{"id":41140,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/loan-and-share-pledge-agreement-sohu-com-inc-charles-zhang.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"loan-and-share-pledge-agreement-sohu-com-inc-charles-zhang","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/loan-and-share-pledge-agreement-sohu-com-inc-charles-zhang.html","title":{"rendered":"Loan and Share Pledge Agreement &#8211; Sohu.com Inc., Charles Zhang and Wei Li"},"content":{"rendered":"<pre><p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\"><b>THIS LOAN AND SHARE PLEDGE AGREEMENT<\/b> (this \u0093<b>Agreement<\/b>\u0094) is entered into on this 19th day of November 2001 in Beijing, People\u0092s Republic of China (\u0093<b>PRC<\/b>\u0094)<\/font><\/p>\n\n<p style=\"margin-left:13px\"><font face=\"Times New Roman\" size=\"2\"><i>among<\/i><\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">(1)<b>  Sohu.com, Inc.<\/b>, a U.S. corporation, of Delaware, U.S. (\u0093<b>Party A<\/b>\u0094),<\/font><\/p>\n\n<p style=\"margin-left:13px\"><font face=\"Times New Roman\" size=\"2\"><i>and<\/i><\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">(2)<b>  Charles Zhang<\/b>, a PRC citizen whose passport number is 2729176 and residential address is Hui Hao Ge Apartments, Henderson Centre, 18 Jianguomen Nei Avenue, Beijing, 100005, PRC (\u0093<b>Party B<\/b>\u0094),<\/font><\/p>\n\n<p style=\"margin-left:13px\"><font face=\"Times New Roman\" size=\"2\"><i>and<\/i><\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">(3)<b>  Wei Li<\/b>, a PRC citizen whose PRC identity card no. is 110108721201576. (\u0093<b>Party C<\/b>\u0094)<\/font><\/p>\n\n<p><font face=\"Times New Roman\" size=\"2\">(individually a \u0093<b>Party<\/b>\u0094 and together the \u0093<b>Parties<\/b>\u0094).<\/font><\/p>\n\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\"><b>RECITALS <\/b><\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">A.  Party B and Party C wish to establish Beijing Century High-Tech Company Limited a domestic limited liability company in Beijing, PRC (\u0093<b>Domestic Company<\/b>\u0094), in which they will hold 80% and 20% equity, respectively.<\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">B.  The Domestic Company will be established to engage in the business of investment, investment management, enterprise management consulting, investment consulting, and undertaking business operations of other entities with agency capacity within the PRC.<\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">C.  Party B and Party C wish to borrow the amount specified in Article 2.1 below (the \u0093<b>Loan<\/b>\u0094) from Party A, and Party A has agreed to provide the Loan to Party B and Party C on an interest-free basis, for the sole purpose of establishing the Domestic Company and developing the Domestic Company\u0092s business, which shall specifically include the entering into of a series of agreements with Party A and its Affiliates (as defined below).<\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">D.  As security for the Loan and their performance of this Agreement, Party B and Party C have agreed to pledge their respective equity interests in the Domestic Company (the \u0093<b>Shares<\/b>\u0094) to Party A.<\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\"><b>NOW, THEREFORE<\/b>, the Parties agree as follows:<\/font><\/p>\n\n<p><font face=\"Times New Roman\" size=\"2\"><b>1.    DEFINITIONS AND INTERPRETATIONS<\/b><\/font><\/p>\n\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">1.1  <b>Definitions.<\/b>    Unless otherwise indicated, the following terms in this Agreement shall have the meanings set forth below:<\/font><\/p>\n\n<p align=\"center\">\n\n<\/p><\/pre>\n<table cellspacing=\"0\" cellpadding=\"0\" width=\"100%\" border=\"0\">\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Affiliate<\/b>\u0094 any affiliate entity or business associate of Party A, including without limitation the WFOE \u0096 Sohu ITC Information Technology (Beijing) Co., Ltd.<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Certificate<\/b>\u0094 as defined in Article 3.1.9;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Conversion Date<\/b>\u0094 As defined in Article 7.2.1;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Conversion Notice<\/b>\u0094   as defined in Article 7.1;<\/font><\/p>\n<p><ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Designee<\/b>\u0094 an individual, corporation or other appropriate entity designated by Party A to be the recipient of a Share<\/font><\/p>\n<p>r&gt;<br \/>\n<\/ttd><\/ttd><\/ttd><\/ttd><\/ttd><\/table>\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">A-1<\/font><\/p>\n<\/p>\n<hr size=\"1\">\n<p align=\"center\">\n<table cellspacing=\"0\" cellpadding=\"0\" width=\"100%\" border=\"0\">\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px\"><font face=\"Times New Roman\" size=\"2\">Transfer;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Event of Default<\/b>\u0094 As defined in Article 6;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Loan Date<\/b>\u0094 with respect to Party B and Party C, the date on which the portion of the Loan amount borrowed by such Party is paid into his designated bank account;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>PRC Law<\/b>\u0094 any published and available laws and regulations of the PRC;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Repayment Date<\/b>\u0094 as defined in Article 2.3;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>RMB<\/b>\u0094 Renminbi, the lawful currency of the PRC;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>Share Transfer<\/b>\u0094 as defined in Article 7.2.1;<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>USD<\/b>\u0094 United States Dollar, the lawful currency of the United States of America.