Document:

Exhibit 10.7

 

Execution Copy

 

This VOTING AGREEMENT (this “Agreement”) is made as of August 11, 2017

 

AMONG:

 

(1)                                 SOGOU INC., an exempted company with limited liability incorporated under the laws of the Cayman Islands with its registered office at P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands (the “Company”);

 

(2)                                 SOHU.COM (SEARCH) LIMITED, an exempted company with limited liability incorporated under the laws of the Cayman Islands with its registered office at P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands (“Sohu Search”); and

 

(3)                                 THL A21 LIMITED, a business company with limited liability under the laws of the British Virgin Islands whose registered office is at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands (“Tencent”).

 

Sohu Search and Tencent are referred to, collectively as the “Shareholder Parties” or individually as a “Shareholder Party”.  The Company, Sohu Search and Tencent are referred to, collectively as the “Parties”, or individually as a “Party”.

 

RECITALS:

 

(A)                               The Company is contemplating conducting an IPO (as hereinafter defined) in the near future.

 

(B)                               As of the date of this Agreement, each Shareholder Party holds the number of the classes or series of shares in the equity capital of the Company set forth in Schedule 1 hereto.

 

(C)                               In connection with and in furtherance of the IPO, the Parties propose to undertake a restructuring of the Company’s share capital, pursuant to which, among other things:

 

1)                         each of the 32,000,000 issued and outstanding Pre-IPO Series A Preferred Shares will be redesignated as Post-IPO Class A Ordinary Shares;

 

2)                         each of the 151,557,875 issued and outstanding shares in the Company held by Tencent immediately prior to the IPO (which include Pre-IPO Class A Ordinary Shares, Pre-IPO Class B Ordinary Shares, and Pre-IPO Series B Preferred Shares) will be redesignated as Post-IPO Class B Ordinary Shares;

 

3)                         each of the 127,200,000 issued and outstanding Pre-IPO Class A Ordinary Shares held by Sohu Search for its own account immediately

 

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prior to the IPO will be redesignated as Post-IPO Class B Ordinary Shares;

 

4)                         each of the 35,764,581 remaining issued and outstanding Pre-IPO Class A Ordinary Shares will be redesignated as Post-IPO Class A Ordinary Shares; and

 

5)                         each of the Post-IPO Class A Ordinary Shares will be entitled to one vote per share and, subject to the terms of this Agreement and the Post-IPO M&A (as defined below), each of the Post-IPO Class B Ordinary Shares will be entitled to ten votes per share.

 

(D)                               In connection with and in furtherance of the foregoing and the covenants and agreements herein contained, effective upon the completion of the IPO the Company’s existing Sixth Amended and Restated Memorandum of Association and Second Amended and Restated Articles of Association (together, the “Pre-IPO M&A”) will be replaced with a Seventh Amended and Restated Memorandum of Association and Third Amended and Restated Articles of Association substantially in the form attached hereto as Exhibit 1 (together, the “Post-IPO M&A”).

 

(E)                                The Parties acknowledge that Sohu Search intends to transfer a portion of the Pre-IPO Class A Ordinary Shares to a Permitted Transferee (as defined below) prior to the completion of the IPO; provided that (i) prior to and as a condition of such transfer, such Permitted Transferee will agree in writing to be bound by the terms and conditions of this Agreement pursuant to a joinder substantially in the form attached hereto as Exhibit 2 and an irrevocable power of attorney in the form attached hereto as Exhibit 3; and (ii) following such transfer, all references to Sohu Search in this Agreement will be deemed to refer to either Sohu Search or such Permitted Transferee or both, as applicable.

 

(F)                                 The Parties wish to provide for certain matters relating to the Post-IPO Class B Ordinary Shares.

 

(G)                               In consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

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) in the case of a Person other than a natural person, any other Person that directly or indirectly Controls, is Controlled by or is under common Control with the Subject Person and (b) in the case of a natural person, a Relative of the Subject Person and any other Person that is directly or indirectly Controlled by the Subject

 

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Person or his Relative; provided that the Company and its Subsidiaries shall be deemed not to be Affiliates of any Shareholder; and for the avoidance of doubt, in the case of a natural person, merely holding a position as an executive officer or member of the board of directors of a Subject Person will not in and of itself cause the Person holding such position to be an Affiliate of the Subject Person unless such Person otherwise fits within the description of Affiliate in the preceding sentences.

 

“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 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.

 

“Change of Control” of a Person (the “Subject Person”) means any consolidation or merger of the Subject Person with or into any other Person or the acquisition of Equity Securities in the Subject Person, after which any Person who has Control of the Subject Person ceases to have any direct or indirect Control immediately after such consolidation, merger or acquisition.

 

“Companies Law” means the Companies Law (2016 Revision) of the Cayman Islands, as further amended, modified or re-enacted from time to time.

 

“Control” of a Person means (a) ownership of more than 50% of the voting shares in issue or other voting equity interests or voting 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.

 

“Encumbrance” 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 (including, without limitation, in the case

 

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of the Company, any Post-IPO Shares following the completion of the IPO) 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 interests (whether or not such derivative securities are issued by such Person).

 

“Governmental Authority” means any government or political subdivision thereof; any department, agency, or instrumentality of any government or political subdivision thereof, including any entity or enterprise owned or Controlled by a government; any public international organization; any court or arbitral tribunal; and any governing body of any securities exchange or other governmental, regulatory, self-regulating organization, or enforcement authority or instrumentality, in each event whether domestic, foreign, or supranational.

 

“Group” means collectively the Company and its Subsidiaries, and “Group Company” means any of them.

 

“IPO” means the sale of Post-IPO Class A Ordinary Shares or, if applicable, American depositary shares representing such Post-IPO Class A Ordinary Shares in the first firm-commitment underwritten public offering in the United States pursuant to an effective registration statement under the Securities Act.

 

“Liquidation Event” means:

 

(a)                                 a voluntary or involuntary liquidation, dissolution, strike-off or winding up of the Company;

 

(b)                                 a merger or consolidation, in which (i) the Company is a constituent party or (ii) another Group Company is a constituent party and the Company issues shares pursuant to such merger or consolidation, except any such merger or consolidation involving the Company or another Group Company in which the shares of the Company outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the share capital of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly-owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation (provided that all Post-IPO Class A Ordinary Shares issuable upon exercise of options or pursuant to other equity awards approved in accordance with Section 5.1 outstanding immediately prior to such merger or consolidation or upon conversion of convertible securities outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding Post-IPO Class A Ordinary Shares are converted or exchanged);

 

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(c)                                  the sale, lease, transfer, license, or other disposition, in a single transaction or series of related transactions, by the Company and/or any other Group Company of all or substantially all the assets of the Company and the other Group Companies taken as a whole, or the sale or disposition (whether by merger or otherwise) of one or more Group  Companies if substantially all of the assets of the Company and the other Group Companies taken as a whole are held by such Group Company or Group Companies, except where such sale, lease, transfer, license, or other disposition is to a wholly-owned Subsidiary of the Company.  For the avoidance of doubt, the license to any Person other than a Group Company of any technologies or intellectual properties of the Company or any of the other Group Companies that (i) is necessary for the conduct of the business of the Group Companies and (ii) is not in the ordinary course of business and consistent with past practice will be deemed a “Liquidation Event”; or

 

(d)                                 the sale, exchange, or transfer by any Person of direct or indirect voting Control of the Company or of any other material Group Companies, in a single transaction or series of related transactions, provided that the sale, exchange or transfer by the holders of voting securities of any shareholder of the Company of voting Control of such shareholder which does not result in the sale, exchange, or transfer of direct or indirect voting Control of the Company or of any other material Group Companies will not be considered a Liquidation Event.

 

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

 

“Photon” means Photon Group Limited, a company incorporated under laws of the British Virgin Islands.

 

“Post-IPO Class A Ordinary Shares” means the class A ordinary shares in scripless form, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Post-IPO M&A, including one vote per share.

 

“Post-IPO Class B Ordinary Shares” means the class B ordinary shares in scripless form, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Post-IPO M&A, including ten votes per share.

 

“Post-IPO Share(s)” means any share(s) in the equity capital of the Company following the completion of the IPO.

 

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

 

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“Pre-IPO Class A Ordinary Shares” means the class A ordinary shares, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Pre-IPO M&A.

 

“Pre-IPO Class B Ordinary Shares” means the class B ordinary shares, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Pre-IPO M&A.

 

“Pre-IPO Series A Preferred Shares” means the series A preferred shares, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Pre-IPO M&A.

 

“Pre-IPO Series B Preferred Shares” means the series B preferred shares, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Pre-IPO M&A.

 

“Pre-IPO Shares” means, collectively, the Pre-IPO Class A Ordinary Shares, the Pre-IPO Class B Ordinary Shares, the Pre-IPO Series A Preferred Shares, and the Pre-IPO Series B Preferred Shares.

 

“Pre-IPO Sohu Search Shares” means 127,200,000 Pre-IPO Class A Ordinary Shares held by Sohu Search as of the date of this Agreement.

 

“Pre-IPO Tencent Shares” means 6,757,875 Pre-IPO Class A Ordinary Shares, 79,368,421 Pre-IPO Class B Ordinary Shares and 65,431,579 Pre-IPO Series B Preferred Shares, or 151,557,875 shares in the Company in the aggregate, held by Tencent as of the date of this Agreement.

 

“Principal Business” means the principal business of the Company, which is 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 subject to such approval as may be required under Section 5.1, such other business activities and investments as the Company may engage in or pursue from time to time.

 

“Registration Agent” means the Person maintaining the Company’s register of members and register of directors and officers.

 

“Relative” of a natural person means any spouse, parent, grandparent, child, grandchild, sibling, uncle, aunt, nephew, niece or great-grandparent of such person and his or her spouse (if any).

 

“Sohu Restricted Person(s)” means such Person(s) as to which the Shareholder Parties agree and provide notice to the Company in writing from time to time.

 

“Subsidiary” means, with respect to any specified Person, any other Person Controlled, directly or indirectly, by the specified Person, whether through contractual arrangements or through ownership of voting Equity Securities, voting power, or registered capital.  For the avoidance of the doubt, a “variable interest entity” (a “VIE Entity”) Controlled by another entity shall, for purposes of this Agreement, be deemed to be a Subsidiary of that other

 

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entity and shall include, for the Company, Beijing Sogou Information Services Co., Ltd. (北京搜狗信息服务有限公司) (“Sogou Information”) and each of Sogou Information’s Subsidiaries.

 

“Tencent Restricted Person(s)” means such Person(s) as to which the Shareholder Parties agree and provide notice to the Company in writing from time to time.

 

“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
    
	
“Arbitration Notice”
    	
 
    	
Section 12.2(a)
    
	
“Company”
    	
 
    	
Preamble
    
	
“Confidential Information”
    	
 
    	
Section 8.1
    
	
“HKIAC”
    	
 
    	
Section 12.2(b)
    
	
“Independent Director”
    	
 
    	
Section 3.1(a)(i)
    
	
“Interim Period”
    	
 
    	
Section 6.2
    
	
“NASDAQ Listing Rules”
    	
 
    	
Section 3.1(a)(i)
    
	
“Notice”
    	
 
    	
Section 10.1
    
	
“NYSE Rules”
    	
 
    	
Section 3.1(a)(i)
    
	
“Party” or “Parties”
    	
 
    	
Preamble
    
	
“Permitted Transferee”
    	
 
    	
Section 4.4(a)
    
	
“Post-IPO M&A”
    	
 
    	
Recital (D)
    
	
“Pre-IPO M&A”
    	
 
    	
Recital (D)
    
	
“Representative”
    	
 
    	
Section 8.1
    
	
“Reversion Event”
    	
 
    	
Section 3.3(a)(i)
    
	
“Shareholder Party” or “Shareholder   Parties”
    	
 
    	
Preamble
    
	
“Sohu Search”
    	
 
    	
Preamble
    
	
“Sohu Search Director”
    	
 
    	
Section 3.1(a)(i)(A)
    
	
“Suspension Event”
    	
 
    	
Section 3.3(a)
    
	
“Tencent”
    	
 
    	
Preamble
    
	
“Tencent Director”
    	
 
    	
Section 3.1(a)(i)(B)
    
	
“Transfer”
    	
 
    	
Section 4.1
    
	
“Triggering Event”
    	
 
    	
Section 6.1
    

 

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

 

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each of the masculine, feminine, and neuter genders, and words importing the singular include the plural, and vice versa.

