Exhibit 10.1

SUBSCRIPTION AGREEMENT (this “Agreement”) made on the 16th day of September,
2013

AMONG:

 

(1) SOGOU INC., an exempted company with limited liability incorporated under
the laws of the Cayman Islands (the “Company”);

 

(2) SOHU.COM (SEARCH) LIMITED, an exempted company with limited liability
incorporated under the laws of the Cayman Islands (“Sohu Search”);

 

(3) THL A21 LIMITED, a BVI Business Company incorporated in the British Virgin
Islands (“Investor”); and

 

(4) PHOTON GROUP LIMITED, a company incorporated under the laws of the British
Virgin Islands (“Photon”).

(together, the “Parties” and each, a “Party”).

RECITALS:

 

(A) The Company is an exempted company with limited liability organized and
existing under the laws of the Cayman Islands. Further particulars of the
Company and its Subsidiaries are set out in Schedule 2.

 

(B) On the date hereof and immediately prior to Completion (as defined below),
the Sohu Search Consortium (as defined below) and various current or former
employees of the Company and its Affiliates hold 100% of the issued share
capital of the Company comprising of ordinary shares and Series A Preferred
Shares (as defined below).

 

(C) Upon the terms and subject to the conditions set forth herein, the Company
shall allot and issue to the Investor, and the Investor shall subscribe for
certain Class B Ordinary Shares and Series B Preferred Shares. At Completion,
the existing ordinary shares shall be re-designated as Class A Ordinary Shares,
as defined below.

 

(D) The Investor wishes to invest in the Company by subscribing for the
Subscribed Shares (as defined below) to be issued by the Company, and the
Investor wish to induce the Company to accept the consideration for and issue
the Subscribed Shares, pursuant to the terms and subject to the conditions of
this Agreement.

 

(E) The Parties desire to enter into this Agreement and make the respective
representations, warranties, covenants and agreements set forth herein on the
terms and conditions set forth herein.

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AGREEMENT:

SECTION 1

INTERPRETATION

 

1.1 Definitions. In this Agreement, unless the context otherwise requires the
following words and expressions have the following meanings:

“Affiliate” of a Person (the “Subject Person”) means a Person that directly or
indirectly through one or more intermediaries Controls or is Controlled by or is
under common Control with the Subject Person.

“Basic Documents” means this Agreement, the Shareholders’ Agreement, the Voting
Agreement, the Restated Charter and such of the Material Contracts (as defined
in Schedule 1) as are designated as such.

“Board” means the board of directors of the Company.

“Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks located in the Cayman Islands, the United States of America,
the PRC or Hong Kong are authorized or required by law or executive order to be
closed and on which no tropical cyclone warning no.8 or above and no “black”
rainstorm warning signal is hoisted in Hong Kong at any time between 8:00 a.m.
and 6:00 p.m. Hong Kong time.

“BVICo” means Sogou (BVI) Limited, a BVI Business Company organized and existing
under the laws of the British Virgin Islands with its registered office at P.O.
Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin
Islands and a wholly owned subsidiary of the Company.

“China” or the “PRC” means the People’s Republic of China, and for purposes of
this Agreement, excluding Hong Kong and Macau Special Administrative Regions of
the PRC and Taiwan.

“China Web” means China Web Search (HK) Limited, a company limited by shares
organized and existing under the laws of Hong Kong with its registered office at
Suite 801, Winsome House, 73 Wyndham Street, Central, Hong Kong.

“Class A Ordinary Shares” means the class A ordinary shares of par value $0.001
each, which will be created by re-designating all the ordinary shares, par value
$0.001 each, of the Company issued and outstanding prior to Completion.

“Class B Ordinary Shares” means the class B ordinary shares of par value $0.001
each, which will be a new class of shares created prior to, and issued by the
Company upon, Completion.

“Completion” means the completion of the subscription for and issuance of the
Subscribed Shares in accordance with the provisions of this Agreement.

 

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“Completion Date” means the date hereof.

“Contributed IP” means the intellectual property assets owned by Tencent
ParentCo as set forth on Schedule 4 and to be transferred to BVICo at Completion
pursuant to Section 2.1(b)(ii).

“Control” of a Person means (a) ownership of more than 50% of the shares in
issue or other equity interests or registered capital of such Person or (b) the
power to direct the management or policies of such Person, whether through the
ownership of more than 50% of the voting power of such Person, through the power
to appoint a majority of the members of the board of directors or similar
governing body of such Person, through contractual arrangements or otherwise.

“Disclosure Schedule” means, in respect of the Company Warranties, the
disclosure schedule delivered by Sohu Search and the Company to the Investor on
the date hereof.

“Encumbrances” means (a) any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, deed of trust, title retention,
security interest or other encumbrance of any kind securing, or conferring any
priority of payment in respect of, any obligation of any Person, including
without limitation any right granted by a transaction which, in legal terms, is
not the granting of security but which has an economic or financial effect
similar to the granting of security under applicable law, (b) any lease,
sub-lease, occupancy agreement, easement or covenant granting a right of use or
occupancy to any Person, (c) any proxy, power of attorney, voting trust
agreement, interest, option, right of first offer, negotiation or refusal or
transfer restriction in favor of any Person and (d) any adverse claim as to
title, possession or use.

“Equity Securities” means, with respect to any Person, such Person’s equity
capital, membership interests, partnership interests, registered capital, joint
venture or other ownership interests or any options, warrants or other
securities that are directly or indirectly convertible into, or exercisable or
exchangeable for, such equity capital, membership interests, partnership
interests, registered capital, joint venture or other ownership interest
(whether or not such derivative securities are issued by such Person). Unless
the context otherwise requires, any reference to “Equity Securities” refers to
the Equity Securities of the Company.

“Existing Shareholders” means all shareholders of the Company immediately prior
to Completion.

“Fundamental Company Warranties” means the warranties made by the Company, Sohu
Search and Photon (as applicable) in paragraphs 1 to 6 in Part A of Schedule 1
and paragraphs 1 to 9 in Part B of Schedule 1.

“Fundamental Investor Warranties” means the warranties made by the Investor in
paragraphs 1 to 6 in Part A of Schedule 1.

 

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“Governmental Authority” means any government or political subdivision thereof;
any department, agency or instrumentality of any government or political
subdivision thereof; any court or arbitral tribunal; and the governing body of
any securities exchange.

“Group” means collectively the Company and its Subsidiaries (which includes
Sogou OpCo), and “Group Member” means any of them.

“Hong Kong” means the Hong Kong Special Administrative Region of the PRC.

“HKCo-1” means Sogou Hong Kong Limited, a company limited by shares organized
and existing under the laws of Hong Kong with its registered office at 12th
Floor, Ruttonjee House, 11 Duddell Street, Central, Hong Kong and a wholly-owned
subsidiary of the Company.

“HKCo-2” means Vast Creation Advertising Media Services Limited, a company
limited by shares organized and existing under the laws of Hong Kong with its
registered office at Room 1705, 17th Floor, Yardley Commercial Building, 1-6
Connaught Road West, Hong Kong and a wholly-owned subsidiary of the Company.

“Non-Fundamental Company Warranties” means the Company Warranties other than the
Fundamental Company Warranties.

“Non-Fundamental Investor Warranties” means the Investor Warranties other than
the Fundamental Investor Warranties.

“Person” means any natural person, firm, company, governmental authority, joint
venture, partnership, association or other entity (whether or not having
separate legal personality).

“Renminbi” or “RMB” means Renminbi, the lawful currency of the PRC.

“Restated Charter” means the Fifth Amended and Restated Memorandum and the
Second Amended and Restated Articles of Association of the Company, in the form
of Exhibit A, to be adopted by the Company at or prior to Completion.

“Series A Preferred Holders” means all holders of Series A Preferred Shares
immediately prior to the Completion.

“Series A Preferred Shares” means the Series A Preferred Shares, par value
US$0.001, of the Company.

“Series B Preferred Shares” means the Series B Preferred Shares of par value
US$0.001 each, which will be a new class of shares created prior to, and issued
by the Company upon, Completion.

 

 

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“Shareholders’ Agreement” means the shareholders’ agreement entered into by and
among Sohu Search, Photon, Sogou Management, the Investor and the other parties
named therein on the date hereof.

“Sogou Management” means the individuals identified in Schedule 3.

“Sogou OpCo” means LOGO [g619977dsp44_1.jpg] (Beijing Sogou Information Service
Co., Ltd.), a PRC company organized and existing under the laws of the PRC and
an entity Controlled by the Company.

“Sohu Search Consortium” means Sohu Search, Photon, China Web and Sogou
Management, collectively.

“Subscribed Shares” means the Subscribed B Ordinary Shares and the Subscribed B
Preferred Shares.

“Subsidiary” means, with respect to any specified Person, any other Person
Controlled by the specified Person, directly or indirectly, whether through
contractual arrangements or through ownership of equity securities, voting power
or registered capital. For the avoidance of the doubt, a variable interest
entity Controlled by another entity shall be deemed a Subsidiary of that other
entity.

“Termination Agreement” means the termination agreement entered into by and
among the Company, Sohu Search, Photon and China Web on the date hereof.

“Tencent ParentCo” means Tencent Holdings Limited, an exempted company with
limited liability organized and existing under the laws of the Cayman Islands
with its registered address at 4th Floor, Royal Bank House, 24 Shedden Road,
George Town, Grand Cayman KY1-1110, Cayman Islands.

“Transaction” means the transactions contemplated under this Agreement and all
related transactions and matters provided for or contemplated in this Agreement
and the other Basic Documents.

“Voting Agreement” means the voting agreement in the form of Exhibit B to be
entered into by and among Sohu Search, Photon and Sogou Management at
Completion.

“Warranties” means collectively the Company Warranties and the Investor
Warranties set forth in Schedule 1.

“WFOE-1” means LOGO [g619977dsp44_2.jpg] (Beijing Sogou Technology Development
Co., Ltd.), a wholly-foreign owned enterprise organized and existing under the
laws of the PRC with its registered address at Room 01, 9/F, Building No.9
Sohu.com Internet Plaza, No. 1 Zhongguancun Road East, Haidian District,
Beijing, PRC and an indirectly wholly-owned subsidiary of the Company.

 

 

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“WFOE-2” means LOGO [g619977dsp45_1.jpg] (Beijing Sogou Network Technology Co.,
Ltd.), a wholly-foreign owned enterprise organized and existing under the laws
of the PRC with its registered address at Room 1916, 19/F, Building No. 4, No. 1
Wang Zhuang Road, Haidian District, Beijing, PRC and an indirectly wholly-owned
subsidiary of the Company.

