of Party B during the validity period of the Agreement, the changed organization shall undertake or separately undertake the obligations hereunder. If Party B is declared to be dissolved or bankrupt, Party A shall have the right to dispose of its mortgaged property before the expiration.
If Party B is a natural person with a spouse, the letter of the spouse confirming mortgage guarantee shall be provided as required by Party A. If Party B has no spouse, Party B specially declares that by the signature of the Agreement, it has not legally married with anyone and/or has no spouse (or former spouse) with legal marriage relationship in Chinese mainland and abroad who enjoys co-ownership to the mortgage hereunder, and all the marital status information provided by Party B to Party A are true, complete and reliable. At the same time, Party B confirms that Party A can verify and investigate the martial status information provided by Party B when Party A considers it as necessary (without obtaining any further authorization), and guarantees to provide all convenience unconditionally.
13. In case of any of the following circumstances, Party A may dispose of the mortgage in accordance with law:
13.1 Party B (or the Credit Applicant) has one of the default events specified in the Credit Agreement or a specific Agreement under the Credit Agreement;
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13.2 Party B or other mortgagor/guarantor has one of the default events specified in the Credit Agreement, or Party B fails to perform its obligations hereunder;
13.3 Party B, as a natural person, dies without any successor or devisee; or its successor or devisee waives the inheritance or legacy and refuses to perform the obligation to repay the principal and interest of credit debts;
13.4 Party B suspends its business, has its business license revoked or canceled, files for or is filed for bankruptcy, dissolution, etc. when Party B acts as a legal person or other organization;
13.5 The mortgage is damaged, or its value is reduced, which may endanger Party As rights;
13.6 Other causes that may endanger the realization of creditors rights under the Credit Agreement.
14. Liability for Breach of Agreement
14.1 If Party B violates the Agreement and neglects the maintenance and management of the mortgage, resulting in the value reduction of the mortgage, or Party Bs behavior directly endangers the mortgage, leading to the value reduction of the mortgage, Party A has the right to require Party B to restore the value of the mortgage or provide other properties acceptable to Party A as guarantee. If Party B refuses to restore or provide, Party A shall have the right to dispose of the mortgage before the expiration in accordance with law.
14.2 If Party B violates the Agreement and disposes of the mortgaged property without authorization, the act shall be invalid; Party A shall have the right to require Party B to immediately stop the infringement of Party As mortgage right and restore the mortgage to its original state, and may require Party B to provide other properties acceptable to Party A as guarantee or dispose of the mortgage before the expiration in accordance with law based on the actual situation.
14.3 Party B undertakes that there are no legal and factual obstacles to the establishment and realization of the mortgage right. If Party B conceals that the mortgage is co-owned, disputed, seized, detained, has been or will be included in the expropriation or demolition, leased, has set with the mortgage, exists the legal priority (including but not limited to the priority of construction funds) or Party B has no ownership or disposition right to the mortgage, causing economic losses to Party A, a new guarantee shall be provided as required by Party A.
14.4 If Party B fails to provide new guarantee as required by Party A in case of any breach of Agreement mentioned above, Party B shall bear the penalty of 30% of the line of credit amount under the Credit Agreement. If any economic loss is caused to Party A therefrom, Party B shall also compensate Party A for all economic losses.
15. Collection of Relevant Fructus
If Party B (or the Credit Applicant) fails to pay off the principal and interest of the loan, advance payment and other credit debts owed by Party B (or the Credit Applicant) to Party A and all other relevant expenses, and Party A claims the mortgage right, causing the mortgage to be seized or detained by the peoples court in accordance with law, Party A shall have the right to collect the natural fructus separated from the mortgage and the legal fructus that Party B can collect from the mortgage since the date of seizure or detention.
16. Realization of Mortgage
16.1 In case of any single or multiple circumstances specified in Article 13 of the Agreement or the mortgage to be disposed of in accordance with the provisions of the liability for breach of Agreement, Party A may choose one of the following ways to realize the mortgage right:
16.1.1 Party A and Party B have reached an agreement to convert directly or auction or sell off the mortgage; if the two Parties fail to reach an agreement within 15 days after any of the circumstances specified in Article 13 of the Agreement or the date of Party As disposal of the mortgage in accordance with the provisions of liability for breach of Agreement, Party A shall have the right to directly request the peoples court to auction or sell off the mortgage;
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16.1.2 The mortgage shall be disposed of by the legal procedures in accordance with the dispute settlement method agreed in the Credit Agreement;
16.1.3 Party A may directly apply to a competent peoples court for enforcement of the debts owed by Party B under the Agreement to which a notary public has legally granted the effectiveness of forcible execution upon application by the Parties.
16.2 Party A shall have the priority to be compensated for the price obtained from disposing of the mortgage in the above method. The part of the price exceeding the principal and interest of various loans, advances owed by Party B (or the Credit Applicant) under the Credit Agreement and other credit debts and all relevant expenses shall belong to Party B. Party A shall claim the insufficient part otherwise.
17. Elimination of Mortgage
The mortgage right will be automatically eliminated when the principal and interest of all credit debts owed by Party B (or the Credit Applicant) to Party A under the Credit Agreement are paid off timely upon the expiration of the credit period. The property right certificates or evidence and property insurance policy of Party B kept by Party A shall be returned to Party B. Party A may assist Party B for mortgage registration cancellation procedures in accordance with the requirements of Party B.
18. Miscellaneous
18.1 Non-waiver
During the term hereof, Party As tolerant, postponed or delayed exercise of its interests or rights under the Credit Agreement for any default or delay of Party B (or Credit Applicant) shall not impair, impact, or restrict any and all rights and interests that Party A is entitled to as a creditor in accordance with the relevant laws and regulations and the Agreement, nor shall it be deemed as Party As permission or acceptance of any breach of the Agreement or be deemed as Party As waiver of its right to take actions against existing or future defaults.
18.2 Notices
18.2.1 The notifications, requirements or other documents, etc. of the Parties related to the Agreement shall be sent in writing (including but not limited to letter, fax, email, E-bank function/enterprise App and other E-platforms, SMS or WeChat, etc.)
18.2.2 Any notice, request, or other document that is delivered by a specially assigned person (including but not limited to by a lawyer, notary, or courier) shall be deemed to have been served when the recipient signs on it (if the recipient refuses to accept it, it shall be deemed to have been served seven days after the date of rejection, return, or delivery (whichever is earlier)). Any notice, request, or other document that is delivered by postal service shall be deemed to have been served seven days after the date of posting. Any notice, request, or other document that is delivered by fax, email, Party As E-platforms, SMS, WeChat, or other electronic means shall be deemed to have been served on the date when the senders corresponding system shows successful delivery.
Where Party A notifies Party B of assignment of debts or collects funds from Party B via the announcement on the public media, the announcing date shall be regarded as the service date.
18.2.3 In case of change to either Partys contact address, email, fax number, mobile phone number or WeChat account, it shall notify the other Party within five working days as from the date of such change. Otherwise, the other Party shall have the right to use the original contact address or information. Where the service fails due to change in contact address or contact information, the returning date or seven days after posting (whichever is earlier) shall be regarded as the service date. The changing Party shall assume the possible losses resulted therefrom, and the legal validity of service shall not be prejudiced.
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18.2.4 The contact addresses, emails, fax numbers, mobile phone numbers, WeChat accounts as listed herein shall also serve as the addresses for service of respective notarization documents and judicial documents (including but not limited to indictment/claim of arbitration, evidence, summons, notice of respondence to action, notice to produce evidence, notice of court session, written judgment/award, written verdict, mediation document, notice of due performance, and other instruments during the trial and execution phases), and that the appellate court and notarization institution serve the instruments to the aforementioned service addresses in the writing mode as stipulated herein shall be regarded as duly served (The concrete service standard shall refer to the preceding clause for execution).
18.3 Unless otherwise expressly stated, the terms and expressions referred to herein shall have the same meaning as those in the Credit Agreement.
18.4 Party B confirms that all operations of Party A in handling specific business for Party B (or the Credit Applicant) and Party As operations related to the Agreement can be handled at any branch of Party A, and relevant correspondence can be generated, signed or issued. The business operation and correspondence of the branches of Party A shall be deemed as acts of Party A and shall be binding on both Parties.
18.5 If the credit debt is not in RMB, Party A shall have the right to use the amount recovered to directly purchase foreign exchange at the exchange rate announced by Party A at the time of settlement as agreed herein, so as to pay off the credit debts. The calculation of non-RMB debt amount under the specific business texts shall be subject to the converted amount at the exchange rate (purchase price) announced by Party A at the time of settlement.
18.6 In case of division, integration (merger) and other situations of Party B during the validity period of the Agreement, the changed organization shall undertake or separately undertake the obligations hereunder. If Party B is declared to be dissolved or bankrupt, Party A shall have the right to dispose of its mortgaged property before the expiration.
18.7 Special Terms and Conditions of real estate mortgage (Please check Ö in ☐ if applicable)
☑ Principal Creditors Rights and Real Estate Maximum Mortgage Agreement(for Real Estate Registration only) (please fill in the Agreement name of the standard version required by the mortgage registration authority)with No. 2020 Asian Games Village Credit Granting 1154 signed by Party A and Party B is only for the purpose of handling the mortgage registration procedures. The specific rights and obligations of both Parties and the agreements on the Main Agreement and mortgage shall be subject to this Agreement. In particular, Party B shall provide guarantee within the scope of guarantee with the full value of the mortgage. At the request of the mortgage registration authority, ☐☐ Maximum amount and currency of creditors rights/☐ maximum amount of guaranteed creditors rights (please check the content in the standard Agreement version required by the corresponding mortgage registration authority) filled in at the time of registration is tentatively set as ☑☑ 1.4 times of the line of credit/☐ the evaluated value of the mortgage when mortgage is set (please choose one of them), i.e., USD_518 million. The specific amount shall be subject to the total amount obtained when the mortgage is realized.
19. Transfer of Creditors Rights and Mortgage Right
19.1 If Party A transfers all the creditors rights under the Credit Agreement to a third party, the maximum mortgage right shall be transferred to the creditors right assignee all together, whether the creditors rights guaranteed by the maximum mortgage are determined or not.
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19.2 After the creditors rights mortgaged hereunder are determined, if Party A transfers part of the creditors rights, part of the mortgage will also be transferred. Party A shall share the mortgage right of the mortgage in proportion to the amount of the creditors rights not transferred with the transferee; before the determination of the creditors rights guaranteed by the mortgage of the Agreement, if Party A transfers part of the creditors rights, part of the mortgage will also be transferred and the principal creditors rights of Party A guaranteed by the original maximum mortgage shall be reduced accordingly (i.e. the maximum amount of Party As principal creditors rights guaranteed by the original maximum mortgage amount minus the amount of transferred creditors rights). After the determination of Party As non-transferred principal creditors rights, Party A and the transferee shall jointly enjoy the mortgage right to the mortgage in proportion to the amount of creditors rights.