 

(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” or “laws” shall include all applicable laws, statutes, regulations, rules, and orders of any Governmental Authority, securities exchange, or other self-regulating body, including 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 import, unless the context requires otherwise, refer to this Agreement as a whole and not to any particular Section hereof or Schedule or Exhibit hereto.  References to any document (including this Agreement) are references to that document as duly 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 Post-IPO Class A 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 numbers of Shares or prices per Share in this Agreement shall be appropriately adjusted to take into account any share splits, combinations, reorganizations, share dividends, mergers, recapitalizations, and similar events that affect the share capital of the Company after the date hereof.

 

(h)                                 Time.  Except as otherwise provided, (i) for purposes of calculating the length of time from a given day or the day of a given act or event, the relevant period shall be calculated exclusive of that day, and (ii) for all other purposes, any period of time commencing on or from a given day or the day of a given act or event shall include that day.  If the day on or by which a payment must be made is not a Business Day, that payment must be made on or by the Business Day immediately following such day.

 

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(i)                                     Writing.  References to writing include any mode of reproducing words in a legible and non-transitory form, including emails and faxes.

 

SECTION 2
 COVENANTS OF THE PARTIES

 

2.1                               Adoption of the Post-IPO M&A.  The Shareholder Parties agree that, in connection with the preparations for the IPO, each of them shall, within their respective power, cause the Board to, and the Company shall, at the appropriate time, propose to the shareholders that the shareholders approve the Company’s adoption of the Post-IPO M&A, the effectiveness of which shall be conditional upon completion of the IPO.  The Company shall not, without the prior written consent of the Shareholder Parties, propose any other form of the memorandum and articles of association for adoption by the shareholders of the Company in connection with the IPO.  Each Shareholder Party shall vote in favor of the adoption of the Post-IPO M&A and shall not vote in favor of any resolution which seeks to adopt any charter documents for the Company that are in conflict with the Post-IPO M&A.

 

2.2                               Redesignation of Shares.  Upon the Post-IPO M&A becoming effective:

 

(a)                                 The authorized share capital of the Company will be divided into Post-IPO Class A Ordinary Shares and Post-IPO Class B Ordinary Shares, as set forth in the Post-IPO M&A; and

 

(b)                                 All of Pre-IPO Shares will be redesignated as either Post-IPO Class A Ordinary Shares or Post-IPO Class B Ordinary Shares issued by the Company, as set forth in and in accordance with the recitals to this Agreement, and each of the Post-IPO Shares shall have the rights and subject to the restrictions attached to such Post-IPO Shares as described in this Agreement and as set forth in the Post-IPO M&A.

 

2.3                               Pre-IPO Transfer by Sohu Search. If, prior to the completion of the IPO, Sohu Search proposes to transfer any Pre-IPO Class A Ordinary Shares to a Permitted Transferee, then in addition to such Permitted Transferee’s obligation to sign a joinder pursuant to Section 2.2 of the Shareholders’ Agreement in respect of the Company dated September 16, 2013, prior to and as a condition to such transfer, Sohu Search shall procure such Permitted Transferee to agree in writing to be bound by the terms and conditions of this Agreement pursuant to a joinder substantially in the form attached hereto as Exhibit 2 and an irrevocable power of attorney in the form attached hereto as Exhibit 3.

 

SECTION 3
 AGREEMENT TO VOTE

 

3.1                               Board Composition.  Following the completion of the IPO, for as long as this Agreement is in effect:

 

(a)                                 each Shareholder Party shall, in its capacity as a shareholder of the Company, take such actions as may be required under applicable law

 

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and the Post-IPO M&A to vote or cause to be voted such number of the Post-IPO Shares held by it or its Affiliates as determined pursuant to Section 3.1(b) or 3.1(c) below (as applicable) in favor of the following composition of the Board:

 

(i)                                     for three years following the completion of the IPO, the Board shall be constituted with seven (7) directors in total, three (3) of whom must (1) be “Independent Directors” as defined in the NASDAQ Stock Market LLC Listing Rules (the “NASDAQ Listing Rules”) or the New York Stock Exchange LLC Listed Company Manual (the “NYSE Rules”), as applicable, or meet any applicable exceptions in the NASDAQ Listing Rules or the NYSE Rules, as applicable, (2) meet the criteria for independence set forth in Rule 10A-3 under the Securities Exchange Act of 1934, (3) have not participated in the preparation of the financial statements of the Company or any Subsidiary within the last three years, and (4) be able to read and understand fundamental financial statements, including the Company’s balance sheets, income statements and cash flow statements (each such director, an “Independent Director”); in addition, at least one of such three Independent Directors must be someone with financial sophistication as described in the NASDAQ Listing Rules or the NYSE Rules, as applicable, and an “audit committee financial expert” as defined in Securities and Exchange Commission Form 20-F; and among such seven (7) directors:

 

(A)                               four (4) directors, which shall include at least two (2) directors qualified as Independent Directors (and at least one of whom shall be someone with financial sophistication and an “audit committee financial expert” as described above), shall be appointed by Sohu Search to the Board (each, a “Sohu Search Director”);

 

(B)                               two (2) directors, which shall include at least one (1) director qualified as an Independent Director, shall be appointed by Tencent to the Board (each, a “Tencent Director”); and

 

(C)                               the then chief executive officer of the Company shall be appointed to be a director; and

 

(ii)                                  after the third (3rd) anniversary of the completion of the IPO, the Board composition may be changed as proposed by Sohu Search, and Tencent will give its consent to such changes as and to the extent needed and as specified in this Agreement (whether in its capacity as a shareholder of the Company or through its appointee(s) on the Board), provided that Tencent shall always be entitled to appoint at least one (1) director to the Board.

 

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(b)                                 Subject to Section 3.3, the number of Post-IPO Shares that Tencent shall vote, or cause to be voted, in accordance with Section 3.1(a) shall be 45,578,896 Post-IPO Class B Ordinary Shares.

 

(c)                                  The number of Post-IPO Shares that Sohu Search shall vote, or cause to be voted, in accordance with Section 3.1(a) shall be all the Post-IPO Shares it and its Affiliates hold at the time of the vote.

 

3.2                               Removal and Replacement of Directors.

 

(a)                                 Following the completion of the IPO, for so long as Sohu Search, Tencent, and their respective Affiliates hold, in the aggregate, more than 50% of the voting power of the Company:

 

(i)                                     Sohu Search shall be entitled to appoint, remove, and replace any Sohu Search Director, with or without cause; and

 

(ii)                                  Tencent shall be entitled to appoint, remove, and replace any Tencent Director, with or without cause;

 

in each case by Sohu Search or Tencent (as applicable) depositing a notification of appointment or removal to the Registration Agent (with a copy to the Company’s registered office) and without the need of obtaining any shareholder or Board approval of the Company, and the Company shall, or shall direct its Registration Agent to, update the Company’s register of directors and officers accordingly and without delay.

 

(b)                                 In addition, if at any time following the third (3rd) year anniversary of the completion of the IPO Sohu Search determines that it would like to change the composition of the Board in accordance with Section 3.1(a)(ii), Sohu Search will be entitled to either increase or decrease the size of the Board and appoint at least a majority of the members of the Board and (i) remove and replace any director so appointed, in each case by depositing a notification of appointment or removal at the Registration Agent (with a copy to the registered office of the Company) and (ii) remove any Tencent Director as and to the extent necessary to permit the Sohu Search Directors to constitute a majority of the directors of the Board, in each case without further action or ratification by the Parties or any shareholders of the Company, whereupon the maximum number of directors shall automatically increase or decrease accordingly and the Company shall, or shall direct its Registration Agent to, update the register of directors and officers accordingly and without delay, provided that (x) Tencent shall always be entitled to appoint at least one (1) director to the Board, and (y) if at any time there is more than one (1) Tencent Director and Sohu Search wishes to remove one or more Tencent Directors pursuant to this subsection, Tencent shall be entitled to designate the Tencent Director, or Tencent Directors, to be so removed.

 

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3.3                               Suspension and Conditional Reversion.

 

(a)                                 If at any time after the IPO Sohu Search and its Affiliate(s) hold in the aggregate more than 50% of the voting power of the Company without application of the provisions of Sections 3.1 and 3.2 (a “Suspension Event”), subject always to the right of Tencent to have at least one (1) director elected to the Board, Sections 3.1 and 3.2 shall be suspended and shall have no further force or effect,

 

(i)                                     provided that, if Sohu Search and its Affiliate(s) hold in the aggregate 50% or less of the voting power of the Company without application of the provisions of Sections 3.1 and 3.2 (a “Reversion Event”) at any time that is (1) during the five (5)-year period following the completion of the IPO and (2) after the occurrence of a Suspension Event, and if none of the events provided in Section 3.4 has occurred, Sections 3.1 and 3.2 shall again become effective from the date of such Reversion Event until the date on which a Suspension Event occurs again, and

 

(ii)                                  provided further that the number of Post-IPO Class B Ordinary Shares that Tencent shall be required to vote or cause to be voted in accordance with Section 3.1(a) shall be the lower of (1) 45,578,896 Post-IPO Class B Ordinary Shares and (2) the number of the Post-IPO Class B Ordinary Shares held by Tencent and its Affiliates which, together with the voting power of all Post-IPO Shares held by Sohu Search and its Affiliate(s) at the time of the vote, gives Sohu Search and its Affiliate(s) in the aggregate 50.1% of the voting power of the Company at any general meeting of shareholders of the Company.

 

(b)                                 For the avoidance of doubt, this Section 3.3 may apply on multiple occasions until the fifth year anniversary of the completion date of the IPO.

 

3.4                               Termination of the Agreement to Vote.  Notwithstanding any other provision contained herein, Sections 3.1 and 3.2 shall terminate upon the earlier to occur of:

 

(a)                                 Dr. Charles Zhang both ceasing to be the chairman of Sohu.com Inc. and ceasing to be the single largest beneficial owner of the outstanding equity shares of Sohu.com Inc. (which, for the avoidance of doubt, includes any interests in Sohu.com Inc. that are held by Photon or any other Person so long as Dr. Charles Zhang Controls Photon or such other Person);

 

(b)                                 Sohu Search and its Affiliate(s) having Transferred in aggregate (whether directly or indirectly) to Persons other than Sohu Search’s Permitted Transferees 30% or more of the Post-IPO Class B Ordinary Shares held by Sohu Search and its Permitted Transferee(s) on the date of the completion of the IPO;

 

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(c)                                  the occurrence of a Triggering Event (subject to the terms of Section 6.2);

 

(d)                                 Tencent ceasing to own any Post-IPO Class B Ordinary Shares;

 

(e)                                  the fifth year anniversary of the date of the completion of the IPO if a Suspension Event has occurred and is continuing on such date; and

 

(f)                                   the Company does not comply with Section 6.6.