“$” or “US$” means United States Dollars, the lawful currency of the United
States of America.

 

1.2 Terms Defined Elsewhere in this Agreement. The following terms are defined
in this Agreement as follows:

 

Term

 

Section

    “Agreement”   Preamble   “Basic Warranties”   Section 4.1   “Cash
Consideration”   Section 2.1(b)(i)   “Company”   Preamble   “Company Indemnified
Party”   Section 7.1(b)   “Company Indemnifying Party”   Section 7.1(a)  
“Company Losses”   Section 7.1(b)   “Company Specific Warranties”   Section 4.2
  “Company Warranties”   Section 4.2   “Company Warrantors”   Section 4.2  
“Confidential Information”   Section 5.1   “HKIAC”   Section 10.2(b)   “Initial
Bank Account”   Section 3.2(a)(x)   “Investor”   Preamble   “Investor
Indemnified Party”   Section 7.1(a)   “Investor Losses”   Section 7.1(a)  
“Investor Specific Warranties”   Section 4.3   “Investor Warranties”   Section
4.3   “Notices”   Section 8.1   “Party” or “Parties”   Preamble   “Photon”  
Preamble   “Representatives”   Section 5.1   “Sohu Search”   Preamble  
“Survival Period”   Section 4.8   “Subscribed B Ordinary Shares”   Section
2.1(a)   “Subscribed B Preferred Shares”   Section 2.1(a)  

 

1.3 Interpretation.

 

  (a) Directly or Indirectly. The phrase “directly or indirectly” means
directly, or indirectly through one or more intermediate Persons or through
contractual or other arrangements, and “direct or indirect” has the correlative
meaning.

 

  (b) Gender and Number. Unless the context otherwise requires, all words
(whether gender-specific or gender neutral) shall be deemed to include each of
the masculine, feminine and neuter genders, and words importing the singular
include the plural and vice versa.

 

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  (c) Headings. Headings are included for convenience only and shall not affect
the construction of any provision of this Agreement.

 

  (d) Include not Limiting. “Include,” “including,” “are inclusive of” and
similar expressions are not expressions of limitation and shall be construed as
if followed by the words “without limitation.”

 

  (e) Law. References to “law” shall include all applicable laws, regulations,
rules and orders of any Governmental Authority, securities exchange or other
self-regulating body, any common or customary law, constitution, code,
ordinance, statute or other legislative measure and any regulation, rule,
treaty, order, decree or judgment; and “lawful” shall be construed accordingly.

 

  (f) References to Documents. References to this Agreement include the
Schedules and Exhibits, which form an integral part hereof. A reference to any
Section, Schedule or Exhibit is, unless otherwise specified, to such Section of,
or Schedule or Exhibit to this Agreement. The words “hereof,” “hereunder” and
“hereto,” and words of like shall, unless the context requires otherwise, refer
to this Agreement as a whole and not to any particular Section hereof or
Schedule or Exhibit hereto. Unless specified otherwise, a reference to any
document (including this Agreement) is to that document as amended,
consolidated, supplemented, novated or replaced from time to time.

 

  (g) Share Calculations. In calculations of share numbers, references to “fully
diluted basis” mean that the calculation is to be made assuming that all
outstanding options, warrants and other Equity Securities convertible into or
exercisable or exchangeable for ordinary shares (whether or not by their terms
then currently convertible) have been so converted, exercised or exchanged, and
references to “non-diluted basis” mean the calculation is to be made taken into
account only shares then in issue. All references to number of shares or the
prices per share in this Agreement shall be appropriately adjusted to take into
account any share splits, combinations, reorganizations, share dividends,
mergers, recapitalizations similar events that affect the share capital of the
Company the date hereof.

 

  (h) Time. If a period of time and dates from a given day or the day of a given
act or event is specified, such period shall be calculated inclusive of that
day.

 

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SECTION 2

SUBSCRIPTION

 

2.1 Subscription.

 

  (a) On the date hereof and at Completion, upon the terms and subject to the
conditions of this Agreement, the Investor shall subscribe for, and the Company
shall allot and issue to the Investor (i) 79,368,421 Class B Ordinary Shares
(the “Subscribed B Ordinary Shares”) and (ii) 65,431,579 Series B Preferred
Shares (the “Subscribed B Preferred Shares”).

 

  (b) In consideration of the issuance of the Subscribed Shares by the Company,
the Investor shall:

 

  (i) pay to the Company a cash consideration of $475,471,816 (the “Cash
Consideration”); and

 

  (ii) procure Tencent ParentCo to transfer the Contributed IP to BVICo.

 

2.2 Simultaneous Completion. Completion of the subscription of the Subscribed
Shares pursuant to Section 2.1(a) shall take place simultaneously.

 

2.3 No Conditions Precedent to Completion. There shall be no conditions to the
obligations of each Party to proceed with the transactions set out in
Section 2.1 on the date hereof.

SECTION 3

COMPLETION AND POST-COMPLETION ACTIONS

 

3.1 Time and Place of Completion. The Completion shall take place at the offices
of the Company in Beijing on the date hereof, or at such other time and place as
the Parties may agree.

 

3.2 Actions at Completion. At Completion:

 

  (a) the Company shall, and Sohu Search shall procure that the Company shall,
by all necessary action of the Board and the Existing Shareholders:

 

  (i) adopt the Restated Charter;

 

  (ii) re-designate all of the existing and outstanding ordinary shares into
168,310,758 Class A Ordinary Shares;

 

  (iii) authorize and create the Class B Ordinary Shares, and issue and allot
79,368,421 Class B Ordinary Shares to the Investor;

 

  (iv) authorize and create the Series B Preferred Shares, and issue and allot
65,431,579 Series B Preferred Shares to the Investor;

 

  (v) appoint two nominees of the Investor as directors on the Board; for the
avoidance of doubt, the total number of directors on the Board immediately after
Completion shall be five;

 

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  (vi) deliver to the Investor a copy of the register of members of the Company
with the Investor duly registered thereon as the owner of 79,368,421 Class B
Ordinary Shares and 65,431,579 Series B Preferred Shares and all other
shareholders as holders of either Class A Ordinary Shares or Series A Preferred
Shares;

 

  (vii) deliver to the Investor a copy of all Board resolutions and
shareholders’ resolutions (both ordinary and special), including all attachments
thereto, required to effect all the actions described in this Section 3.2(a);

 

  (viii) deliver to the Investor a copy of the register of directors of the
Company reflecting the appointments set out in Section 3.2(a)(v) above;

 

  (ix) deliver to the Investor an opinion from Cayman Islands counsel to the
Company, dated as of the Completion Date, in form and substance satisfactory to
the Investor and covering the agreed matters; and

 

  (x) appoint a Person designated by the Investor (who shall be one of the two
directors appointed in Section 3.2(a)(v) above) to be an authorized signatory of
the Company’s bank account into which the Cash Consideration is paid (the
“Initial Bank Account”) with such signing authority as determined by the Board
and agreed with the Investor.

 

  (b) the Investor shall:

 

  (i) pay the Cash Consideration in immediately available cleared funds and in
US$ to the Initial Bank Account, details of which have been provided to the
Investor by the Company at least three (3) Business Days prior to Completion;
and

 

  (ii) deliver to the Company a copy of all its board resolutions and
shareholder resolutions (to the extent required by applicable laws or the
constitutive documents of the Investor), including all attachments thereto,
required to effect the Investor’s obligations under the Transaction and the
Basic Documents;

 

  (c) the Company, Sohu Search, Photon, the members of Sogou Management and the
Investor shall enter into the Shareholders’ Agreement;

 

  (d) Sohu Search, Photon and Sogou Management shall enter into the Voting
Agreement; and

 

  (e) the Company and each member of the Sohu Search Consortium shall enter into
the Termination Agreement.

 

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3.3 Post Completion Covenants.

 

  (a) Immediately after Completion, the Board (which, for the avoidance of
doubt, shall include the directors appointed under Section 3.2(a)(v) above)
shall pass certain resolutions authorizing certain additional operational
matters in the form agreed to by the Company and the Investor.

 

  (b) The Company agrees and covenants to the Investor that prior to the use of
the Cash Consideration in full by the Company, the Company shall not remove the
Investor appointed director as a signatory to the Initial Bank Account or change
its bank account authorization or limit for the Initial Bank Account without the
Investor’s written consent. The Company further agrees and covenants to the
Investor that the approval and signature of Martin Chi Ping LAU shall be
required for any payment or withdrawal that would reduce the balance in the
Initial Bank Account below such amount as is equal to (i) US$147,107,302 (One
Forty-Seven Million One Hundred Seven Thousand Three Hundred Two U.S. Dollars)
minus (ii) the aggregate of all amounts previously paid or withdrawn with the
approval and signature of Martin Chi Ping LAU.

 

  (c) To the extent not completed on the Completion Date, as soon as possible
after Completion, the Investor shall procure Tencent ParentCo to finalize
formalities and sign all such documents as may be reasonable to complete any
post Completion registration requirements to transfer the ownership of the
Contributed IP to BVICo.

 

  (d) The Investor shall procure that its Affiliates who are parties thereto
comply with their obligations under the Basic Documents to which they are
parties.

 

  (e) The Company, Sohu Search and Photon shall procure that their Affiliates
who are parties thereto comply with their obligations under the Basic Documents
to which they are parties.

 

  (f) As soon as possible after Completion, the Company shall deliver to the
Investor share certificates, duly issued in the name of the Investor and
reflecting the Investor’s ownership of the Subscribed Shares.

SECTION 4

REPRESENTATIONS AND WARRANTIES

 

4.1 Basic Warranties. Each Party hereby represents and warrants to the other
Parties in the terms set forth in Part A of Schedule 1 (the “Basic Warranties”)
with respect to itself.

 

4.2 Company Warranties. Sohu Search and the Company (the “Company Warrantors”)
hereby jointly and severally represent and warrant to the Investor in the terms
set forth in Part B of Schedule 1 (the “Company Specific Warranties”, together
with the Basic Warranties made by Sohu Search and the Company, the “Company
Warranties”).

 

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4.3 Investor Warranties. The Investor represents and warrants to Sohu Search and
the Company in the terms set forth in Part C of Schedule 1 (the “Investor
Specific Warranties”, together with the Basic Warranties made by the Investor,
the “Investor Warranties”).