20. Applicable Laws and Dispute Resolution
20.1 The conclusion, interpretation and dispute resolution of the Agreement shall be governed by the laws of the Peoples Republic (excluding laws of Hong Kong, Macao and Taiwan).
20.2 It is agreed by the Parties that any dispute arising out of the performance of the Agreement between the Parties shall be resolved as per the dispute resolution method stipulated in the Credit Agreement.
21. Effectiveness of Mortgage Agreement
The Agreement shall take effect as of the date when both Parties legal representatives/principals or their authorized agents sign (or stamp name seals) and stamp official seals/special seals for Agreement (If Party B is a natural person, the Agreement shall take effect as of the date when Party B signs and Party As legal representative/principal or its authorized agent signs (or stamp name seal) and stamps the official seal/special seal for Agreement) and shall be automatically nullified on the date of expiration of mortgage period or when the principal and interest of credit granting debt and all related expenses owed by Party B to Party A under the Credit Agreement are paid off (whichever is later).
22. Supplementary Provisions
22.1. The Agreement is made in duplicate, with Party A, Party B, _____/_____ and _____/_____ holding one copy and each copy being equally authentic.
22.2 Other agreed terms:___/__________________________________________________________________________
_____________________________________________________________________________________________________
______________________________________________________________________________________________________
_____________________________________________________________________________________________________
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Appendix 1
List of Specific Outstanding Businesses
Unit: Ten Thousand
S.N. |
Business No. | Balance | Starting Date | Due Date | ||||||||||||
1 |
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2 |
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3 |
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4 |
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5 |
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6 |
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7 |
Special Reminder:
All terms hereof have been fully consulted by the Parties. Party B has been reminded by Party A to pay special attention to and make full and good understanding of the terms with regard to the exemption or restriction on Party As liabilities, the rights owned by Party A unilaterally, the increase of Party Bs liabilities, and the restriction on Party Bs rights. Party A has explained the above terms as required by Party B. The Parties hereto have the same understanding of the terms of the Agreement.
(The remainder of this page is intentionally left blank)
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(The following is the signature of the Maximum Mortgage Agreement with No. 2020 Asian Games Village Credit Granting 1154-Pledge 02)
Party A: Beijing Branch of China Merchants Bank Co., Ltd.
Principal or authorized agent (signature or stamped name seal):/s/ Kai XIONG
Contact Address: No. 156 Fuxingmennei Avenue, Xicheng District, Beijing
Corporate Email: gujing0610@cmbchina.com
Corporate Fax: /
Mobile Phone No. of Contact Person: 17600355610
Corporate WeChat Account:/
Please sign and fill it out as below if the mortgagor acts as a legal person or other organization:
Party B: Beijing Sohu New Media Information Technology Co., Ltd.
Legal Representative/Principal or Authorized Agent (signature/stamped name seal):/s/ ChaoyangZHANG
Contact Address: Building 3, No. 2 Yard of Kexueyuan Nanlu, Haidian District, Beijing
Email: puhuang@sohu-inc.com
Fax: 56412828
Mobile phone number of contact person: 13811220840
Corporate WeChat Account: /
Please sign and fill it out as below if the mortgagor is a natural person:
Party B (signature): /
Nationality and ID Certificate:/
ID Certificate No.: /
Contact Address: /
Email: /
Fax No.: /
Mobile Phone Number: /
WeChat: /
Date of Signing: December 10, 2020
14
Exhibit 4.93
Letter of Comfort
No.: 2020 Asian Games Village Credit Granting 1154
To: Beijing Branch of China Merchants Bank Co., Ltd.
Whereas, Beijing AmazGame Age Internet Technology Co., Ltd. has applied for external guarantee business in your bank and signed the Credit Agreement with No. [2020 Asian Games Village Credit Granting 1154] (hereinafter referred to as Credit Agreement) and the Guarantee Cooperation Agreement with No. [2020 Asian Games Village External Guarantee Cooperation Agreement No. 016, and 2020 Asian Games Village External Guarantee Cooperation Agreement No.017] (hereinafter referred to as Cooperation Agreement) with your bank. The Letter of Comfort is hereby issued by [Changyou.com Limited ] (hereinafter referred to as we or us) to guarantee the realization of your banks creditors rights under the Credit Agreement and the Cooperation Agreement and to confirm to your bank that we may actively assist your bank in obtaining the disposable funds of affiliates inside and outside the group for repayment.
The Letter of Comfort shall take effect and become legally binding upon us after being signed by our authorized representative and sealed with official seal, which shall remain in force until all debts under the Credit Agreement and the Cooperation Agreement have been paid off. The Letter of Comfort cannot be unilaterally revoked, withdrawn or changed. We have obtained and performed all necessary internal and external approval, authorization or other relevant procedures required for signing and performance of the Letter of Comfort. We shall not defend against your bank on grounds including but not limited to failing to pass the internal examination and approval procedure, failing to meet other conditions stipulated in other contracts, failing to comply with the laws, regulations and regulatory provisions, etc.
Authorized signatory: /s/ Changyou.com Limited
Date: December 9, 2020
Exhibit 4.94
Statement of Undertaking
No.: 2020 Asian Games Village Credit Granting 1154
To: Beijing Branch of China Merchants Bank Co., Ltd.
Whereas, Beijing AmazGame Age Internet Technology Co., Ltd. has applied for external guarantee business in your bank and signed the Credit Agreement with No. [2020 Asian Games Village Credit Granting 1154] (hereinafter referred to as Credit Agreement) and the Guarantee Cooperation Agreement with No. [2020 Asian Games Village External Guarantee Cooperation Agreement No. 016, and 2020 Asian Games Village External Guarantee Cooperation Agreement No.017] (hereinafter referred to as Cooperation Agreement) with your bank. In order to guarantee the realization of your banks creditors rights under the Credit Agreement and the Cooperation Agreement, Sohu.com Ltd (hereinafter referred to as we or us) hereby irrevocably undertakes and confirms the following matters:
Until all debts under the Credit Agreement and the Cooperation Agreement have been paid off, we shall not pledge the equity of Changyou.com HK Limited and Changyou.com Limited to any third party or set burden of rights in any other form without the written consent of your bank.
The Statement of Undertaking shall take immediate effect and become legally binding upon us after being signed by our authorized representative and sealed with official seal, which shall remain in force until all debts under the Credit Agreement and the Cooperation Agreement are paid off. The Statement of Undertaking cannot be unilaterally revoked, withdrawn or changed. We have obtained and performed all necessary internal and external approval, authorization or other relevant procedures required for signing and performance of the Statement of Undertaking. We shall not defend against your bank on grounds including but not limited to failing to pass the internal examination and approval procedure, failing to meet other conditions stipulated in other contracts, failing to comply with the laws, regulations and regulatory provisions, etc. If we violate any contents hereof to cause losses to your bank, your bank shall have the right to request us to compensate for all losses thus incurred.
Sohu.com Ltd
Authorized signatory: /s/Joanna Lv
Date: December 10, 2020
Exhibit 4.95
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT (this Agreement), effective as of January 1, 2021, by and between Changyou.com Limited, a Cayman Islands company (the Company), and Dewen Chen, an individual (the Employee).
1. Definitions. Capitalized terms used herein and not otherwise defined in the text below will have the meanings ascribed thereto on Annex 1.
2. Employment; Duties.
(a) The Company agrees to employ the Employee in the capacity and with such responsibilities as are generally set forth on Annex 2.
(b) The Employee hereby agrees to devote his full time and best efforts in such capacities as are set forth on Annex 2 on the terms and conditions set forth herein. Notwithstanding the foregoing, the Employee may engage in other activities, such as activities involving professional, charitable, educational, religious and similar types of organizations, provided that the Employee complies with the Executive Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement, in the form attached hereto as Annex 3 (the Employee Obligations Agreement) and such other activities do not interfere with or prohibit the performance of the Employees duties under this Agreement, or conflict in any material way with the business of the Company or of its subsidiaries and affiliates (including the Companys variable interest entities). The provisions of the Employee Obligations Agreement between the Company and the Employee as in effect prior to January 1, 2021 will continue with full force and effect with respect to all matters arising with respect to periods through December 31, 2020. The Employee Obligations Agreement will be effective as of January 1, 2021 and will have full force and effect on and after such date.
(c) The Employee will use best efforts during the Term to ensure that the Companys business and those of its subsidiaries and variable interest entities are conducted in accordance with all applicable laws and regulations of all jurisdictions in which such businesses are conducted.
3. Compensation.
(a) Base Annual Income. During the Term, the Company will pay the Employee an annual base salary as set forth on Annex 2, payable monthly pursuant to the Companys normal payroll practices.
(b) Discretionary Bonus. During the Term, the Company, in its sole discretion, may award to the Employee an annual bonus based on the Employees performance and other factors deemed relevant by the Companys Board of Directors.
(c) Share Incentive Awards. The Employee will be eligible to participate in any share incentive programs available to officers or employees of the Company.
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(d) Reimbursement of Expenses. The Company will reimburse the Employee for reasonable expenses incurred by the Employee in the course of, and necessary in connection with, the performance by the Employee of his or her duties to the Company, provided that such expenses are substantiated in accordance with the Companys policies.
4. Other Employee Benefits.
(a) Vacation; Sick Leave. The Employee will be entitled to such number of weeks of paid vacation each year as are set forth on Annex 2, the taking of which must be coordinated with the Employees supervisor in accordance with the Companys standard vacation policy. Unless otherwise approved by the Companys Board of Directors, vacation that is not used in a particular year may only be carried forward to subsequent years in accordance with the Companys policies in effect from time to time. The Employee will be eligible for sick leave in accordance with the Companys policies in effect from time to time.
(b) Healthcare Plan. The Company will arrange for membership in the Companys group healthcare plan for the Employee and the Employees spouse, in accordance with the Companys standard policies from time to time with respect to health insurance and in accordance with the rules established for individual participation in such plan and under applicable law.
(c) Life and Disability Insurance. The Company will provide term life and disability insurance payable to the Employee, in each case in an amount up to a maximum of one times the Employees base salary in effect from time to time, provided however, that such amount will be reduced by the amount of any life insurance or death or disability benefit coverage, as applicable, that is provided to the Employee under any other benefit plans or arrangements of the Company. Such policies will be in accordance with the Companys standard policies from time to time with respect to such insurance and the rules established for individual participation in such plans and under applicable law.