 

SECTION 4
 TRANSFER RESTRICTIONS

 

4.1                               Limitation on Transfers.  No Shareholder Party may sell, give, assign, hypothecate, pledge, encumber, grant a security interest in, or otherwise dispose of, or suffer to exist (whether by operation of law or otherwise) any Encumbrance on, any Post-IPO Shares or any right, title or interest (including legal, beneficial or economic interest) therein or thereto (each, a “Transfer”) if prohibited or restricted by this Agreement.  Any attempt to Transfer any Post-IPO Shares in violation of this Agreement shall be null and void ab initio, and the Company shall not register any such Transfer.

 

4.2                               Transfers in Compliance with Law.  Following the completion of the IPO, notwithstanding any other provision of this Agreement, no Transfer may be made pursuant to this Section 4 unless (a) the Transfer complies in all respects with the other applicable provisions of this Agreement and the Post-IPO M&A and (b) the Transfer complies in all respects with applicable securities laws.  If requested by the Company in its reasonable discretion, an opinion of counsel to the Transferring Shareholder Party shall be supplied to the Company, at the Transferring Shareholder Party’s expense, to the effect that such Transfer complies with applicable securities laws.

 

4.3                               Lock-up Period.  In connection with the IPO, each Shareholder Party shall be subject to a customary post—IPO lockup for a period of six (6) months.  No Shareholder Party shall be subject to a longer post-IPO lockup period without its prior written consent.

 

4.4                               Post-Lock-up Period Restrictions.  Without prejudice to any other provision, upon and after expiration of any applicable lock-up period following the completion of the IPO,

 

(a)                                 if a Shareholder Party proposes to Transfer any of its Post-IPO Class B Ordinary Shares to a Permitted Transferee, prior to and as a condition to such Transfer, the Permitted Transferee shall agree in writing to be bound by the terms and conditions of this Agreement pursuant to a joinder substantially in the form attached hereto as Exhibit 2 and an irrevocable power of attorney in the form attached hereto as Exhibit 3; a “Permitted Transferee” shall mean, in the case of Sohu Search, a wholly-owned Subsidiary of Sohu.com Inc., and, in the case of Tencent, a wholly-owned Subsidiary of Tencent Holdings Limited; and if at any time a Permitted Transferee ceases to be a Permitted

 

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Transferee, such Person shall immediately transfer all of the Post-IPO Class B Ordinary Shares in which it holds any interest to a Permitted Transferee,

 

(b)                                 if a Shareholder Party proposes to Transfer any of its Post-IPO Class B Ordinary Shares to any Person other than a Permitted Transferee, prior to and as a condition to such Transfer, subject to Section 4.7, the Transferring Shareholder Party shall render to the Company for conversion into Post-IPO Class A Ordinary Shares, and the Company shall cancel, the Post-IPO Class B Ordinary Shares to be Transferred, and the Company shall issue an equivalent number of Post-IPO Class A Shares to such Shareholder Party or its transferee; and

 

(c)                                  notwithstanding Section 4.4(b), a Shareholder Party may pledge to, or grant a security interest in for the benefit of, any Person, whether or not such Person is a Permitted Transferee, any of its Post-IPO Class B Ordinary Shares as collateral to secure such Shareholder Party’s or its Affiliate’s repayment and performance of one or more bona fide loans to such Shareholder Party or such Affiliate by such Person without triggering the requirements of conversion by such Shareholder Party of the Post-IPO Class B Ordinary Shares subject to such pledge or such security interest under Section 4.4(b); provided however, if any disposition of any Post-IPO Class B Ordinary Shares (including creation of any pledge or any security interest over such Shares) to any Person other than a Permitted Transferee will result in the Shareholder Party that holds such Shares immediately before such disposition being unable to exercise at its own discretion the voting power of any such Shares, then Section 4.4(b) shall apply to such disposition, and prior to and as a condition to such disposition, such Shareholder Party must render such Shares for conversion into, and cancellation by the Company in exchange for the issuance of, an equivalent number of Post-IPO Class A Ordinary Shares to it or the Person it will dispose of such Shares to.

 

4.5                               No Transfer to Restricted Persons.  Without the prior written consent of Sohu Search, Tencent shall not Transfer any Post-IPO Shares to any Sohu Restricted Person. Without the prior written consent of Tencent, Sohu Search shall not Transfer any Post-IPO Shares to any Tencent Restricted Person.

 

4.6                               Avoidance of Restrictions.  The Parties agree that the Transfer restrictions in this Agreement and in the Post-IPO M&A shall not be capable of being avoided by the holding of Post-IPO Shares indirectly through a company or other entity that can itself be sold in order to dispose of an interest in Post-IPO Shares free of such restrictions.  Any transfer or other disposal of any right, title or interest (including legal, beneficial or economic) in any shares (or other interest) resulting in any Change of Control of a Shareholder Party or of any Person having Control over that Shareholder Party shall be treated as being a Transfer of the Post-IPO Shares held by that Shareholder Party, and the provisions of this Agreement and the Post-IPO M&A that apply in respect of the Transfer of Post-IPO Shares shall thereupon apply in respect of the Post-IPO Shares so held; provided, that a Change of Control of Sohu.com Inc. that

 

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does not otherwise constitute a “Triggering Event” under Section 6.1 hereof will not in and of itself be treated as Transfer of Post-IPO Shares.

 

4.7                               The Company may effect the conversion of the Post-IPO Class B Ordinary Shares in any manner available under the Companies Law or applicable law, including redeeming or repurchasing the Post-IPO Class B Ordinary Shares and applying the proceeds thereof towards the payment for the same number of Post-IPO Class A Ordinary Shares to be issued immediately after the redemption or repurchase of such Post-IPO Class B Ordinary Shares.

 

SECTION 5
 RESERVED MATTERS

 

5.1                               From and after the completion of the IPO, in addition to any other vote or consent required by the Companies Law and the Post-IPO M&A, each Party shall, within its power, procure that, for so long as Sohu Search or Tencent holds not less than 15% of the issued shares of the Company (calculated on a fully diluted basis), consent from such Shareholder Party (“Required Consent”) shall be obtained for any action (whether by amendment of the Post-IPO M&A or otherwise, and whether in a single transaction or a series of related transactions) that approves or effects any of the following matters:

 

(a)                                 any Liquidation Event, or consent to any Liquidation Event;

 

(b)                                 amendment, alteration, or repeal any provision of the Post-IPO M&A;

 

(c)                                  any material changes to, or cessation of, any line of the Principal Business;

 

(d)                                 creation or authorization of the creation of, or issuance of or creation of an obligation of the Company to issue, (i) additional Post-IPO Class B Ordinary Shares or (ii) shares of (by reclassification or otherwise) any class or series that are pari passu or senior in any respect to the Post-IPO Class A Ordinary Shares;

 

(e)                                  any transaction between any Group Company (on the one hand) and Sohu Search and/or any of its Affiliates (on the other hand), other than transactions entered into in the ordinary course of business on an arm’s length basis; and

 

(f)                                   agreement or commitment to any of the foregoing.

 

5.2                               Where any act listed in Sections 5.1(a) to 5.1(f) above requires the approval of the shareholders of the Company in accordance with the Companies Law, if the shareholders vote in favor of such act but the Required Consent has not been obtained, then the holders of all classes of shares of the Company then in existence who vote agaianst such act shall, collectively, have such number of votes as are equal to the aggregate number of votes cast in favor of such act plus one (1).

 

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SECTION 6
 CHANGE OF VOTING POWER OF POST-IPO CLASS B ORDINARY SHARES

 

6.1                               Upon the occurrence of any of the following events (each, a “Triggering Event”), each of the Post-IPO Class B Ordinary Shares shall be convertible, at the option of the holder thereof, into an equivalent number of Post-IPO Class A Ordinary Shares:

 

(a)                                 (i) a Change of Control of Sohu Search, (ii) a Change of Control of Sohu.com Inc., or (iii) a Change of Control of any other Person which results in Sohu.com Inc. ceasing to have direct or indirect Control over Sohu Search, and in each case, such Change of Control is not approved by the relevant board of directors of the company subject to the Change of Control and, in any case, not approved by the board of directors of Sohu.com Inc.;

 

(b)                                 (i) a Change of Control of Sohu Search, (ii) a Change of Control of Sohu.com Inc., or (iii) a Change of Control of any other Person which results in Sohu.com Inc. ceasing to have direct or indirect Control over Sohu Search, and in each case, such Change of Control results in one or more Tencent Restricted Person(s) acquiring direct or indirect Control of Sohu Search;

 

(c)                                  a majority of the members of (i) the Board; (ii) the board of Sohu.com Inc.; (iii) the board of any other Person through which Sohu.com Inc. exercises its direct or indirect Control over Sohu Search; or (iv) the board of any VIE Entity of (1) any Group Company, (2) Sohu.com Inc., or (3) any Person through which Sohu.com Inc. exercises its direct or indirect Control over Sohu Search, in any case consisting of Persons appointed or nominated by one or more Tencent Restricted Person(s); or

 

(d)                                 the Company’s Registration Agent is changed without Tencent’s prior written consent.

 

6.2                               In furtherance of the intent and purposes of Section 6.1, notwithstanding the provisions of Section 3.4(c) providing that a Triggering Event will terminate Sections 3.1 and 3.2 of this Agreement,

 

(a)                                 Sections 3.1 and 3.2 will not be terminated until the end of the period (the “Interim Period”) between the date of the occurrence of a Triggering Event and the date on which the Company’s register of members has been updated to reflect the conversion of all the Post-IPO Class B Ordinary Shares held by Sohu Search into Post-IPO Class A Ordinary Shares pursuant to Section 6.1;

 

(b)                                 during the Interim Period, Sections 3.1 and 3.2 will be deemed to be amended automatically, and without any action of any Party, such that during such Interim Period, all rights of Sohu Search under Sections 3.1 and 3.2 shall be completely vested in Tencent rather than in Sohu

 

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Search and, all references to Sohu Search under Sections 3.1 and 3.2 (other than in Section 3.1(c) and with respect to the first two (2) references to Sohu Search in Section 3.2(a)) hereof shall be deemed to refer to Tencent; and

 

(c)                                  Sections 3.1 and 3.2 will terminate as of the end of the Interim Period.

 

6.3                               The Company acknowledges that, on the date hereof, Sohu Search had granted Tencent an irrevocable power of attorney in the form attached hereto as Exhibit 3 (the “Tencent POA”), which authorizes Tencent to, upon occurrence of a Triggering Event, send a written notice to the Company’s Registration Agent on behalf of Sohu Search to convert all the Post-IPO Class B Ordinary Shares held by Sohu Search to Post-IPO Class A Ordinary Shares.  Tencent shall send a copy of such notice to the Company and Sohu Search at the same time it sends the notice to Registration Agent.

 

6.4                               Upon occurrence of a Triggering Event, if Tencent wishes to exercise its rights under Section 6.2(b), it shall have the right to send a written notice to the Registration Agent, with the Company and Sohu Search copied on such notice, replacing the Sohu Search Directors with individuals appointed by Tencent.

 

6.5                               In addition to the irrevocable instruction the Company should give to the Registration Agent pursuant to Section 6.6 below, upon receipt of the notice(s) from Tencent in respect of any share conversion and/or change of directors, the Company shall cause its Registration Agent (a) to immediately update the Company’s register of members and/or register of directors and officers (as applicable, and subject to satisfaction of KYC requirements for any newly appointed directors) and (b) to circulate to all Parties as soon as possible and in any event within two Business Days the updated register(s) reflecting the share conversion and/or director change(s) set forth in the notices issued by Tencent.