 

4.4 Date of Warranty. Each Warranty is made on the date of this Agreement.

 

4.5 No Implied or Other Warranties.

 

  (a) The Parties agree and acknowledge that other than:

 

  (i) the Company Warranties made by the Company Warrantors pursuant to
Section 4.1 above; and

 

  (ii) the Investor Warranties made by the Investor pursuant to Section 4.3
above,

none of the Company Warrantors or the Investor are making any representations or
warranties with respect to the matters contemplated by this Agreement.

 

  (b) Without limiting the foregoing:

 

  (i) The Investor acknowledges and agrees that the Company Warranties made by
the Company Warrantors pursuant to Section 4.1 above are the sole
representations or warranties made with respect to the Company and/or its
operations, financial condition, business, assets, capital structure,
liabilities and any other matter impacting the Company, and the Investor
acknowledges and agrees that it is relying solely on such representations and
warranties in deciding to enter into this Agreement, and expressly waives any
rights or remedies with respect to any statement, information, or data made or
provided to, or obtained by the Investor other than such sole representations
and warranties; and

 

  (ii) the Company Warrantors acknowledge and agree that the Investor Warranties
made by the Investor pursuant to Section 4.3 above are the sole representations
or warranties made with respect to the Investor and/or its operations, financial
condition, business, assets, capital structure, liabilities and any other matter
impacting the Investor and the Contributed IP, and the Company Warrantors
acknowledge and agree that each of them is relying solely on such
representations and warranties in deciding to enter into this Agreement, and
expressly waives any rights or remedies with respect to any statement,
information, or data made or provided to, or obtained by, the Company Warrantors
other than such sole representations and warranties.

 

4.6 Specific Disclosure. Disclosure of any matter in a Disclosure Schedule
corresponding to a particular Warranty shall, should the existence of such
matter or its contents be relevant, as reasonably apparent on its face, to any
other Warranty, be deemed to be disclosed for that other Warranty whether or not
an explicit cross reference appears.

 

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4.7 Knowledge of Claims. The Warranties are given subject to the matters in
respect of any Warranty (i) disclosed in the Disclosure Schedule (including the
schedules and appendices thereof) or (ii) otherwise “Disclosed”, as such term is
defined in Schedule 1 herein.

 

4.8 Survival. The Warranties shall survive for a period of 18 months from the
date hereof (“Survival Period”).

SECTION 5

CONFIDENTIALITY AND RESTRICTIONS ON PUBLICITY

 

5.1 General Obligation. Each Party undertakes to the other Parties that it shall
not reveal, and that it shall procure that its directors, equity interest
holders, officers, employees, agents or Affiliates (collectively,
“Representatives”) do not reveal, to any third party any Confidential
Information without the prior written consent of the Company or the concerned
Party, as the case may be, or use any Confidential Information in such manner
that is detrimental to the Company or the concerned Party, as the case may be.
The term “Confidential Information” as used in this Section 5 means, (a) any
information concerning the organization, business, technology, intellectual
property, safety records, investment, finance, transactions or other affairs of
any Party or any of their respective directors, officers or employees (whether
conveyed in written, oral or in any other form and whether such information is
furnished before, on or after the date of this Agreement); (b) the terms of this
Agreement or any of the other Basic Documents, or the identities of the Parties
and their respective Affiliates; and (c) any other information or materials
prepared by a Party or its Representatives that contains or otherwise reflects,
or is generated or derived from, information set forth in (a). “Confidential
Information” does not include information: (i) that is or becomes generally
available to the public other than as a result of disclosure by or at the
direction of a Party or any of the Representatives in violation of this
Agreement or any Basic Document, (ii) that was in the possession of the
receiving Party prior to the disclosure, if to the knowledge of the receiving
Party, the source of the information does not owe confidentiality obligation to
the concerned Party, or (iii) that is independently developed by a Party or its
Representatives without reference to or reliance on any Confidential
Information.

 

5.2 Exceptions. The provisions of Section 5.1 shall not apply to:

 

  (a) disclosure of Confidential Information that is permitted by this Agreement
or any other Basic Document;

 

  (b) disclosure by a Party to a Representative or an Affiliate so long as such
disclosure is necessary in order for that Party to perform its obligations, or
exercise its rights, under this Agreement or any other Basic Document to which
it is a party, provided that such Representative or an Affiliate (i) is under a
similar obligation of confidentiality or (ii) is otherwise under a binding
professional obligation of confidentiality; or

 

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  (c) disclosure, after giving prior notice to the other Parties to the extent
practicable under the circumstances and subject to any practicable arrangements
to protect confidentiality, to the extent required under the rules of any stock
exchange on which the shares of a Party or its parent company are listed or by
applicable laws or judicial or regulatory process or in connection with any
judicial process regarding any legal action, suit or proceeding arising out of
or relating to this Agreement.

 

5.3 Publicity. No Party shall make, and each Party shall cause its respective
officers, employees, agents and Affiliates and the respective officers,
employees or agents of each such Affiliate to not make, any public announcement
or comment regarding this Agreement or the transactions contemplated hereby
without first consulting with and obtaining the written consent of the other
Parties, except to the extent that such announcement or comment is required by
law or any regulations governing stock exchanges, pursuant to a court order, by
any securities exchange on which securities of such Party or an Affiliate
thereof are listed or by any governmental or regulatory body.

SECTION 6

EXPENSES

 

6.1 Fees and Expenses. All Parties shall bear their own respective expenses
incurred in connection with the preparation, execution, negotiation and
performance of this Agreement and the other Basic Documents and the transactions
contemplated hereby and thereby, including all fees and expenses of agents,
representatives, counsel and accountants.

SECTION 7

INDEMNIFICATION

 

7.1 Indemnification.

 

  (a) Sohu Search, Photon and the Company (each, a “Company Indemnifying Party”)
shall indemnify, defend and hold harmless the Investor and its Affiliates,
officers, directors, agents and employees (each, an “Investor Indemnified
Party”) from and against any and all losses, damages, liabilities, claims,
proceedings, Taxes, costs and expenses (including the fees, disbursements and
other charges of counsel reasonably incurred by the Investor Indemnified Party
in any action between the Company Indemnifying Party and the Investor
Indemnified Party or between the Investor Indemnified Party and any third party,
in connection with any investigation or evaluation of a claim or otherwise)
(collectively, “Investor Losses”) resulting from or arising out of any breach by
the Company Indemnifying Party of any Company Warranty or any other covenant or
agreement in this Agreement or any other Basic Document.

 

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  (b) The Investor shall indemnify, defend and hold harmless Sohu Search, Photon
and the Company and their respective Affiliates, officers, directors, agents and
employees (each, a “Company Indemnified Party”) from and against any and all
losses, damages, liabilities, claims, proceedings, Taxes, costs and expenses
(including the fees, disbursements and other charges of counsel reasonably
incurred by the Company Indemnified Party in any action between the Investor and
the Company Indemnified Party or between the Company Indemnified Party and any
third party, in connection with any investigation or evaluation of a claim or
otherwise) (collectively, “Company Losses”) resulting from or arising out of any
breach by the Investor of any Investor Warranty or any other covenant or
agreement in this Agreement or any other Basic Document.

 

7.2 Breach of Warranties. The amount of any payment to any Company Indemnified
Party or Investor Indemnified Party (as the case may be) pursuant to Section 7.1
shall be sufficient to make such Company Indemnified Party or Investor
Indemnified Party (as the case may be) whole for any Company Losses or Investor
Losses (as the case may be) incurred by it resulting from a breach of a Company
Warranty or Investor Warranty (as the case may be). In connection with the
indemnification obligation of the Company Indemnifying Party or the Investor (as
the case may be) as set forth above, the Company Indemnifying Party or the
Investor (as the case may be) shall, upon presentation of appropriate invoices
containing reasonable detail, reimburse each Company Indemnified Party or
Investor Indemnified Party (as the case may be) for all such expenses as they
are incurred by such Company Indemnified Party or Investor Indemnified Party (as
the case may be).

 

7.3 Limitation on Liability. Notwithstanding anything herein:

 

  (a) In no event shall a Company Indemnifying Party or the Investor be liable
for any indirect losses or remote, speculative, exemplary, consequential, or
punitive damages or damages based on any type of multiples.

 

  (b) No Company Indemnifying Party or the Investor shall be liable in respect
of any claim for any Investor Losses or Company Losses (as the case may be) (or
a series of claims arising from substantially similar facts or circumstances)
unless and until the amount that would otherwise be recoverable from such
Company Indemnifying Party or such the Investor (but for this Section 7.3(b)) in
respect of any such claim or series of claims arising from substantially similar
facts or circumstances in aggregate exceeds $100,000.

 

  (c) No Company Indemnifying Party or the Investor shall be liable in respect
of a claim for any Investor Losses or Company Losses (as the case may be) unless
and until the amount that would be otherwise recoverable from such Company
Indemnifying Party or the Investor (but for this Section 7.3(c)) in respect of
such claim, when aggregated with any other amount or amounts recoverable from
such Company Indemnifying Party or the Investor in respect of other claims
(excluding any amounts in respect of a claim for which such Company Indemnifying
Party or the Investor has no liability because of Section 7.3(b)), exceeds
$1,000,000. In such an event, the Company Indemnifying Party or the Investor (as
the case may be) shall be liable for the entire aggregate amount of the Investor
Losses or Company Losses (as the case may be) and not just the excess.

 

 

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  (d) For the avoidance of doubt and notwithstanding any other provision in this
Agreement:

 

  (i) in no circumstance shall the aggregate liability of the Company
Indemnifying Parties or the Investor (as the case may be) in respect of all
Investor Losses or Company Losses (respectively) resulting from or arising out
of:

 

  (x) any breach by any Company Indemnifying Party of any Fundamental Company
Warranties, combined with any liability under Section 7.3(d)(ii)(x), exceed, in
respect of (1) the Company, $448,000,000, and in respect of (2) Sohu Search,
$240,000,000 and (3) Photon, $64,000,000, provided that the aggregate liability
of the Company Indemnifying Parties under this Section 7.3(d)(i)(x) shall not
exceed $448,000,000; and  

 

  (y) any breach by the Investor of any Fundamental Investor Warranties,
combined with any liability under Section 7.3(d)(ii)(y), exceed $448,000,000;
and

 

  (ii) in no circumstance shall the aggregate liability of Company Indemnifying
Parties or the Investor (as the case may be) in respect of all Investor Losses
or Company Losses (respectively) resulting from or arising out of:

 

  (x) any breach by any Company Indemnifying Party of any Non-Fundamental
Company Warranties exceed, in respect of (1) the Company, $89,600,000, and in
respect of (2) Sohu Search, $48,000,000 and (3) Photon, $12,800,000, provided
that the aggregate liability of the Company Indemnifying Parties under this
Section 7.3(d)(ii)(x) shall not exceed $89,600,000; and  

 

  (y) any breach by the Investor of any Non-Fundamental Investor Warranties
exceed $89,600,000.