(d) Other Benefits. Pursuant to the Companys policies in effect from time to time and the applicable plan rules, the Employee will be eligible to participate in the other employee benefit plans of general application, which may include, without limitation, housing allowance or reimbursement and in which, in any event, will include the benefits at the levels set forth on Annex 2.
5. Certain Representations, Warranties and Covenants of the Employee.
(a) Related Company Positions. The Employee agrees that the Employee and members of the Employees immediate family will not have any financial interest directly or indirectly (including through any entity in which the Employee or any member of the Employees immediate family has a position or financial interest) in any transactions with the Company or any subsidiaries or affiliates (including the Companys variable interest entities) thereof unless all such transactions, prior to being entered into, have been disclosed to the Board of Directors and approved by a majority of the independent members of the Board of Directors and comply with all other Company policies and applicable law as may be in effect from time to time. The Employee also agrees that he will inform the Board of Directors of the Company of any transactions involving the Company or any of its subsidiaries or affiliates (including the Companys variable interest entities) in which senior officers, including but not limited to the Employee, or their immediate family members have a financial interest.
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(b) Discounts, Rebates or Commissions. Unless expressly permitted by written policies and procedures of the Company in effect from time to time that may be applicable to the Employee, neither the Employee nor any immediate family member will be entitled to receive or obtain directly or indirectly any discount, rebate or commission in respect of any sale or purchase of goods or services effected or other business transacted (whether or not by the Employee) by or on behalf of the Company or any of its subsidiaries or affiliates (including the Companys variable interest entities), and if the Employee or any immediate family member (or any firm or company in which the Employee or any immediate family member is interested) obtains any such discount, rebate or commission, the Employee will pay to the Company an amount equal to the amount so received (or the proportionate amount received by any such firm or company to the extent of the Employees or family members interest therein).
6. Term; Termination.
(a) Unless sooner terminated pursuant to the provisions of this Section 6, the term of this Agreement (the Term) will commence on the date hereof and end on December 31, 2023.
(b) Voluntary Termination by the Employee. The Employee may voluntarily Terminate this Agreement by providing the Company with ninety (90) days advance written notice (Voluntary Termination), in which case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employees right to all other benefits will terminate as of the date of Termination, other than any continuation required by applicable law. Without limiting the foregoing, if, in connection with a Change in Control, the surviving entity or successor to the Companys business offers the Employee employment on substantially equivalent terms to those set forth in this Agreement and such offer is not accepted by the Employee, the refusal by the Employee to accept such offer and the subsequent termination of the Employees employment by the Company will be deemed to be a voluntary termination of employment by the Employee and will not be treated as a termination by the Company without Cause.
(c) Termination by the Company for Cause. The Company may Terminate this Agreement for Cause by written notice to the Employee, effective immediately upon the delivery of such notice. In such case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employees right to all other benefits will terminate, other than any continuation required by applicable law.
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(d) Termination by the Employee with Good Reason or Termination by the Company without Cause. The Employee may Terminate this Agreement for Good Reason, and the Company may Terminate this Agreement without Cause, in either case upon thirty (30) days advance written notice by the party Terminating this Agreement to the other party and the Termination will be effective as of the expiration of such thirty (30) day period. If the Employee Terminates with Good Reason or the Company Terminates without Cause, the Employee will be entitled to continue to receive payment of severance benefits equal to the Employees monthly base salary in effect on the date of Termination for the shorter of (i) six (6) months and (ii) the remainder of the Term of this Agreement (the Severance Period), provided that the Employee complies with the Employee Obligations Agreement during the Severance Period and executes a release agreement in the form requested by the Company at the time of such Termination that releases the Company from any and all claims arising from or related to the employment relationship and/or such Termination. Such payments will be made ratably over the Severance Period according to the Companys standard payroll schedule. The Employee will also receive payment of a bonus for the remainder of the year of the Termination, but only to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Companys Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees. Health insurance benefits with the same coverage (i.e., medical, dental, optical and/or mental health coverage) provided to the Employee prior to the Termination and in all other material respects comparable to those in place immediately prior to the Termination will be provided at the Companys expense during the Severance Period. The Company will also continue to carry the Employee on its Directors and Officers insurance policy for six (6) years following the Date of Termination at the Companys expense with respect to insurable events which occurred during the Employees term as a director or officer of the Company, with such coverage being at least comparable to that in effect immediately prior to the Termination Date; provided, however, that (i) such terms, conditions and exceptions will not be, in the aggregate, materially less favorable to the Employee than those in effect on the Termination Date and (ii) if the aggregate annual premiums for such insurance at any time during such period exceed two hundred percent (200%) of the per annum rate of premium currently paid by the Company for such insurance, then the Company will provide the maximum coverage that will then be available at an annual premium equal to two hundred percent (200%) of such rate.
(e) Termination by Reason of Death or Disability. A Termination of the Employees employment by reason of death or Disability shall not be deemed to be a Termination by the Company (for or without Cause) or by the Employee (for or without Good Reason). In the event that the Employees employment with the Company Terminates as a result of the Employees death or Disability, the Employee or the Employees estate or representative, as applicable, will receive all accrued salary and accrued vacation as of the date of the Employees death or Disability and any other benefits payable under the Companys then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, the Employee or the Employees estate or representative, as applicable, will receive a bonus for the year in which the death or Disability occurs to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Companys Board of Directors or by the Board of Directors of Sohu.com Limited, a Cayman Islands company and the ultimate parent of the Company (Sohu), or Sohus Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees.
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(f) Misconduct After Termination of Employment. Notwithstanding the foregoing, if the Employee after the termination of his employment violates or fails to fully comply with the Employee Obligations Agreement, thereafter (i) the Employee will not be entitled to any payments from the Company, (ii) any insurance or other benefits that have continued will terminate immediately, (iii) the Employee will promptly reimburse to the Company all amounts that have been paid to the Employee pursuant to this Section 6; and (iv) if the Employee would not, in the absence of such violation or failure to comply, have been entitled to severance payments from the Company equal to at least six (6) months base salary, the Employee must pay to the Company an amount equal to the difference between six (6) months base salary and the amount of severance pay measured by base salary reimbursed to the Company by the Employee pursuant to clause (iii) of this sentence.
7. Employee Obligations Agreement. By signing this Agreement, the Employee hereby agrees to execute and deliver to the Company the Employee Obligations Agreement, and such execution and delivery will be a condition to the Employees entitlement to his or her rights under this Agreement.
8. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law principles thereof.
9. Dispute Resolution.
(a) At the option of the party initiating the claim, any dispute, controversy, difference or claim arising out of or relating to this Agreement may be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The award rendered in such an arbitration proceeding will be final and binding and judgment on the award rendered may be entered in any court having jurisdiction over the parties.
(b) The number of arbitrators will be three, one of whom will be appointed by the party asserting a claim against the other party or parties, one of whom will be appointed by the party or parties (acting together), as the case may be, against whom a claim has been asserted, and the third of whom will be selected by mutual agreement, if possible, within thirty days after the selection of the second arbitrator.
(c) The language of the arbitration will be Mandarin Chinese and any foreign language documents presented at such arbitration will be accompanied by a Mandarin Chinese translation thereof prepared at the expense of the party seeking to present such document.
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(d) Any award of the arbitrators (i) will be in writing, (ii) will state the reasons upon which such award is based and (iii) may include an award of costs, including reasonable attorneys fees and disbursements.
(e) The arbitrators will have no authority to award punitive damages or any other damages not measured by the prevailing partys actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Agreement.
(f) Notwithstanding the foregoing, any party may apply to any court having jurisdiction over the parties to obtain injunctive relief in order to maintain the status quo until such time as an arbitration award is rendered or the dispute, controversy or claim is otherwise resolved.
10. Notices. All notices, requests and other communications under this Agreement must be in writing (including email and express mail or courier delivery or in person delivery, but excluding ordinary mail delivery) and given to the address stated below:
(a) | if to the Employee, to the email address or the physical address, as applicable, that is on file with the Company from time to time, as may be updated by the Employee; |
(b) | if to the Company: |
Changyou.com Limited
Changyou Building, Raycom Creative Industrial Park,
65 Bajiao East Road, Shijingshan District
Beijing, Peoples Republic of China 100043
Attention: Yanfeng Lyu
Director
Email: joannalu@sohu-inc.com
or to such other email address or physical address as either party may hereafter specify for the purpose by written notice to the other party in the manner provided in this Section 10. All such notices, requests and other communications will be deemed received: (i) if given by email, when transmitted to the email address specified in this Section 10 if confirmation of receipt is received; (ii) if sent by express courier delivery, or delivered in person, when delivered.
11. Miscellaneous.
(a) Entire Agreement. This Agreement, together with the Employee Obligations Agreement, constitutes the entire understanding between the Company and the Employee relating to the subject matter hereof with respect to periods on and after January 1, 2021 and supersedes and cancels all prior and contemporaneous written and oral agreements and understandings with respect to the subject matter of this Agreement with respect to periods on and after January 1, 2021. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement with respect to periods on and after January 1, 2021.
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(b) Modification; Waiver. No provision of this Agreement may be modified, waived or discharged unless modification, waiver or discharge is agreed to in a writing signed by the Employee and such officer of the Company as may be specifically authorized by the Companys Board of Directors. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
(c) Successors; Binding Agreement. This Agreement will be binding upon and will inure to the benefit of the Employee, the Employees heirs, executors, administrators and beneficiaries, and the Company and its successors (whether direct or indirect, by purchase, merger, consolidation or otherwise), subject to the terms and conditions set forth herein.
(d) Withholding Taxes. All amounts payable to the Employee under this Agreement will be subject to applicable withholding of income, wage and other taxes to the extent required by applicable law.
(e) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.
(f) Language. This Agreement is written in the English language only. The English language also will be the controlling language for all future communications between the parties hereto concerning this Agreement.
(g) Counterparts. This Agreement may be signed in any number of counterparts, each of which will be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of January 1, 2021.