 

6.6                               Prior to the IPO, the Company shall adopt a Board resolution and send an irrevocable instruction to its Registration Agent, in each case in form and substance satisfactory to Tencent, authorizing the Registration Agent to, upon receipt of a notice or instruction from Tencent stating that a Triggering Event has occurred, accept the Tencent notice and, without the further action on any other Person (a) convert all the Post-IPO Class B Ordinary Shares held by Sohu Search to Post-IPO Class A Ordinary Shares and (b) update the register of directors (as applicable).  The Company shall not amend or revoke such Board resolution or irrevocable instruction, and shall not give the Registration Agent any other instruction that may adversely affect any of Tencent’s rights under this Section 6.

 

6.7                               The Company shall not change its Registration Agent without Tencent’s prior written consent.

 

6.8                               Sohu Search undertakes to Tencent that it will not challenge the validity of the notices issued by Tencent with respect to any share conversion and/or changes of directors in connection with a Triggering Event, provided however that if

 

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Sohu Search disputes the occurrence of a Triggering Event, Sohu Search may raise the dispute with Tencent (and Tencent only).  If Sohu Search prevails in such dispute, all the Post-IPO Class B Ordinary Shares held by Sohu Search that were converted to Post-IPO Class A Ordinary Shares shall be re-converted into Post-IPO Class B Ordinary Shares, and any and all of the directors who replaced the Sohu Search Directors pursuant to Section 6.4 hereof (if any) shall immediately resign from the Board and be replaced with individuals nominated by Sohu Search.

 

6.9                               Sohu Search shall notify the other Parties as soon as it becomes aware that a Triggering Event is expected to occur, and shall in any event notify the other Parties within three (3) Business Days after a Triggering Event has occurred.   Tencent may also notify the other Parties as soon as it becomes aware that a Triggering Event is expected to occur or has occurred.

 

SECTION 7
 REPRESENTATIONS AND WARRANTIES

 

7.1                               Representations and Warranties.  Each Party represents to other Parties that:

 

(a)                                 such Party is duly incorporated and existing, and in good standing, under the laws of the jurisdiction of its incorporation or organization and has the full power and authority to enter into, execute and deliver this Agreement and to perform the arrangements contemplated hereby;

 

(b)                                 the execution, performance and delivery by such Party of this Agreement have been duly authorized by all necessary corporate actions of such Party;

 

(c)                                  assuming the due authorization, execution and delivery hereof by the other Parties, this Agreement constitutes the legal, valid, and binding obligation of such Party, enforceable against such Party in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and

 

(d)                                 the execution, delivery and performance of this Agreement by such Party and the consummation of the arrangements contemplated hereby will not, (i) violate any provision of the constitutional, organizational or governance documents of such Party to the extent relevant, (ii) require such Party to obtain any consent, approval or action of, or make any filing with or give any notice to, any government authority in such Party’s country of organization or any other Person pursuant to any instrument, contract or other agreement to which such Party is a party or by which such Party is bound, other than any such consent, approval, action or filing that has already been duly obtained or made, or that is permitted to be, and will be, obtained or made following the date hereof, or that is otherwise required hereunder, (iii) conflict with or result in any material breach or violation of any of the terms and

 

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conditions of, or constitute (or with notice or lapse of time or both constitute) a material default under, any instrument, contract or other agreement to which such Party is a party or by which such Party is bound, or (iv) violate any law applicable to such Party that would materially and adversely affect such Party’s ability to execute, deliver or perform its obligations hereunder.

 

SECTION 8
 CONFIDENTIALITY AND RESTRICTIONS ON PUBLICITY

 

8.1                               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 and agents (collectively, “Representatives”) do not reveal to any third party any Confidential Information without the prior written consent of 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 8 means, (a) any information concerning the organization, business, technology, intellectual property, safety records, investment, finance, transactions or affairs of the Company or the concerned 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; and (c) any other information or materials prepared by a Party or its Representatives that contains or otherwise reflects, or is generated from, Confidential Information.

 

8.2                               Exceptions.  The provisions of Section 8.1 shall not apply to:

 

(a)                                 disclosure of Confidential Information 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;

 

(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, provided that such Representative or Affiliate (i) is under a similar obligation of confidentiality or (ii) is otherwise under a binding professional obligation of confidentiality; or

 

(c)                                  disclosure, after giving prior notice to the concerned Party to the extent practicable under the circumstances and subject to any practicable arrangements to protect confidentiality, to the extent required in connection with the disclosures necessary for the preparation and completion of the IPO, or under the rules of any stock exchange on which the shares of the disclosing 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.

 

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8.3                               Public Announcements.  Except as required by law, by any Governmental Authority, by any relevant stock exchange on which the shares of a Party or its parent company are listed or otherwise agreed by each Party, no publicity release or public announcement concerning the relationship or involvement of the Parties formed hereunder shall be made by any Party.  The Party that intends to make a publicity release or public announcement in connection with this Agreement or any arrangement contemplated hereunder as required by any Governmental Authority or any relevant stock exchange shall provide in advance a draft to the other Parties, allow reasonable time for the other Parties to review the draft, and take into account all reasonable requests of the other Parties concerning the form and content of such release or announcement.

 

SECTION 9 
 TERM AND TERMINATION

 

9.1                               Effective Date; Termination.  Other than Section 3 to Section 6 (inclusive) which shall become effective upon completion of the IPO, this Agreement shall become effective as of the date first above written and shall continue in effect until:

 

(a)                                 if the IPO is completed within 12 months after the date of this Agreement, the earlier to occur of (i) agreement of Sohu Search and Tencent in writing to terminate this Agreement and (ii) Sohu.com Inc. and its wholly owned Subsidiaries or Tencent Holdings Limited and its wholly owned Subsidiaries no longer beneficially owning any Equity Securities in the Company; and

 

(b)                                 if the IPO is not completed within 12 months after the date of this Agreement, the last day of such 12-month period.

 

9.2                               Effect of Termination and Survival Provisions.  If this Agreement is terminated pursuant to Section 9.1, this Agreement shall become null and void and of no force and effect beyond termination, except that the Parties shall continue to be bound by the provisions of Section 8 (Confidentiality and Restrictions on Publicity), this Section 9, Section 11.2 (No Agency), Section 11.3 (No Partnership) and Section 12 (Governing Law and Dispute Resolution.  Nothing in this Section 9.2 shall be deemed to release any Party from any liability for any breach of this Agreement prior to the effective date of such termination.

 

SECTION 10
 NOTICES

 

10.1                        Notice Addresses and Method of Delivery.  All notices, requests, demands, consents and other communications (each, a “Notice”) required to be given by one Party to the other Parties shall be in writing and delivered by hand delivery, express courier or email to the recipient Party at the address stated below:

 

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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 copies to:                                                                                    Sogou Inc.

Level 15, Sohu.com Internet Plaza

No. 1 Unit Zhongguancun East Road, Haidian District

Beijing 100084

People’s Republic of China

Email: xiaochuanwang@sohu-inc.com

 

and

 

Goulston & Storrs P.C.
 400 Atlantic Avenue

Boston, MA 02110

U.S.A.
 Attention: Timothy B. Bancroft

Email: tbancroft@goulstonstorrs.com

 

if to Sohu Search:                                                                 Sohu.com (Search) Limited

Floor 4, Willow House, Cricket Square, P.O. Box 

2804, Grand Cayman KY1-1112, Cayman Islands

Attention: Joanna Lv
 Email: joannalu@sohu-inc.com

 

with copies to:                                                                                    Sohu.com (Search) Limited

c/o Sohu.com Inc.

Level 18, Sohu.com Media Plaza

Block 3, No. 2 Kexueyuan South Road, Haidian District

Beijing 100190, People’s Republic of China

 

and

 

Goulston & Storrs PC

400 Atlantic Avenue

Boston, MA 02110

Attention: Timothy B. Bancroft
 Email: tbancroft@goulstonstorrs.com

 

if to Tencent:                                                                                         c/o Tencent Holdings Limited

Level 29, Three Pacific Place

1 Queen’s Road East

Wanchai, Hong Kong

Attention: Compliance and Transactions Department

Email: legalnotice@tencent.com

 

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with a copy to:                                                                                 Tencent Building, Keji Zhongyi Avenue,

Hi-tech Park, Nanshan District,

Shenzhen 518057, PRC

Attention: Mergers and Acquisitions Department

Email: PD_Support@tencent.com

 

Paul, Weiss, Rifkind, Wharton & Garrison
 12th Floor, The Hong Kong Club Building,
 3A Chater Road, Central,
 Hong Kong
 Attention: Jeanette K. Chan

Email: jchan@paulweiss.com

 

or, as to each Party, at such other address or email address or number as shall be designated by such Party in a notice to the other Parties 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.  Notwithstanding the foregoing, any notice involving non-performance or termination shall be sent by hand delivery or by prepaid express courier.

 

10.2                        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; and

 

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

 

10.3                        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; and

 

(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.

 

SECTION 11
 MISCELLANEOUS

 

11.1                        Discrepancies.  If there is any discrepancy between any provision of this Agreement and any provision of the Post-IPO M&A or the charter documents of any other Group Company, the provisions of this Agreement shall prevail as among the Shareholder Parties, and each Party shall, within their respective power, procure that the Post-IPO M&A or the charter documents of the relevant Group Company, as the case may be, are promptly amended, to the extent permitted by applicable law, in order to conform with this Agreement.

 

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11.2                        No Agency.  No Shareholder Party, acting solely in its capacity as a shareholder of the Company, shall act as an agent of the Company or have any authority to act for or to bind the Company, except as authorized by the Board.  Either Shareholder Party that takes any action or binds the Company in violation of this Section 11.2 shall be solely responsible for, and shall indemnify the Company and the other Shareholder Party (solely in such other Shareholder Party’s capacity as a shareholder of the Company) against, any losses, claims, damages, liabilities, judgments, fines, obligations, expenses and liabilities of any kind or nature whatsoever (including any investigative, legal and other expenses reasonably incurred in connection with, and any amounts paid in settlement of, any pending or threatened legal action or proceeding) that the Company, or such other Shareholder Party (solely in its capacity as a shareholder of the Company), as the case may be, may at any time become subject to or liable for by reason of such violation.

 

11.3                        No Partnership.  The Shareholder Parties expressly do not intend hereby to form a partnership, either general or limited, under any jurisdiction’s partnership law.  The Shareholder Parties do not intend to be partners to each other, or partners as to any third party, or create any fiduciary relationship among themselves, by virtue of their status as shareholders of the Company.  To the extent that either Shareholder Party, by word or action, represents to another Person that the other Shareholder Party is a partner or that the Company is a partnership, the Shareholder Party making such representation shall be liable to the other Shareholder Party if such other Shareholder Party incurs any losses, claims, damages, liabilities, judgments, fines, obligations, expenses and liabilities of any kind or nature whatsoever (including any investigative, legal or other expenses reasonably incurred in connection with, and any amount paid in settlement of, any pending or threatened legal action or proceeding) arising out of or relating to such representation.

 

11.4                        Further Assurance.  Each Party agrees to perform and cause to be performed all further actions and things, and execute and deliver and cause to be executed and delivered such further documents, as may be required by law or as the other Parties may reasonably request, to implement and/or give effect to this Agreement and the arrangements contemplated hereunder.  Without prejudice to the generality of the above, the Company shall promptly give instructions to the Company Secretary and its agents, including the Registration Agent, to take all such actions or refraining to take actions (including whether or not to update the Company’s register of directors and officers and/or register of members or instructions to convert Post-IPO Class B Ordinary Shares into Post-IPO Class A Ordinary Shares) to reflect the intent of the Parties and the provisions set out in this Agreement.

 

11.5                        Amendment.  This Agreement may be amended, modified or supplemented with the written instrument executed by the Parties, and any such amendment shall be valid and binding on all Parties.

 

11.6                        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

 

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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 any other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof.