 

  (e) Each Company Indemnified Party and Investor Indemnified Party shall
procure and ensure that all reasonable steps are taken and all reasonable
assistance is given to avoid or mitigate any Company Losses or Investor Losses
(respectively) which in the absence of mitigation might give rise to a liability
in respect of any claim under this Agreement.

 

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  (f) For the avoidance of doubt, any claim for a breach of a Company Warranty
or Investor Warranty shall be qualified by and subject to any relevant
disclosure made in the Disclosure Schedule or otherwise “Disclosed”, as such
term is defined in Schedule 1 to against on such Warranties.

 

  (g) In determining Investor Losses or Company Losses (as the case may be)
subject to indemnification hereunder, the amount of such Investor Losses or
Company Losses shall be calculated taking into account and giving credit against
the Investor Losses or the Company Losses, as applicable, any insurance proceeds
(or other contribution or payment from any third party) actually received by an
Investor Indemnified Party or a Company Indemnified Party, as applicable, (net
of any cost and expenses reasonably incurred in receiving such proceeds,
contribution or payment and any increase in premium), and the Investor
Indemnified Party or the Company Indemnified Party, as applicable, shall use
commercially reasonable efforts to pursue and collect any such insurance
proceeds, contribution or other payments. The foregoing sentence shall not
oblige any Investor Indemnified Party or Company Indemnified Party to procure
any insurance policy or to take action which would result in an increase in
premiums, a change in coverage or any other adverse change under any insurance
policy.

 

  (h) No Company Indemnified Party or Investor Indemnified Party will be
entitled to indemnification with respect to any claim made pursuant to this
Section 7 for Company Losses or Investor Losses (as the case may be) unless
written notice of a possible claim for indemnification with respect to such
Company Losses or Investor Losses (as the case may be) is given by the Party
seeking indemnification to the other Party prior to the expiration of the
Survival Period.

 

7.4 Remedies. The indemnity provision set out in this Section 7 shall be the
exclusive remedy for any breach of this Agreement or any other Basic Document,
or in connection with the matters contemplated hereby or thereby, except (i) for
claims of fraud and (ii) that the Parties shall be entitled to specific
performance under this Agreement. The Parties agree that monetary damages may
not be adequate compensation for any loss incurred by a Party by reason of any
breach of obligations contained in this Agreement by the other Parties and each
Party hereby agrees to waive and not to assert in any action for specific
performance of any such obligation the defense that a remedy at law would be
adequate.

 

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SECTION 8

NOTICES

 

8.1 Notice Addresses and Method of Delivery. All notices, requests, demands,
consents and other communications (“Notices”) required to be given by any Party
to any other Party shall be in writing and delivered by hand delivery, express
courier, email, or facsimile to the applicable Party at the address or facsimile
number stated below:

 

if to Sohu Search:       SOHU.COM (SEARCH) LIMITED       Floor 4, Willow House,
Cricket Square, P.O. Box       2804, Grand Cayman KY1-1112, Cayman Islands      
Email: carol@sohu-inc.com       with a copy to:       Goulston & Storrs PC      
400 Atlantic Avenue       Boston, MA 02110       Attention: Timothy B. Bancroft
      Facsimile No.: +1-617-574-7568       E-mail: tbancroft@goulstonstorrs.com
if to the Company:       SOGOU INC.       Floor 4, Willow House, Cricket Square,
P.O. Box       2804, Grand Cayman KY1-1112, Cayman Islands       Email:
xiaochuanwang@sohu-inc.com with a copy to:       Goulston & Storrs PC       400
Atlantic Avenue       Boston, MA 02110       Attention: Timothy B. Bancroft   
   Facsimile No.: +1-617-574-7568       E-mail: tbancroft@goulstonstorrs.com if
to the Investor:       THL A21 Limited       c/o Tencent Holdings Limited      
Level 29, Three Pacific Place       1 Queen’s Road East       Wanchai, Hong Kong
      Attention: Corporate Counsel       Telephone: +852 3148 5100 Ext: 68805   
   Facsimile: +852 2520 1148       E-mail: richardpu@tencent.com.hk

 

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      with a copy to:       Paul, Weiss, Rifkind, Wharton & Garrison       12th
Floor, The Hong Kong Club Building,       3A Chater Road, Central,       Hong
Kong       Attention: Jeanette K. Chan       Facsimile No.: +852 2840 4300      
E-mail: jchan@paulweiss.com if to Photon:       PHOTON GROUP LIMITED       Floor
4, Willow House, Cricket Square, P.O. Box       2804, Grand Cayman KY1-1112,
Cayman Islands       email: liwei@sohu-inc.com

or, as to each Party, at such other address or facsimile number as shall be
designated by such Party in a notice to the other Party containing the new
information in the same format as the information set out above and complying as
to delivery with the terms of this Section 8.

 

8.2 Time of Delivery. Any Notice delivered:

 

  (a) by hand delivery shall be deemed to have been delivered on the date of
actual delivery;

 

  (b) by email shall be deemed to have been delivered upon confirmation of
delivery;

 

  (c) by prepaid express courier shall be deemed to have been delivered upon
delivery by the courier; and

 

  (d) by facsimile shall be deemed to have been delivered on the day the
transmission is sent (as long as the sender has a confirmation report specifying
a facsimile, a facsimile number of the recipient, the number of pages sent and
the date of the transmission).

 

8.3 Proof of Delivery. In proving delivery of any Notice it shall be sufficient:

 

  (a) in the case of delivery by hand delivery or courier, to prove that the
Notice was properly addressed and delivered;

 

  (b) in the case of delivery by email, to prove that the transmission was
confirmed as sent by the originating email account to the email address of the
recipient, on the date specified; and

 

  (c) in the case of delivery by facsimile transmission, to prove that the
transmission was confirmed as sent by the originating machine to the facsimile
number of the recipient, on the date specified.

 

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SECTION 9

MISCELLANEOUS

 

9.1 No Partnership. The Parties expressly do not intend hereby to form a
partnership, either general or limited, under any jurisdiction’s partnership
law. The Parties do not intend to be partners one to another, or partners as to
any third party, or create any fiduciary relationship among themselves, solely
by virtue of the Investor’s status as the holder of the Subscribed Shares.

 

9.2 Amendment. This Agreement may not be amended, modified or supplemented
except by a written instrument executed by each of the Parties.

 

9.3 Waiver. No waiver of any provision of this Agreement shall be effective
unless set forth in a written instrument signed by the Party waiving such
provision. No failure or delay by a Party in exercising any right, power or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of the same preclude any further exercise thereof or
the exercise of any other right, power or remedy. Without limiting the
foregoing, no waiver by a Party of any breach by the other Party of any
provision hereof shall be deemed to be a waiver of any subsequent breach of that
or any other provision hereof.

 

9.4 Entire Agreement. This Agreement (together with the other Basic Documents)
constitutes the whole agreement between the Parties relating to the subject
matter hereof and supersedes any prior agreements or understandings relating to
such subject matter.

 

9.5 Severability. Each and every obligation under this Agreement shall be
treated as a separate obligation and shall be severally enforceable as such and
in the event of any obligation or obligations being or becoming unenforceable in
whole or in part. To the extent that any provision or provisions of this
Agreement are unenforceable, they shall be deemed to be deleted from this
Agreement, and any such deletion shall not affect the enforceability of this
Agreement as remain not so deleted.

 

9.6 Counterparts. This Agreement may be executed in one or more counterparts
including counterparts transmitted by e-mail (with any attachments in PDF
format) or facsimile, each of which shall be deemed an original, but all of
which signed and taken together, shall constitute one document.

 

9.7 Transfer; Assignment. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Parties. No Party may
transfer or assign its rights or obligations under this Agreement without the
prior written consent of each other Party, and any purported transfer or
assignment without such consent shall be void ab initio and without effect.

SECTION 10

GOVERNING LAW AND JURISDICTION

 

10.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAW THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION.

 

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10.2 Dispute Resolution.

 

  (a) Any dispute, controversy or claim arising out of or relating to this
Agreement, or the interpretation, breach, termination or validity hereof, shall
first be subject to resolution through consultation of the parties to such
dispute, controversy or claim. Such consultation shall begin within seven
(7) days after one Party hereto has delivered to the other Parties involved a
written request for such consultation. If within thirty (30) days following the
commencement of such consultation the dispute cannot be resolved, the dispute
shall be submitted to arbitration upon the request of any Party with notice to
the other Parties.

 

  (b) The arbitration shall be conducted in Hong Kong in accordance with the
Arbitration Rules of the United Nations Commission on International Trade Law
and the Hong Kong International Arbitration Centre (“HKIAC”) Procedures for the
Administration of International Arbitration in force at the date of this
Agreement then in effect. There shall be three arbitrators. The complainant and
the respondent to such dispute shall each select one arbitrator within thirty
(30) days after giving or receiving the demand for arbitration. Such arbitrators
shall be freely selected, and the Parties shall not be limited in their
selection to any prescribed list. The Chairman of the HKIAC shall select the
third arbitrator, who shall be qualified to practice law in Hong Kong. If either
party to the arbitration does not appoint an arbitrator who has consented to
participate within thirty (30) days after selection of the first arbitrator, the
relevant appointment shall be made by the Chairman of the HKIAC.

 

  (c) The arbitration proceedings shall be conducted in English. The arbitration
tribunal shall apply the Arbitration Rules of the HKIAC in effect at the time of
the arbitration. However, if such rules are in conflict with the provisions of
this Section 10.2, including the provisions concerning the appointment of
arbitrators, the provisions of this Section 10.2 shall prevail.

 

  (d) The arbitrators shall decide any dispute submitted by the parties to the
arbitration strictly in accordance with the substantive law of New York and
shall not apply any other substantive law.

 

  (e) Each Party hereto shall cooperate with any party to the dispute in making
full disclosure of and providing complete access to all information and
documents requested by such party in connection with such arbitration
proceedings, subject only to any confidentiality obligations binding on the
Party receiving the request.