<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd valign=\"top\" colspan=\"3\" width=\"97%\"><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">\u0093<b>WFOE<\/b>\u0094 A wholly-owned subsidiary established by Party A in the PRC.<\/font><\/p>\n<p>r&gt;<br \/>\n<\/ttd><\/ttd><\/ttd><\/ttd><\/ttd><\/ttd><\/ttd><\/ttd><\/ttd><\/table>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">1.2<b>  Interpretations.<\/b>    The headings herein are for reference purposes only and do not affect the meaning or interpretation of any provision hereof. Any reference herein to an Article or Appendix is to an article or appendix of this Agreement. The use of the plural shall include the use of the singular, and vice versa. Unless otherwise indicated, a reference herein to a day, month or year is to a calendar day, month or year. A reference to a business day is to a day on which commercial banks are open for business in both the PRC and the U.S. The use of the masculine shall include the use of the feminine, and vice versa.<\/font><\/p>\n<p><font face=\"Times New Roman\" size=\"2\"><b>2.    AMOUNT AND REPAYMENT OF THE LOAN<\/b><\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.1<b>  Loan Amount.<\/b>    Party A agrees, subject to the terms and conditions of this Agreement, to extend the Loan to Party B and Party C in a total amount of USD4.595 million that is equivalent to RMB 38,000,000, of which 80% shall be for the benefit of Party B and the remaining 20% shall be for the benefit of Party C. The Loan shall be interest-free.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.2<b>  Provision of Loan.<\/b>    The Loan shall be deemed to have been provided to Party B and Party C on the Loan Date.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.3<b>  Date of Repayment.<\/b>    The Loan, together with any other moneys owing under this Agreement by Party B and Party C, shall become repayable upon the earliest to occur of any of the following events (each a \u0093<b>Repayment Date<\/b>\u0094):<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.3.1  in full, on the occurrence of an Event of Default;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.3.2  in full, on the resignation or removal of Party B or Party C from the position of director, general manager, supervisor of the Domestic Company;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.3.3  in full, with respect to Party B or Party C, the date on which such Party\u0092s employment relationship with Party A or any Affiliate terminates for any reason;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.3.4  In full, where Party A intends to replace this Agreement with another agreement, the date of the written notice from Party A to Party B and Party C confirming such intention; or<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.3.5  In full or in part, at Party A\u0092s sole discretion upon any date selected by Party A after the second anniversary of the date of signing of this Agreement.<\/font><\/p>\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">A-2<\/font><\/p>\n<\/p>\n<hr size=\"1\">\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">2.4<b>  Method of Repayment.<\/b>    Repayment will be made only by means of converting the Loan into Shares, as described in Article 7 below, with the final amount of the Loan being due and repayable on the final Conversion Date. The Loan may not be repaid prior to the Repayment Date or by any means not specifically permitted in this Article 2.4 without the express written consent of Party A.<\/font><\/p>\n<p><font face=\"Times New Roman\" size=\"2\"><b>3.    UNDERTAKINGS AND WARRANTIES OF PARTY B AND PARTY C<\/b><\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1<b>  Undertakings and Warranties.<\/b>  Each of Party B and Party C hereby undertakes and warrants to Party A that:<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.1  the Loan will be used solely for the purpose of establishing the Domestic Company and developing its business activities;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.2  he shall use the proceeds from the Loan solely for the purpose of contributing his amount of the registered capital in the Domestic Company;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.3  he has and shall maintain the full power and authority to enter into this Agreement, to borrow the Loan and to perform his obligations hereunder;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.4  there are no civil or criminal, claims, actions, suits, investigations or proceedings pending or, to his knowledge, threatened against him;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.5  there is no provision of any Agreement, enforceable judgement or order of any court binding on him or affecting his property, which would in any way prevent or materially adversely affect his execution or performance of this Agreement;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.6  the execution and performance of this Agreement and the realization of Party A\u0092s rights hereunder will not violate any mortgage right, contract, judgement, decree or law which is binding upon him or his assets;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.7  upon his investment in the Domestic Company, he shall be the sole legal and beneficial owner of his Shares, free and clear of all pledges and encumbrances other than the security interest created by this Agreement;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.8  he shall cause the pledge of his respective Shares to Party A to be recorded on the Domestic Company\u0092s register of shareholders;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.9  upon the establishment of the Domestic Company, he shall provide to Party A a certificate from the Domestic Company evidencing his ownership of the Shares (a \u0093<b>Certificate<\/b>\u0094) together with an Assignment Agreement, substantially in the form