EXHIBIT 10.30

MASTER TRANSACTION AGREEMENT

between

SOHU.COM INC.

and

CHANGYOU.COM LIMITED

January 1, 2009

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TABLE OF CONTENTS

 

ARTICLE I DOCUMENTS AND ITEMS TO BE DELIVERED PRIOR TO F-1 FILING

   2     1.1   Documents to be delivered by Sohu    2     1.2   Documents to be
delivered by Changyou, AmazGame and Gamease    2 ARTICLE II THE IPO AND ACTIONS
PENDING THE IPO    2     2.1   Transactions prior to the IPO    2     2.2  
Cooperation    3 ARTICLE III MMORPG BUSINESS TRANSFER, COVENANTS AND OTHER
MATTERS    3     3.1   Other Agreements    3     3.2   Further Instruments    3
    3.3   Agreement for Exchange of Information    4     3.4   Auditors and
Audits; Financial Statements; Accounting Matters    6     3.5   Confidentiality
   10     3.6   Privileged Matters    12     3.7   Future Litigation and Other
Proceedings    13     3.8   Mail and other Communications    14     3.9  
Administrative Services Agreements    14     3.10   Payment of Expenses    14
ARTICLE IV MUTUAL RELEASES; INDEMNIFICATION    15     4.1   Release of Claims   
15     4.2   Indemnification by Changyou    15     4.3   Indemnification by Sohu
   16     4.4   Ancillary Agreement Liabilities    19     4.5   Procedures for
Defense, Settlement and Indemnification of the Third Party Claims    17     4.6
  Additional Matters    18     4.7   Survival of Indemnities    19 ARTICLE V
Dispute resolution    19     5.1   Dispute Resolution    19 ARTICLE VI
MISCELLANEOUS    20     6.1   Consent of Sohu    20     6.2   Limitation of
Liability    20     6.3   Entire Agreement    20     6.4   Governing Law and
Jurisdiction    20     6.5   Termination; Amendment    20     6.6   Notices   
21     6.7   Counterparts    21     6.8   Binding Effect; Assignment    21
    6.9   Severability    22     6.10   Failure or Indulgence not Waiver;
Remedies Cumulative    22     6.11   Authority    22     6.12   Interpretation
   22     6.13   Conflicting Agreements    22     6.14   Third Party
Beneficiaries    23 ARTICLE VII DEFINITIONS    23     7.1   Defined Terms    23

 

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MASTER TRANSACTION AGREEMENT

This Master Transaction Agreement is dated as of January 1, 2009, by and between
Sohu.com Inc., a Delaware corporation (“Sohu”), and Changyou.com Limited, a
Cayman Islands corporation (“Changyou”) (each of Sohu and Changyou a “Party”
and, together, the “Parties”).

Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in Article VII hereof.

RECITALS

WHEREAS, Sohu is the beneficial owner of a majority of the issued and
outstanding Ordinary Shares of Changyou;

WHEREAS, the Parties have entered into, executed and delivered, and will enter
into, execute and deliver as may be necessary or desirable, the MMORPG Business
Transfer Agreements relating to the transfer of the Changyou Business from Sohu
and its subsidiaries and variable interest entities (“VIEs”) to Changyou and its
subsidiary Beijing AmazGame Internet Technology Co., Ltd., a company organized
in the People’s Republic of China (“AmazGame”), and its VIE Beijing Gamease Age
Digital Technology Co., Ltd., a company organized in the People’s Republic of
China (“Gamease”);

WHEREAS, Sohu has been engaged in the MMORPG business and, since December 1,
2007, has conducted such business through Changyou, as more fully described in a
draft Registration Statement on Form F-1 submitted for non-public review and
comment by the U.S. Securities and Exchange Commission (the “SEC”) under the
Securities Act (as so submitted and as amended from time to time prior to the
Live Filing Date, the “Draft IPO Registration Statement”) to be filed publicly
with the SEC via its EDGAR system (the date of such public filing, the “Live
Filing Date”) following the satisfactory completion of such review and comment
and as financial market conditions permit (as so filed, and as amended
thereafter from time to time, the “IPO Registration Statement);

WHEREAS, the Parties currently contemplate that Changyou will make an initial
public offering (“IPO”) pursuant to the IPO Registration Statement;

WHEREAS, the Parties intend in this Agreement, including the Exhibits and
Schedules hereto, to set forth and memorialize the principal arrangements among
Sohu and Changyou regarding the relationship of the Parties from and after the
filing of the IPO Registration Statement and the consummation of the IPO; and

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions,
covenants and provisions of this Agreement and intending to be legally bound,
Sohu and Changyou covenant and agree as follows:

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ARTICLE I

DOCUMENTS AND ITEMS TO BE DELIVERED PRIOR TO F-1 FILING

1.1 Documents to be delivered by Sohu. Sohu has delivered and its subsidiaries
and VIEs have delivered, as appropriate, or Sohu will deliver, or will cause its
subsidiaries and VIEs to deliver, as appropriate, prior to the Live Filing Date,
to Changyou, AmazGame and/or Gamease, as appropriate: (a) a duly executed
Marketing Services Agreement, substantially in the form attached to the Draft
IPO Registration Statement as Exhibit 10.17, with such changes, if any, to such
form as may be agreed to by the Parties prior to such execution (the “Marketing
Services Agreement”); (b) a duly executed Non-Competition Agreement,
substantially in the form attached to the Draft IPO Registration Statement as
Exhibit 10.16, with such changes, if any, to such form as may be agreed to by
the Parties prior to such execution (the “Non-Competition Agreement”); (c) the
MMORPG Business Transfer Agreements, and (d) such other agreements, documents or
instruments as the Parties may agree are necessary or desirable in order to
achieve the purposes hereof. For purposes of this agreement, Changyou and its
subsidiaries and VIEs will not be considered subsidiaries and VIEs of Sohu.

1.2 Documents to be delivered by Changyou, AmazGame and Gamease. Changyou,
AmazGame, Gamease and their subsidiaries and VIEs have delivered, as
appropriate, or Changyou, will deliver, or will cause AmazGame, Gamease, and any
of Changyou’s or AmazGame’s or Gamease’s subsidiaries and VIEs to deliver, as
appropriate, prior to the Live Filing Date, to Sohu or its subsidiaries or VIEs,
as appropriate: (a) in each case where Changyou, AmazGame or Gamease is a party
to any agreement or instrument referred to in Section 1.1, a duly executed
counterpart of such agreement or instrument; and (b) such other agreements,
documents or instruments as the Parties may agree are necessary or desirable in
order to achieve the purposes hereof.

ARTICLE II

THE IPO AND ACTIONS PENDING THE IPO

2.1 Transactions prior to the IPO. Subject to the occurrence of the events
described in this Article II, the Parties intend to consummate the IPO and to
take, or cause to be taken, the actions specified in this Section 2.1.

(a) Registration Statement. Changyou has submitted or plans to submit for
non-public review by the SEC the Draft IPO Registration Statement, and intends
to submit such amendments or supplements thereto as may be requested by the SEC
staff in connection with such non-public review and agreed to by Changyou, and
subsequently to file with the SEC the IPO Registration Statement and make such
amendments and supplements thereto as may be necessary or desirable in order to
cause the same to comply with the Securities Act and other applicable law, to
become and remain effective under the Securities Act, or as may be requested by
the representatives of the underwriters for the IPO (the “Underwriters”),
including, without limitation, filing such amendments or supplements to the IPO
Registration Statement as may be required by the underwriting agreement to be
entered into among Changyou and the Underwriters (the “Underwriting Agreement”)
following the effectiveness of the IPO Registration Statement under the
Securities Act.

 

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(b) Underwriting Agreement. Following the effectiveness of the IPO Registration
Statement, Changyou will enter into the Underwriting Agreement, which shall in
form and substance be satisfactory Changyou, as determined by its board of
directors or authorized designees, as appropriate, and Changyou shall comply
with its obligations thereunder.

(c) Nasdaq Global Market Listing. Changyou plans to prepare, file and have
approved an application for listing on the Nasdaq Global Market of the American
depositary shares, representing Ordinary Shares, to be offered and sold in the
IPO (the “ADSs”).

2.2 Cooperation. Sohu and Changyou shall each consult with, and cooperate in all
respects with, the other in connection with the marketing, including any
roadshow presentations, and pricing of the ADSs and shall take any and all
actions as may be reasonably necessary or desirable to consummate the IPO as
contemplated by the IPO Registration Statement and the Underwriting Agreement.

ARTICLE III

MMORPG BUSINESS TRANSFER,

COVENANTS AND OTHER MATTERS

3.1 Other Agreements. Each of the Parties agrees to execute or cause to be
executed by the appropriate parties and deliver, as appropriate, such other
agreements, instruments and other documents as may be necessary or desirable in
order to effect the purposes of this Agreement and the Inter-Company Agreements.

3.2 Further Instruments. Sohu will execute and deliver, and will cause its
subsidiaries and VIEs to execute and deliver, to Changyou, AmazGame and/or
Gamease, as the case may be, such instruments of transfer, conveyance,
assignment, substitution and confirmation, and will take such action as may be
reasonably necessary or desirable in order to transfer, convey and assign to
AmazGame and/or Gamease and confirm AmazGame’s and/or Gamease’s title to all
assets, rights, interests and other things of value used in or necessary for the
conduct and operation of the Changyou Business on or prior to the Live Filing
Date or to be transferred or licensed to Changyou, AmazGame and/or Gamease
pursuant to this Agreement, the MMORPG Business Transfer Agreements or any
document referred to herein or therein, to put Changyou and its subsidiaries and
VIEs in actual possession and operating control thereof and to permit Changyou
and its subsidiaries and VIEs to exercise all rights with respect thereto
(including, without limitation, rights under Contracts and other arrangements as
to which the consent of any third party to the transfer thereof shall not have
previously been obtained) relating to the Changyou Business; provided, however,
that in the absence of such execution and delivery by Sohu and/or its
subsidiaries and VIEs, such execution and delivery shall be deemed for all
purposes to have occurred subject only to Changyou’s obligation to pay to Sohu
or its applicable subsidiary or VIE an amount equal to the book value thereof to
the extent not previously so paid.