 

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  (f) The award of the arbitration tribunal shall be final and binding upon the
disputing parties, and any party to the dispute may apply to a court of
competent jurisdiction for enforcement of such award.

 

  (g) Any party to the dispute shall be entitled to seek preliminary injunctive
relief, if possible, from any court of competent jurisdiction pending the
constitution of the arbitral tribunal.

 

  (h) The costs and expenses of the arbitration shall be borne equally by each
Party to the dispute, and each Party shall pay its own fees, disbursements and
other charges of its counsel.

[Remainder of this page intentionally left blank.]

 

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IN WITNESS WHEREOF this Agreement has been executed on the day and year first
above written.

 

SOGOU INC. By:  

 

  Name:   Title: SOHU.COM (SEARCH) LIMITED By:  

 

  Name:   Title: THL A21 LIMITED By:  

 

  Name:   Title: PHOTON GROUP LIMITED By:  

 

  Name:   Title:

[Signature Page to Subscription Agreement]

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SCHEDULE 1

WARRANTIES

Definitions

In this Schedule 1, capitalized terms not otherwise defined have the meanings
set forth in this Agreement, and the following terms have the meanings
specified:

“Accounts” means collectively (i) the unaudited consolidated balance sheet of
the Company as of December 31, 2012, and the unaudited statements of income and
cash flows for the 12-month period ending on such date and the (ii) unaudited
consolidated balance sheet of the Company as of June 30, 2013, and the unaudited
statements of income and cash flows for the six-month period ending on such
date.

“Accounts Receivable” means all accounts or notes receivable held by the Company
and any security, claim, remedy or other right related to any of the foregoing.

“Accounts Date” means June 30, 2013.

“Assets” means all assets, rights and privileges of any nature and all goodwill
associated therewith, including without limitation all rights in respect of
Contracts, all Intellectual Property, Equipment, but excluding rights in respect
of real property.

“Contracts” means all contracts, agreements, licenses, engagements, leases,
financial instruments, purchase orders, commitments and other contractual
arrangements, which are currently subsisting and effective and which have not
been terminated or completed.

“Disclosed” means, in respect of any Warranty, disclosed in: (i) the Disclosure
Schedule (including the schedules and appendices thereof), (ii) all matters
contemplated in the Basic Documents, (iii) the public filings on the website of
(1) the United States Securities and Exchange Commission or EDGAR (Electronic
Data-Gathering, Analysis, and Retrieval) or (2) HKExnews, the disclosure site of
the Stock Exchange of Hong Kong Limited, or (iv) all matters disclosed on the
investor relations section of the websites of Sohu.com Inc. and Tencent
ParentCo.

“Equipment” means all the plant and machinery, tools and equipment, vehicles and
office furniture, computer equipment and other tangible assets.

“Government Approval” means any approval, authorization, release, order, or
consent required to be obtained from, or any registration, qualification,
designation, declaration, filing, notice, statement or other communication
required to be filed with or delivered to, any Governmental Authority or any
other Person, or any waiver of any of the foregoing.

“Government Entity” means any government (foreign or domestic) or any
department, agency or instrumentality thereof, including any entity or
enterprise owned or Controlled by a government, or a public international
organization.

--------------------------------------------------------------------------------

“Governmental Order” means any applicable order, ruling, decision, verdict,
decree, writ, subpoena, mandate, precept, command, directive, consent, approval,
award, judgment, injunction or other similar determination or finding by, before
or under the supervision of any Governmental Authority.

“Intellectual Property” means all letters patent, trademarks, service marks,
registered designs, domain names and utility models, copyrights, inventions,
Know-how, brand names, database rights and business names and any similar rights
situated in any country and the benefit (subject to the burden) of any of the
foregoing (in each case whether registered or unregistered and including
applications for the grant of any of the foregoing and the right to apply for
any of the foregoing in any part of the world).

“Key Employee” with respect to the Group means the following individuals: each
member of Sogou Management.

“Know-how” means all know-how, lists of customers or suppliers, trade secrets,
technical processes or other confidential information relating thereto.

“Liabilities” means all indebtedness and other liabilities of any nature
whatsoever, actual or contingent, and whether or not of a nature required to be
disclosed in the accounts of the Group.

“Material Adverse Effect” affecting a person, means any effect that is
materially adverse to the business, conditions (financial or otherwise),
prospects, properties or assets of such person.

“Material Contracts” means any contract entered into by any Group Member (as
defined in Part B of this Schedule 1) or to which any assets, equity interest or
shares of any Group Member are subject to and that:

 

(a) was entered into otherwise than in the ordinary course of business or on an
arm’s length basis;

 

(b) has a total contract value (including an amount being guaranteed, borrowed,
loaned or potentially indemnified) greater than or equal to RMB 5,000,000;

 

(c) involves obligations (contingent or otherwise) of, or payments in excess of,
or equal to, RMB 10,000,000 individually or in the aggregate per annum or that
has terms in excess of one (1) year;

 

(d) restricts the ability of a Group Member to compete or to conduct or engage
in any business or activity or in any territory;

 

(e) relates to the sale, issuance, grant, exercise, award, purchase, repurchase
or redemption of any Equity Securities;

 

(f) involves any provisions providing exclusivity, “change in control”, “most
favored nations”, rights of first refusal or first negotiation or similar
rights, or grants a power of attorney, agency or similar authority;

 

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(g) on which the business of any Group Member is substantially dependent or
which is otherwise material to the business of any Group Member;

 

(h) involves indebtedness, an extension of credit, a guaranty or assumption of
any obligation, or the grant of a Encumbrance in excess of or equal to RMB
10,000,000;

 

(i) involves the lease, license, sale, use, disposition or acquisition of a
material amount of assets or of a business,

 

(j) involves the waiver, compromise, or settlement of any material dispute,
claim, litigation or arbitration,

 

(k) involves the ownership or lease of, title to, use of, or any leasehold or
other interest in, any real or personal property (except for personal property
leases involving payments of less than RMB 10,000,000 per annum),

 

(l) involves the establishment, contribution to, or operation of a partnership,
joint venture, franchise or involving a sharing of profits or losses, or any
investment in, loan to or acquisition or sale of the securities, equity
interests or assets of any Person,

 

(m) is with any Related Party;

 

(n) is with a Governmental Authority or state owned enterprise (except for any
agreement or series of related agreements involving payments of less than RMB
10,000,000),

 

(o) which are VIE Control Documents; or

 

(p) is otherwise material to any Group Member.

“Principal Business” means the provision via personal computers and mobile
devices of Internet search services, pinyin input module services, contextual
advertising services, online games and web directory services, and such other
businesses and activities and investments as may be approved by the shareholders
of the Company from time to time in accordance with the Shareholders’ Agreement.

“Proceedings” means any claim, suit, action, arbitration, mediation,
investigation, legal action, litigation, prosecution or other legal or
administrative proceeding;

“Related Party” means (a) any shareholder who holds more than 10% of the Company
and any shareholder of any other Group Member or Subsidiary thereof, (b) any
director of any Group Member or any Subsidiary thereof, (c) any officer of any
Group Member or any Subsidiary thereof, (d) any Relative of a shareholder,
director or officer of any Group Member or any Subsidiary thereof, (e) any
Person in which any shareholder or any director of any Group Member or any
Subsidiary thereof has any interest, other than a passive shareholding of less
than 5% in a publicly listed company, and (f) any other Affiliate of any Group
Member or any Subsidiary thereof.

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“Tax” means any and all applicable tax and taxes (including any value added tax
or sales tax, business tax, income tax, stamp or other duty, levy, impost,
charge, fee, deduction, or withholding of any nature) imposed, levied, collected
or assessed by any Government Entity in the PRC or elsewhere and includes any
penalties for late or non-payment of such tax or taxes.

“Tax Return” means all Cayman Islands, Hong Kong and China returns,
declarations, claims for refunds, forms, statements, reports, schedules,
information returns or similar statements or documents, and any amendments
thereof (including any related or supporting information or schedule attached
thereto) required to be filed (including electronically) with any Taxing
Authority in connection with the determination, assessment or collection of any
Tax or Taxes.

“Taxing Authority” means any Government Entity responsible for or having
jurisdiction over the assessment, determination, collection or other imposition
of Taxes.

“US GAAP” means generally accepted accounting principles in the United States of
America.

“VIE Control Documents” means the suite of contracts between the wholly-owned
subsidiary of the Company and the Company’s “variable interest entity” or the
shareholders of such “variable interest entity”, including (1) Exclusive
Technology Consulting and Service Agreement dated September 26, 2010 by and
among Beijing Sogou Technology Development Co., Ltd. LOGO [g619977dsp65_1.jpg] ,
a wholly-foreign owned enterprise organized and existing under the laws of the
PRC and an indirectly wholly-owned subsidiary of the Company (“Sogou
Technology”), and Beijing Sogou Information Services Co., Ltd.  LOGO
[g619977dsp65_2.jpg] (“Sogou Information”), (2) Business Operation Agreement
dated September 26, 2010 by and among Sogou Technology, Sogou Information and
the shareholders of Sogou Information, (3) Exclusive Equity Interest Purchase
Rights Agreement dated September 26, 2010 by and among Sogou Technology, Sogou
Information and the shareholders of Sogou Information, (4) Share Pledge
Agreement dated September 26, 2010 by and among Sogou Technology (as the
pledgee), and the shareholders of Sogou information (as the pledgors), and
(5) Loan Agreement dated September 26, 2010 by Sogou Technology and each of the
shareholders of Sogou Information.

“Warrantor(s)’ Knowledge” means, (a) where the Investor is providing the
Warranty, the actual knowledge of Ms. Sheila Liang, Assistant General Counsel of
Tencent ParentCo, after reasonable enquiry, as of the date of this Agreement;
and (b) where Sohu Search and the Company are providing the Warranty, the actual
knowledge of Mr. Xiaochuan Wang, the Chief Executive Officer of the Company,
after reasonable enquiry, as of the date of this Agreement.

 

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Part A – Basic Warranties

All Basic Warranties set out in this Schedule 1 shall be qualified by the
Disclosure Schedule prepared by the Party making such Warranty and all matters,
actions, interpretations and definitions stipulated or contemplated by this
Agreement

Each Party represents and warrants to the other Parties in the terms set forth
below.