Signature of Employee: | Changyou.com Limited | |||||
/s/ Dewen Chen | By: | /s/ Yanfeng Lyu | ||||
Dewen Chen | Name: Yanfeng Lyu | |||||
Title: Director |
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Annex 1
Certain Definitions
Cause means:
(i) | willful misconduct or gross negligence by the Employee, or any willful or grossly negligent omission to perform any act, resulting in injury to the Company or any subsidiaries or affiliates (including the Companys variable interest entities) thereof; |
(ii) | misconduct or negligence of the Employee that results in gain or personal enrichment of the Employee to the detriment of the Company or any subsidiaries or affiliates (including the Companys variable interest entities) thereof; |
(iii) | breach of any of the Employees agreements with the Company, including those set forth herein and in the Employee Obligations Agreement, and including, but not limited to, the repeated failure to perform substantially the Employees duties to the Company or any subsidiaries or affiliates (including the Companys variable interest entities) thereof, excessive absenteeism or dishonesty; |
(iv) | any attempt by the Employee to assign or delegate this Agreement or any of the rights, duties, responsibilities, privileges or obligations hereunder without the prior consent of the Company (except in respect of any delegation by the Employee of his employment duties hereunder to other employees of the Company in accordance with its usual business practice); |
(v) | the Employees indictment or conviction for, or confession of, a felony or any crime involving moral turpitude under the laws of the United States or any State thereof, or under the laws of China, or Hong Kong; |
(vi) | declaration by a court that the Employee is insane or incompetent to manage his business affairs; |
(vii) | habitual drug or alcohol abuse which materially impairs the Employees ability to perform his duties; or |
(viii) | filing of any petition or other proceeding seeking to find the Employee bankrupt or insolvent. |
Change in Control means the occurrence of any of the following events:
(i) | any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Securities Exchange Act of 1934) other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company, becomes the direct or beneficial owner of securities representing fifty percent (50%) or more of the combined voting power of the Companys then-outstanding securities; |
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(ii) | during any period of two (2) consecutive years after the date of this Agreement, individuals who at the beginning of such period constitute the Board of Directors of the Company, and all new directors (other than directors designated by a person who has entered into an agreement with the Company to effect a transaction described in (i), (iii), or (iv) of this definition) whose election or nomination to the Board was approved by a vote of at least two-thirds of the directors then in office, cease for any reason to constitute at least a majority of the members of the Board; |
(iii) | the effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; |
(iv) | the complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Companys assets; or |
(v) | there occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement. |
Company means Changyou.com Limited and, unless the context suggests to the contrary, all of its subsidiaries and related companies.
Disability means the Employee becomes physically or mentally impaired to an extent which renders him or her unable to perform the essential functions of his or her job, with or without reasonable accommodation, for a period of six consecutive months, or an aggregate of nine months in any two year period.
Good Reason means the occurrence of any of the following events without the Employees express written consent, provided that the Employee has given notice to the Company of such event and the Company has not remedied the problem within fifteen (15) days:
(i) | any significant change in the duties and responsibilities of the Employee inconsistent in any material and adverse respect with the Employees title and position (including status, officer positions and reporting requirements), authority, duties or responsibilities as contemplated by Annex 2 to this Agreement. For the purposes of this Agreement, because of the evolving nature of the Employers business, the Companys changing of Employees reporting relationships and department(s) will not be considered a significant change in duties and responsibilities; |
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(ii) | any material breach by the Company of this Agreement, including without limitation any reduction of the Employees base salary or the Companys failure to pay to the Employee any portion of the Employees compensation; or |
(iii) | the failure, in the event of a Change in Control in which the Company is not the surviving entity, of the surviving entity or the successor to the Companys business to assume this Agreement pursuant to its terms or to offer the Employee employment on substantially equivalent terms to those set forth in this Agreement. |
Termination (and any similar, capitalized use of the term, such as Terminate) means, according to the context, the termination of this Agreement or the Employees ceasing to render employment services.
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Annex 2
Particular Terms of Employees Employment
Title(s): Chief Executive Officer.
Reporting Requirement: The Employee will report to the Companys Board of Directors.
Responsibilities: Such duties and responsibilities as are ordinarily associated with the Employees title(s) in a United States publicly-traded corporation and such other duties as may be specified by the Companys Board of Directors from time to time.
Job Location: The Employees duties will be rendered at the Companys headquarters located in Beijing, China, or at such other place or places and at such times as the needs of the Company may from time-to-time dictate.
Base Salary: [RMB 4,000,000] per year (after-tax) , as adjusted by the Board of Directors from time to time
# of Weeks of Paid Vacation per Year: [three weeks]_ ( per year )
Other Benefits:
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Annex 3
EXECUTIVE EMPLOYEE NON-COMPETITION, NON-SOLICITATION, CONFIDENTIAL INFORMATION AND WORK PRODUCT AGREEMENT
In consideration of my employment and the compensation paid to me by Changyou.com Limited, a Cayman Island company, or a subsidiary or variable interest entity thereof (Changyou.com Limited or any such subsidiary or variable interest entity will be referred to herein individually and collectively as Changyou and the term Changyou will also be deemed to include Sohu.com Limited and its subsidiaries or variable interest entities, unless the context requires otherwise), and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, I agree as follows:
1. Non-Competition. During the term of my employment agreement with Changyou.com Limited and continuing after the termination of such employment agreement for the longer of (i) one year after the termination of such employment agreement for any reason and (ii) such period of time as Changyou is paying to me any severance benefits (the Noncompete Period), I will not, on my own behalf, or as owner, manager, stockholder (other than as stockholder of less than 2% of the outstanding stock of a company that is publicly traded or listed on a stock exchange), consultant, director, officer or employee of or in any other manner connected with any business entity, participate or be involved in any Competitor without the prior written authorization of Changyou. Competitor means any business of the type and character of business in which Changyou engages or proposes to engage and may include, without limitation, an individual, company, enterprise, partnership enterprise, government office, committee, social organization or other organization that, in any event, produces, distributes or provides the same or substantially similar kind of product or service as Changyou. On the date of this Executive Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement (this Agreement), Competitors of Changyou include without limitation: ShengQuanda Interactive Entertainment Limited, Netease.com Inc., Tencent Holdings Ltd., Perfect World Co. Ltd, Giant Interactive Group, Inc., The9 Limited, Netdragon Websoft, Inc., Taomee Holdings Limited, Shenzhen ZQ Game Technology Corporation, Guangzhou Huaduo Network Technology Co., Ltd (duowan.com), Kongzhong Corp, KingSoft Corporation Limited, SINA Corporation and Beijing Byte Dance Technology Co. LTD . Such list of examples of Competitors of Changyou may be updated by Changyou from time to time.
2. Nonsolicitation. During the Noncompete Period, I will not, either for my own account or for the account of any other person: (i) solicit, induce, attempt to hire, or hire any employee or contractor of Changyou or any other person who may have been employed or engaged by Changyou during the term of my employment with Changyou unless that person has not worked with Changyou within the six months following my last day of employment with Changyou; (ii) solicit business or relationship in competition with Changyou from any of Changyous customers, suppliers or partners or any other entity with which Changyou does business; (iii) assist in such hiring or solicitation by any other person or business entity or encourage any such employee to terminate his or her employment with Changyou; or (iv) encourage any such customer, supplier or partner or any other entity to terminate its relationship with Changyou.
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3. Confidential Information.
(a) While employed by Changyou and indefinitely thereafter, I will not, directly or indirectly, use any Confidential Information (as hereinafter defined) other than pursuant to my employment by and for the benefit of Changyou, or disclose any such Confidential Information to anyone outside of Changyou or to anyone within Changyou who has not been authorized to receive such information, except as directed in writing by an authorized representative of Changyou.
(b) Confidential Information means all trade secrets, proprietary information, and other data and information, in any form, belonging to Changyou or any of their respective clients, customers, consultants, licensees or affiliates that is held in confidence by Changyou. Confidential Information includes, but is not limited to computer software, the structure of Changyous online game development platform, business plans and arrangements, customer lists, marketing materials, financial information, research, and any other information identified or treated as confidential by Changyou or any of their respective clients, customer, consultants, licensees or affiliates. Notwithstanding the foregoing, Confidential Information does not include information which Changyou has voluntarily disclosed to the public without restriction, or which is otherwise known to the public at large.
4. Rights in Work Product.
(a) I agree that all Work Product (as hereinafter defined) will be the sole property of Changyou. I agree that all Work Product that constitutes original works of authorship protectable by copyright are works made for hire, as that term is defined in the United States Copyright Act and, therefore, the property of Changyou. I agree to waive, and hereby waive and irrevocably and exclusively assign to Changyou, all right, title and interest I may have in or to any other Work Product and, to the extent that such rights may not be waived or assigned, I agree not to assert such rights against Changyou or its licensees (and sublicensees), successors or assigns.
(b) I agree to promptly disclose all Work Product to the appropriate individuals in Changyou as such Work Product is created in accordance with the requirements of my job and as directed by Changyou.
(c) Work Product means any and all inventions, improvements, developments, concepts, ideas, expressions, processes, prototypes, plans, drawings, designs, models, formulations, specifications, methods, techniques, shop-practices, discoveries, innovations, creations, technologies, formulas, algorithms, data, computer databases, reports, laboratory notebooks, papers, writings, photographs, source and object codes, software programs, other works of authorship, and know-how and show-how, or parts thereof conceived, developed, or otherwise made by me alone or jointly with others (i) during the period of my employment with Changyou or (ii) during the six month period next succeeding the termination of my employment with Changyou if the same in any way relates to the present or proposed products, programs or services of Changyou or to tasks assigned to me during the course of my employment, whether or not patentable or subject to copyright or trademark protection, whether or not reduced to tangible form or reduced to practice, whether or not made during my regular working hours, and whether or not made on Changyou premises.
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5. Employees Prior Obligations. I hereby certify I have no continuing obligation to any previous employer or other person or entity which requires me not to disclose any information to Changyou.
6. Employees Obligation to Cooperate. At any time during my employment with Changyou and thereafter upon the request of Changyou, I will execute all documents and perform all lawful acts that Changyou considers necessary or advisable to secure its rights hereunder and to carry out the intent of this Agreement. Without limiting the generality of the foregoing, I agree to render to Changyou or its nominee all reasonable assistance as may be required:
(a) | In the prosecution or applications for letters patent, foreign and domestic, or re-issues, extensions and continuations thereof; |
(b) | In the prosecution or defense of interferences which may be declared involving any of said applications or patents; |
(c) | In any administrative proceeding or litigation in which Changyou may be involved relating to any Work Product; and |
(d) | In the execution of documents and the taking of all other lawful acts which Changyou considers necessary or advisable in creating and protecting its copyright, patent, trademark, trade secret and other proprietary rights in any Work Product. |
The reasonable out-of-pocket expenses incurred by me in rendering such assistance at the request of Changyou will be reimbursed by Changyou. If I am no longer an employee of Changyou at the time I render such assistance, Changyou will pay me a reasonable fee for my time.