 

11.7                        Entire Agreement.  This Agreement and the Post-IPO M&A represent the entire understanding and constitute the whole agreement among the Parties relating to the subject matter hereof and supersedes any prior agreements or understandings relating to such subject matter, provided that the Parties acknowledge and agree that the Shareholders’ Agreement in respect of the Company dated September 16, 2013 shall continue to remain in full force and effect until terminated pursuant to the provisions thereof.

 

11.8                        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.

 

11.9                        Counterparts.  This Agreement may be executed in any number of counterparts and by the Parties in separate counterparts, including counterparts transmitted by e-mails, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  Except as otherwise specified, this Agreement shall become legally binding at the time of execution of the last such counterpart and shall have effect from the date first above written.

 

11.10                 Consent to Specific Performance.  The Parties declare that it may be impossible to measure in money the damages that would be suffered by a Party by reason of the failure by the other Parties to perform any of the obligations hereunder.  Therefore, if any Party shall institute any action or proceeding to enforce the provisions hereof, the other Party(ies) against whom such action or proceeding is brought hereby waives any claim or defense therein that the instituting Party has an adequate remedy at law.

 

11.11                 Consent.  Any consent required under this Agreement shall be valid and effective only if given in writing.

 

SECTION 12
 GOVERNING LAW AND DISPUTE RESOLUTION

 

12.1                        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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12.2                        Arbitration.

 

(a)                                 Any dispute, controversy or claim arising out of, in connection with or relating to this Agreement (or the interpretation, breach, termination or validity thereof) shall be resolved through arbitration.  A dispute may be submitted to arbitration upon the request of any Party with written notice to the other Parties (the “Arbitration Notice”).

 

(b)                                 The arbitration shall be conducted in Hong Kong and administered by the Hong Kong International Arbitration Centre (the “HKIAC”) under the UNCITRAL Arbitration Rules in force at the time of the initiation of the arbitration.  There shall be three arbitrators.  The claimant(s) to the dispute shall choose one arbitrator, and the respondent(s) shall choose one arbitrator, within 30 days after the delivery of the Arbitration Notice to the other Parties.  Both arbitrators shall agree on the third arbitrator within 30 days of their appointment.  If any of the members of the arbitral tribunal have not been appointed within 30 days after the Arbitration Notice is given, the relevant appointment shall be made by the Secretary General of the HKIAC.  The arbitration shall be conducted in English.

 

(c)                                  Each Party shall cooperate with the other in making full disclosure of and providing complete access to all information and documents requested by the other(s) in connection with such arbitration proceedings, subject only to any doctrine of legal privilege or any confidentiality obligations binding on such Party.

 

(d)                                 The costs of arbitration shall be borne by the losing Party, unless otherwise determined by the arbitration tribunal.

 

(e)                                  When any dispute occurs and when any dispute is under arbitration, except for the matters in dispute, the Parties shall continue to fulfill their respective obligations and shall be entitled to exercise their rights under this Agreement.

 

(f)                                   The award of the arbitration tribunal shall be final and binding upon the Parties, and the prevailing Party may apply to a court of competent jurisdiction for enforcement of such award.

 

(g)                                  Any Party shall be entitled to seek preliminary injunctive relief from any court of competent jurisdiction pending the constitution of the arbitration tribunal.

 

[Signature pages follow]

 

25

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

 

 

	
 
    	
SOGOU INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

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

 

 

	
 
    	
THL A21 LIMITED
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[signature page to voting agreement]

 

 

SCHEDULE 1

NUMBER AND CLASS/SERIES OF SHARES HELD BY SOHU SEARCH AND TENCENT PRIOR TO AND UPON/AFTER THE IPO

 

	
 
    	
 
    	
Pre- and Post-IPO Class/Series of Shares
    	
 
    
	
Name of Shareholder
    	
 
    	
Class A Ordinary Shares
    	
 
    	
Class B Ordinary Shares
    	
 
    	
Series A Preferred Shares
    	
 
    	
Series B Preferred Shares
    	
 
    
	
SOHU.COM (SEARCH) LIMITED
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
-                     As of the date of this   Agreement as well as immediately prior to IPO
    	
 
    	
127,200,000   Pre-IPO Class A Ordinary Shares
    	
 
    	
0
    	
 
    	
0
    	
 
    	
0
    	
 
    
	
 
    	
 
    	
-                     Upon and immediately after   IPO
    	
 
    	
0
    	
 
    	
127,200,000   Post-IPO Class B Ordinary Shares
    	
 
    	
0
    	
 
    	
0
    	
 
    
	
THL   A21 LIMITED
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
-                     As of the date of this   Agreement as well as immediately prior to IPO
    	
 
    	
6,757,875   Pre-IPO Class A Ordinary Shares
    	
 
    	
79,368,421   Pre-IPO Class B Ordinary Shares
    	
 
    	
0
    	
 
    	
65,431,579   Pre-IPO Series B Preferred Shares
    	
 
    
	
 
    	
 
    	
-                     Upon and immediately after   IPO
    	
 
    	
0
    	
 
    	
151,557,875   Post-IPO Class B Ordinary Shares
    	
 
    	
0
    	
 
    	
0
    	
 
    

 

[Voting Agreement - Schedule 1]

 

 

EXHIBIT 1

FORM OF THE POST-IPO M&A OF THE COMPANY

 

[Voting Agreement — Exhibit 1]

 

 

EXHIBIT 2

FORM OF JOINDER

 

Reference is made to the [transfer document], dated [    ] between [Transferring Shareholder Party] (the “Transferor”) and the undersigned, pursuant to which the Transferor shall sell to the undersigned, and the undersigned shall purchase from the Transferor, [number] [Pre-IPO Class A Ordinary Shares]/[Post-IPO Class B Ordinary Shares] for consideration equal to [consideration].  It is a condition to the completion of such sale and purchase that the undersigned become a party to that certain Voting Agreement, dated [    ], 2017 among Sogou Inc., Sohu.com (Search) Limited and THL A21 Limited (the “Voting Agreement”).  Except as the context may otherwise require, all words and expressions defined in the Voting Agreement shall have the same meanings when used herein.

 

Accordingly, by execution of this joinder, the undersigned covenants to the Company as agent and trustee for all other Persons who are present or who may hereafter become a Shareholder Party under the Voting Agreement, and to the Company itself, to ratify, adhere to and be fully bound by, and subject to, all of the covenants, terms and conditions of the Transferor imposed by the Voting Agreement as though an original party thereto in the same capacity as the Transferor since the date thereof.  The undersigned authorizes this signature page to be attached to and made part of the Voting Agreement.

 

All other Persons who are present or who may hereafter become a Shareholder Party under the Voting Agreement and the Company shall be entitled to enforce the Voting Agreement against the undersigned, and the undersigned shall be entitled to all rights and benefits of the Transferor under the Voting Agreement, in each case as if the undersigned had been an original party to the Shareholders’ Agreement since the date thereof.

 

The address of the undersigned for purposes of all notices under the Voting Agreement is: [            ]

 

THIS JOINDER 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.

 

IN WITNESS WHEREOF, the parties have caused this Joinder to be executed on      ,       .

 

	
 
    	
SOGOU, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Voting Agreement — Exhibit 2]

 

 

	
 
    	
[NAME OF NEW SHAREHOLDER]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Voting Agreement — Exhibit 2]

 

 

EXHIBIT 3

FORM OF IRREVOCABLE POWER OF ATTORNEY

 

THIS IRREVOCABLE POWER OF ATTORNEY is made on                       

 

	
BY
    	
 
    	
[Name of Sohu shareholder] a   company incorporated under the laws of [·]   whose [business] / [registered] office is situated at [·]   (the “Company”).
    

 

IT IS AGREED AND DECLARED THAT

 

In exercise of the power(s) in that behalf contained in its Articles of Association and in order to secure the performance of an obligation owed to the Attorney, the Company HEREBY IRREVOCABLY APPOINTS [name of Tencent shareholder] whose [business] / [registered] office is situated at [·] (the “Attorney”), to be the true and lawful attorney-in-fact of the Company, for and in the name of and on behalf of the Company, acting singly, to do and execute all and any of the acts, things and other matters following, namely to:

 

1.             in accordance with section 6 of the voting agreement entered into by Sohu.com (Search) Limited, THL A21 Limited and Sogou Inc. (an exempted company with limited liability incorporated under the laws of the Cayman Islands with its registered office at P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205, Cayman Islands (“Sogou”)) in respect of Sogou dated [Date] [and a Joinder signed by the Company on the date first above written] (the “Voting Agreement”), upon the occurrence of a Triggering Event (as defined in the Voting Agreement), send a written notice (the “Conversion Notice”) to the Person that is maintaining Sogou’s register of members (the “Registration Agent”) on behalf of the Company:

 

(a)           to instruct the Registration Agent (with a  copy to Sogou and the Company) to convert all of the Post-IPO Class B Ordinary Shares (as defined in the Voting Agreement) held by the Company to Post-IPO Class A Ordinary Shares (as defined in the Voting Agreement); and

 

(b)           to request the Registration Agent to circulate to the Company, the Attorney and Sogou as soon as possible and in any event within two Business Days (as defined in the Voting Agreement) after the date the Conversion Notice the updated register of members of Sogou reflecting the share conversion set forth in the Conversion Notice.

 

AND IT IS FURTHER AGREED AND DECLARED THAT

 

2.             The Company hereby ratifies and confirms, and agrees to ratify and confirm, any acts and other things whatsoever that the Attorney shall do or purport to do by virtue of this Irrevocable Power of Attorney including any such acts and things done between the time this Irrevocable Power of Attorney ceases to be effective and valid.

 

3.             The Company hereby authorises and empowers the Attorney (a) to acknowledge in the name of and as the act and deed of the Company this Irrevocable Power of Attorney, that this Irrevocable Power of Attorney has been executed as a deed and (b) to register and record this Irrevocable Power of Attorney in any office and/or registry in any country and to procure to be done any and every other act and thing whatsoever which may in any way be necessary, advisable, convenient or otherwise desirable for authenticating and otherwise giving full effect to this Irrevocable Power of Attorney according to the law and usages of any country as fully and effectually as the Company could.

 

[Voting Agreement — Exhibit 3]

 

 

4.             By the execution of this Irrevocable Power of Attorney, the Company undertakes to indemnify, and hereby indemnifies, the person named above as Attorney (and any substitutes or delegates of such Attorney) of the Company from and against all actions, proceedings, losses, costs, damages, expenses, claims, demands and other liabilities of any nature whatsoever which any or all of them may suffer or otherwise incur by reason of the Attorney acting pursuant to or in reliance on this Irrevocable Power of Attorney.

 

5.             The Company acknowledges, agrees and confirms that notwithstanding any other document or instruction it may sign or send or cause to be signed or sent after the date hereof, this Irrevocable Power of Attorney shall be irrevocable, effective and valid, and shall not be capable of being amended or revoked in any manner, until 11.59pm (Cayman Islands time) on the date falling 30 days after the Registration Agent circulates to the Company, the Attorney and Sogou the updated register of members of Sogou reflecting the share conversion set forth in the Conversion Notice.

 

6.             This Irrevocable Power of Attorney shall be governed by and construed in accordance with the laws of the Cayman Islands.

 

[the remainder of this page is intentionally left blank]

 

[Voting Agreement — Exhibit 3]

 

 

IN WITNESS WHEREOF the Company has executed this Irrevocable Power of Attorney as a deed the day and year first above written.