Fundamental Warranties

 

1. It is a company duly incorporated and validly existing and in good standing
under the laws of its place of incorporation and has the full power, authority
and legal right to own, lease and operate its properties and to carry on its
business as now being conducted.

 

2. It has the full power, capacity and authority to enter into, execute and
deliver this Agreement and the other Basic Documents and to consummate the
Transaction, and its execution and delivery of this Agreement and the other
Basic Documents and its performance of the Transaction have been duly authorized
by all necessary corporate or other action.

 

3. Assuming the due authorization, execution and delivery by the other Parties,
this Agreement and the other Basic Documents constitute its legal, valid and
binding obligations, enforceable against it in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally.

 

4. The execution, delivery and performance of this Agreement or the other Basic
Documents by it will not: (i) violate any provision of its organizational
documents; (ii) save as contemplated by this Agreement, require it to obtain any
consent, approval or action of, or make any filing with or give any notice to,
any Governmental Authority except for any consent, approval, action, filing, or
notice the failure to so obtain would not prevent or delay the ability of such
Party to consummate the Transaction; or (iii) violate any law or any order,
writ, injunction or decree of any court, administrative agency or governmental
body affecting such Party, except for any law, order, writ, injunction or
decree, a violation of which would not prevent or delay the ability of such
Party to consummate the Transaction.

 

5. It is not in or about to enter into receivership or liquidation and no
petition has been presented for its winding up and there are no grounds on which
such a petition could be based.

 

6. No Proceedings are pending or, to the Warrantor(s)’ Knowledge, threatened
against it on the date of this Agreement that may challenge, prevent, delay or
otherwise interfere with, the consummation of the Transaction.

 

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Non-Fundamental Warranties

 

7. The execution, delivery and performance of this Agreement or the other Basic
Documents by it will not: (i) save as contemplated by this Agreement, require it
to obtain any consent, approval or action of, or make any filing with or give
any notice to, any third party (which is not a Governmental Authority) pursuant
to any agreement to which it is a party or by which it is bound except for any
consent, approval, action, filing, or notice the failure to so obtain would not
prevent or delay the ability of such Party to consummate the Transaction or
(ii) conflict with or result in any material breach or violation of any of the
terms and conditions of, or constitute (or with notice or lapse of time or both
constitute) a default under, any Material Contract to which it is a party or by
which it is bound.

 

28

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Part B – Company Specific Warranties

Sohu Search and the Company hereby jointly and severally represent and warrant
to the Investor in the terms set forth below with respect to the Group.

All Company Specific Warranties set out in this Part B of Schedule 1 shall be
qualified by the Disclosure Schedule prepared by the Warrantor(s) and all
matters, actions, interpretations and definitions stipulated or contemplated by
this Agreement.

Corporate Matters – Fundamental Warranties

 

1. Each Group Member has been duly incorporated, is validly existing and is in
good standing under applicable law and has full power, authority and legal right
to own its assets and carry on its business as set out in its respective
business licenses, except where the failure to have such power and authority
would not be material; and (b) no Group Member has stopped or suspended paying
its debts as they fall due except where the failure to do so would not be
material, is in or about to enter into receivership, liquidation or any other
voluntary arrangement or compromise or other arrangement with its creditors in
the context of impending receivership or liquidation and, to the Warrantor(s)’
Knowledge, no petition has been presented for the winding up of any Group Member
and there are no grounds on which such a petition could be based.

 

2. There are (a) no outstanding options, warrants, rights (including conversion
or preemption rights) or agreements for the subscription or purchase from any
Group Member of any shares in the equity capital or registered capital of any
Group Member or any securities convertible into or ultimately exchangeable or
exercisable for any shares equity capital or registered capital of any Group
Member, and (b) no shares in the equity capital or registered capital of any
Group Member, or other shares issuable by any Group Member, are subject to any
preemptive rights, rights of first refusal or other rights to subscribe or
purchase such shares (whether in favor of any Group Member or any other Person),
pursuant to any agreement or commitment of any Group Member.

 

3. The execution, delivery and performance of this Agreement or the other Basic
Documents by the Group Member will not:

 

  (a) violate any provision of the organizational documents of any Group Member;

 

  (b) except as contemplated by this Agreement, require any Group Member(s) to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any Governmental Authority, except for any consent, approval, action,
filing, or notice the failure to so obtain would not prevent or delay the
ability of any Group Member(s) to consummate the Transaction or any consent,
approval, action, filing or notice that does not relate to a Group Member; or

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  (c) violate any law or any rule or regulation of any administrative agency or
governmental body or any order, writ, injunction or decree of any court,
administrative agency or governmental body affecting a Group Member, except for
any law, rule, regulation, order, writ, injunction or decree, a violation of
which would not prevent or delay the ability of any Group Member(s) to
consummate the Transaction.

 

4. Each Group Member has complied with all relevant corporate procedures which
are required under the laws of the relevant jurisdiction for the purposes of
maintaining a corporate entity in such relevant jurisdiction, including without
limitation, the submission of all necessary filings and notices to any
Government Authorities, except where the failure to comply would not be
material.

 

5. Part B of Schedule 2 sets out a true, complete and correct illustration in
all material respects of the corporate structure of the Group and a true,
complete and correct description in all material respects of the share capital
and ownership (on a fully diluted basis) of the Group as of the date of this
Agreement before Completion. Part C of Schedule 2 sets out a true, complete and
correct illustration in all material respects of the corporate structure of the
Group and a true, complete and correct description in all material respects of
the share capital and ownership (on a fully diluted basis) of the Group as of
the date of this Agreement after Completion. No Group Member has any direct or
indirect equity interest in any other entity as of the date of this Agreement
before and after Completion other than as set out in Part B of Schedule 2 or
Part C of Schedule 2 (as applicable).

 

6. The descriptions of the Equity Securities and the other descriptions of the
Company, BVICo, HKCo-1, HKCo-2, WFOE-1, WFOE-2 and Sogou OpCo set forth in Part
A of Schedule 2 to this Agreement are true and accurate, and such Equity
Securities, have been duly authorized, validly issued, fully paid and
non-assessable and, in the case of a Group Member other than the Company, are
free from any and all Encumbrances.

 

7. Upon Completion there shall not be any authorized or outstanding Equity
Securities of the Company except those shares as set out in Part A of Schedule
2.

 

8. All presently outstanding Equity Securities of each Group Member have been
duly and validly issued in compliance with all applicable laws. All Equity
Securities of each Group Member (other than the Company) are free and clear of
any Encumbrances. Except as required for the Transaction, there are no
(i) resolutions pending to increase the share capital of any Group Member or
cause the liquidation, winding up, or dissolution of any Group Member or
(ii) dividends which have accrued or been declared but are unpaid by any Group
Member.

 

9. The Subscribed Shares will have the rights as stated in the Restated Charter,
when issued and delivered in accordance with the terms of this Agreement, will
be duly and validly issued, fully paid and non assessable, and will be free from
any Encumbrances.

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Corporate Matters – Non-Fundamental Warranties

 

10. There are no agreements outstanding which grant the right to any person to
require the creation of any Encumbrance over any part of the equity interest of
any Group Member other than the Company and, to the Warrantor(s)’ Knowledge,
there are no agreements outstanding which grant the right to any person to
require the creation of any Encumbrance over any part of the equity interest of
the Company.

 

11. The execution, delivery and performance of this Agreement or the other Basic
Documents by the Group Member will not:

 

  (a) except as contemplated by this Agreement, require any Group Member(s) to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any third party (that is not a Governmental Authority) pursuant to
any agreement to which a Group Member is a party or by which a Group Member is
bound, except for any consent, approval, action, filing, or notice the failure
to so obtain would not prevent or delay the ability of any Group Member(s) to
consummate the Transaction or any consent, approval, action, filing or notice
that does not relate to a Group Member; or

 

  (b) conflict with or result in any material breach or violation of any of the
terms and conditions of, or constitute (or with notice or lapse of time or both
constitute) a default under, any agreement to which a Group Member is a party or
by which a Group Member is bound (except for any breach or violation which would
not prevent or delay the ability of any Group Member(s) to consummate the
Transaction).

 

12. All available registers and the minute books of directors’ and members’
meetings of each Group Member up to and including August 2013 are up to date,
and contain true, and accurate records in all material respects of all matters
required to be dealt with therein and under the laws of the relevant
jurisdiction.

 

13. Except for HKCo-1, HKCo-2, WFOE-1, WFOE-2 and Sogou OpCo, the Company does
not own any Equity Securities of, or other direct or indirect interest of any
kind in, any other Person, and WFOE-1 or WFOE-2 do not own any Equity Securities
of, or other direct or indirect interest of any kind in, any other Person
(except for Sogou OpCo in relation to WFOE-1).

 

14. No Group Member’s Contracts relating to its Equity Securities provides for
acceleration of vesting or lapse of a repurchase right or other changes in the
vesting provisions or other terms of such agreement or understanding upon the
occurrence of any event or combination of events.

 

15. Chor Woon Carol YU holds a proxy (the “Proxy”) permitting her to vote on
behalf of all current and former employees of the Company who hold ordinary
shares in the share capital of the Company, other than the members of Sogou
Management, and the Proxy is valid, legal, binding and remains effective on the
date hereof. The terms of the Proxy are as set out in the forms as Disclosed by
the Company and Sohu Search to the Investor.

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Taxation

 

16. Each Group Member has on a timely basis made all material returns for
taxation purposes which it is obliged to make and all such returns and other
information supplied to the relevant tax authority in the relevant jurisdiction
are true, accurate and complete in all material respects and have been prepared
in accordance with all applicable laws.

 

17. There are no outstanding claims, assessments (including penalty or interest
claims) in respect of taxation except for claims or assessments which,
individually or in the aggregate, would not be material.

 

18. The Group is not subject to any dispute with the relevant tax authority of
any jurisdiction, except for disputes which, individually or in the aggregate,
would not be material.

 

19. Each Group Member has paid all taxes for which it is liable from the date of
its incorporation onwards on the relevant due dates, except for taxes as to
which failure to pay would not, individually or in the aggregate, reasonably be
likely to have a material effect.

Assets and Properties

 

20. Each Group Member has good and marketable title, free and clear of all
Encumbrances, to all of the owned properties and assets, real and personal,
tangible or intangible, that are reflected as owned by such Group Member on the
Accounts (the “Assets”). The Assets are not affected by, nor the subject of, any
disputes, except for any disputes which would not, individually or in the
aggregate, reasonably be likely to have a Material Adverse Effect.