7. Termination; Return of Changyou Property. Upon the termination of my employment with Changyou for any reason, or at any time upon Changyous request, I will return to Changyou all Work Product and Confidential Information and notes, memoranda, records, customer lists, proposals, business plans and other documents, computer software, materials, tools, equipment and other property in my possession or under my control, relating to any work done for Changyou, or otherwise belonging to Changyou, it being acknowledged that all such items are the sole property of Changyou. Further, before obtaining my final paycheck, I agree to sign a certificate stating the following:
Termination Certificate
This is to certify that I do not have in my possession or custody, nor have I failed to return, any Work Product (as defined in the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement between Changyou.com Limited (Changyou) and me) or any notes, memoranda, records, customer lists, proposals, business plans or other documents or any computer software, materials, tools, equipment or other property (or copies of any of the foregoing) belonging to Changyou.
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8. General Provisions.
(a) This Agreement contains the entire agreement between me and Changyou with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings related to the subject matter hereof, whether written or oral; provided however, that this Agreement will not supersede (i) the Trade Secret and Confidentiality Agreement dated as of ____ and (ii) the Non-Compete Agreement date as of ____, each between Beijing AmazGame Age Internet Technology Co., Ltd., a company incorporated in the Peoples Republic of China (the Beijing AmazGame), and me (collectively, the Beijing AmazGame Agreements), and (iii) the Employee Obligations Agreement between Changyou and me in effect prior to the date hereof (the Prior Employee Obligations Agreement), which will continue in full force and effect with respect to, or arising in connection with, all matters within the subject thereof through the date immediately prior to the date hereof; provided, however that in the event of a conflict between any provision of this Agreement and any provision of either of the Beijing AmazGame Agreements or any provision of the Prior Employee Obligations Agreement, the provision of this Agreement will prevail. This Agreement may not be modified except by a written agreement signed by Changyou and me.
(b) This Agreement will be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law principles thereof. At the option of the party initiating the claim, any dispute, controversy, difference or claim arising out of or relating to this Agreement may be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. The award rendered in such an arbitration proceeding will be final and binding and judgment on the award rendered may be entered in any court having jurisdiction over the parties. The number of arbitrators will be three, one of whom will be appointed by the party asserting a claim against the other party or parties, one of whom will be appointed by the party or parties (acting together), as the case may be, against whom a claim has been asserted, and the third of whom will be selected by mutual agreement, if possible, within thirty days after the selection of the second arbitrator. The language of the arbitration will be Mandarin Chinese and any foreign language documents presented at such arbitration will be accompanied by a Mandarin Chinese translation thereof prepared at the expense of the party seeking to present such document. Any award of the arbitrators (i) will be in writing, (ii) will state the reasons upon which such award is based and (iii) may include an award of costs, including reasonable attorneys fees and disbursements. The arbitrators will have no authority to award punitive damages or any other damages not measured by the prevailing partys actual damages, and may not, in any event, make any ruling, finding or award that does not conform to the terms and conditions of this Agreement. Notwithstanding the foregoing, any party may apply to any court having jurisdiction over the parties to obtain injunctive relief in order to maintain the status quo until such time as an arbitration award may be rendered or the dispute, controversy or claim may be otherwise resolved.
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(c) In the event that any provision of this Agreement is determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time, over too large a geographic area, or over too great a range of activities, it will be interpreted to extend only over the maximum period of time, geographic area or range of activities as to which it may be enforceable.
(d) If, after application of paragraph (c) above, any provision of this Agreement will be determined to be invalid, illegal or otherwise unenforceable by any court of competent jurisdiction, the validity, legality and enforceability of the other provisions of this Agreement will not be affected thereby. Any invalid, illegal or unenforceable provision of this Agreement will be severed, and after any such severance, all other provisions hereof will remain in full force and effect.
(e) Changyou and I agree that either of us may waive or fail to enforce violations of any part of this Agreement without waiving the right in the future to insist on strict compliance with all or parts of this Agreement.
(f) My obligations under this Agreement will survive the termination of my employment with Changyou regardless of the manner of or reasons for such termination, and regardless of whether such termination constitutes a breach of any other agreement I may have with Changyou. My obligations under this Agreement will be binding upon my heirs, executors and administrators, and the provisions of this Agreement will inure to the benefit of the successors and assigns of Changyou.
(g) I agree and acknowledge that the rights and obligations set forth in this Agreement are of a unique and special nature and necessary to ensure the preservation, protection and continuity of Changyous business, employees, Confidential Information, and intellectual property rights. Accordingly, Changyou is without an adequate legal remedy in the event of my violation of any of the covenants set forth in this Agreement. I agree, therefore, that, in addition to all other rights and remedies, at law or in equity or otherwise, that may be available to Changyou, each of the covenants made by me under this Agreement will be enforceable by injunction, specific performance or other equitable relief, without any requirement that Changyou post a bond or that Changyou prove any damages.
[Signature page follows]
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IN WITNESS WHEREOF, the undersigned employee and Changyou have executed this Executive Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement effective as of January 1, 2021.
Signature of Employee: | Changyou.com Limited | |||||
/s/ Dewen Chen | By: | /s/ Yanfeng Lyu | ||||
Dewen Chen | Name: Yanfeng Lyu | |||||
Title: Director |
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Exhibit 4.96
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, effective as of January 1, 2021, by and between Sohu.com Limited, a Cayman Islands company, and Charles Zhang, an individual (the Employee).
1. Definitions. Capitalized terms used herein and not otherwise defined in the text below will have the meanings ascribed thereto on Annex 1.
2. Employment; Duties.
(a) The Company agrees to employ the Employee in the capacity and with such responsibilities as are generally set forth on Annex 2.
(b) The Employee hereby agrees to devote his full time and best efforts in such capacities as are set forth on Annex 2 on the terms and conditions set forth herein. Notwithstanding the foregoing, the Employee may engage in other activities, such as activities involving professional, charitable, educational, religious and similar types of organizations, provided the Employee complies with the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement, in the form attached hereto as Annex 3 (the Employee Obligations Agreement) and such other activities do not interfere with or prohibit the performance of the Employees duties under this Agreement, or conflict in any material way with the business of the Company or of its subsidiaries and affiliates (including the Companys variable interest entities). The provisions of the Employee Obligations Agreements between the Company and the Employee as in effect prior to January 1, 2021 (the Prior Employee Obligations Agreements) will continue in full force and effect with respect to all matters arising with respect to periods through December 31, 2020. The Employee Obligations Agreement effective as of January 1, 2021 and will be in full force and effect on and after such date.
(c) The Employee will use best efforts during the Term to ensure that the Companys business and the businesses of its subsidiaries and affiliates (including the Companys variable interest entities) are conducted in accordance with all applicable laws and regulations of all jurisdictions in which such businesses are conducted.
3. Compensation.
(a) Base Annual Income. During the Term, the Company will pay the Employee an annual base salary as set forth on Annex 2, payable monthly pursuant to the Companys normal payroll practices.
(b) Discretionary Bonus. During the Term, the Company, in its sole discretion, may award to the Employee an annual bonus based on the Employees performance and other factors deemed relevant by the Companys Board of Directors.
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(c) Share Incentive Awards. The Employee will be eligible to participate in any share incentive programs available to officers or employees of the Company.
(d) Reimbursement of Expenses. The Company will reimburse the Employee for reasonable expenses incurred by the Employee in the course of, and necessary in connection with, the performance by the Employee of his duties to the Company, provided that such expenses are substantiated in accordance with the Companys policies.
4. Other Employee Benefits.
(a) Vacation; Sick Leave. The Employee will be entitled to such number of weeks of paid vacation each year as are set forth on Annex 2, the taking of which must be in accordance with the Companys standard vacation policy. Unless otherwise approved by the Companys Board of Directors, vacation that is not used in a particular year may only be carried forward to subsequent years in accordance with the Companys policies in effect from time to time. The Employee will be eligible for sick leave in accordance with the Companys policies in effect from time to time.
(b) Healthcare Plan. The Company will arrange for membership in the Companys group healthcare plan for the Employee, the Employees spouse and, if applicable, the Employees children under 18 years old, in accordance with the Companys standard policies from time to time with respect to health insurance and in accordance with the rules established for individual participation in such plan and under applicable law.
(c) Life and Disability Insurance. The Company will provide term life and disability insurance payable to the Employee, in each case initially in a maximum amount of RMB2,000,000, but subject to adjustment from time to time, provided however, that such amount will be reduced by the amount of any life insurance or death or disability benefit coverage, as applicable, that is provided to the Employee under any other benefit plans or arrangements of the Company. Such policies will be in accordance with the Companys standard policies from time to time with respect to such insurance and the rules established for individual participation in such plans and under applicable law.
(d) Other Benefits. Pursuant to the Companys policies in effect from time to time and the applicable plan rules, the Employee will be eligible to participate in other employee benefit plans of general application, which may include, without limitation, housing allowance or reimbursement, tuition fees for the Employees children, if any, at an international school and tax equalization, which will include, in any event, benefits at the levels set forth on Annex 2.
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5. Certain Representations, Warranties and Covenants of the Employee.
(a) Related Company Positions. The Employee agrees that the Employee and members of the Employees immediate family will not have any financial interest directly or indirectly (including through any entity in which the Employee or any member of the Employees immediate family has a position or financial interest) in any transactions with the Company or any subsidiaries or affiliates (including the Companys variable interest entities) thereof unless all such transactions, prior to being entered into, have been disclosed to the Board of Directors and approved by a majority of the independent members of the Board of Directors and comply with all other Company policies and applicable law as may be in effect from time to time. The Employee also agrees that he will inform the Board of Directors of the Company of any transactions involving the Company or any of its subsidiaries or affiliates (including the Companys variable interest entities) in which senior officers, including but not limited to the Employee, or their immediate family members have a financial interest.
(b) Discounts, Rebates or Commissions. Unless expressly permitted by written policies and procedures of the Company in effect from time to time that may be applicable to the Employee, neither the Employee nor any immediate family member will be entitled to receive or obtain directly or indirectly any discount, rebate or commission in respect of any sale or purchase of goods or services effected or other business transacted (whether or not by the Employee) by or on behalf of the Company or any of its subsidiaries or affiliates (including the Companys variable interest entities), and if the Employee or any immediate family member (or any firm or company in which the Employee or any immediate family member is interested) obtains any such discount, rebate or commission, the Employee will pay to the Company an amount equal to the amount so received (or the proportionate amount received by any such firm or company to the extent of the Employees or family members interest therein).
6. Term; Termination.
(a) Unless sooner terminated pursuant to the provisions of this Section 6, the term of this Agreement (the Term) will commence on the date hereof and end on December 31, 2023.
(b) Voluntary Termination by the Employee. The Employee may voluntarily Terminate this Agreement by providing the Company with ninety (90) days advance written notice (Voluntary Termination), in which case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employees right to all other benefits will terminate as of the date of Termination, other than any continuation required by applicable law. Without limiting the foregoing, if, in connection with a Change in Control, the surviving entity or successor to the Companys business offers the Employee employment on substantially equivalent terms to those set forth in this Agreement and such offer is not accepted by the Employee, the refusal by the Employee to accept such offer and the subsequent termination of the Employees employment by the Company will be deemed to be a voluntary termination of employment by the Employee and will not be treated as a termination by the Company without Cause.