(b) Sohu will execute and deliver, and will cause its subsidiaries and VIEs to
execute and deliver, to Changyou, AmazGame and/or Gamease, as the case may be,
all instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as may be reasonably necessary or desirable
in order to have Sohu and its subsidiaries and VIEs, as the case may be, fully
and unconditionally assume and discharge the

 

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Sohu Liabilities; provided, however, that in the absence of such execution and
delivery by Sohu and/or any such other appropriate subsidiaries and VIEs, such
execution and delivery shall be deemed for all purposes to have occurred.

(c) Changyou will, and will cause AmazGame, Gamease and any other appropriate
subsidiaries and VIEs of Changyou to, execute and deliver to Sohu and its
subsidiaries and VIEs all instruments, assumptions, novations, undertakings,
substitutions or other documents and take such other action as may be reasonably
necessary or desirable in order to have Changyou, AmazGame or Gamease, as the
case may be, fully and unconditionally assume and discharge the Changyou
Liabilities; provided, however, that in the absence of such execution and
delivery by Changyou, AmazGame, Gamease and/or any such other appropriate
subsidiaries and VIEs, such execution and delivery shall be deemed for all
purposes to have occurred.

(d) Except as hereinabove provided or as set forth in the MMORPG Business
Transfer Agreements, neither Sohu, Changyou, nor their respective subsidiaries
and VIEs shall be obligated, in connection with the foregoing matters set forth
in this Section, to expend money other than reasonable out-of-pocket expenses,
attorneys’ fees and recording or similar fees, unless reimbursed by the other
relevant Party. Furthermore, each Party, at the request of any other Parties
hereto, shall execute and deliver such other instruments and do and perform such
other acts and things as may be necessary or desirable for effecting completely
the consummation of the transactions contemplated hereby.

3.3 Agreement for Exchange of Information.

(a) Generally. Each of the Parties agrees to provide, or cause to be provided,
to the other Parties, at any time, promptly after written request therefor, all
reports and other Information regularly provided by one Party to any other Party
prior to the Live Filing Date and any Information in the possession or under the
control of such Party to the extent reasonably requested by the requesting Party
(i) to comply with reporting, disclosure, filing or other requirements imposed
on the requesting Party (including under applicable securities laws) by a
Governmental Authority having jurisdiction over the requesting Party, (ii) for
use in any other judicial, regulatory, administrative or other proceeding or in
order to satisfy audit, accounting, claims, regulatory, litigation or other
similar requirements, (iii) to comply with its obligations under this Agreement
or any Inter-Company Agreement or (iv) at any time after the Live Filing Date to
the extent such Information and cooperation are necessary to comply with such
reporting, filing and disclosure obligations, for the preparation of financial
statements or completing an audit, and as reasonably necessary to conduct the
ongoing businesses of Sohu or Changyou, as the case may be. Each of the Parties
agrees to make their respective personnel available to discuss the Information
exchanged pursuant to this Section 3.3. In the event that any Party determines
that any such provision of Information or other actions contemplated by this
Section 3.3 could be commercially detrimental, violate any law or agreement, or
waive any attorney-client privilege, the Parties shall take all reasonable
measures to permit the compliance with such obligations in a manner that avoids
any such harm or consequence

(b) Internal Accounting Controls; Financial Information. After the Live Filing
Date, (i) each Party shall maintain in effect at its own cost and expense
adequate systems and

 

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controls for its business to the extent necessary to enable each other Party to
satisfy its reporting, tax return, accounting, audit and other obligations, and
(ii) each Party shall provide, or cause to be provided, to each other Party and
its subsidiaries and VIEs in such form as such requesting Party shall request,
at no charge to the requesting Party, all financial and other data and
information as the requesting Party determines necessary or advisable in order
to prepare its financial statements and reports or filings with any Governmental
Authority.

(c) Ownership of Information. Any Information owned by a Party that is provided
to a requesting Party pursuant to this Section 3.3 shall be deemed to remain the
property of the providing Party. Unless specifically set forth herein, nothing
contained in this Agreement shall be construed as granting or conferring rights
of license or otherwise in any such Information.

(d) Record Retention. To facilitate the possible exchange of Information
pursuant to this Section 3.3 and other provisions of this Agreement, each Party
agrees to use its reasonable best efforts for a period of ten years to retain
all Information in its respective possession or control substantially in
accordance with its respective record retention policies and/or practices as in
effect on the Live Filing Date, and for such longer period as may be required by
any Governmental Authority, any litigation matter, any applicable law or any
Inter-Company Agreement. However, at any time after such 10-year period each
Party may amend its respective record retention policies at such Party’s
discretion; provided, however, that the amending Party must give thirty
(30) days prior written notice of such change in the policy to each other Party.
No Party will destroy, or permit any of its Subsidiaries to destroy, any
Information that exists on the Live Filing Date (other than Information that is
permitted to be destroyed under the current respective record retention policies
of each Party) and that falls under the categories listed in Section 3.3(a),
without first notifying each other Parties of the proposed destruction and
giving each other Party the opportunity to take possession or make copies of
such Information prior to such destruction.

(e) Limitation of Liability. Each Party will use its reasonable best efforts to
ensure that Information provided to the other Parties hereunder is accurate and
complete; provided, however, no Party shall have any liability to any other
Party if any Information exchanged or provided pursuant to this Section 3.3 is
found to be inaccurate, in the absence of gross negligence, bad faith, or
willful misconduct by the Party providing the Information. No Party shall have
any liability to any other Parties if any Information is destroyed or lost after
the relevant Party has complied with the provisions of Section 3.3(d).

(f) Other Agreements Providing For Exchange of Information. The rights and
obligations granted under this Section 3.3 are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in this Agreement and any
Inter-Company Agreement.

(g) Production of Witnesses; Records; Cooperation. For a period of seven (7)
years after the first date upon which members of the Sohu Group no longer
collectively own at least twenty percent (20%) of the voting power of the then
outstanding securities of Changyou, and except in the case of a legal or other
proceeding by one Party against any other Party, each Party shall use its
reasonable best efforts to make available to each other Parties, upon written

 

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request, the former, current and future directors, officers, employees, other
personnel and agents of such Party as witnesses and any books, records or other
documents within its control or which it otherwise has the ability to make
available, to the extent that any such individual (giving consideration to
business demands of such directors, officers, employees, other personnel and
agents) or books, records or other documents may reasonably be required in
connection with any legal, administrative or other proceeding in which the
requesting Party may from time to time be involved, regardless of whether such
legal, administrative or other proceeding is a matter with respect to which
indemnification may be sought hereunder. The requesting Party shall bear all
costs and expenses in connection therewith.

3.4 Auditors and Audits; Financial Statements; Accounting Matters. Each Party
agrees that:

(a) Selection of Auditors.

(i) Until the first Sohu fiscal year end occurring after the date that members
of the Sohu Group no longer collectively own at least a majority of the voting
power of the then outstanding securities of Changyou, Changyou shall use its
reasonable best efforts to select the independent certified public accountants
(“Changyou’s Auditors”) used by Sohu to serve as its independent certified
public accountants (“Sohu’s Auditors” and, for the avoidance of doubt, should
Sohu at any time change the accounting firm serving as its independent certified
public accountants, “Sohu’s Auditors” shall thereafter mean the new firm serving
as Sohu’s independent certified public accountants) for purposes of providing an
opinion on its consolidated financial statements; provided, however, that
Changyou’s Auditors may be different from Sohu’s Auditors if necessary to comply
with applicable laws regarding auditor independence and qualifications
(provided, however, that Changyou shall not take any actions, and shall use its
reasonable best efforts to cause its directors, officers and employees not to
take any actions, that could reasonably be expected to require Changyou to
engage auditors other than Sohu’s Auditors). After the Live Filing Date, the
foregoing shall not be construed so as to unlawfully limit any responsibility of
the audit committee of Changyou’s board of directors, pursuant to SEC Rule
10A-3(b)(2) and rules of the Nasdaq Global Market, to appoint, compensate,
retain and oversee the work of the registered public accounting firm Changyou
engages.

(ii) Until the first Sohu fiscal year end occurring after the date that members
of the Sohu Group no longer collectively own at least a majority of the voting
power of the then outstanding securities of Changyou, Changyou shall provide to
Sohu as much prior notice as reasonably practical of any change in Changyou’s
Auditors for purposes of providing an opinion on its consolidated financial
statements.