attached hereto as an Appendix;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.10  for duration of this Agreement, he will not cause the Domestic Company, without the written consent of Party A, to engage directly or indirectly in any business activities which compete with those of Party A other than those described in Recital B above;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.11  he will, at any time and at Party A\u0092s expense, defend the Shares against any third party claims;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.12  without the consent of Party A, except as expressly permitted hereunder, he will not arrange for or otherwise permit or cause the issuance of any new shares of capital stock of the Domestic Company;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.13  he shall do or cause to be done all such acts, and execute or cause to be executed any necessary documents and registrations, such that the conversion of the Loan, the Share Transfers and all other transactions contemplated hereunder are effected in a legal and valid manner; and<\/font><\/p>\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">A-3<\/font><\/p>\n<\/p>\n<hr size=\"1\">\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">3.1.14  he shall maintain as strictly confidential the existence and provisions of this Agreement, as well as of any correspondence, resolutions, ancillary agreements and any other documentation associated herewith.<\/font><\/p>\n<p><font face=\"Times New Roman\" size=\"2\"><b>4.    COVENANTS <\/b><\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.1<b>  Affirmative Covenants.<\/b>    Each of Party B and Party C hereby covenants that he will furnish to Party A, within 10 days after the end of each month after the Domestic Company has been established, with financial statements of the Domestic Company and such additional information as Party A may from time to time reasonably request<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2  <b>Further Covenants.<\/b>    Each of Party B and Party C further covenants that, from the date hereof until full repayment of the Loan has been effected, he will not, and will ensure that the Domestic Company does not, except with the prior written consent of Party A:<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2.1  incur or assume any debt that is not due and payable in the ordinary course of its business (except indebtedness to Party A hereunder or as otherwise specifically permitted hereunder);<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2.2  incur or assume any mortgage, pledge or other encumbrance of any kind upon any assets of the Domestic Company, whether now owned or hereafter acquired;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2.3  enter into any agreement, arrangement, commitment or understanding to, or actually acquire all or part of the substantial assets of any third party;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2.4  enter into any agreement, arrangement, commitment or understanding to, or actually sell, lease, or otherwise dispose of any assets of the Domestic Company except in the ordinary course of business;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2.5  enter into any agreement, arrangement, commitment or understanding to, or actually, make loans or advances to any third party;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2.6  enter into any agreement, arrangement, commitment or understanding to, or actually, assume, guarantee, endorse or otherwise become liable for the obligation of any third party or other entity; or<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.2.7 permit the Domestic Company to conduct any business not expressly described in Recital B of this Agreement.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3<b>  Rights of Party A.<\/b><\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3.1  Party B and Party C agree that they shall obtain Party A\u0092s written approval prior to undertaking any of the following, namely:<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3.1.1  appointing and removing the directors of the Domestic Company;<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3.1.2  appointing and removing the general manager of the Domestic Company; and<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3.1.3  approving the terms of employment of the general manager.<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3.2  Party B and Party C agree that they shall obtain Party A\u0092s written approval prior to undertaking any of the following, namely:<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3.2.1  appointing and removing of the senior management personnel and any key personnel of the Domestic Company; and<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">4.3.2.2  approving the terms of employment of the senior management personnel and key personnel of the Domestic Company.<\/font><\/p>\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">A-4<\/font><\/p>\n<\/p>\n<hr size=\"1\">\n<p><font face=\"Times New Roman\" size=\"2\"><b>5.    SHARE PLEDGE <\/b><\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">5.1<b>  Share Pledge.<\/b>    As security for the performance in full of the obligations of Party B and Party C under this Agreement, Party B and Party C each hereby pledges to Party A, and creates in favor of Party A or the Designee (as appropriate), a first priority security interest in all of the rights, title and interest in and to:<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">5.1.1  the Shares; and<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">5.1.2  all of his incidental rights with respect to the Shares, now or hereafter acquired.<\/font><\/p>\n<p><font face=\"Times New Roman\" size=\"2\">Such security interest to be perfected by compliance by Party B and Party C with Article 3.1.9 of this Agreement.