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(c) Termination by the Company for Cause. The Company may Terminate this Agreement for Cause by written notice to the Employee, effective immediately upon the delivery of such notice. In such case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employees right to all other benefits will terminate, other than any continuation required by applicable law.
(d) Termination by the Employee with Good Reason or Termination by the Company without Cause. The Employee may Terminate this Agreement for Good Reason, and the Company may Terminate this Agreement without Cause, in either case upon thirty (30) days advance written notice by the party Terminating this Agreement to the other party and the Termination will be effective as of the expiration of such thirty (30) day period. If the Employee Terminates with Good Reason or the Company Terminates without Cause, the Employee will be entitled to continue to receive payment of severance benefits equal to the Employees monthly base salary in effect on the date of Termination for the shorter of (i) six (6) months and (ii) the remainder of the Term of this Agreement (the Severance Period), provided that the Employee complies with the Employee Obligations Agreement during the Severance Period and executes a release agreement in the form requested by the Company at the time of such Termination that releases the Company from any and all claims arising from or related to the employment relationship and/or such Termination. Such payments will be made ratably over the Severance Period according to the Companys standard payroll schedule. The Employee will also receive payment of a bonus for the remainder of the year of the Termination, but only to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Companys, Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees. Health insurance benefits with the same coverage (i.e., medical, dental, optical and mental health coverage) provided to the Employee prior to the Termination and in all other material respects comparable to those in place immediately prior to the Termination will be provided at the Companys expense during the Severance Period. The Company will also continue to carry the Employee on its Directors and Officers insurance policy for six (6) years following the Date of Termination at the Companys expense with respect to insurable events which occurred during the Employees term as a director or officer of the Company, with such coverage being at least comparable to that in effect immediately prior to the Termination Date; provided, however, that (i) such terms, conditions and exceptions will not be, in the aggregate, materially less favorable to the Employee than those in effect on the Termination Date and (ii) if the aggregate annual premiums for such insurance at any time during such period exceed two hundred percent (200%) of the per annum rate of premium currently paid by the Company for such insurance, then the Company will provide the maximum coverage that is then available at an annual premium equal to two hundred percent (200%) of such rate.
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(e) Termination by Reason of Death or Disability. A Termination of the Employees employment by reason of death or Disability will not be deemed to be a Termination by the Company (for or without Cause) or by the Employee (for or without Good Reason). In the event that the Employees employment with the Company Terminates as a result of the Employees death or Disability, the Employee or the Employees estate or representative, as applicable, will receive all accrued salary and accrued vacation as of the date of the Employees death or Disability and any other benefits payable under the Companys then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, the Employee or the Employees estate or representative, as applicable, will receive a bonus for the year in which the death or Disability occurs to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Companys Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees.
(f) Misconduct After Termination of Employment. Notwithstanding the foregoing, if the Employee after the termination of his employment violates or fails to fully comply with the Employee Obligations Agreement, thereafter (i) the Employee will not be entitled to any payments from the Company, (ii) any insurance or other benefits that have continued will terminate immediately, (iii) the Employee will promptly reimburse to the Company all amounts that have been paid to the Employee pursuant to this Section 6; and (iv) if the Employee would not, in the absence of such violation or failure to comply, have been entitled to severance payments from the Company equal to at least six (6) months base salary, the Employee will pay to the Company an amount equal to the difference between six (6) months base salary and the amount of severance pay measured by base salary reimbursed to the Company by the Employee pursuant to clause (iii) of this sentence.
7. Equity-Based Compensation-Related Provisions.
(a) Termination by the Company Without Cause after a Change in Control. If Company Terminates this Agreement without Cause within twelve (12) months following a Change in Control, the vesting and exercisability of each of the Employees outstanding stock options or other equity-based incentive awards (Awards) will accelerate such that the Award will become fully vested and exercisable upon the effectiveness of the Termination, and any repurchase right of the Company with respect to shares of stock or other equity issued upon exercise of the Award will completely lapse, in each case subject to paragraph (c) below (Forfeiture of Options for Misconduct).
(b) Termination other than by the Company Without Cause after a Change in Control. If the Employees employment with the Company Terminates for any reason, unless the Company Terminates this Agreement without Cause within twelve (12) months following a Change in Control, the vesting and exercisability of each of the Employees outstanding Awards will cease upon the effectiveness of the Termination, such that any unvested Award will be cancelled.
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(c) Forfeiture of Options for Misconduct. If the Employee fails to comply with the terms of this Agreement, the Employee Obligations Agreement, or the written policies and procedures of the Company, as the same may be amended from time to time, or acts against the specific instructions of the Board of Directors of the Company or if this Agreement is terminated by the Company for Cause (each a Penalty Breach), the Employee will forfeit any Awards that have been granted to him or to which the Employee may be entitled, whether the same are then vested or not, and the same will not thereafter be exercisable at all, and all shares of common stock of the Company, if any, purchased by the Employee pursuant to the exercise of Awards and still then owned by the Employee may be repurchased by the Company, at its sole discretion, at the price paid by the Employee for such shares of common stock. The terms of all outstanding option grants are hereby amended to conform with this provision.
8. Employee Obligations Agreement. By signing this Agreement, the Employee hereby agrees to execute and deliver to the Company the Employee Obligations Agreement, and such execution and delivery will be a condition to the Employees entitlement to his rights under this Agreement.
9. Governing Law; Resolution of Disputes. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of New York if the Employee is not a citizen of the Peoples Republic of China (the PRC), and in accordance with the laws of the PRC if the Employee is a citizen of the PRC, in each case exclusive of such jurisdictions principles of conflicts of law. If, under the applicable law, any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation or ordinance, such portion will be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement; the invalidity of any such portion will not affect the force, effect and validity of the remaining portion hereof. Each of the parties hereto irrevocably agrees that any dispute, controversy, difference or claim arising out of, relating to, or concerning any interpretation, construction, performance or breach of this Agreement may be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted,. There will be one arbitrator, selected in accordance with the Arbitration Rules. The decision of the arbitrator will be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrators decision in any court having jurisdiction. The parties to the arbitration will each pay an equal share of the costs and expenses of such arbitration, and each party will separately pay for its respective counsel fees and expenses; provided, however, that the prevailing party in any such arbitration will be entitled to recover from the non-prevailing party its reasonable costs and attorney fees.
10. Notices. All notices, requests and other communications under this Agreement must be in writing (including email or similar writing and express mail or courier delivery or in person delivery, but excluding ordinary mail delivery) and given to the address stated below:
(a) if to the Employee, to the address or email address that is on file with the Company from time to time, as may be updated by the Employee;
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(b) if to the Company, to:
Sohu.com limited
Level 18, Sohu.com Media Plaza
Block 3, No. 2 Kexueyuan South Road, Haidian District
Beijing 100190
Peoples Republic of China
Attention: Joanna Lv
Chief Financial Officer
Email: joannalu@sohu-inc.com
with a copy to:
Goulston & Storrs
400 Atlantic Avenue
Boston, MA 02110
Attention: Tim Bancroft
Email: tbancroft@goulstonstorrs.com
or to such other address or email address as either party may hereafter specify for the purpose by written notice to the other party in the manner provided in this Section 10. All such notices, requests and other communications will be deemed received: (i) if given by email, when transmitted to the email address specified in this Section 10 if confirmation of receipt is received; (ii) if sent by express mail or courier delivery, when delivered; and (iii) if given in person, when delivered.
11. Miscellaneous.
(a) Entire Agreement. This Agreement, together with the Employee Obligations Agreement, constitutes the entire understanding between the Company and the Employee relating to the subject matter hereof with respect to periods on and after January 1, 2021 and supersedes and cancels all prior and contemporaneous written and oral agreements and understandings with respect to the subject matter of this Agreement with respect to periods on and after January 1, 2021. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement with respect to periods on and after January 1, 2021.
(b) Modification; Waiver. No provision of this Agreement may be modified, waived or discharged unless modification, waiver or discharge is agreed to in a writing signed by the Employee and such officer of the Company as may be specifically designated by its Board of Directors. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.
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(c) Successors; Binding Agreement. This Agreement will be binding upon and will inure to the benefit of the Employee, the Employees heirs, executors, administrators and beneficiaries, and the Company and its successors (whether direct or indirect, by purchase, merger, consolidation or otherwise), subject to the terms and conditions set forth herein.
(d) Withholding Taxes. All amounts payable to the Employee under this Agreement will be subject to applicable withholding of income, wage and other taxes to the extent required by applicable law.
(e) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.
(f) Language. This Agreement is written in the English language only. The English language also will be the controlling language for all future communications between the parties hereto concerning this Agreement.
(g) Counterparts. This Agreement may be signed in any number of counterparts, each of which will be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
Employee: | Sohu.com Limited | |||||||
/s/ Charles Zhang | By: | /s/ Joanna Lv | ||||||
Charles Zhang | Name: Joanna Lv | |||||||
Title: Chief Financial Officer |
Annex 1
Certain Definitions
Cause means:
(i) | willful misconduct or gross negligence by the Employee, or any willful or grossly negligent omission to perform any act, resulting in injury to the Company or any subsidiaries or affiliates (including the Companys variable interest entities) thereof; |
(ii) | misconduct or negligence of the Employee that results in gain or personal enrichment of the Employee to the detriment of the Company or any subsidiaries or affiliates (including the Companys variable interest entities) thereof; |
(iii) | breach of any of the Employees agreements with the Company, including those set forth herein and in the Employee Obligations Agreement, and including, but not limited to, the repeated failure to perform substantially the Employees duties to the Company or any subsidiaries or affiliates thereof, excessive absenteeism or dishonesty; |
(iv) | any attempt by the Employee to assign or delegate this Agreement or any of the rights, duties, responsibilities, privileges or obligations hereunder without the prior approval of the Board of Directors of the Company (except in respect of any delegation by the Employee of his employment duties hereunder to other employees of the Company in accordance with its usual business practice); |
(v) | the Employees indictment or conviction for, or confession of, a felony or any crime involving moral turpitude under the laws of the United States or any State thereof, or under the laws of China, or Hong Kong; |
(vi) | declaration by a court that the Employee is insane or incompetent to manage his business affairs; |
(vii) | habitual drug or alcohol abuse which materially impairs the Employees ability to perform his duties; or |
(viii) | filing of any petition or other proceeding seeking to find the Employee bankrupt or insolvent. |
(i)
Change in Control means the occurrence of any of the following events:
(i) | any person (within the meaning of Section 13(d) or Section 14(d)(2) of the Securities Exchange Act of 1934) other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company, becomes the direct or beneficial owner of securities representing fifty percent (50%) or more of the combined voting power of the Companys then-outstanding securities; |
(ii) | during any period of two (2) consecutive years after the date of this Agreement, individuals who at the beginning of such period constitute the Board of Directors of the Company, and all new directors (other than directors designated by a person who has entered into an agreement with the Company to effect a transaction described in (i), (iii), or (iv) of this definition) whose election or nomination to the Board was approved by a vote of at least two-thirds of the directors then in office, cease for any reason to constitute at least a majority of the members of the Board; |
(iii) | the effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity; |
(iv) | the complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Companys assets; or |
(v) | there occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement. |
Company means Sohu.com Limited and, unless the context suggests to the contrary, all of its subsidiaries and related companies.