(b) Date of Auditors’ Opinion and Quarterly Reviews. Until the first Sohu fiscal
year end occurring after members of the Sohu Group no longer collectively own at
least a majority of the voting power of the then outstanding securities of
Changyou, and thereafter to the extent necessary for the purpose of preparing
financial statements or completing a financial statement audit, Changyou shall
use its reasonable best efforts to enable Changyou’s Auditors to complete their
audit such that they will date their opinion on such Party’s audited annual

 

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financial statements on the same date that Sohu’s Auditors date their opinion on
Sohu’s audited annual financial statements, and to enable Sohu to meet its
timetable for the printing, filing and public dissemination of Sohu’s annual
financial statements. Until the first Sohu fiscal year end occurring after
members of the Sohu Group no longer collectively own at least a majority of the
voting power of the then outstanding securities of Changyou, and thereafter to
the extent necessary for the purpose of preparing financial statements or
completing a financial statement audit, Changyou shall use its reasonable best
efforts to enable Changyou’s Auditors to complete their annual audit and
quarterly review procedures such that they will provide clearance on such
Party’s annual and quarterly financial statements on the same date that Sohu’s
Auditors provide clearance on Sohu’s annual and quarterly financial statements.

(c) Annual and Quarterly Financial Statements. Until the date that members of
the Sohu Group no longer collectively own at least a majority of the voting
power of the then outstanding securities of Changyou, Changyou shall not change
its fiscal year and, until the first Sohu fiscal year end occurring after
members of the Sohu Group no longer collectively own at least a majority of the
voting power of the then outstanding securities of Changyou, and thereafter to
the extent necessary for the purpose of preparing financial statements or
completing a financial statement audit, shall provide to Sohu on a timely basis
all Information that Sohu reasonably requires to meet its schedule for the
preparation, printing, filing, and public dissemination of Sohu’s annual,
quarterly and monthly financial statements. Without limiting the generality of
the foregoing, Changyou will provide all required financial Information with
respect to such Party to Changyou’s Auditors in a sufficient and reasonable time
and in sufficient detail to permit Changyou’s Auditors to take all steps and
perform all reviews necessary to provide sufficient assistance to Sohu’s
Auditors with respect to financial Information to be included or contained in
Sohu’s annual, quarterly and monthly financial statements. Similarly, Sohu shall
provide to Changyou on a timely basis all financial Information that such Party
reasonably requires to meet its schedule for the preparation, printing, filing,
and public dissemination of such Party’s annual, quarterly and monthly financial
statements. Without limiting the generality of the foregoing, Sohu will provide
all required financial Information with respect to Sohu and its subsidiaries and
VIEs to Changyou’s Auditors in a sufficient and reasonable time and in
sufficient detail to permit Changyou’s Auditors to take all steps and perform
all reviews necessary to provide sufficient assistance to Changyou’s Auditors
with respect to Information to be included or contained in Changyou’s annual and
quarterly financial statements.

(d) Certifications and Attestations.

(i) Until the first Sohu fiscal year end occurring after members of the Sohu
Group no longer collectively own at least a majority of the voting power of the
then outstanding securities of Changyou, and thereafter to the extent necessary
for the timely filing by Sohu of annual and quarterly reports under the Exchange
Act or in connection with any investigations of prior periods, Changyou shall
cause its principal executive officer and principal financial officer to provide
to Sohu on a timely basis and as reasonably requested by Sohu (A) any
certificates requested as support for the certifications and attestations
required by Sections 302, 906 and 404 of the Sarbanes-Oxley Act of 2002 to be
filed with such annual and quarterly reports, (B) any certificates or other
written Information which such principal executive officer or principal
financial

 

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officer received as support for the certificates provided to Sohu and (C) a
reasonable opportunity to discuss with such principal financial officer and
other appropriate officers and employees of such Party any issues reasonably
related to the foregoing.

(ii) The extent necessary for the timely filing by Changyou of annual and
quarterly reports under the Exchange Act or in connection with any
investigations of prior periods, Sohu shall cause its appropriate officers and
employees to provide to Changyou on a timely basis and as reasonably requested
by such Party (A) any certificates requested as support for the certifications
and attestations required by Sections 302, 906 and 404 of the Sarbanes-Oxley Act
of 2002 to be filed with such annual and quarterly reports, (B) any certificates
or other Information which such appropriate officers and employees received as
support for the certificates provided to such Party and (C) a reasonable
opportunity to discuss with such appropriate officers and employees any issues
reasonably related to the foregoing.

(e) Compliance With Laws, Policies and Regulations. Until members of the Sohu
Group no longer collectively own at least a majority of the voting power of the
then outstanding securities of Changyou, Changyou shall comply with all
financial accounting and reporting rules, policies and directives of Sohu, to
the extent such rules, policies and directives have been previously communicated
to such Party, and fulfill all timing and reporting requirements, applicable to
Sohu subsidiaries and VIEs that are consolidated with Sohu for financial
statement purposes. Without limiting the foregoing, Changyou shall comply with
all financial accounting and reporting rules and policies, and fulfill all
timing and reporting requirements, under applicable federal securities laws and
Nasdaq Global Market rules. Changyou shall not be deemed to be in breach of its
obligations set forth in this provision to the extent that such Party is unable
to comply with such obligations as a result of the actions or inactions of Sohu.

(f) Identity of Personnel Performing the Annual Audit and Quarterly Reviews.
Until members of the Sohu Group no longer collectively own at least a majority
of the voting power of the then outstanding securities of Changyou, and
thereafter to the extent such information and cooperation is necessary for the
preparation of financial statements or completing a financial statements audit,
Changyou shall authorize Changyou’s Auditors to make available to Sohu’s
Auditors both the personnel who performed or will perform the annual audits and
quarterly reviews of such Party and work papers related to the annual audits and
quarterly reviews of such Party, in all cases within a reasonable time prior to
Changyou’s Auditors’ opinion date, so that Sohu’s Auditors are able to perform
the procedures they consider necessary to take responsibility for the work of
Changyou’s Auditors as it relates to Sohu’s Auditors’ report on Sohu’s financial
statements, all within sufficient time to enable Sohu to meet its timetable for
the printing, filing and public dissemination of Sohu’s annual and quarterly
statements. Similarly, Sohu shall authorize Sohu’s Auditors to make available to
Changyou’s Auditors both the personnel who performed or will perform the annual
audits and quarterly reviews of Sohu and work papers related to the annual
audits and quarterly reviews of Sohu, in all cases within a reasonable time
prior to Sohu’s Auditors’ opinion date, so that Changyou’s Auditors are able to
perform the procedures they consider necessary to take responsibility for the
work of Sohu’s Auditors as it relates to Changyou’s Auditors’ report on such
Party’s statements, all within

 

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sufficient time to enable such Party to meet its timetable for the printing,
filing and public dissemination of such Party’s annual and quarterly financial
statements.

(g) Access to Books and Records. Until members of the Sohu Group no longer
collectively own at least a majority of the voting power of the then outstanding
securities of Changyou, and thereafter to the extent such information and
cooperation is necessary for the preparation of financial statements or
completing a financial statements audit, all governmental audits are complete
and the applicable statute of limitations for tax matters has expired, Changyou
shall provide Sohu’s internal auditors, counsel and other designated
representatives of Sohu access during normal business hours to (i) the premises
of such Party and its subsidiaries and VIEs and all Information (and duplicating
rights) within the knowledge, possession or control of such Party and its
subsidiaries and VIEs and (ii) the officers and employees of such Party and its
subsidiaries and VIEs, so that Sohu may conduct reasonable audits relating to
the financial statements provided by such Party pursuant hereto as well as to
the internal accounting controls and operations of such Party. Similarly, Sohu
shall provide Changyou’s internal auditors, counsel and other designated
representatives of Changyou access during normal business hours to (x) the
premises of Sohu and its subsidiaries and VIEs and all Information (and
duplicating rights with respect thereto) within the knowledge, possession or
control of Sohu and its subsidiaries and VIEs and (y) the officers and employees
of Sohu and its subsidiaries and VIEs, so that such Party may conduct reasonable
audits relating to the financial statements provided by Sohu pursuant hereto as
well as to the internal accounting controls and operations of Sohu and its
subsidiaries and VIEs.

(h) Notice of Change in Accounting Principles. Until members of the Sohu Group
no longer collectively own at least a majority of the voting power of the then
outstanding securities of Changyou, and thereafter if a change in accounting
principles by a Sohu or Changyou would affect the historical financial
statements of the other Party, no such Party shall make or adopt any significant
changes in its accounting estimates or accounting principles from those in
effect on the Live Filing Date without first consulting with each other Party,
and if requested by any other Party, such Party’s independent public accountants
with respect thereto. Sohu shall give Changyou as much prior notice as
reasonably practical of any proposed determination of, or any significant
changes in, its accounting estimates or accounting principles from those in
effect on the Live Filing Date. Sohu will consult with Changyou and, if
requested by such Party, Sohu will consult with such Party’s independent public
accountants with respect thereto. Changyou shall give Sohu as much prior notice
as reasonably practical of any proposed determination of, or any significant
changes in, its accounting estimates or accounting principles from those in
effect on the Live Filing Date. Changyou will consult with Sohu and, if
requested by Sohu, such Party will consult with Sohu’s independent public
accountants with respect thereto.

(i) Conflict With Third-Party Agreements. Nothing in Section 3.3 or this
Section 3.4 shall require Changyou to violate any agreement with any third party
regarding the confidentiality of confidential and proprietary information
relating to that third party or its business; provided, however, that in the
event that Changyou is required under Section 3.3 or this Section 3.4 to
disclose any such Information, such Party shall use its reasonable best efforts
to seek to obtain such third party’s consent to the disclosure of such
information.

 

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3.5 Confidentiality.