Contracts and Transactions

 

21. Each Material Contract of the Group is valid and binding on the Group Member
and, to the Warrantor(s)’ Knowledge, on the other party or parties thereto, and
has been duly authorized, executed and delivered by the Group Member and by each
other party thereto and constitutes the valid and binding obligation of each
party thereto, enforceable against each party thereto in accordance with its
terms. Each Material Contract has been duly authorized, executed and delivered
by such Group Member, constitutes the valid and binding obligation of such Group
Member enforceable against it and to the Warrantor(s)’ Knowledge, constitutes
the valid and binding obligation of such other party enforceable against such
other party in accordance with its terms, except where such enforceability may
be limited by applicable bankruptcy, insolvency reorganization, moratorium or
similar laws affecting creditors’ rights generally. As of the date of this
Agreement, with respect to the Material Contracts, no Group Member has received
notice of any uncured or unwaived material default by the Group or, to the
Warrantor(s)’ Knowledge, by any other party or parties thereto.

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22. No Group Member is in the course of negotiating any Contract that, if
entered into, would be a Material Contract. No Group Member is a party to any
contract made orally that would be a Material Contract or that is otherwise
material to the Group, taken as a whole.

 

23. None of Material Contracts to which any Group Member is a party or by which
it is bound contains any provisions whereby the execution and / or performance
of this Agreement and / or a change in the ownership, control or management of
the Group will cause a termination or a default under such agreements.

 

24. Except as contemplated under the Transaction and under the Basic Documents,
there are no Contracts, understandings, transactions or proposed transactions
between any Group Member on the one hand and any Related Party on the other
hand. No Related Party is indebted to any Group Member, nor is such Group Member
indebted (or committed to make loans or extend or guarantee credit) to any
Related Party.

 

25. No Group Member has retained and to the Warrantor(s)’ Knowledge, no other
Person has retained on behalf of any Group Member, any investment banker,
broker, or finder and there are no fees or charges due or payable to third
parties in connection with the Transaction.

 

26. To the Warrantor(s)’ Knowledge, each Group Member has carried on its
business in compliance with all applicable laws and regulations in the relevant
jurisdictions in all material respects. To the Warrantor(s)’ Knowledge, there
are no pending or on-going inquiries or investigations by any Governmental
Authority in respect of any Group Member which may have a material adverse
effect and no such inquiry or investigations have been threatened.

 

27. There are no Contracts which restrict the ability of any Group Member to
conduct any type of business anywhere in the world.

Licenses and Compliance with laws

 

28. Each Group Member has obtained all licenses, approvals, permits, consents
and registrations necessary for the carrying on of its business as currently
conducted (including the applicable Governmental Authority covering the
franchise areas in which the respective Group Member operates internet search
engine services) except where the failure to obtain such licenses, approvals,
permits, consents or registrations would not have a Material Adverse Effect on
such Group Member. True and accurate copies of all material licenses of the
Group have been made available for inspection and all such material licenses are
in full force and effect.

 

29. No approval from any Governmental Authority is required on the part of any
Group Member on or prior to Completion with its valid execution, delivery or
performance of the Transaction or the Basic Documents (only to the extent such
Group Member is a party to a Basic Document).

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30. Each Group Member has obtained any and all Government Approvals required to
be obtained on or prior to the Completion and have fulfilled any and all filings
and registration requirements with applicable Governmental Authorities necessary
in respect of the Group Members and their operations. All such filings and
registrations with applicable Governmental Authorities required in respect of
the Group Members, including but not limited to the registrations with the
following Governmental Authorities of the PRC: the Ministry of Commerce (or any
predecessors), the State Administration of Industry and Commerce, the State
Administration of Foreign Exchange, the Ministry of Industry and Information
Technology, the Ministry of Culture, the General Administration for Press and
Publication, the State Administration for Radio, Film and Television, tax
bureau, customs authorities and the local counterparts of each of such
Governmental Authorities, as applicable, have been duly completed in accordance
with applicable laws. No Group Member has received any letter or notice from any
applicable Governmental Authorities notifying it of the revocation of any
Government Approval issued to it or the need for compliance or remedial actions
in respect of the activities carried out directly or indirectly by any Group
Member. Each Group Member has been conducting its business activities within the
permitted scope of business or is otherwise operating its businesses in material
compliance with all relevant laws and Governmental Orders. No Group Member has
reason to believe that any authorization of any Governmental Authority, license
or permit requisite for the conduct of any part of its business which is subject
to periodic renewal will not be granted or renewed by the relevant Governmental
Authorities.

 

31. Each entity within the Group incorporated within China (“Relevant PRC
Subsidiary”) has obtained any material certificates, approvals, permits,
licenses, registration receipts and any similar authority necessary under PRC
laws to conduct foreign exchange transactions (collectively, the “Foreign
Exchange Authorization”) as now being conducted by it, and believes it can
obtain, without undue burden or expense, any such Foreign Exchange Authorization
for the conduct of foreign exchange transactions as planned to be conducted. All
existing Foreign Exchange Authorizations held by each Relevant PRC Subsidiary
are valid, and no Relevant PRC Subsidiary is in default in any material respect
under any such Foreign Exchange Authorization.

 

32. Each Group Member has been and is in compliance with all Governmental Orders
(including without limitation all laws of the PRC with respect to mergers,
acquisitions, foreign investment and foreign exchange transactions) in all
material respects that are applicable to it or to the conduct or operation of
its business or the ownership or use of any of its assets or properties.

Intellectual Property Rights

 

33. The Group owns or has the right to use all patents, copyrights, trademarks,
designs, business names or other registrable or unregistrable intellectual
property rights (the “Intellectual Property Rights”) used in connection with its
business. Each Group Member has all Intellectual Property Rights required for
its business as currently conducted and as contemplated to be conducted.

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34. None of the Intellectual Property of any Group Member has been wrongfully or
unlawfully acquired by it.

 

35. True and accurate copies of all licenses granted to or by each Group Member
in respect of any Intellectual Property Rights (the “IP Licenses”) which are
Material Contracts have been provided by the Warrantor(s) to the other Parties.
Except as provided in the IP Licenses, no Group Member is obligated to pay any
royalties or other payments to any Person in respect of Intellectual Property
used by the Group. No Group Member is in breach of any IP License or of any
agreement under which any confidential business information was or is to be made
available to it.

 

36. All rights in all Intellectual Property owned or otherwise required for the
business of each Group Member as currently conducted or contemplated to be
conducted are vested in or validly granted to such Group Member and except as
Disclosed in relation to paragraph 35 above are not subject to any limit as to
time or any other limitation, right of termination (including on any change in
the underlying ownership or control of any Group Member) or restriction and all
renewal fees and steps required for their maintenance or protection have been
paid and taken.

 

37. No Group Member is a party to any confidentiality or other agreement or
subject to any duty which restricts the free use or disclosure, or requires
disclosure, of business information owned by or required for its business.

 

38. No Group Member has granted, nor is obliged to grant, any license,
sub-license or assignment in respect of any Intellectual Property owned or
otherwise required for its business, and has not disclosed nor is obliged to
disclose any Know-how required for its business to any Person, other than its
employees for the purpose of carrying on its business. There are no restrictions
on the right of any Group Member to license or sub-license any Intellectual
Property owned by it.

 

39. (a) To the Warrantor(s)’ Knowledge, there has been no actual or alleged
material infringement of any of Intellectual Property Rights of or by any Group
Member; and (b) the Group’s Intellectual Property, and the validity or
subsistence of the Group’s right, title and interest therein, is not subject of
any current, pending or, to the Warrantor(s)’ Knowledge, threatened challenge,
claim or proceedings, including for opposition, cancellation, revocation or
rectification, and has not during the period of one year prior to Completion
been the subject of any material challenge, claim or proceeding, and, to the
Warrantor(s)’ Knowledge, there are no facts or matters which might give rise to
any such challenge, claim or proceedings.

 

40. Each Group Member has taken all reasonable steps open to it to preserve its
Intellectual Property. All renewal fees regarding its Intellectual Property due
on or before Completion have been paid in full, except where the failure to pay
such fees is not material.

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41. To the Warrantor(s)’ Knowledge, the carrying on of the Group’s business or
businesses as presently constituted does not, save as set forth in the
Disclosure Schedule, require any licenses or consents from, or the making of
royalty or similar payments to, any third party in relation to such third
party’s Intellectual Property. To the Warrantor(s)’ Knowledge, no Group Member
uses or needs to use any processes and is not engaged in any activities which
infringe any Intellectual Property belonging to any third party where such
infringement is in respect of a claim for an amount of RMB 10 million or
greater. To the Warrantor(s)’ Knowledge, no Group Member has within the period
of one year preceding Completion used any Intellectual Property in a manner
which has infringed or infringes the Intellectual Property rights of a third
party where such infringement is in respect of a claim for an amount of RMB
10 million or greater.

 

42. No Group Member has applications to register any Intellectual Property which
are not being pursued with all reasonable due diligence and speed.

 

43. All employees of the Group have entered into a standard confidentiality and
non-competition agreements. To the Warrantor(s)’ Knowledge, none of these
employees are in breach of such agreements. To Warrantor(s)’ Knowledge, none of
the Group’s employees is obligated under any Contract, or subject to any
judgment, decree or order of any Governmental Authority, that would interfere
with the use of his or her best efforts to promote the interests of the Group or
that would conflict with the Group’s businesses as proposed to be conducted.
Neither the execution or delivery of this Agreement or any Basic Document, nor
the carrying on of the Group’s businesses by the Group’s employees, nor the
conduct of the Group’s businesses as proposed, will, to the Warrantor(s)’
Knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated.

Real Property

 

44. The real properties of the Group (together, the “Real Property”) comprise
all the land, buildings and premises (as well as the fixtures attached thereto)
currently owned, occupied or used by the Group or with respect to which the
Group has any estate, interest, right or title. The Group has proper legal title
to the land use rights and building ownership rights with respect to the Real
Property (including possession of the land use rights certificates and building
ownerships certificates) and is, subject to compliance with all applicable laws
of Hong Kong and the PRC, entitled to transfer, sell, mortgage or otherwise
dispose of the Real Property and there are no occupancy rights or Encumbrances
in favor of third parties affecting it.