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">5.2<b>  Power of Attorney.<\/b>    Each of Party B and Party C hereby irrevocably grants to Party A or the Designee (as appropriate) full power of attorney for the purpose of carrying out the provisions of this Agreement, as well as taking any action and executing any instrument which Party A in good faith deems necessary to accomplish for purposes of this Agreement.<\/font><\/p>\n<p><font face=\"Times New Roman\" size=\"2\"><b>6.    EVENTS OF DEFAULT <\/b><\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">The occurrence of any of the following events shall constitute a default of the Loan hereunder and a breach of this Agreement by Party B or Party C (as appropriate) (an \u0093<b>Event of Default<\/b>\u0094):<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">6.1  a Share Transfer has not been effected by either Party B or Party C within 20 working days after the corresponding Conversion Date or such time as may otherwise be agreed upon by the Parties;<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">6.2  either Party B or Party C is in breach of any of the terms and conditions hereof, and such breach has not been rectified for a period of 10 days after receipt of Party A\u0092s written notice requesting such rectified;<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">6.3  any undertaking or warranty made by either Party B or Party C herein shall prove to have been false or misleading in any material respect;<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">6.4  Party B or Party C makes any arrangement with his respective creditors or takes or suffers any similar action in consequence of debt; or<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">6.5  any judgment is made under any applicable law against Party B or Party C which exceeds USD 50,000.<\/font><\/p>\n<p><font face=\"Times New Roman\" size=\"2\"><b>7.    LOAN CONVERSION <\/b><\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">7.1<b>  Share Conversion.<\/b>    As of the Repayment Date, the Loan shall be convertible into Shares on the basis that 100 percent of the Loan amount equals 100 percent of the Shares. For the avoidance of doubt, if 10 percent of the Loan were repayable by Party B and\/or Party C, then such Party or Parties, as the case may be, would be required to transfer 10% of the total number of the Shares to Party A. The Loan shall become repayable to such extent as Party A may from time to time request, until the entire Loan amount has been repaid.<b> <\/b>Party A shall request to convert all or a percentage of the Loan by means of a written notice to Party B and Party C that specifies the percentage of the Loan to be converted into Shares (\u0093<b>Conversion Notice<\/b>\u0094).<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">7.2<b>  Share Transfer. <\/b><\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">7.2.1  Within 20 working days after receipt of a Conversion Notice (\u0093<b>Conversion Date<\/b>\u0094), Party B and Party C shall effect the transfer of the portion of the Shares designated in the Conversion Notice, either to Party A directly or to the Designee specified by Party A in the Conversion Notice (each a \u0093<b>Share Transfer<\/b>\u0094).<\/font><\/p>\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">A-5<\/font><\/p>\n<\/p>\n<hr size=\"1\">\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">7.2.2  For the avoidance of doubt, upon the completion of the conversion of the Loan and the transfer of all of the Shares of Party B and Party C (whether pursuant to this Article 7 or an Event of Default), Party A shall hold as many of the Shares as is permissible under PRC Law, and the remainder of the Shares (if applicable) shall be held by the Designees, with Party B and Party C no longer holding any Shares. At such time, this Agreement shall be deemed to have terminated, and the obligations of Party B and Party C hereunder to have been fulfilled (with the exception of those under 3.1.13 and 3.1.14).<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">7.3<b>  Delay.<\/b>    Party B and Party C each undertakes to notify Party A immediately of any delay in effecting a Share Transfer or completing the procedures described in Article 7.2 above, together with the reason for such delay and revised effective date of the Share Transfer.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">7.4<b>  Repayment of Loan.<\/b>    The corresponding portion of the Loan shall be deemed to have been repaid as of the effective date of each Share Transfer. Once Party B and Party C have completed the Share Transfers in accordance with the provisions of this Article 7, the Loan shall be deemed to have been repaid in full and Party B and Party C shall be deemed to have performed their repayment obligations hereunder.<\/font><\/p>\n<p><font face=\"Times New Roman\" size=\"2\"><b>8.    MISCELLANEOUS <\/b><\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.1<b>  Notices and Delivery.<\/b>    All notices and communications among the Parties shall be made in writing and in the English language by facsimile transmission with confirmation of transmission, delivery in person (including courier service) or registered airmail letter to the appropriate correspondence addresses set forth below:<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\"><i>Party A <\/i><\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Sohu.com, Inc.<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">15\/F, Tower 2, Bright China Chang An Building, 7 Jianguomen Nei Avenue, Beijing 100005<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Tel : 8610-6510-2160<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Fax : 8610-6510-2159<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\"><i>Party B <\/i><\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Charles Zhang<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Tel : 8610-6510-2160<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Party C<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Wei Li<\/font><\/p>\n<p style=\"margin-left:54px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">Tel : 8610-6510-2160<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.2<b>  Timing.