(a) Each of the Parties shall hold and shall cause each of their respective
subsidiaries and VIEs to hold, and shall each cause their respective officers,
employees, agents, consultants and advisors and those of their respective
subsidiaries and VIEs to hold, in strict confidence and not to disclose or
release without the prior written consent of the relevant other Party, any and
all Confidential Information concerning such other Party and its respective
subsidiaries and VIEs; provided, that each of the Parties may disclose, or may
permit disclosure of, Confidential Information (i) to their respective
subsidiaries and VIEs, auditors, attorneys, financial advisors, bankers and
other appropriate consultants and advisors who have a need to know such
information and, in each case, are informed of their obligation to hold such
information confidential to the same extent as is applicable to the Parties
hereto and in respect of whose failure to comply with such obligations, Changyou
or Sohu, as the case may be, will be responsible, (ii) if the Parties or any of
their respective subsidiaries or VIEs are compelled to disclose any such
Confidential Information by judicial or administrative process or (iii) if the
Parties reasonably determine in good faith that such disclosure is required by
other requirements of law. Notwithstanding the foregoing, in the event that any
demand or request for disclosure of Confidential Information is made in
connection with any judicial or administrative process, or a Party determines in
good faith that disclosure is otherwise required by law, such Party shall
promptly notify the relevant other Parties of the existence of such request,
demand, or conclusion, and shall provide such other Parties a reasonable
opportunity to seek an appropriate protective order or other remedy, which the
notifying Party will cooperate in obtaining. In the event that an appropriate
protective order or other remedy is not obtained, the Party whose Confidential
Information is required to be disclosed shall or shall cause the notifying Party
to furnish, or cause to be furnished, only that portion of the Confidential
Information that is required to be disclosed and shall use its reasonable best
efforts to obtain reasonable assurances that confidential treatment will be
accorded to such Information.

(b) As used in this Section 3.5:

(i) “Confidential Information” shall mean Confidential Business Information and
Confidential Technical Information concerning one Party which, prior to, on or
following the Live Filing Date, has been disclosed by Sohu or its subsidiaries
or VIEs, or by Changyou or its subsidiaries or VIEs, that (1) is in written,
recorded, graphical or other tangible form and is marked “Proprietary,”
“Confidential” or “Trade Secret,” or where it is evident from the nature and
content of such Information that the disclosing Party considers it to be
confidential, (2) is in oral form and identified by the disclosing Party as
“Proprietary”, “Confidential” or “Trade Secret” at the time of oral disclosure,
including pursuant to the access provisions of Section 3.3 or Section 3.4 hereof
or any other provision of this Agreement or where it is evident from the nature
and content of such Information that the disclosing Party considers it to be
confidential, or (3) in the case of such Information disclosed on or prior to
the date hereof, either such Information is identified by the owning Party to
the other relevant Party as Confidential Business Information or Confidential
Technical Information, orally or in writing on or prior to the Live Filing Date,
or it is evident from the nature and content of such Information that the
disclosing Party considers it to be confidential, and includes any modifications
or derivatives prepared by the receiving Party that contain or are based

 

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upon any Confidential Information obtained from the disclosing Party, including
any analysis, reports, or summaries of the Confidential Information.
Confidential Information may also include information disclosed to a disclosing
Party by third parties. Confidential Information shall not, however, include any
information which (A) was publicly known and made generally available in the
public domain prior to the time of disclosure by the disclosing Party;
(B) becomes publicly known and made generally available after disclosure by the
disclosing Party to the receiving Party through no action or inaction of the
receiving Party; (C) is obtained by the receiving Party from a third party
without a breach of such third party’s obligations of confidentiality; or (D) is
on or after the Live Filing Date independently developed by the receiving Party
without use of or reference to the disclosing Party’s Confidential Information.

(ii) “Confidential Technical Information” shall mean all proprietary scientific,
engineering, mathematical or design information, data and material of the
disclosing Party including, without limitation, (a) specifications, ideas,
concepts, models, and strategies for products or services, (b) quality assurance
policies, procedures and specifications, (c) source code and object code,
(d) training materials and information, and (e) all other know-how, methodology,
processes, procedures, techniques and trade secrets related to product or
service design, development, manufacture, implementation, use, support and
maintenance.

(iii) “Confidential Business Information” shall mean all proprietary
information, data or material of the disclosing Party other than Confidential
Technical Information, including, but not limited to (a) proprietary earnings
reports and forecasts, (b) proprietary macro-economic reports and forecasts,
(c) proprietary business plans, (d) proprietary general market evaluations and
surveys, (e) proprietary financing and credit-related information, and
(f) customer information.

(c) Nothing in this Agreement shall restrict (i) the disclosing Party from
using, disclosing, or disseminating its own Confidential Information in any way,
or (ii) reassignment of the receiving Party’s employees. Moreover, nothing in
the Agreement supersedes any restriction imposed by third parties on their
Confidential Information, and there is no obligation on the disclosing Party to
conform third party agreements to the terms of this Agreement except as
expressly set forth therein.

(d) Notwithstanding anything to the contrary set forth herein, (i) Sohu and its
subsidiaries and VIEs and Changyou and its subsidiaries and VIEs shall be deemed
to have satisfied their obligations hereunder with respect to Confidential
Information if they exercise the same degree of care (but no less than a
reasonable degree of care) as they take to preserve confidentiality for their
own similar Information and (ii) confidentiality obligations provided for in any
agreement between Sohu or its subsidiaries or VIEs, or Changyou or any of its
subsidiaries or VIEs, and any employee of Sohu or any of its subsidiaries or
VIEs or Changyou or any of its subsidiaries or VIEs shall remain in full force
and effect.

(e) Confidential Information of Sohu and its subsidiaries and VIEs in the
possession of and used by any other Party as of the Live Filing Date may
continue to be used by such Person in possession of the Confidential Information
in and only in the operation of the

 

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Sohu Business, in the case of Sohu and its subsidiaries and VIEs, or the
Changyou Business, in the case of Changyou and its subsidiaries and VIEs, and
may be used only so long as the Confidential Information is maintained in
confidence and not disclosed in violation of Section 3.5(a). Such continued
right to use Confidential Information may not be transferred, including by
merger, consolidation, reorganization, operation of law, or otherwise, to any
third party unless such third party (A) purchases all or substantially all of
the business or business line and assets in one transaction or in a series of
related transactions for which or in which the relevant Confidential Information
is used or employed and (B) expressly agrees in writing to be bound by the
provisions of this Section 3.5. In the event that such right to use is
transferred in accordance with the preceding sentence, the transferring Party
shall not disclose the source of the relevant Confidential Information.

3.6 Privileged Matters.

(a) The Parties agree that their respective rights and obligations to maintain,
preserve, assert or waive any or all privileges belonging to each such entity or
their respective subsidiaries or VIEs including but not limited to the
attorney-client and work product privileges (collectively, “Privileges”), shall
be governed by the provisions of this Section 3.6. With respect to Privileged
Information (as defined below) of Sohu, Sohu shall have sole authority in
perpetuity to determine whether to assert or waive any or all Privileges, and
Changyou shall take no action (nor permit any of its respective subsidiaries or
VIEs to take action) without the prior written consent of Sohu that could result
in any waiver of any Privilege that could be asserted by Sohu or any of its
subsidiaries or VIES under applicable law and this Agreement. With respect to
Privileged Information of Changyou, Changyou shall have sole authority in
perpetuity to determine whether to assert or waive any or all Privileges, and
Sohu shall take no action (nor permit any of its subsidiaries or VIEs to take
action) without the prior written consent of Changyou that could result in any
waiver of any Privilege that could be asserted by Changyou or any of its
subsidiaries or VIEs under applicable law and this Agreement.

(b) The rights and obligations created by this Section 3.6 shall apply to all
Information as to which the Parties or their respective subsidiaries or VIEs
would be entitled to assert or has asserted a Privilege (“Privileged
Information”). Privileged Information of Sohu includes but is not limited to
(i) any and all Information regarding the business of Sohu and its subsidiaries
and VIEs (other than Information regarding the Changyou Business), whether or
not it is in the possession of Changyou or any of its subsidiaries and VIEs;
(ii) all communications subject to a Privilege between counsel for Sohu
(including in-house counsel) and any individual who, at the time of the
communication, was an employee of Sohu, regardless of whether such employee is
or becomes an employee of Changyou or any of its subsidiaries and VIEs and
(iii) all Information generated, received or arising after the Live Filing Date
that refers or relates to Privileged Information of Sohu generated, received or
arising prior to the Live Filing Date. Privileged Information of Changyou
includes but is not limited to (x) any and all Information regarding the
Changyou Business, whether or not it is in the possession of Sohu or any of its
subsidiaries and VIEs; (y) all communications subject to a Privilege occurring
after the Live Filing Date between counsel for Changyou (including in-house
counsel and former in-house counsel who are or were employees of Sohu) and any
person who, at the time of the communication, was an employee of Changyou,
regardless of whether such employee was, is or becomes an employee of Sohu or
any of its subsidiaries or VIEs and (z) all Information

 

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generated, received or arising after the Live Filing Date that refers or relates
to Privileged Information of Changyou generated, received or arising after the
Live Filing Date.