 

45. All leases pursuant to which a Group Member, as lessee, leases real or
personal property are valid and binding on such Group Member and, to the
Warrantor(s)’ Knowledge, on the other parties thereto and neither the Group
Member nor, to the Warrantor(s)’ Knowledge, any other party thereto, is in
material default thereunder. There are no leases, subleases or licenses granting
to any person other than a Group Member any right to the possession, use,
occupancy or enjoyment of the real property owned or leased by the Group, or any
portion thereof, other than as made in the normal course of the Group’s
business.

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Accounts

 

46. The Company has made available or delivered to the Investors copies of the
Accounts. The Accounts (i) have been prepared in accordance with the books and
records of the Group and in accordance with US GAAP, applied on a consistent
basis, and (ii) fairly present, in all material respects, the financial
condition and position of the Group as of the dates indicated therein and the
results of operations and cash flows of the Group for the periods indicated
therein.

 

47. No Group Member has any obligation or liability other than: (i) liabilities
reflected or reserved against in the Accounts, (ii) liabilities incurred in the
ordinary course of business consistent with past practice since the Accounts
Date, (iii) liabilities incurred pursuant to Contracts to which any Group Member
is a party, (iv) liabilities with respect to or relating to any matters which
are disclosed anywhere in the Disclosure Schedule of the Company, and
(v) liabilities which are not, individually or in the aggregate, material in
amount.

 

48. The Accounts Receivable reflected on the Accounts and the Accounts
Receivable arising after the date thereof have arisen from bona fide
transactions entered into by the Company involving the sale of goods or the
rendering of services in the ordinary course of business consistent with past
practice. The reserve for bad debts shown in the Accounts or, with respect to
Accounts Receivable arising after the Accounts Date, on the accounting records
of the Principal Business have been determined in accordance with US GAAP,
consistently applied, subject to normal year-end adjustments and the absence of
disclosures normally made in footnotes.

 

49. Since the Accounts Date, the Group has operated its business in the ordinary
course consistent with its past practice, there has not been any Material
Adverse Effect or any material change in the way the Group conducts its
business, no Group Member has entered into any transaction outside of the
ordinary course of business consistent with its past practice, and there has not
been by or with respect to any Group Member:

 

  (a) any purchase, acquisition, sale, lease, disposal of or other transfer of
any assets that are individually or in the aggregate material to its business,
whether tangible or intangible, other than the purchase or sale of inventory in
the ordinary course of business consistent with its past practice, and no
acquisition (by merger, consolidation or other combination, or acquisition of
stock or assets, or otherwise) of any business or other Person or division
thereof;

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  (b) any waiver, termination, settlement or compromise of a valuable right or
of a debt;

 

  (c) any incurrence, creation, assumption, repayment, satisfaction, or
discharge of(i) any material Encumbrance or (ii) any indebtedness or guarantee,
or the making of any loan or advance (other than reasonable and normal advances
to employees for bona fide expenses that are incurred in the ordinary course of
business consistent with its past practice), or the making of any material
investment or capital contribution (which shall include, without limitation, any
investment or capital contribution in an amount greater than or equal to (in any
single or series of related transactions) RMB 10,000,000);

 

  (d) any amendment to any Material Contract, any entering of any new Material
Contract, or any termination of any Contract that would have been a Material
Contract if in effect on the date hereof, or any amendment to any constitutive
document of any Group Member, or any indication of any intention to amend, enter
into or terminate any Material Contract, or any amendment to or waiver under any
constitutive document of any Group Member;

 

  (e) any employment, termination of employment, or material change in any
compensation arrangement or agreement with any Key Employee of any Group Member
(which shall include, without limitation, any change by more than ten percent
(10%) of the aggregate annual compensation due to any Key Employee);

 

  (f) any declaration, setting aside or payment or other distribution in respect
of any Equity Securities, or any direct or indirect redemption, purchase or
other acquisition of any Equity Securities;

 

  (g) any material damage, destruction or loss, whether or not covered by
insurance, adversely affecting the assets, properties, financial condition,
operation or business of any Group Member (which shall include, without
limitation, any damage, destruction or loss in an aggregate amount greater than
or equal to RMB 10,000,000);

 

  (h) any material change in accounting methods or practices or any revaluation
of any of its assets;

 

  (i) (except in the ordinary course of business consistent with its past
practice, entry into any closing agreement in respect of material Taxes,
settlement of any claim or assessment in respect of any material Taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of any material Taxes, entry or change of any
material Tax election, change of any method of accounting resulting in a
material amount of additional Tax or filing of any material amended Tax Return;

 

  (j) any commencement or settlement of any material Proceedings; or

 

  (k) any agreement or commitment to do any of the things described in this
paragraph 49 of Part B of Schedule 1.

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Insurance

 

50. All Assets of the Group that are of an insurable nature have at all times
been and are insured in commercially reasonable amounts. Nothing has been done
or omitted to be done by or on behalf of any Group Member which would make any
policy of insurance void or voidable or enable the insurers to avoid the same;
there is no claim outstanding under any such policy; and there are no facts or
circumstances likely to give rise to such a claim or result in an increased rate
of premium. All premiums due and payable by any member of the Group in respect
of the above insurances have been paid in full.

 

51. No Group Member has suffered any uninsured losses or waived any rights or
claims of material or substantial value with respect to any policy of insurance
or allowed any insurance to lapse.

 

52. No claim under any policy of insurance taken out in connection with the
business or assets of any Group Member is outstanding and there are no facts or
circumstances likely to give rise to such a claim.

Employee and Labor Relations

 

53. Each Group Member has conducted, and conducts, the Principal Business with
respect to its employees in a manner that complies, in all material respects,
with all applicable laws relating to employment and employment practices, terms
and conditions of employment, immigration and wages and hours, including any
such laws respecting employment discrimination, employee classification,
workers’ compensation family and medical leave, and occupational safety and
health and workers’ compensation requirements; no proceedings are pending or
threatened with respect to the employees under such laws or the employment of
the employees, including breach of contract, wrongful termination, intentional
infliction of emotional distress, invasion of privacy or other torts or workers’
compensation, and there have been no such proceedings during the last two years.
There are no current employee claims.

 

54. There has not been in the last two years any strike, slowdown, work stoppage
or lockout involving the Principal Business. There are no current employee
claims.

 

55. No Group Member is, or has been during the last two years, a party to or
bound by any collective bargaining agreement. There are no labor unions or other
organizations representing, purporting to represent or attempting to represent
any of the employees and there has not been in the last two years any such
representation or attempted representation.

 

56. Except as Disclosed, no Group Member is a party to, or has issued any shares
or options over any shares to any of its employees pursuant to, any plan
providing incentives to any of its employees involving securities or which are
securities based, in which any employees can participate, including share option
plans, long term incentive plans, restricted share plans and share incentive
plans.

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57. The Disclosure Schedule prepared by the Group identifies all material
employee benefit arrangements.

Litigation

 

58. No Group Member is involved whether as plaintiff or defendant or otherwise
in any civil, criminal or arbitration proceedings (apart from debt collecting in
the ordinary course of business) or in any Proceedings before any tribunal and
no such Proceedings are threatened in writing or pending, except for matters
that are not material.

 

59. There is no unsatisfied judgment, court order or tribunal or arbitral award
outstanding against any Group Member and no distress, execution or process has
been levied on any part of its business or assets.

Indebtedness

 

60. Details of the Group’s indebtedness (other than payables incurred in the
ordinary course of business) as at the end of the calendar month preceding the
date of this Agreement are set out in the Disclosure Schedule.

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Part C – Investor Specific Warranties

The Investor represents and warrants to Sohu Search and the Company that the
representations and warranties set forth in this Part C of Schedule 1 are true
as of the date hereof:

Intellectual Property Rights

 

1. Tencent ParentCo owns or has the right to use the Contributed IP.

 

2. None of the Contributed IP has been wrongfully or unlawfully acquired by
Tencent ParentCo.

 

3. True and accurate copies of all licenses in respect of the Contributed IP
(the “Contributed IP Licenses”) have been provided by the Investor to the
Company and Sohu Search. Except as provided in the Contributed IP Licenses,
Tencent ParentCo is not obligated to pay any royalties or other payments to any
Person in respect of the Contributed IP. Tencent ParentCo is not in breach of
any of the Contributed IP Licenses.

 

4. All rights in respect of the Contributed IP are owned and vested in or
validly granted to Tencent ParentCo and except as Disclosed in relation to
paragraph 3 above are not subject to any limit as to time or any other
limitation, right of termination (including on any change in the underlying
ownership or control of Tencent ParentCo) or restriction and all renewal fees
and steps required for their maintenance or protection have been paid and taken.

 

5. (a) To the Warrantor(s)’ Knowledge, there has been no actual or alleged
material infringement of any of rights in respect of the Contributed IP of or by
Tencent ParentCo; and (b) the Contributed IP, and the validity or subsistence of
Tencent ParentCo ’s right, title and interest therein, is not subject of any
current, pending or, to the Warrantor(s)’ Knowledge, threatened challenge, claim
or proceedings, including for opposition, cancellation, revocation or
rectification, and has not during the period of one year prior to Completion
been the subject of any material challenge, claim or proceeding, and, to the
Warrantor(s)’ Knowledge, there are no facts or matters which might give rise to
any such challenge, claim or proceedings.

 

6. Tencent ParentCo has taken all reasonable steps open to it to preserve its
rights in relation to the Contributed IP. All renewal fees regarding the
Contributed IP due on or before Completion have been paid in full, except where
the failure to pay such fees is not material.

Structure

 

7. Part A of Schedule 2 (in relation to the Investor only) sets out a true,
complete and correct illustration of the corporate details of the Investor and a
true, complete and correct description of the share capital and ownership of the
Investor as of the date of this Agreement.

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Subscribed Shares

 

8. The Subscribed Shares to be acquired pursuant to this Agreement will be
acquired by the Investor for investment for the Investor’s own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same.

 

9. The Investor understands that the Subscribed Shares are characterized as
“restricted securities” under U.S. federal securities laws in as much as they
are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities may
be resold without registration under the Securities Act of 1933, as amended (the
“Act”) only in certain limited circumstances. The Investor further represents
that it is familiar with Rule 144 under the Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Act.

 

10. The Investor is (i) subscribing for the Subscribed Shares outside the United
States in reliance on an exemption from the registration requirements of U.S.
federal and state securities laws under Regulation S under the Act or (ii) an
“accredited investor” within the meaning of Rule 501 of Regulation D under the
Act, as presently in effect, under the Act.

 

11. There are no restrictions under the laws of the jurisdiction where the
Investor is incorporated that would prevent the Investor from subscribing to the
Subscribed Shares.