 

 

	
EXECUTED   AS A DEED for and on behalf of [Name of Sohu shareholder]:1 
    	
)
    	
 
    
	
)
    	
 
    
	
 
    	
)
    	
Duly Authorised Signatory
    
	
 
    	
)
    	
 
    
	
 
    	
)
    	
Name:
    	
 
    
	
 
    	
)
    	
 
    	
 
    
	
 
    	
)
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 )
    	
 
    
	
 
    	
 )
    	
 
    
	
 
    	
 )
    	
Duly Authorised   Signatory
    
	
 
    	
 )
    	
 
    
	
 
    	
 )
    	
Name:
    	
 
    
	
 
    	
 )
    	
 
    	
 
    
	
 
    	
 )
    	
Title:
    	
 
    

 

	
in the presence   of:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature of   Witness
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    

 

[Voting Agreement — Exhibit 3]

 

	
 
    

 

VOTING AGREEMENT

 

among

 

SOGOU, INC.,

 

SOHU.COM (SEARCH) LIMITED,

 

and

 

THL A21 LIMITED,

 

 

Dated [·]

 

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
SECTION 1 INTERPRETATION
    	
2
    
	
 
    	
 
    
	
SECTION 2   COVENANTS OF THE PARTIES
    	
9
    
	
 
    	
 
    
	
SECTION 3   AGREEMENT TO VOTE
    	
9
    
	
 
    	
 
    
	
SECTION 4 TRANSFER   RESTRICTIONS
    	
13
    
	
 
    	
 
    
	
SECTION 5 RESERVED   MATTERS
    	
15
    
	
 
    	
 
    
	
SECTION 6 CHANGE   OF VOTING POWER OF POST-IPO CLASS B ORDINARY SHARES
    	
16
    
	
 
    	
 
    
	
SECTION 7 REPRESENTATIONS   AND WARRANTIES
    	
18
    
	
 
    	
 
    
	
SECTION 8   CONFIDENTIALITY AND RESTRICTIONS ON PUBLICITY
    	
19
    
	
 
    	
 
    
	
SECTION 9 TERM AND   TERMINATION
    	
20
    
	
 
    	
 
    
	
SECTION 10 NOTICES
    	
20
    
	
 
    	
 
    
	
SECTION 11   MISCELLANEOUS
    	
22
    
	
 
    	
 
    
	
SECTION 12   GOVERNING LAW AND DISPUTE RESOLUTION
    	
24
    
	
 
    	
 
    
	
SCHEDULE 1
    	
NUMBER AND CLASS/SERIES   OF SHARES HELD BY SOHU SEARCH AND TENCENT PRIOR TO AND UPON/AFTER THE IPO
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBIT 1
    	
FORM OF THE   POST-IPO M&A OF THE COMPANY
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBIT 2
    	
FORM OF JOINDER
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBIT 3
    	
FORM OF   IRREVOCABLE POWER OF ATTORNEYExhibit 10.8

 

Execution Copy

 

SOGOU INC.

 

REGISTRATION RIGHTS AGREEMENT

 

               , 2017

 

 

TABLE OF CONTENTS

 

	
1.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
Registration Rights
    	
4
    
	
 
    	
 
    	
 
    
	
3.
    	
Miscellaneous
    	
15
    

 

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is entered into as of [•], 2017.

 

AMONG:

 

(1)                                 Sogou Inc., an exempted company with limited liability incorporated under the laws of the Cayman Islands with its office at Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Islands (the “Company”),

 

(2)                                 Sohu.com (Search) Limited, an exempted company with limited liability incorporated under the laws of the Cayman Islands with its registered office at Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Islands (“Sohu Search”),

 

(3)                                 THL A21 Limited, an exempted company with limited liability under the laws of the British Virgin Islands whose registered office is at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (“Tencent”); and

 

(4)                                 Photon Group Limited, a company incorporated under laws of the British Virgin Islands with its address at Floor 4, Willow House, Cricket Square, P.O. Box 2804, Grand Cayman KY1-1112, Cayman Island (“Photon”).

 

RECITALS:

 

A.                                    The Company is contemplating conducting an initial public offering of its shares on an internationally recognized stock exchange in the near future.

 

B.                                    As of the date of this Agreement, each of Sohu Search, Tencent and Photon holds certain shares of the Company which are considered “restricted securities” under the Securities Act (as defined below).

 

C.                                    In connection with the contemplated initial public offering, the Company has agreed to provide Sohu Search, Tencent and Photon with certain registration rights with respect to their respective Registrable Securities (as defined below) as set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual promises and covenants herein and other consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                      Definitions.  For purposes of this Agreement:

 

(a)                                 The term “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with such Person.

 

1

 

(b)                                 The term “Agreement” has the meaning set forth in the Preamble of this Agreement.

 

(c)                                  The term “Arbitration Rules” has the meaning set forth in Section 3.4(b).

 

(d)                                 The term “Board” has the meaning set forth in Section 2.5(a).

 

(e)                                  The term “Business Day” means any weekday that the banks in the Cayman Islands, the Hong Kong Special Administrative Region, the People’s Republic of China, and the United States of America are generally open for business.

 

(f)                                   The term “Code” means the Internal Revenue Code of 1986, as amended.

 

(g)                                  The term “Company Activity” has the meaning set forth in Section 2.5(a).

 

(h)                                 “Control” of a given Person means the power or authority, whether exercised or not, to direct the business, management and/or policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise;  provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing.

 

(i)                                     The term “Equity Securities” means any shares of, or securities convertible into or exchangeable or exercisable for any shares of, the Company’s capital securities.

 

(j)                                    The term “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

(k)                                 The term “Form F-3” means Form F-3 under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

(l)                                     The term “F-3 Initiating Holders” has the meaning set forth in Section 2.3(a).

 

(m)                             The term “Holder” means any person owning of record Registrable Securities that have not been sold to the public pursuant to Rule 144 or otherwise, or any assignee thereof to whom rights of a Holder under this Agreement have been duly assigned in accordance with Section 2.9 hereof.

 

(n)                                 The term “Indemnified Party” has the meaning set forth in Section 2.6(c).

 

(o)                                 The term “Indemnifying Party” has the meaning set forth in Section 2.6(c).

 

2

 

(p)                                 The term “IPO” means the sale of Post-IPO Class A Ordinary Shares or, if applicable, American depositary shares representing such Post-IPO Class A Ordinary Shares in the first firm-commitment underwritten public offering in the United States pursuant to an effective registration statement under the Securities Act.

 

(q)                                 The term “Initiating Holders” means one or more Holders who in the aggregate hold(s) not less than twenty-five percent (25%) of the then outstanding Registrable Securities.

 

(r)                                    The term “Inspector” has the meaning set forth in Section 2.5(g).

 

(s)                                   The term “Lockup Start Date” has the meaning set forth in Section 2.11(a).

 

(t)                                    The term “Market Standoff Period” has the meaning set forth in Section 2.11(a).

 

(u)                                 The term “Parties” means collectively the Company, Sohu Search, Tencent and Photon, and the term “Party” means any one of them.

 

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

 

(w)                               The term “Post-IPO Class A Ordinary Shares” means the Class A Ordinary Shares, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Post-IPO M&A, including one vote per share.

 

(x)                                 The term “Post-IPO Class B Ordinary Shares” means the Class B Ordinary Shares, par value US$0.001 per share, in the share capital of the Company, with the rights set forth in the Post-IPO M&A, including ten votes per share.

 

(y)                                 The term “Post-IPO M&A” means the memorandum and articles of association of the Company that the Company proposes to become effective upon completion of the IPO (which effectiveness shall be subject to the approval of Sohu Search and Tencent in their capacity as shareholders of the Company).

 

(z)                                  The term “Principal Tribunal” has the meaning set forth in Section 3.4(c).

 

(aa)                          The terms “register,” “registered,” and “registration” refer to a registration (including, but not limited to, a registration of American Depository Receipts) effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

 

(bb)                          The term “Registrable Securities” means (i) the Post-IPO Class A Ordinary Shares issuable or issued upon conversion of the Post-IPO Class B Ordinary Shares, (ii) any Post-IPO Class A Ordinary Shares owned or hereafter acquired by a Holder, and (iii) any other Post-IPO Class A Ordinary Shares of the Company issued as (or issuable upon the conversion or

 

3

 

exercise of any warrant, right or other security that is issued as) a dividend or other distribution  with respect to, or in exchange for, or in replacement of, the shares referenced in (i) or (ii) above, excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which his, her or its rights under Section 2 hereof are not assigned in accordance with this Agreement or any securities sold in a public offering, whether sold pursuant to Rule 144, in a registered offering or otherwise.

 

(cc)                            The term “Registration Expenses” means all expenses incurred by the Company in complying with Sections 1.1, 2.2 and 2.3 hereof, including without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, all “roadshow” expenses (if the underwriter or managing underwriter advises that a “roadshow” is advisable to complete the sale of the Registrable Securities proposed to be sold in an offering), any liability insurance or other premiums for insurance obtained in connection with any registration hereunder, fees and disbursements of counsel for the Company, blue sky fees and expenses, accounting fees of the Company (including expenses to obtain a customary comfort letter), the expense of any special audits incident to or required by any such registration, but excluding the Selling Expenses.  Registration Expenses shall also include the reasonable fees and disbursements for one special counsel to the Holders per registration.

 

(dd)                          The term “Rule 144” means Rule 144 under the Securities Act, as such rule may be amended from time to time, or any successor or substitute rule, law or provision.

 

(ee)                            The term “Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

(ff)                              The term “SEC” means the United States Securities and Exchange Commission.

 

(gg)                            The term “Selling Expenses” means all underwriting discounts and selling commissions applicable to the sale of Registrable Securities pursuant to Sections 1.1, 2.2 and 2.3 hereof.

 

(hh)                          The term “Subsidiary” means, with respect to any specified Person, any other Person Controlled, directly or indirectly, by the specified Person, whether through contractual arrangements or through ownership of voting equity securities, voting power, or registered capital.  For the avoidance of the doubt, a “variable interest entity” Controlled by another entity shall, for purposes of this Agreement, be deemed to be a Subsidiary of that other entity and shall include, for the Company, Beijing Sogou Information Services Co., Ltd. (北京搜狗信息服务有限公司) (“Sogou Information”) and each of Sogou Information’s Subsidiaries.

 

2.                                      Registration Rights.  The Company covenants and agrees as follows:

 

2.1                               Demand for Registration.  If at any time after six (6) months following the effective date of the Company’s IPO, the Company receives from the Initiating Holders a written request that the Company effect a registration pursuant to this Section 2.1 with respect to shares of Registrable Securities, the Company will:

 

4

 

(a)                                 promptly and within ten (10) days after the receipt of such request, give written notice of the proposed registration to all other Holders; and

 

(b)                                 file a registration statement under the Securities Act of all Registrable Securities which the Holders request to be registered, subject to the limitations of this Section 2.1, not sooner than five (5) Business Days but within thirty (30) days of the mailing of such notice by the Company in accordance with Section 3.7 hereof and effect such registration statement as soon as practicable.

 

(c)                                  Notwithstanding the foregoing, the Company shall not be obligated to take any action to effect or complete any such registration pursuant to this Section 2.1:

 

(i)                                     In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(ii)                                  Following the filing of, and for one hundred eighty (180) days immediately following the effective date of, any registration statement pertaining to Equity Securities of the Company (other than a registration of securities with respect to an employee benefit plan);

 

(iii)                               After the Company has effected two (2) such demand registrations pursuant to this Section 2.1; or

 

(iv)                              If the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form F-3 pursuant to a request made pursuant to Section 2.3 below.

 

(d)                                 Underwriting.  In the event that the Initiating Holders intend to distribute the Registrable Securities by means of an underwriting, the Company shall advise the Holders as part of the notice given pursuant to Section 2.1(a) hereof that the right of any Holder to registration pursuant to this Section 2.1 shall be conditioned upon such Holder’s participation in the underwriting arrangements required by this Section 2.1, and the inclusion of such Holder’s Registrable Securities in the underwriting, to the extent requested, shall be limited to the extent provided herein.