(c) Upon receipt by Sohu or its subsidiaries or VIEs, or Changyou or its
subsidiaries or VIEs, as the case may be, of any subpoena, discovery or other
request from any third party that actually or arguably calls for the production
or disclosure of Privileged Information of the other Party or its subsidiaries
or VIEs, or if Sohu or its subsidiaries or VIEs, or Changyou or its subsidiaries
and VIEs, as the case may be, obtains knowledge that any of its current or
former employees has received any subpoena, discovery or other request from any
third party that actually or arguably calls for the production or disclosure of
Privileged Information of the other Party or its subsidiaries or VIEs, Sohu or
Changyou, as the case may be, shall promptly notify that other Party of the
existence of the request and shall provide that other Party a reasonable
opportunity to review the Information and to assert any rights such other Party
may have under this Section 3.6 or otherwise to prevent the production or
disclosure of Privileged Information. Sohu or its subsidiaries or VIEs, or
Changyou or its subsidiaries and VIEs, as the case may be, will not produce or
disclose to any third party any of the other Party’s Privileged Information
under this Section 3.6 unless (a) such other Party has provided its express
written consent to such production or disclosure or (b) a court of competent
jurisdiction has entered an order not subject to interlocutory appeal or review
finding that the Information is not entitled to protection from disclosure under
any applicable privilege, doctrine or rule.

(d) Sohu’s transfer of books and records pertaining to the Changyou Business and
other Information pertaining to Changyou, if any, Sohu’s agreement to permit
Changyou to obtain Information existing prior to the Live Filing Date,
Changyou’s transfer of books and records and other Information pertaining to
Sohu, if any, and Changyou’s agreement to permit Sohu to obtain Information
existing prior to the Live Filing Date are made in reliance on Sohu’s and
Changyou’s respective agreements, as set forth in Section 3.5 and this
Section 3.6, to maintain the confidentiality of such Information and to take the
steps provided herein for the preservation of all Privileges that may belong to
or be asserted by Sohu, or Changyou, as the case may be. The access to
Information, witnesses and individuals being granted pursuant to Section 3.3 and
Section 3.4 and the disclosure to one Party of Privileged Information relating
to the other Parties’ businesses pursuant to this Agreement shall not be
asserted by Sohu or Changyou to constitute, or otherwise be deemed, a waiver of
any Privilege that has been or may be asserted under this Section 3.6 or
otherwise. Nothing in this Agreement shall operate to reduce, minimize or
condition the rights granted to Sohu, or Changyou, or the obligations imposed
upon Sohu, and Changyou, by this Section.

3.7 Future Litigation and Other Proceedings. In the event that Changyou (or any
of its subsidiaries or VIEs or any of its or their respective officers or
directors), or Sohu (or any of its subsidiaries or VIEs or any of its or their
respective officers or directors) at any time after the date hereof initiates or
becomes subject to any litigation or other proceedings before any Governmental
Authority or arbitration panel with respect to which the Parties have no prior
agreements (as to indemnification or otherwise), each Party (and its
subsidiaries and VIEs and its and their respective officers and directors) that
has not initiated and is not subject to such litigation or other proceedings
shall comply, at the litigant Party’s expense, with any reasonable requests by
the litigant Party for assistance in connection with such litigation or other
proceedings (including by way of provision of information and making available
of associates or

 

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employees as witnesses). In the event that Changyou (or any of its subsidiaries
or VIEs or any of its or their respective officers or directors), and Sohu (or
any of its subsidiaries or VIEs or any of its or their respective officers or
directors), or any combination thereof, at any time after the date hereof
initiate or become subject to any litigation or other proceedings before any
Governmental Authority or arbitration panel with respect to which the litigant
Parties have no prior agreements (as to indemnification or otherwise), each
litigant Party (and its officers and directors) shall, at their own expense,
coordinate their strategies and actions with respect to such litigation or other
proceedings to the extent such coordination would not be detrimental to their
respective interests and shall comply, at the expense of the requesting Party,
with any reasonable requests of such Party for assistance in connection
therewith (including by way of provision of information and making available of
employees as witnesses).

3.8 Mail and other Communications. Each of Sohu and Changyou may receive mail,
facsimiles, packages and other communications properly belonging to the other.
Accordingly, each Party authorizes each of the other Parties to receive and open
all mail, telegrams, packages and other communications received by it and not
unambiguously intended for any other Party or any of the other Parties’ officers
or directors, and to retain the same to the extent that they relate to the
business of the receiving Party or, to the extent that they do not relate to the
business of the receiving Party, the receiving Party shall promptly deliver such
mail, telegrams, packages or other communications, including, without
limitation, notices of any liens or encumbrances on any asset transferred to
Changyou or its subsidiaries or VIEs in connection with the separation from Sohu
(or, in case the same relate to both businesses, copies thereof) to the other
relevant Party as provided for in Section 6.6 hereof. The provisions of this
Section are not intended to, and shall not, be deemed to constitute (a) an
authorization by either Sohu or Changyou to permit the other to accept service
of process on its behalf and no Party is or shall be deemed to be the agent of
any other for service of process purposes or (b) a waiver of any Privilege with
respect to Privileged Information contained in such mail, telegrams, packages or
other communications.

3.9 Administrative Services Agreements. Sohu and its subsidiaries and VIEs and
Changyou and its subsidiaries and VIEs may enter into interim administrative
services agreements from time to time covering the provision of various interim
services, if any, including financial, accounting, legal, and other services by
Sohu (and its subsidiaries and VIEs) to Changyou (and its subsidiaries and VIEs)
or, in certain circumstances, vice versa. Such services will generally be
provided for a fee equal to the actual Direct Costs and Indirect Costs of
providing such services plus an additional amount as agreed to by the Parties,
subject to other consideration’s being agreed to by the Parties. “Direct Costs”
shall include compensation and travel expenses attributable to employees,
temporary workers, and contractors directly engaged in performing the services
as well as materials and supplies consumed in performing the services. “Indirect
Costs” shall include occupancy, IT supervision and other overhead burden of the
department incurring the direct costs of providing the service. Payment for any
such services will be due within fifteen (15) days after Sohu renders an invoice
for such services.

3.10 Payment of Expenses. Except as otherwise provided in this Agreement, the
Inter-Company Agreements or any other agreement between or among any of the
Parties relating to the IPO, (i) all costs and expenses of the Parties hereto in
connection with the IPO (including costs associated with drafting this
Agreement, the Inter-Company Agreements and the documents relating to the
formation of Changyou and its subsidiaries and VIEs) shall be paid by

 

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Changyou and (ii) all costs and expenses of the Parties hereto in connection
with any matter not relating to the IPO shall be paid by the Party which incurs
such cost or expense. Notwithstanding the foregoing, Changyou and Sohu shall
each be responsible for their own internal fees, costs and expenses (e.g.,
salaries of personnel) incurred in connection with the IPO.

ARTICLE IV

MUTUAL RELEASES; INDEMNIFICATION

4.1 Release of Claims.

(a) Changyou Release. Except as provided in Section 4.1(c), Changyou, for itself
and as agent for each of its subsidiaries and VIEs (including without limitation
AmazGame and Gamease), effective as of December 1, 2007, does hereby assume, and
does hereby remise, release and forever discharge the Sohu Indemnitees from, any
and all Changyou Liabilities whatsoever, whether at law or in equity (including
any right of contribution), whether arising under any contract or agreement, by
operation of law or otherwise, existing or arising from any past acts or events
occurring or failing to occur or alleged to have occurred or to have failed to
occur or any conditions existing or alleged to have existed on or before the
Live Filing Date, including in connection with the transactions and all other
activities to implement the IPO.

(b) Sohu Release. Except as provided in Section 4.1(c), Sohu, for itself and as
agent for each of its subsidiaries and VIEs, does hereby remise, release and
forever discharge the Changyou Indemnitees from any and all Sohu Liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any past acts or events occurring or failing
to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Live Filing
Date, including in connection with the transactions and all other activities to
implement the IPO.

(c) No Impairment. Nothing contained in Section 4.1(a) or Section 4.1(b) shall
limit or otherwise affect any Party’s rights or obligations pursuant to or
contemplated by this Agreement or any Inter-Company Agreement, in each case in
accordance with its terms, including, without limitation, any obligations
relating to indemnification, including indemnification pursuant to Section 4.2
and Section 4.3 of this Agreement.

4.2 Indemnification by Changyou. Except as otherwise provided in this Agreement,
Changyou shall, for itself and as agent for each of its subsidiaries and VIEs,
indemnify, defend (or, where applicable, pay the defense costs for) and hold
harmless the Sohu Indemnitees from and against, and shall reimburse the Sohu
Indemnitees with respect to, any and all Losses that any third party seeks to
impose upon the Sohu Indemnitees, or which are imposed upon the Sohu
Indemnitees, and that relate to, arise or result from, whether prior to, on or
following the Live Filing Date, any of the following items (without
duplication):

(a) any Changyou Liability;

(b) any breach by Changyou or any of its subsidiaries and VIEs of this Agreement
or any of the Inter-Company Agreements; and

 

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(c) any Liabilities relating to, arising out of or resulting from any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, with respect to all information
(i) contained in the IPO Registration Statement, any issuer free writing
prospectus or any preliminary, final or supplemental prospectus forming a part
of the IPO Registration Statement (other than information provided in writing by
Sohu or any of its subsidiaries or VIEs to Changyou specifically for inclusion
in the IPO Registration Statement, any issuer free writing prospectus or any
preliminary, final or supplemental prospectus forming a part of the IPO
Registration Statement), (ii) contained in any public filings made by Changyou
with the SEC following the Live Filing Date or (iii) provided in writing by
Changyou or its subsidiaries or VIEs to Sohu specifically for inclusion in
Sohu’s annual or quarterly reports following the Live Filing Date to the extent
(A) such information pertains to (x) Changyou or its subsidiaries or VIEs or
(y) the Changyou Business or (B) Sohu has provided prior written notice to
Changyou that such information will be included in one or more annual or
quarterly reports, specifying how such information will be presented, and the
information is included in such annual or quarterly reports; provided that this
sub-clause (B) shall not apply to the extent that any such Liability arises out
of or results from, or in connection with, any action or inaction of Sohu or any
of its subsidiaries or VIEs, including as a result of any misstatement or
omission of any information by Sohu or its subsidiaries or VIEs to Changyou.