Disability means the Employee becomes physically or mentally impaired to an extent which renders him unable to perform the essential functions of his job, with or without reasonable accommodation, for a period of six consecutive months, or an aggregate of nine months in any two year period.
(ii)
Good Reason means the occurrence of any of the following events without the Employees express written consent, provided that the Employee has given notice to the Company of such event and the Company has not remedied the problem within fifteen (15) days:
(i) | any significant change in the duties and responsibilities of the Employee inconsistent in any material and adverse respect with the Employees title and position (including status, officer positions and reporting requirements), authority, duties or responsibilities as contemplated by Annex 2 to this Agreement. For the purposes of this Agreement, because of the evolving nature of the Employers business, the Companys changing of Employees reporting relationships and department(s) will not be considered a significant change in duties and responsibilities; |
(ii) | any material breach by the Company of this Agreement, including without limitation any reduction of the Employees base salary or the Companys failure to pay to the Employee any portion of the Employees compensation; or |
(iii) | the failure, in the event of a Change in Control in which the Company is not the surviving entity, of the surviving entity or the successor to the Companys business to assume this Agreement pursuant to its terms or to offer the Employee employment on substantially equivalent terms to those set forth in this Agreement. |
Termination (and any similar, capitalized use of the term, such as Terminate) means, according to the context, the termination of this Agreement or the Employees ceasing to render employment services.
(iii)
Annex 2
Particular Terms of Employees Employment
Title(s): Chief Executive Officer
Reporting Requirement: The Employee will report to the Companys Board of Directors.
Responsibilities: Such duties and responsibilities as are ordinarily associated with the Employees title(s) in a United States publicly-traded corporation and such other duties as may be specified by the Board of Directors from time to time.
Base Salary: RMB4,000,000 per year or as adjusted by the Board of Directors from time to time.
# of Weeks of Paid Vacation per Year: Three (3)
Other Benefits:
Annual reimbursement of RMB2,000,000 per year
Tax equalization on salary and bonus to 15%.
Health, life and disability insurance and tuition fees for the Employees children, if any, as per company policy.
Bonus as specifically approved each year.
Annex 3
FORM OF EMPLOYEE NON-COMPETITION, NON-SOLICITATION, CONFIDENTIAL INFORMATION AND WORK PRODUCT AGREEMENT
In consideration of my employment and the compensation paid to me by Sohu.com Limited, a Cayman Islands company (the Company), or a subsidiary or other affiliate or related company thereof (Sohu.com Limited or any such subsidiary or related company or other affiliate referred to herein individually and collectively as SOHU), and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, I agree as follows:
1. Non-Competition. During the term of my employment with SOHU and continuing after the termination of such employment for the longer of (i) one year after the termination of my employment with SOHU for any reason and (ii) such period of time as SOHU is paying to me any severance benefits, (the Noncompete Period), I will not, on my own behalf, or as owner, manager, stockholder (other than as stockholder of less than 2% of the outstanding stock of a company that is publicly traded or listed on a stock exchange), consultant, director, officer or employee of or in any other manner connected with any business entity, participate or be involved in any Competitor without the prior written authorization of the Board of Directors of SOHU. Competitor means any business of the type and character of business in which SOHU engages or proposes to engage and may include, without limitation, an individual, company, enterprise, partnership enterprise, government office, committee, social organization or other organization that, in any event, produces, distributes or provides the same or substantially similar kind of product or service as SOHU. On the date of this Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement (this Agreement), Competitors include, without limitation, the following companies and their subsidiaries or affiliates:
(1) | BAT: Baidu, Alibaba, Tencent |
(2) | TMDJ: TouTiao, Meituan Dianping, Didi, JD |
(3) | Media: Sina/Weibo, NetEase, Phoenix, Qutoutiao |
(4) | Game: Perfect World, Giant, Kalends, iDreamsky, IGG, 37, YOOZOO, Century Huatong, Kingsoft |
(5) | Video: Youku, iQiyi, Bilibili, Douyin, Douyu, Huya, Kuaishou, YY |
(6) | Other vertical sites: Autohome, BitAuto, Fang, Leju |
(7) | U.S. internet companies: Google, Yahoo, Facebook, Twitter |
Such list may be updated by the Company from time to time so that it is consistent with the list of competitors disclosed in the Companys annual reports on Form 20-F filed with the U.S. Securities and Exchange Commission.
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2. Nonsolicitation. During the Noncompete Period, I will not, either for my own account or for the account of any other person: (i) solicit, induce, attempt to hire, or hire any employee or contractor of SOHU or any other person who may have been employed or engaged by SOHU during the term of my employment with SOHU unless that person has not worked with SOHU within the six months following my last day of employment with SOHU; (ii) solicit business or relationship in competition with SOHU from any of SOHUs customers, suppliers or partners or any other entity with which SOHU does business; (iii) assist in such hiring or solicitation by any other person or business entity or encourage any such employee to terminate his employment with SOHU; or (iv) encourage any such customer, supplier or partner or any other entity to terminate its relationship with SOHU.
3. Confidential Information.
(a) While employed by SOHU and indefinitely thereafter, I will not, directly or indirectly, use any Confidential Information (as hereinafter defined) other than pursuant to my employment by and for the benefit of SOHU, or disclose any such Confidential Information to anyone outside of SOHU or to anyone within SOHU who has not been authorized to receive such information, except as directed in writing by an authorized representative of SOHU.
(b) Confidential Information means all trade secrets, proprietary information, and other data and information, in any form, belonging to SOHU or any of their respective clients, customers, consultants, licensees or affiliates that is held in confidence by SOHU. Confidential Information includes, but is not limited to computer software, the structure of SOHUs online directories and search engines, business plans and arrangements, customer lists, marketing materials, financial information, research, and any other information identified or treated as confidential by SOHU or any of their respective clients, customer, consultants, licensees or affiliates. Notwithstanding the foregoing, Confidential Information does not include information which SOHU has voluntarily disclosed to the public without restriction, or which is otherwise known to the public at large.
4. Rights in Work Product.
(a) I agree that all Work Product (as hereinafter defined) will be the sole property of SOHU. I agree that all Work Product that constitutes original works of authorship protectable by copyright are works made for hire, as that term is defined in the United States Copyright Act and, therefore, the property of SOHU. I agree to waive, and hereby waive and irrevocably and exclusively assign to SOHU, all right, title and interest I may have in or to any other Work Product and, to the extent that such rights may not be waived or assigned, I agree not to assert such rights against SOHU or its licensees (and sublicensees), successors or assigns.
(b) I agree to promptly disclose all Work Product to the appropriate individuals in SOHU as such Work Product is created in accordance with the requirements of my job and as directed by SOHU.
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(c) Work Product means any and all inventions, improvements, developments, concepts, ideas, expressions, processes, prototypes, plans, drawings, designs, models, formulations, specifications, methods, techniques, shop-practices, discoveries, innovations, creations, technologies, formulas, algorithms, data, computer databases, reports, laboratory notebooks, papers, writings, photographs, source and object codes, software programs, other works of authorship, and know-how and show-how, or parts thereof conceived, developed, or otherwise made by me alone or jointly with others (i) during the period of my employment with SOHU or (ii) during the six month period next succeeding the termination of my employment with SOHU if the same in any way relates to the present or proposed products, programs or services of SOHU or to tasks assigned to me during the course of my employment, whether or not patentable or subject to copyright or trademark protection, whether or not reduced to tangible form or reduced to practice, whether or not made during my regular working hours, and whether or not made on SOHU premises.
5. Employees Prior Obligations. I hereby certify I have no continuing obligation to any previous employer or other person or entity which requires me not to disclose any information to SOHU.
6. Employees Obligation to Cooperate. At any time during my employment with SOHU and thereafter upon the request of SOHU, I will execute all documents and perform all lawful acts that SOHU considers necessary or advisable to secure its rights hereunder and to carry out the intent of this Agreement. Without limiting the generality of the foregoing, I agree to render to SOHU or its nominee all reasonable assistance as may be required:
(a) | In the prosecution or applications for letters patent, foreign and domestic, or re-issues, extensions and continuations thereof; |
(b) | In the prosecution or defense of interferences which may be declared involving any of said applications or patents; |
(c) | In any administrative proceeding or litigation in which SOHU may be involved relating to any Work Product; and |
(d) | In the execution of documents and the taking of all other lawful acts which SOHU considers necessary or advisable in creating and protecting its copyright, patent, trademark, trade secret and other proprietary rights in any Work Product. |
The reasonable out-of-pocket expenses incurred by me in rendering such assistance at the request of SOHU will be reimbursed by SOHU. If I am no longer an employee of SOHU at the time I render such assistance, SOHU will pay me a reasonable fee for my time.
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7. Termination; Return of SOHU Property. Upon the termination of my employment with SOHU for any reason, or at any time upon SOHUs request, I will return to SOHU all Work Product and Confidential Information and notes, memoranda, records, customer lists, proposals, business plans and other documents, computer software, materials, tools, equipment and other property in my possession or under my control, relating to any work done for SOHU, or otherwise belonging to SOHU, it being acknowledged that all such items are the sole property of SOHU. Further, before obtaining my final paycheck, I agree to sign a certificate stating the following:
Termination Certificate
This is to certify that I do not have in my possession or custody, nor have I failed to return, any Work Product (as defined in the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement between me and Sohu.com Limited (SOHU)) or any notes, memoranda, records, customer lists, proposals, business plans or other documents or any computer software, materials, tools, equipment or other property (or copies of any of the foregoing) belonging to SOHU.