 

All Holders proposing to distribute their securities through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Holders holding a majority of the Registrable Securities to be registered.  Notwithstanding any other provision of this Section 2.1, if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the Registrable Securities to be included in such registration to an amount no less than thirty percent (30%) of the Registrable Securities requested to be registered by the Holders. The securities held and requested to be included in such underwriting by the Company’s directors, officers, employees, consultants and other shareholders shall be reduced completely before any reduction is made to the Registrable Securities held by the Holders.  The Company shall so advise all Holders requesting to be

 

5

 

included in the registration and underwriting, and the number of shares of Registrable Securities that the managing underwriter determines may be included in the registration and underwriting shall be  allocated among all the Holders requesting to be included in the registration and underwriting in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by them at the time of filing the registration statement.

 

To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.  If any Holder disapproves of the terms of the underwriting, such Holder may elect to withdraw therefrom by written notice to the Company, the managing underwriter and the Initiating Holders.  The Registrable Securities and/or other securities so withdrawn shall also be withdrawn from registration.

 

2.2                               Company Registration.

 

(a)                                 Notice of Registration.  If at any time, or from time to time, the Company determines to register any of its Registrable Securities, either for its own account or the account of a Holder, other than (i) a registration relating solely to employee benefit plans or (ii) a registration relating solely to a Rule 145 transaction, the Company will:

 

(i)                                     promptly and at least twenty (20) days before the anticipated filing date, give to each Holder written notice thereof; and

 

(ii)                                  include in such registration (and any related qualifications including compliance with Blue Sky laws), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within ten (10) Business Days after the date of such written notice from the Company, by any Holder.

 

(b)                                 Underwriting.  If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 2.2(a)(i) hereof.  In such event, the right of any Holder to registration pursuant to Section 2.2 hereof shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of Registrable Securities in the underwriting shall be limited to the extent provided herein.

 

All Holders proposing to distribute their securities through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by the Company.  Notwithstanding any other provision of this Section 2.2, if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the Registrable Securities to be included in such registration to an amount no less than thirty percent (30%) of the Registrable Securities requested to be registered by the Holders. The securities held and requested to be included in such underwriting by the Company’s directors, officers, employees, consultants and other shareholders shall be reduced completely before any reduction is made to the Registrable Securities held by the Holders.  The Company shall so advise all Holders requesting to be included in the registration and underwriting, and the number of shares of Registrable Securities that the managing underwriter determines may be included in

 

6

 

the registration and underwriting shall be allocated among all the Holders requesting to be included in the registration  and underwriting in proportion, as nearly as practicable, to the respective amounts of Registrable Securities held by them at the time of filing the registration statement.

 

To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.  If any Holder disapproves of the terms of the underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the managing underwriter and the Initiating Holders.  The Registrable Securities and/or other securities so withdrawn shall also be withdrawn from registration.

 

(c)                                  Right to Terminate Registration.  The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

 

(d)                                 If a Holder decides not to include any or all of its Registrable Securities in any registration statement thereafter filed by the Company under this Section 2.2, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement(s) as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth in this Agreement.

 

(e)                                  Registration pursuant to this Section 2.2 shall not be deemed to be a demand registration as described in Section 2.1 above.  Except as otherwise provided herein, there shall be no limit on the number of times any Holder may request registration of Registrable Securities under this Section 2.2.

 

2.3                               Registration on Form F-3.

 

(a)                                 Request for Registration.  In case the Company receives from Holder(s) holding at least 20% of the then outstanding Registrable Securities (the “F-3 Initiating Holders”) a written request that the Company file a registration statement on Form F-3 or Form S-3 (or any successor form to Form F-3) for a public offering of shares of the Registrable Securities, and the Company is a registrant entitled to use Form F-3 to register the Registrable Securities for such an offering, the Company shall:

 

(i)                                     promptly and at least ten (10) days before the anticipated filing date, give written notice to all other Holders of the proposed registration and offer them the opportunity to participate; and

 

(ii)                                  use its reasonable best efforts to cause such Registrable Securities to be registered for the offering on such form as such Holder or Holders may reasonably request; in each case within thirty (30) days of the mailing of such notice by the Company in accordance with Section 3.7 hereof.

 

If such offer is to be an underwritten offer, the underwriters must be acceptable to both the Holders and the Company.  In the event the registration is proposed by the F-3 Initiating

 

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Holders holding a majority of the Registrable Securities then held by all F-3 Initiating Holders to be part  of a firm commitment underwritten public offering, the substantive provisions of Section 2.1(d) hereof shall be applicable to each such registration initiated under this Section 2.3.

 

(b)                                 Notwithstanding the foregoing, the Company shall not be obligated to take any action pursuant to this Section 2.3:

 

(i)                                     Following the filing of, and for one hundred eighty (180) days immediately following the effective date of, any registration statement pertaining to Equity Securities of the Company (other than a registration with respect to an employee benefit plan), provided that (A) the Company is actively employing in good faith its reasonable best efforts to cause such registration statement to become effective, and (B) the Registrable Securities of Holders have not been excluded (with respect to all or any portion of the Registrable Securities the Holders requested to be included in such registration) pursuant to the provisions of Sections 2.1(d) or 2.2(b);

 

(ii)                                  In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; or

 

(iii)                               If the Company, within ten (10) days of the receipt of the request of the Initiating Holders, pursuant to this Section 2.3, gives notice of its bona fide intention to effect the filing of a registration statement pertaining to Equity Securities of the Company with the SEC within sixty (60) days of receipt of such request (other than with respect to a registration statement relating to an employee benefit plan), provided, that the Company is actively employing in good faith its reasonable best efforts to cause that registration statement to become effective within sixty (60) days of receipt of that request; provided, further, that the Holders are entitled to join such registration.

 

(c)                                  Registration pursuant to this Section 2.3 shall not be deemed to be a demand registration as described in Section 2.1 above.  Except as otherwise provided herein, there shall be no limit on the number of times any Holder may request registration of Registrable Securities under this Section 2.3.

 

2.4                               Expenses of Registration. All Registration Expenses incurred in connection with (i) two (2) registrations pursuant to Section 2.1 hereof, (ii) all registrations pursuant to Section 2.2 hereof and (iii) all registrations pursuant to Section 2.3 hereof shall be borne by the Company.  Notwithstanding the foregoing, in the event that Holders cause the Company to begin a registration pursuant to Section 2.1 or 2.3 hereof, and the request for such registration is subsequently withdrawn by the Holders (unless the withdrawal is based upon material adverse information concerning the Company of which the Holders were not aware at the time of such request, in which case the Company will bear all Registration Expenses relating to such withdrawn offering), all Holders shall be deemed to have forfeited their right to one registration under Section 2.1 or 2.3 hereof, as the case may be, unless the Initiating Holders with respect to a registration pursuant to Section 2.1 or the Holders with respect to a registration pursuant to Section 2.3 (as applicable) pay for, or reimburse the Company for, the Registration Expenses

 

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incurred by the Company in connection with such withdrawn or incomplete registration.  Unless otherwise stated herein, all  Selling Expenses relating to securities registered on behalf of the Holders shall be borne by the Holders of such securities pro rata on the basis of the number of shares so registered or proposed to be so registered.

 

2.5                               Registration Procedures.  In the case of each registration effected by the Company pursuant to this Agreement, the Company will keep each Holder advised in writing as to the initiation of such registration and as to the completion thereof.  The Company will:

 

(a)                                 Prepare and file with the SEC a registration statement with respect to such securities and use its reasonable best efforts to cause such registration statement to become and remain effective for at least one hundred eighty (180) days or until the distribution described in the registration statement has been completed; provided, however, that (i) such one hundred eighty (180) day period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an underwriter of Post-IPO Class A Ordinary Shares (or other securities) of the Company; and (ii) in the case of any registration of Registrable Securities on Form F-3 which are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred eighty (180) day or a longer period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold.  Notwithstanding the foregoing, the Company shall be entitled to suspend effectiveness of the registration statement for up to ninety (90) days if the Company shall furnish to the Holder a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board of Directors of the Company (the “Board”), it would not be in the best interests of the Company and its shareholders for such registration statement to continue to be effective because the Company is engaged in any activity or transaction or preparations or negotiations for any activity or transaction (“Company Activity”) that the Company has a bona fide business purpose for preserving as confidential, and the Company determines in good faith that the public disclosure requirement imposed on the Company pursuant to such registration statement would require premature disclosure of the Company Activity; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period;

 

(b)                                 Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

 

(c)                                  Furnish to the Holders participating in such registration and to the underwriters of the securities being registered such reasonable number of copies of the registration statement, preliminary prospectus, final prospectus and such other documents as such Holders or underwriters may reasonably request in order to facilitate the public offering of such securities;

 

(d)                                 Furnish, at the request of any Holder requesting registration of Registrable Securities, (i) an opinion, dated the date of such request, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering addressed, to the underwriters, if any, and to the

 

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Holders requesting registration of Registrable Securities and (ii) a letter dated the date of such date, from the independent accountants of the Company, in form and substance as is customarily given by  independent accountants to underwriters in an underwritten public offering addressed, to the underwriters, if any, and to the Holders requesting registration of Registrable Securities;

 

(e)                                  Use its reasonable best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdiction as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therein or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdiction unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(f)                                   In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering and take such other actions as are prudent and reasonably required in order to expedite or facilitate the disposition of Registration Securities, including causing its officers to participate in “road shows” and other information meetings organized by the underwriter or the managing underwriter;

 

(g)                                  Make available at reasonable times for inspection by any Holder of Registrable Securities being registered, any managing underwriter participating in any disposition of Registrable Securities pursuant to a registration statement, a Holder’s counsel and any other attorney, accountant or other agent retained by such Holder or any managing underwriter (each, an “Inspector”), all financial and other records, pertinent corporate documents and properties of the Company and its Subsidiaries as shall be reasonably necessary to enable them to exercise their due diligence responsibilities, and cause the Company’s and its Subsidiaries’ officers, directors and employees, and the independent public accountants of the Company, to supply all information reasonably requested by any such Inspector in connection with the registration statement;

 

(h)                                 Notify each Holder covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of (i) the issuance of any stop order by the SEC in respect of such registration statement, or (ii) the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

 

(i)                                     Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed;

 

(j)                                    Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP (the Committee on Uniform Securities Identification Procedures) number for all such Registrable Securities, in each case not later than the effective date of such registration; and

 

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(k)                                 Take all other reasonable actions as are necessary to expedite or facilitate the disposition of the Registrable Securities in accordance with this Agreement.

 

2.6                               Indemnification.

 

(a)                                 The Company will indemnify each Holder, each of its officers, directors, partners, counsel, underwriters, and each person controlling such Holder within the meaning of the Securities Act or the Exchange Act, with respect to which registration has been effected pursuant to this Agreement, against all expenses, claims, losses, damages or liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of the Securities Act, the Exchange Act, state securities laws or any rule or regulation promulgated under such laws applicable to the Company in connection with any such registration, and the Company will reimburse each Holder, each of its officers, directors, partners, counsel, underwriters, and each person controlling such Holder, for any legal and any other expenses reasonably incurred, as such expenses are incurred, in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case (i) to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by a Holder or any officer, director, partner, counsel, underwriter thereof or such Holder’s controlling person, and stated to be specifically for use therein or (ii) if the delivery of the final disclosure document, or any supplement or amendment thereto, to any party by the Holder would have cured such untrue statement, alleged untrue statement, omission or alleged omission, and the Holder failed to deliver such circular, amendment or supplement, in each case with respect to the information concerning such Holder.