In the event that Changyou or its subsidiaries or VIEs makes a payment to the
Sohu Indemnitees hereunder, and any of the Sohu Indemnitees subsequently
diminishes the Liability on account of which such payment was made, either
directly or through a third-party recovery (other than a recovery indirectly
from Sohu or its subsidiaries or VIEs), Sohu will promptly repay (or will
procure a Sohu Indemnitee to promptly repay) Changyou (or its subsidiary or VIE,
as the case may be) the amount by which the payment made by such member of the
Changyou (or its subsidiary or VIE, as the case may be) exceeds the actual cost
of the associated indemnified Liability.

4.3 Indemnification by Sohu. Except as otherwise provided in this Agreement,
Sohu shall, for itself and as agent for each of its subsidiaries and VIEs,
indemnify, defend (or, where applicable, pay the defense costs for) and hold
harmless the Changyou Indemnitees from and against, and shall reimburse each
such Changyou Indemnitee with respect to, any and all Losses that any third
party seeks to impose upon the Changyou Indemnitees or which are imposed upon
the Changyou Indemnitees to the extent relating to, arising from or resulting
from, whether prior to, on or following the Live Filing Date, any of the
following items (without duplication):

(a) any Liability of Sohu or its subsidiaries or VIEs and all Liabilities
arising out of the operation or conduct of the Sohu Business (in each case
excluding the Changyou Liabilities);

(b) any breach by Sohu or any member of the Sohu Group of this Agreement or any
of the Inter-Company Agreements; and

(c) any Liabilities relating to, arising out of or resulting from any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not

 

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misleading, with respect to all information (i) contained in the IPO
Registration Statement, any issuer free writing prospectus or any preliminary,
final or supplemental prospectus forming a part of the IPO Registration
Statement and provided in writing by Sohu or any of its subsidiaries or VIEs to
Changyou specifically for inclusion in the IPO Registration Statement, any
issuer free writing prospectus or any preliminary, final or supplemental
prospectus forming a part of the IPO Registration Statement), (ii) contained in
any public filings made by Sohu.com with the SEC following the Live Filing Date
or (iii) provided in writing by Sohu or its subsidiaries or VIEs to Changyou
specifically for inclusion in Changyou’s annual or quarterly reports following
the Live Filing Date to the extent (A) such information pertains to (x) Sohu or
any of its subsidiaries or VIEs or (y) the Sohu Business or (B) Changyou has
provided prior written notice to Sohu that such information will be included in
one or more annual or quarterly reports, specifying how such information will be
presented, and the information is included in such annual or quarterly reports;
provided that this sub-clause (B) shall not apply to the extent that any such
Liability arises out of or results from, or in connection with, any action or
inaction of Changyou or any of its subsidiaries or VIEs, including as a result
of any misstatement or omission of any information by Changyou or any of its
subsidiaries or VIEs to Sohu.

In the event that Sohu or its subsidiaries or VIEs makes a payment to the
Changyou Indemnitees hereunder, and any of the Changyou Indemnitees subsequently
diminishes the Liability on account of which such payment was made, either
directly or through a third-party recovery (other than a recovery indirectly
from Changyou), Changyou will promptly repay (or will procure a Changyou
Indemnitee to promptly repay) Sohu (or its subsidiary or VIE, as the case may
be) the amount by which the payment made by Sohu (or its subsidiary or VIE, as
the case may be) exceeds the actual cost of the indemnified Liability.

4.4 Procedures for Defense, Settlement and Indemnification of the Third Party
Claims.

(a) Notice of Claims. If an Indemnitee shall receive notice or otherwise learn
of the assertion by a Person (including any Governmental Authority) other than
Sohu, Changyou and their subsidiaries and VIEs of any claim or of the
commencement by any such Person of any Action (collectively, a “Third Party
Claim”) with respect to which an Indemnifying Party may be obligated to provide
indemnification, Sohu and Changyou as applicable, will ensure that such
Indemnitee shall give such Indemnifying Party written notice thereof within
thirty (30) days after becoming aware of such Third Party Claim. Any such notice
shall describe the Third Party Claim in reasonable detail. Notwithstanding the
foregoing, the delay or failure of any Indemnitee or other Person to give notice
as provided in this Section shall not relieve the related Indemnifying Party of
its obligations under this Article IV, except to the extent that such
Indemnifying Party is actually and substantially prejudiced by such delay or
failure to give notice.

(b) Defense by Indemnifying Party. An Indemnifying Party shall be entitled to
participate in the defense of any Third Party Claim and, to the extent that it
wishes, at its cost, risk and expense, to assume the defense thereof, with
counsel reasonably satisfactory to the Party seeking indemnification, unless the
Indemnifying Party is also a party to such proceeding and the Indemnified Party
determines in good faith that joint representation would be materially
prejudicial to the Indemnified Party’s defense. After timely notice from the
Indemnifying Party

 

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to the Indemnitee of such election to so assume the defense thereof, the
Indemnifying Party shall not be liable to the Party seeking indemnification for
any legal expenses of other counsel or any other expenses subsequently incurred
by Indemnitee in connection with the defense thereof. The Indemnitee agrees to
cooperate in all reasonable respects with the Indemnifying Party and its counsel
in the defense against any Third Party Claim. The Indemnifying Party shall be
entitled to compromise or settle any Third Party Claim as to which it is
providing indemnification, provided that any compromise or settlement shall be
made only with the written consent of the Indemnitee, such consent not to be
unreasonably withheld.

(c) Defense by Indemnitee. If an Indemnifying Party fails to assume the defense
of a Third Party Claim within thirty (30) calendar days after receipt of notice
of such claim, Indemnitee will, upon delivering notice to such effect to the
Indemnifying Party, have the right to undertake the defense, compromise or
settlement of such Third Party Claim on behalf of and for the account of the
Indemnifying Party subject to the limitations as set forth in this Section;
provided, however, that such Third Party Claim shall not be compromised or
settled without the written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld. If the Indemnitee assumes the defense of any
Third Party Claim, it shall keep the Indemnifying Party reasonably informed of
the progress of any such defense, compromise or settlement. The Indemnifying
Party shall reimburse all such costs and expenses of the Indemnitee in the event
it is ultimately determined that the Indemnifying Party is obligated to
indemnify the Indemnitee with respect to such Third Party Claim. In no event
shall an Indemnifying Party be liable for any settlement effected without its
consent, which consent shall not be unreasonably withheld.

4.5 Additional Matters.

(a) Cooperation in Defense and Settlement. With respect to any Third Party Claim
that implicates both Changyou and Sohu in a material way due to the allocation
of Liabilities, responsibilities for management of defense and related
indemnities set forth in this Agreement or any of the Inter-Company Agreements,
the Parties agree to cooperate fully and maintain a joint defense (in a manner
that will preserve the attorney-client privilege, joint defense or other
privilege with respect thereto) so as to minimize such Liabilities and defense
costs associated therewith. Any Party that is not responsible for managing the
defense of such Third Party Claims shall, upon reasonable request, be consulted
with respect to significant matters relating thereto and may, if necessary or
helpful, engage counsel to assist in the defense of such claims.

(b) Subrogation. In the event of payment by or on behalf of any Indemnifying
Party to or on behalf of any Indemnitee in connection with any Third Party
Claim, such Indemnifying Party shall be subrogated to and shall stand in the
place of such Indemnitee, in whole or in part based upon whether the
Indemnifying Party has paid all or only part of the Indemnitee’s Liability, as
to any events or circumstances in respect of which such Indemnitee may have any
right, defense or claim relating to such Third Party Claim against any claimant
or plaintiff asserting such Third Party Claim or against any other person. Such
Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in prosecuting any
subrogated right, defense or claim.

 

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4.6 Survival of Indemnities. The rights and obligations of the Parties under
this Article IV shall survive the sale or other transfer by any Party of any of
its assets or businesses or the assignment by it of any Liabilities or the
acquisition of control of such Party (by sale of capital stock or other equity
interests, merger, consolidation or otherwise).

ARTICLE V

DISPUTE RESOLUTION

5.1 Dispute Resolution.

(a) Any dispute, controversy or claim arising out of or relating to this
Agreement or the Inter-Company Agreements, or the breach, termination or
validity thereof (“Dispute”) which arises between the Parties shall first be
negotiated between appropriate senior executives of each Party who shall have
the authority to resolve the matter. Such executives shall meet to attempt in
good faith to negotiate a resolution of the Dispute prior to pursuing other
available remedies, within ten (10) days of receipt by a Party of written notice
of a Dispute, which date of receipt shall be referred to herein as the “Dispute
Resolution Commencement Date.” Discussions and correspondence relating to trying
to resolve such Dispute shall be treated as Confidential Information and
Privileged Information of each of Sohu and Changyou developed for the purpose of
settlement and shall be exempt from discovery or production and shall not be
admissible in any subsequent proceeding between the Parties.

(b) If the senior executives are unable to resolve the Dispute within 60 days
from the Dispute Resolution Commencement Date, then, the Dispute will be
submitted to the boards of directors of Sohu and Changyou. Representatives of
each board of directors shall meet as soon as practicable to attempt in good
faith to negotiate a resolution of the Dispute.