8. General Provisions.
(a) This Agreement contains the entire agreement between me and the Company with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings related to the subject matter hereof, whether written or oral; provided however, that, with respect to periods through the date hereof, this Agreement will not supersede the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreements between the Company (including its predecessor Sohu.com Inc.) and me that were in effect prior to the date hereof (the Prior Employee Obligations Agreements), which will continue in full force and effect with respect to such periods. This Agreement may not be modified except by written agreement signed by the Company and me.
(b) This Agreement will be governed by and construed and enforced in accordance with the laws of the State of New York if the Employee is not a citizen of the Peoples Republic of China (the PRC), and in accordance with the laws of the PRC if the Employee is a citizen of the PRC, in each case exclusive of such jurisdictions principles of conflicts of law. If, under the applicable law, any portion of this Agreement is at any time deemed to be in conflict with any applicable statute, rule, regulation or ordinance, such portion will be deemed to be modified or altered to conform thereto or, if that is not possible, to be omitted from this Agreement; the invalidity of any such portion will not affect the force, effect and validity of the remaining portion hereof. Each of the parties hereto irrevocably (i) agrees that any dispute, controversy, difference or claim arising out of, relating to, or concerning any interpretation, construction, performance or breach of this Agreement may be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is submitted. There will be one arbitrator, selected in accordance with the Arbitration Rules. The decision of the arbitrator will be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrators decision in any court having jurisdiction. The parties to the arbitration will each pay an equal share of the costs and expenses of such arbitration, and each party will separately pay for its respective counsel fees and expenses; provided, however, that the prevailing party in any such arbitration will be entitled to recover from the non-prevailing party its reasonable costs and attorney fees.
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(c) In the event that any provision of this Agreement is determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time, over too large a geographic area, over too great a range of activities, it will be interpreted to extend only over the maximum period of time, geographic area or range of activities as to which it may be enforceable.
(d) If, after application of paragraph (c) above, any provision of this Agreement will be determined to be invalid, illegal or otherwise unenforceable by any court of competent jurisdiction, the validity, legality and enforceability of the other provisions of this Agreement will not be affected thereby. Any invalid, illegal or unenforceable provision of this Agreement will be severed, and after any such severance, all other provisions hereof will remain in full force and effect.
(e) SOHU and I agree that either of us may waive or fail to enforce violations of any part of this Agreement without waiving the right in the future to insist on strict compliance with all or parts of this Agreement.
(f) My obligations under this Agreement will survive the termination of my employment with SOHU regardless of the manner of or reasons for such termination, and regardless of whether such termination constitutes a breach of any other agreement I may have with SOHU. My obligations under this Agreement will be binding upon my heirs, executors and administrators, and the provisions of this Agreement will inure to the benefit of the successors and assigns of SOHU.
(g) I agree and acknowledge that the rights and obligations set forth in this Agreement are of a unique and special nature and necessary to ensure the preservation, protection and continuity of SOHUs business, employees, Confidential Information, and intellectual property rights. Accordingly, SOHU is without an adequate legal remedy in the event of my violation of any of the covenants set forth in this Agreement. I agree, therefore, that, in addition to all other rights and remedies, at law or in equity or otherwise, that may be available to SOHU, each of the covenants made by me under this Agreement will be enforceable by injunction, specific performance or other equitable relief, without any requirement that SOHU have to post a bond or that SOHU have to prove any damages.
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IN WITNESS WHEREOF, the undersigned employee and the Company have executed this Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement.
Effective as of January 1, 2021 and signed on Beijing.
Employee: | Sohu.com Limited | |||||
/s/ Charles Zhang | By: | /s/ Joanna Lv | ||||
Charles Zhang |
Name: Joanna Lv | |||||
Title: Chief Financial Officer |
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Exhibit 8.1
Principal Subsidiaries and VIEs of the Registrant
Name of Entity |
Jurisdiction of |
Ownership | ||||
Subsidiaries: |
||||||
For Sohu: |
||||||
Sohu.com (Hong Kong) Limited (Sohu HK) |
Hong Kong | 100 | % | |||
Beijing Sohu New Era Information Technology Co., Ltd. (Sohu Era) |
Peoples Republic of China | 100 | % | |||
Sohu.com (Search) Limited (Sohu Search) |
Cayman Islands | 100 | % | |||
Beijing Sohu New Media Information Technology Co., Ltd. (Sohu Media) |
Peoples Republic of China | 100 | % | |||
Sohu.com (Game) Limited (Sohu Game) |
Cayman Islands | 100 | % | |||
Beijing Sohu New Momentum Information Technology Co., Ltd. (Sohu New Momentum) |
Peoples Republic of China | 100 | % | |||
Fox Video Limited (Sohu Video) |
Cayman Islands | 100 | % | |||
Fox Information Technology (Tianjin) Limited (Video Tianjin) |
Peoples Republic of China | 100 | % | |||
Sohu Focus Limited (Sohu Focus) |
Cayman Islands | 100 | % | |||
For Changyou: |
||||||
Changyou.com Limited (Changyou) |
Cayman Islands | 100 | % | |||
Changyou.com (HK) Limited (Changyou HK) |
Hong Kong | 100 | % | |||
Beijing AmazGame Age Internet Technology Co., Ltd. (AmazGame) |
Peoples Republic of China | 100 | % | |||
Beijing Changyou Gamespace Software Technology Co., Ltd. (Gamespace) |
Peoples Republic of China | 100 | % | |||
Changyou.com Korea LLC (Changyou Korea) |
Korea | 100 | % | |||
Beijing Changyou Chuangxiang Software Technology Co., Ltd. (Changyou Chuangxiang) |
Peoples Republic of China | 100 | % | |||
For Sogou: |
||||||
Sogou Inc. (Sogou) |
Cayman Islands | 34 | % | |||
Sogou (BVI) Limited (Sogou BVI) |
British Virgin Islands | 34 | % | |||
Beijing Sogou Technology Development Co., Ltd. (Sogou Technology) |
Peoples Republic of China | 34 | % | |||
Sogou Hong Kong Limited (Sogou HK) |
Hong Kong | 34 | % | |||
Vast Creation Advertising Media Services Limited (Vast Creation) |
Hong Kong | 34 | % | |||
Beijing Sogou Network Technology Co., Ltd (Sogou Network) |
Peoples Republic of China | 34 | % | |||
Sogou (Shantou) Internet Microcredit Co., Ltd. (Sogou Microcredit) |
Peoples Republic of China | 34 | % | |||
Sogou (Hangzhou) Intelligent Technology Co., Ltd. (Sogou Hangzhou) |
Peoples Republic of China | 34 | % | |||
Shantou Ying Zhong Bai Fu Financing Guarantee Co., Ltd. (Sogou Financing Guarantee) |
Peoples Republic of China | 34 | % | |||
VIEs: |
||||||
For Sohu: |
||||||
Beijing Century High-Tech Investment Co., Ltd. (High Century) |
Peoples Republic of China | 100 | % | |||
Beijing Heng Da Yi Tong Information Technology Co., Ltd. (Heng Da Yi Tong) |
Peoples Republic of China | 100 | % | |||
Beijing Sohu Internet Information Service Co., Ltd. (Sohu Internet) |
Peoples Republic of China | 100 | % | |||
Beijing Sohu Donglin Advertising Co., Ltd. (Donglin) |
Peoples Republic of China | 100 | % | |||
Tianjin Jinhu Culture Development Co., Ltd (Tianjin Jinhu) |
Peoples Republic of China | 100 | % | |||
Beijing Focus Interactive Information Service Co., Ltd. (Focus Interactive) |
Peoples Republic of China | 100 | % | |||
For Changyou: |
||||||
Beijing Gamease Age Digital Technology Co., Ltd. (Gamease) |
Peoples Republic of China | 100 | % | |||
Shanghai ICE Information Technology Co., Ltd. (Shanghai ICE) |
Peoples Republic of China | 100 | % | |||
Beijing Guanyou Gamespace Digital Technology Co., Ltd. (Guanyou Gamespace) |
Peoples Republic of China | 100 | % | |||
For Sogou: |
||||||
Beijing Sogou Information Service Co., Ltd.(Sogou Information) |
Peoples Republic of China | 34 | % | |||
Chengdu Easypay Technology Co., Ltd. (Chengdu Easypay) |
Peoples Republic of China | 34 | % |
Exhibit 12.1
I, Charles Zhang, certify that:
1. | I have reviewed this annual report on Form 20-F of Sohu.com Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 18, 2021 | /s/ Charles Zhang | |||||
Charles Zhang, Chief Executive Officer and Chairman of the Board of Directors |
Exhibit 12.2
I, Joanna Lv, certify that:
1. | I have reviewed this annual report on Form 20-F of Sohu.com Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants Board of Directors (or persons performing the equivalent function): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 18, 2021 | /s/ Joanna Lv | |||||
Joanna Lv, Chief Financial Officer |
Exhibit 13.1
Certification Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934
In connection with the Annual Report of Sohu.com Limited (the Company) on Form 20-F for the fiscal year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Charles Zhang, Chief Executive Officer and Chairman of the Board of Directors of the Company, certify, pursuant to U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of December 31, 2020 and results of operations of the Company for the fiscal year ended December 31, 2020.
/s/ Charles Zhang |
Charles Zhang, Chief Executive Officer and |
Chairman of the Board of Directors |
March 18, 2021 |
Exhibit 13.2
Certification Pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934
In connection with the Annual Report of Sohu.com Limited (the Company) on Form 20-F for the fiscal year ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Joanna Lv, Chief Financial Officer of the Company, certify, pursuant to U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition of the Company as of December 31, 2020 and results of operations of the Company for the fiscal year ended December 31, 2020.
/s/ Joanna Lv |
Joanna Lv, Chief Financial Officer |
March 18, 2021 |
Exhibit 15.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-174955) of Sohu.com Limited of our report dated March 18, 2021 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this
Form 20-F.
/s/ PricewaterhouseCoopers Zhong Tian LLP
Beijing, the Peoples Republic of China
March 18, 2021
Exhibit 15.2
Consent of Haiwen & Partners, PRC Counsel
March 18, 2021
Sohu.com Limited
18/F, SOHU.com Media Plaza
Block 3, No. 2 Kexueyuan South Road
Haidian District
Beijing 100190
Peoples Republic of China
Subject: Consent of Haiwen & Partners
We hereby consent to the filing of this consent letter as an exhibit to the annual report on Form 20-F of Sohu.com Limited (the Company) for the Companys fiscal year ended December 31, 2020 being filed with the U.S. Securities and Exchange Commission (the SEC) on or about March 18, 2021 (the Form 20-F).
We also hereby consent to the use of our firm name and summaries of our firms opinions under the headings Information on the Company Government Regulation and Legal Uncertainties in the Form 20-F.
Yours faithfully,
/s/ Haiwen & Partners |
Haiwen & Partners |