 

(b)                                 Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration is being effected, severally and not jointly indemnify the Company, each of its directors and officers, other holders of the Company’s securities covered by such registration statement, each of such other holder’s directors, officers, partners, each person controlling such other holder within the meaning of the Securities Act, each person who controls the Company within the meaning of the Securities Act, and each other Holder, each of its officers and directors and partners and each person controlling such other Holder within the meaning of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Holder of the Securities Act, the Exchange Act, state securities laws or any rule or regulation promulgated under such laws applicable to the Holder, and will reimburse the Company, such other Holders and holders, such directors, officers,

 

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partners or controlling persons for any legal or any other expenses reasonably incurred, as such expenses are incurred, in connection with investigating or defending any such claim, loss, damage, liability or action, but only to the extent that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information concerning such Holder and furnished to the Company by an instrument duly  executed by a Holder, and stated to be specifically for use in such registration statement, prospectus, offering circular or other document.  Notwithstanding the foregoing, the liability of each Holder under this subsection 2.6(b) shall be limited to an amount equal to the net proceeds resulting from the Registrable Securities sold by such Holder in the relevant offering, unless such liability arises out of or is based on the willful misconduct of such Holder.

 

(c)                                  Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless the failure to give such notice is materially prejudicial to an Indemnifying Party’s ability to defend such action or otherwise forfeits substantive rights or defenses of an Indemnifying Party and provided further, that the Indemnifying Party shall not assume the defense for matters as to which there is a conflict of interest or there are separate and different defenses.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party (whose consent shall not be unreasonably withheld), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.

 

(d)                                 If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission (or alleged omission) to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

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(e)                                  Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in actual and direct conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. For the purposes of this Section 2.6(e), the failure of an underwriting agreement to provide indemnification to the Holder as provided in this Agreement shall not be deemed to be in conflict with the provisions of this Agreement and the indemnification provisions of this Section 2.6 shall remain in force.

 

(f)                                   The obligations of the Company and the Holders under this Section 2.6 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 2.6, and otherwise.

 

2.7                               Information by Holder.  The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders, the Registrable Securities held by them and the distribution proposed by such Holder or Holders as the Company may request in writing and as shall be required in connection with any registration referred to in this Agreement.

 

2.8                               Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the SEC which may at any time permit the sale of the Registrable Securities to the public without registration, after completion of an initial registered public offering, the Company agrees to use reasonable best efforts to:

 

(a)                                 Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date that the Company becomes subject to the reporting requirements of the Securities Act or the Exchange Act;

 

(b)                                 File with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); and

 

(c)                                  So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company and other information in the possession of or reasonably obtainable by the Company as the Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing the Holder to sell any such securities without registration

 

2.9                               Assignment of Registration Rights.  The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned (but only with all related obligations under this Agreement) by a Holder to a transferee or assignee of such securities, provided: (a) the Company is, within a reasonable time after such transfer, furnished with written

 

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notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement in the same capacity as the transferring or assigning Holder, including, without limitation, the provisions of Section 2.11 below.

 

2.10                        Limitations on Subsequent Registration Rights.  From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders holding at least a majority of the then outstanding Registrable Securities, grant, or cause or permit to be created, for the benefit of any person or entity any registration rights of any kind (whether similar to the demand, “piggyback” or Form F-3 registration rights described in this Section 2, or otherwise) relating to any securities of the Company which are senior to, or on a parity with, those granted to the Holders of the Registrable Securities.

 

2.11                        “Market Standoff” Agreement.

 

(a)                                 Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s IPO or an subsequent firm commitment underwritten public offering (the “Lockup Start Date”) and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (l80) days in the case of the IPO and not to exceed ninety (90) days in the case of any such subsequent offering) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Post-IPO Class A Ordinary Shares or any securities convertible into or exercisable or exchangeable for Post-IPO Class A Ordinary Shares held immediately prior to the Lockup Start Date, or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Post-IPO Class A Ordinary Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Post-IPO Class A Ordinary Shares or other securities, in cash or otherwise (such period, the “Market Standoff Period”).  The foregoing provisions of this Section 2.11 shall only (x) be applicable to the Holders if all officers, directors and greater than one percent (1%) shareholders (on a fully diluted basis) of the Company enter into similar agreements and (y) to the extent requested by the managing underwriter. If the Company or any underwriter releases any officer or director of the Company or holder of one percent (1%) or more of the Company’s outstanding share capital from his or her or its sale restrictions so undertaken, then each Holder shall be notified prior to such release and shall itself be simultaneously released to the same proportional extent. The underwriters in connection with the Company’s IPO are intended third party beneficiaries of this Section 2.11 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto, to the extent necessary for them to enforce this Section 2.11.  Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in the Company’s IPO that are consistent with this Section 2.11 or that are necessary to give effect thereto.  Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply to all Holders and other persons subject to such agreements pro rata based on the number of shares (on a fully diluted basis) subject to such agreements.

 

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2.12                        Restrictions on Public Sale by the Company.  The Company agrees not to effect any public offering, sale or distribution of any of its Equity Securities (except pursuant to registrations on F-4 or S-8 or any successor thereto), during the period beginning on the effective date of any registration statement in which the Holders are participating and ending on the earlier of (a) the date on which all Registrable Securities registered on such registration statement are sold and (b) 120 days after the effective date of such registration statement (except as part of such registration).

 

2.13                        Termination of Registration Rights.  The rights granted pursuant to Sections 1.1, 2.2 and 2.3 of this Agreement shall terminate, with respect to a particular Holder, whenever such Holder is eligible to sell all its shares of Registrable Securities under Rule 144 during any three (3) month period.

 

3.                                      Miscellaneous.

 

3.1                               Jurisdiction.  This Agreement is drafted primarily in contemplation of an IPO in the United States, which the parties recognize may or may not actually occur. In the event the Company completes an IPO in the United States in the form of American depositary receipts (representing American depositary shares), rather than Post-IPO Class A Ordinary Shares, the term “Registrable Securities” and the provisions of this Agreement in respect of Registrable Securities shall apply mutatis mutandis to such American depositary shares, with appropriate adjustments, if any, to give effect to the intention of the parties in such provisions.  The parties further agree that, in the event the Company does not complete an IPO in the United States, but rather intends to complete an initial public offering of Post-IPO Class A Ordinary Shares, and the listing or admission for quotation of Post-IPO Class A Ordinary Shares on a securities exchange or quotation system, in a jurisdiction outside the United States, the Parties shall, within a reasonable time prior to the completion of such initial public offering, enter into an agreement replacing this Agreement which shall apply mutatis mutandis, with appropriate adjustments or necessary or advisable to give effect to the intention of the Parties as to the substantive provisions, rights, and obligations of the Parties under this Agreement, and shall take such other actions as may be reasonably required under the applicable securities laws and regulations of such jurisdiction and the applicable rules of such securities exchange or quotation system in order for the Holder to be able to freely sell, under such laws and regulations, all or part of its Registrable Securities from time to time.    Each Party further agrees that it shall act (within its power) and cooperate in good faith to give effect to the intention of the Parties as provided in Section 2 hereof.

 

3.2                               Successors and Assigns.  Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any shares of Registrable Securities).  Nothing in this Agreement, express or implied, is intended to confer upon any party other than the Parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement

 

3.3                               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

 

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and other Equity Securities convertible into or exercisable or exchangeable for Post-IPO Class A 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 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.

 

3.4                               Governing Law and Dispute Resolution.

 

(a)                                 This Agreement shall be governed by and construed under the laws of the State of New York as applied to agreements among New York residents entered into and to be performed entirely within New York, without regard to principles of conflict of laws thereunder.

 

(b)                                 Each of the Parties hereto irrevocably (i) agrees that any dispute or controversy arising out of, relating to, or concerning any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Hong Kong under the UNCITRAL Arbitration Rules in accordance with the HKIAC Procedures for the Administration of International Arbitration in force at the date of this Agreement (the “Arbitration Rules”), (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such arbitration, and (iii) submits to the exclusive jurisdiction of Hong Kong in any such arbitration. There shall be one (1) arbitrator, selected in accordance with the Arbitration Rules. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction. The parties to the arbitration shall each pay an equal share of the costs and expenses of such arbitration, and each party shall separately pay for its respective counsel fees and expenses.

 

(c)                                  In the event of two or more arbitrations having been commenced under this Agreement, the tribunal in the arbitration first filed (the “Principal Tribunal”) may in its sole discretion, upon the application of any party to the arbitrations, order that the proceedings be consolidated before the Principal Tribunal, which will have the jurisdiction to resolve all disputes forming part of the consolidation order, if (i) there are issues of fact and/or law common to the arbitrations, (ii) the interests of justice and efficiency would be served by such a consolidation, and (iii) no prejudice would be caused to any party in any material respect as a result of such consolidation, whether through undue delay or otherwise.  Such application shall be made as soon as practicable and the party making such application shall give notice to the other parties to the arbitrations.

 

3.5                               Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

3.6                               Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

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3.7                               Notices.  All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given:  (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail if sent during normal business hours of the recipient, and if not, then on the next Business Day, (iii) when sent by facsimile at the number shown below the signature of each party on the signature page of this Agreement, upon receipt of confirmation of error-free transmission, or (iv) three (3) Business Days after deposit with an international reputable overnight delivery service, postage prepaid, sent to the address shown below the signature of each party on the signature page of this Agreement (or at such other addresses as shall be specified by notice given in accordance with this Section 3.7), with next- or second-business-day delivery guaranteed, provided that the sending party receives a confirmation of delivery from the delivery service provider.

 

3.8                               Entire Agreement; Amendments and Waivers.  This Agreement (including the Exhibits hereto, if any) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Parties.  Any amendment or waiver effected in accordance with this paragraph shall be binding upon each Party.

 

3.9                               Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

 

3.10                        Specific Performance.  The Parties hereto acknowledge that, in view of the transactions contemplated by this Agreement, each Party would not have an adequate remedy at law for money damages in the event that this Agreement has not been performed in accordance with its terms, and therefore agrees that the non-breaching Party(ies) shall be entitled to specific enforcement of the terms hereof in addition to any other remedy to which such non-breaching Party(ies) may be entitled at law or in equity.

 

3.11                        No Waiver.  Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver or relinquishment of, or failure to insist upon strict compliance with, any right, power or remedy hereunder at any one or more times be deemed a waiver or relinquishment of such right, power or remedy at any other time or times.

 

3.12                        Further Assurances.  Upon the terms and subject to the conditions herein, each of the Parties hereto agrees to use its reasonable best efforts to take or cause to be taken all action, to do or cause to be done, to execute such further instruments, and to assist and cooperate with the other Parties hereto in doing, all things necessary, proper or advisable under applicable laws or otherwise to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and, to the extent reasonably requested by another Party, to enforce rights and obligations pursuant hereto.

 

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3.13                        Attorney’s Fees.  In the event that any dispute among the Parties to this Agreement should result in litigation, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the Parties have executed this Registration Rights Agreement as of the date first above written.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
SOGOU INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name: Xiaochuan Wang
    
	
 
    	
Title: Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Level 12, Sohu.com Internet Plaza
    
	
 
    	
No. 1 Unit Zhongguancun East Road,   Haidian District
    
	
 
    	
Beijing 100084, People’s Republic of China
    

 

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
SOHU.COM (SEARCH) LIMITED
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name: Joanna Lv
    
	
 
    	
Title: Acting Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
c/o Sohu.com Inc.
    
	
 
    	
Level 18, Sohu.com Media Plaza
    
	
 
    	
Block 3, No. 2 Kexueyuan South Road,   Haidian District
    
	
 
    	
Beijing 100190, People’s Republic of China
    

 

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
THL A21 LIMITED
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
c/o Tencent Holdings Limited
    
	
 
    	
Level 29, Three Pacific Place
    
	
 
    	
1 Queen’s Road East
    
	
 
    	
Wanchai, Hong Kong
    
	
 
    	
Attention: Corporate Counsel
    

 

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
PHOTON GROUP LIMITED
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Address:
    

 

22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}]]