(c) If the representatives of the two boards of directors are unable to resolve
the Dispute within 120 days from the Dispute Resolution Commencement Date, on
the request of any Party, the Dispute will be mediated by a mediator appointed
pursuant to the mediation rules of the American Arbitration Association. Both
Parties will share the administrative costs of the mediation and the mediator’s
fees and expenses equally, and each Party shall bear all of its other costs and
expenses related to the mediation, including but not limited to attorney’s fees,
witness fees, and travel expenses. The mediation shall take place in Beijing,
China or in whatever alternative forum on which the Parties may agree.

(d) If the Parties cannot resolve any Dispute through mediation within 45 days
after the appointment of the mediator (or the earlier withdrawal thereof), each
Party shall be entitled to seek relief in a court of competent jurisdiction.

Unless otherwise agreed in writing, the Parties will continue to provide service
and honor all other commitments under this Agreement and each Inter-Company
Agreement during the course of dispute resolution pursuant to the provisions of
this Section 5.1 with respect to all matters not subject to such dispute,
controversy or claim.

 

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ARTICLE VI

MISCELLANEOUS

6.1 Consent of Sohu.

(a) Any consent of Sohu pursuant to this Agreement or any of the Inter-Company
Agreements shall not be effective unless it is in writing and evidenced by the
signature of the Chief Executive Officer or Chief Financial Officer of Sohu (or
such other person that the Chief Executive Officer, Chief Financial Officer or
board of directors of Sohu has specifically authorized in writing to give such
consent).

(b) Any consent of Changyou pursuant to this Agreement or any of the
Inter-Company Agreements shall not be effective unless it is in writing and
evidenced by the signature of the Chief Executive Officer or Chief Financial
Officer of Changyou (or such other person that the Chief Executive Officer,
Chief Financial Officer or board of directors of Sohu has specifically
authorized in writing to give such consent).

6.2 Limitation of Liability. IN NO EVENT SHALL SOHU OR ANY OF MEMBER OF THE SOHU
GROUP OR CHANGYOU OR ANY OF ITS SUBSIDIARIES OR VIES BE LIABLE TO THE OTHER
PARTY, OR ITS AFFILIATED COMPANIES FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT,
INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY
OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY’S
INDEMNIFICATION OBLIGATIONS FOR LIABILITIES AS SET FORTH IN THIS AGREEMENT OR IN
ANY INTER-COMPANY AGREEMENT.

6.3 Entire Agreement. This Agreement, the Inter-Company Agreements and the
Exhibits and Schedules referenced or attached hereto and thereto constitute the
entire agreement among the Parties with respect to the subject matter hereof and
thereof and shall supersede all prior written and oral and all contemporaneous
oral agreements and understandings with respect to the subject matter hereof and
thereof.

6.4 Governing Law and Jurisdiction. This Agreement, including the validity
hereof and the rights and obligations of the Parties hereunder, shall be
construed in accordance with and all Disputes hereunder shall be governed by the
laws of the State of New York, U.S.A., applicable to contracts made and to be
performed entirely in such state (without giving effect to the conflicts of laws
provisions thereof). Subject to Section 5.1, each of the Parties hereby submits
unconditionally to jurisdiction of, and agrees that venue shall lie exclusively
in, the federal and state courts located in the City of New York for purposes of
the resolution of any disputes arising under this Agreement.

6.5 Termination; Amendment. This Agreement and any applicable Inter-Company
Agreement may be terminated or amended by mutual consent of the Parties thereto,
evidenced by an instrument in writing signed on behalf of each of the applicable
Parties. In the event of

 

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termination pursuant to this Section 6.5, no Party shall have any liability of
any kind to the other Parties. This Agreement shall terminate on the date that
is five (5) years after the first date upon which members of the Sohu Group no
longer collectively own at least twenty percent (20%) of the voting power of the
then outstanding securities of Changyou; provided, however, that the provisions
of Section 3.7 shall survive for a period of seven (7) years after the
termination of this Agreement and the provisions of Section 3.5, Article IV,
Article V and Article VI shall survive indefinitely after the termination of
this Agreement.

6.6 Notices. Notices, offers, requests or other communications required or
permitted to be given by a Party pursuant to the terms of this Agreement shall
be given in writing to the other Parties to the following addresses:

if to Sohu:

Level 12, Sohu.com Internet Plaza

No. 1 Unit Zhongguancun East Road, Haidian District

Beijing 100084

People’s Republic of China

Attention: Chief Financial Officer

Email: carol@sohu-inc.com

if to Changyou, AmazGame, or Gamease:

East Tower, JinYan Building

No. 29 Shijingshan Road, Shijingshan District

Beijing 100043

People’s Republic of China

Attention: Chief Financial Officer

Email: alex@sohu-inc.com

or to such other address or email address as the Party to whom notice is given
may have previously furnished to the other in writing as provided herein. Any
notice involving non-performance or termination shall be sent by hand delivery
or recognized overnight courier. All other notices may also be sent by email,
confirmed by mail. All notices shall be deemed to have been given when received,
if hand delivered; when transmitted, if transmitted by email; upon confirmation
of delivery, if sent by recognized overnight courier; and upon receipt if
mailed.

6.7 Counterparts. This Agreement, including the Inter-Company Agreements and the
Exhibits and Schedules hereto and thereto and the other documents referred to
herein or therein, may be executed in counterparts, each of which shall be
deemed to be an original but all of which shall constitute one and the same
agreement.

6.8 Binding Effect; Assignment. This Agreement shall inure to the benefit of and
be binding upon the Parties hereto and their respective legal representatives
and successors, and nothing in this Agreement, express or implied, is intended
to confer upon any other Person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. This

 

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Agreement may be enforced separately by each Party’s subsidiaries and VIEs. No
Party may assign this Agreement or any rights or obligations hereunder, without
the prior written consent of each other Party, and any such assignment shall be
void; provided, however, each Party may assign this Agreement to a successor
entity in conjunction with such Party’s reincorporation in another jurisdiction
or into another business form.

6.9 Severability. If any term or other provision of this Agreement or the
Exhibits or Schedules attached hereto is determined by a court, administrative
agency or arbitrator to be invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the fullest extent possible.

6.10 Failure or Indulgence not Waiver; Remedies Cumulative. No failure or delay
on the part of any Party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right. All rights and remedies existing under this Agreement or
the Exhibits or Schedules attached hereto are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

6.11 Authority. Each of the Parties hereto represents to the others that (a) it
has the corporate or other requisite power and authority to execute, deliver and
perform this Agreement, (b) the execution, delivery and performance of this
Agreement by it have been duly authorized by all necessary corporate or other
actions, (c) it has duly and validly executed and delivered this Agreement, and
(d) this Agreement is a legal, valid and binding obligation, enforceable against
it in accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally and general equity principles.

6.12 Interpretation. The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Any capitalized term used in any Exhibit or Schedule but not
otherwise defined therein, shall have the meaning assigned to such term in this
Agreement. When a reference is made in this Agreement to an Article or a
Section, Exhibit or Schedule, such reference shall be to an Article or Section
of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated.

6.13 Conflicting Agreements. None of the provisions of this Agreement is
intended to supersede any provision in any Inter-Company Agreement or any other
agreement with respect to the respective subject matters thereof. In the event
of conflict between this Agreement and any Inter-Company Agreement or other
agreement executed in connection herewith, the provisions of such other
agreement shall prevail.

 

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6.14 Third Party Beneficiaries. None of the provisions of this Agreement shall
be for the benefit of or enforceable by any third party, including any creditor
of any Person. No such third party shall obtain any right under any provision of
this Agreement or shall by reasons of any such provision make any claim in
respect of any Liability (or otherwise) against either Party hereto.

ARTICLE VII

DEFINITIONS

7.1 Defined Terms. The following capitalized terms shall have the meanings given
to them in this Section 7.1:

“Action” means any demand, action, suit, countersuit, claim, counterclaim,
arbitration, inquiry, proceeding or investigation by or before any Governmental
Authority or any arbitration or mediation tribunal.

“ADSs” shall have the meaning set forth in Section 2.2 of this Agreement.

“Agreement” shall mean this Master Transaction Agreement, together with the
Schedules and Exhibits hereto, as the same may be amended from time to time in
accordance with the provisions hereof.

“AmazGame” shall have the meaning set forth in the recitals to this Agreement.

“Ancillary Game Services” means certain online game services of the type that
the Sohu Group provides on its 17173.com web site consisting of links to the
games of online game companies that are customers of 17173.com, with Sohu
generally being compensated by such customers according to, among other things,
the revenues that such customers earn from game players who reach the customers’
games using click-throughs from the 17173.com web site

“Changyou” shall have the meaning set forth in the preamble to this Agreement.

“Changyou’s Auditors” shall have the meaning set forth in Section 3.4(a)(i) of
this Agreement.

“Changyou Balance Sheet” shall mean Changyou’s unaudited consolidated balance
sheet for the most recently completed fiscal quarter as of the Live Filing Date.

“Changyou Business” means the development, operation and licensing of client-end
installed MMORPGs and other support services, as previously conducted by Sohu
and as currently conducted and contemplated to be conducted by Changyou anywhere
in the world, as more completely described in the IPO Registration Statement.

“Changyou Indemnitees” means Changyou and its subsidiaries and VIEs and each of
their respective directors, officers and employees.

“Changyou Liabilities” shall mean (without duplication) the following
Liabilities:

 

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(i) all Liabilities reflected in the Changyou Balance Sheet;

(ii) all Liabilities of Sohu or its subsidiaries and VIEs that arise after the
date of the Changyou Balance Sheet that would be reflected in a Changyou balance
sheet as of the date of such Liabilities, if such balance sheet was prepared
using the same principles and accounting policies under which the Changyou
Balance Sheet was prepared;

(iii) all Liabilities that should have been reflected in the Changyou Balance
Sheet but are not reflected in the Changyou Balance Sheet due to mistake or
unintentional omission;

(iv) all Liabilities, whether arising before, on or after the Live Filing Date,
that relate to, arise or result from: (1) the operation of the Changyou Business
or (2) the operation of any business conducted by Changyou and its subsidiaries
and VIEs at any time after the Live Filing Date; and

(v) Liabilities of Changyou and its subsidiaries and VIEs under this Agreement
or any of the Inter-Company Agreements.

“Confidential Business Information” shall have the meaning set forth in
Section 3.5(b)(iii) of this Agreement.

“Confidential Information” shall have the meaning set forth in Section 3.5(b)(i)
of this Agreement.

“Confidential Technical Information” shall have the meaning set forth in
Section 3.5(b)(ii) of this Agreement.

“Contract” means any contract, agreement, lease, license, sales order, purchase
order, instrument or other commitment that is binding on any Person or any part
of its property under applicable law.

“Dispute” has the meaning set forth in Section 5.1(a) of this Agreement.

“Dispute Resolution Commencement Date” has the meaning set forth in
Section 5.1(a) of this Agreement.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“Gamease” shall have the meaning set forth in the recitals to this Agreement.

“Governmental Authority” shall mean any U.S. federal, state or local, foreign or
international court, government, department, commission, board, bureau, agency,
official or other regulatory, administrative or governmental authority.

 

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“Indemnifying Party” means any party which may be obligated to provide
indemnification to an Indemnitee pursuant to Section 4.2 or Section 4.3 hereof
or any other section of this Agreement or any Inter-Company Agreement.

“Indemnitee” means any party which may be entitled to indemnification from an
Indemnifying Party pursuant to Section 4 hereof or any other section of this
Agreement or any Inter-Company Agreement.

“Information” means information, whether or not patentable or copyrightable, in
written, oral, electronic or other tangible or intangible forms, stored in any
medium, including studies, reports, records, books, contracts, instruments,
surveys, discoveries, ideas, concepts, know-how, techniques, designs,
specifications, drawings, blueprints, diagrams, models, prototypes, samples,
flow charts, data, computer data, disks, diskettes, tapes, computer programs or
other software, marketing plans, customer names, communications by or to
attorneys (including attorney-client privileged communications), memos and other
materials prepared by attorneys or under their direction (including attorney
work product), and other technical, financial, employee or business information
or data.

“Inter-Company Agreements” shall mean the MMORPG Business Transfer Agreements,
the Non-Competition Agreement and the Marketing Services Agreement.

“IPO” shall have the meaning set forth in the recitals to this Agreement.

“IPO Registration Statement” shall have the meaning set forth in the recitals to
this Agreement.

“Liabilities” means all debts, liabilities, guarantees, assurances, commitments
and obligations, whether fixed, contingent or absolute, asserted or unasserted,
matured or unmatured, liquidated or unliquidated, accrued or not accrued, known
or unknown, due or to become due, whenever or however arising (including,
without limitation, whether arising out of any Contract or tort based on
negligence or strict liability) and whether or not the same would be required by
U.S. GAAP to be reflected in financial statements or disclosed in the notes
thereto.

“Live Filing Date” shall have the meaning set forth in the recitals to this
Agreement.

“Loss” and “Losses” mean any and all damages, losses, deficiencies, Liabilities,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses (including, without limitation, the costs and
expenses of any and all Actions and demands, assessments, judgments, settlements
and compromises relating thereto and the reasonable costs and expenses of
attorneys’, accountants’, consultants’ and other professionals’ fees and
expenses incurred in the investigation or defense thereof or the enforcement of
rights hereunder), but excluding punitive damages (other than punitive damages
awarded to any third party against an indemnified party).

“Marketing Services Agreement” shall have the meaning set forth in Section 1.1
of this Agreement.

 

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“MMORPGs” means client-end installed massively multi-player online role-playing
games, excluding, without limitation, Ancillary Game Services and casual games.

“Non-Competition Agreement” shall have the meaning set forth in Section 1.1 of
this Agreement.

“MMORPG Business Transfer Agreements” means those various agreements,
instruments and other operative documents relating to the transfer of the assets
and liabilities of the Changyou Business, including without limitation those
agreements, instruments and documents listed on Schedule 1 attached hereto and
made a part hereof.

“Ordinary Shares” means the ordinary shares of Changyou (including ordinary
shares represented by ADSs and held of record by the depositary bank for the
ADSs).

“Party” or “Parties” shall have the meaning set forth in the preamble of this
Agreement.

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.

“Privileges” shall have the meaning set forth in Section 3.6(a) of this
Agreement.

“Privileged Information” shall have the meaning set forth in Section 3.6(a) of
this Agreement.

“Rule 10A-3(b)(2)” means Rule 10A-3(b)(2) (or any successor rule to similar
effect) promulgated under the Exchange Act.

“SEC” shall have the meaning set forth in the recitals of this Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Sohu Group” means Sohu and its subsidiaries and VIEs, other than Changyou and
its subsidiaries and VIEs.

“Sohu” shall have the meaning set forth in the preamble to this Agreement.

“Sohu’s Auditors” shall have the meaning set forth in Section 3.4 (a)(i) of this
Agreement.

“Sohu Business” means any business that is conducted by Sohu and its
subsidiaries and VIEs and described in its periodic filings with the SEC, other
than the Changyou Business.

“Sohu Indemnitees” means Sohu and its subsidiaries and VIEs (excluding Changyou
and its subsidiaries and VIEs) and each of their respective directors, officers
and employees.

“Sohu Liabilities” shall mean (without duplication) the following Liabilities:

 

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(i) all Liabilities, whether arising before, on or after the Live Filing Date,
that relate to, arise or result from the operation of the Sohu Business, other
than Changyou Liabilities; and

(ii) Liabilities of Sohu and its subsidiaries and VIEs under this Agreement or
any of the Inter-Company Agreements.

“Third Party Claim” has the meaning set forth in Section 5.8(a) of this
Agreement.

“Underwriters” shall have the meaning set forth in Section 2.1(a) of this
Agreement.

“Underwriting Agreement” shall have the meaning set forth in Section 2.1(a) of
this Agreement.

“U.S. GAAP” means generally accepted accounting principles in the United States
as in effect from time to time.

“VIE” of any Person means any entity that controls, is controlled by, or is
under common control with such Person and is deemed to be a variable interest
entity consolidated with such Person for purposes of U.S. GAAP. As used herein,
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such entity, whether
through ownership of voting securities or other interests, by contract or
otherwise. For the purpose of this Agreement, Gamease is a VIE of Changyou.

 

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WHEREFORE, the Parties have signed this Master Transaction Agreement effective
as of the date first set forth above.

 

SOHU.COM INC. By:  

 

  Name:   Title: CHANGYOU.COM LIMITED By:  

 

  Name:   Title:

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SCHEDULE 1

MMORPG Business Transfer Agreements

 

•  

Asset Transfer Agreement between Sohu New Era and AmazGame. Transfers servers
and other key aspects of the MMORPG business operated by Sohu and held by Sohu
New Era, Inc. to AmazGame.

 

•  

Asset Transfer Agreement between Sohu New Era and Gamease. Transfers to Gamease
from Sohu New Era, Inc. that number of servers as is required to be held by
Gamease as the holder of the online game licenses and as operator of the MMORPG
business operated by Sohu.

 

•  

Technology Transfer Agreement between Beijing Fire Fox and Gamease. Transfers to
Gamease from Beijing Fire Fox, a subsidiary of Sohu, technology related to TLBB.

 

•  

Trademark Assignment Agreement between Beijing Fire Fox and Gamease. Transfers
to Gamease from Beijing Fire Fox trademarks and trademark rights.

 

•  

Services Transfer Agreement between Sohu Era and Gamease. Gamease agrees to
provide to TLBB game players operational and maintenance services previously
provided by Sohu Era, and to accept pre-paid game cards previously sold to such
game players and not yet used, in return for Sohu Era’s paying to Gamease a fee
from Sohu Era calculated to compensate Gamease for the value of such pre-paid
cards.

 

•  

Assignment of Rights Agreement among Sohu Internet, Beijing Fire Fox, Beijing Ke
Hai Publishing House and Gamease. Sohu Internet assigns to Gamease its rights to
operate, and its obligations with respect to, TLBB.

 

•  

TLBB Game License Agreement (Vietnam) among Sohu Internet, Beijing Fire Fox and
FPT Telecom, amended by Supplement to Game License Agreement among Sohu
Internet, Beijing Fire Fox, FPT Telecom and Gamease. Sohu Internet and Beijing
Fire Fox, as the joint licensors, assign to Gamease all of their rights and
obligations under the agreement.

 

•  

Amendments to distribution agreements between Sohu New Era and each of the
distributors of pre-paid cards. Agreements amended to replace Sohu New Era with
Gamease.

 

•  

Amendments to employment agreements between Sohu New Era and certain former Sohu
New Era employees. Amendments transfer employees from Sohu New Era to Gamease.

 

•  

Amendments to employment agreements between Sohu New Era and certain former Sohu
New Era employees. Amendments transfer employees from Sohu New Era to AmazGame.

 

•  

Amendments to employment agreements between Beijing Fire Fox and certain former
Beijing Fire Fox employees. Amendments transfer employees from Beijing Fire Fox
to AmazGame.