<\/b>    The time of receipt of the notice or communication shall be deemed to be:<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.2.1  If by facsimile transmission with confirmation of transmission, at the time displayed in the corresponding transmission record, unless such facsimile is sent after 5:00 p.m. or on a non-business day in the place where it is received, in which case the date of receipt shall be deemed to be the following business day;<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.2.2  if in person (including express mail), on the date that the receiving Party or a person at the receiving Party\u0092s address signs for the document; or<\/font><\/p>\n<p style=\"margin-left:27px; text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.2.3  if by registered mail, on the 10<\/font><font face=\"Times New Roman\" size=\"1\"><sup>th<\/sup><\/font><font face=\"Times New Roman\" size=\"2\" color=\"#000000\"><sup><\/sup> day after the date that is printed on the receipt of the registered mail.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.3<b>  Foreign Exchange. <\/b>    All amounts payable by Party B and Party C hereunder shall be paid in USD. If, as a result of foreign exchange restrictions in the PRC, it becomes illegal for either Party B or Party C to make any payment to Party A in USD, then he shall make that payment <\/font><\/p>\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">A-6<\/font><\/p>\n<\/p>\n<hr size=\"1\">\n<p><font face=\"Times New Roman\" size=\"2\">in any other currency permitted for such purposes, as shall be stipulated by Party A at its sole discretion. In such an event, the amount of the payment shall be calculated at the rate published by the Bank of China on the relevant payment date, and shall be free and clear of all expenses, withholding taxes and commissions.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.4<b>  Amendments.<\/b>    The provisions of this Agreement may not be waived, modified or amended except by an instrument in writing signed by the Parties (which instrument shall be attached as an Appendix hereto).<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.5<b>  No Waiver.<\/b>    Failure or delay on the part of any Party to exercise any right under this Agreement shall not operate as a waiver thereof.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.6<b>  Severability.<\/b>    The invalidity of any provision of this Agreement shall not affect the validity of any other provision of this Agreement which is unrelated to that provision.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.7<b>  Survival.<\/b>    The confidentiality obligations of the Parties hereunder shall remain in full force and effect regardless of the termination of this Agreement for any reason.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.8<b>  Taxes and Duties.<\/b>    Party A shall be responsible for all stamp duties and other governmental fees, taxes and reasonable out-of-pocket expenses (including reasonable legal fees) incurred by the Parties in connection with the conversion of the Loan and each Share Transfer made hereunder and in the preparation of this Agreement. <\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.9<b>  Successors.<\/b>    This Agreement shall be binding upon the Parties and upon their respective successors and assigns (if any).<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.10<b>  Assignment.<\/b>    Neither Party B nor Party C may assign or otherwise transfer his rights or obligations under this Agreement without the prior written consent of Party A.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.11<b>  Governing Law.<\/b>    The execution, validity, interpretation and implementation of this Agreement and the settlement of disputes thereunder shall be governed by PRC Law.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.12<b>  Arbitration.<\/b>    All disputes arising out of or in connection with this Agreementshall be finally settled under the Rules of Arbitration of the International Chamber of Commerce as administered by the International Court of Arbitration of the International Chamber of Commerce in <i>Hong Kong <\/i>by a sole arbitrator appointed in accordance with the said Rules conducted in the English language.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.13<b>  Entire Agreement.<\/b>    This Agreement and the Appendix hereto constitute the entire agreement between the Parties and supersede all prior discussions, negotiations and agreements. The Appendix form an integral part hereof and have the same legal effect as this Agreement. If there is any inconsistency between the provisions of this Agreement and any of the Appendix, the provisions of this Agreement shall prevail to the extent of such inconsistency.<\/font><\/p>\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\">8.14<b>  Language.     <\/b>This Agreement will be signed in 3 sets of originals in the Chinese and English language, with 1 original for each Party. The two language versions shall have equal validity and the wording of each version shall be deemed to carry the same meaning. In the event of any discrepancy between the wordings of the said two versions, such discrepancy shall be interpreted according to the purpose of this Agreement and based on the English text.<\/font><\/p>\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">A-7<\/font><\/p>\n<\/p>\n<hr size=\"1\">\n<p style=\"text-indent:27px\"><font face=\"Times New Roman\" size=\"2\"><b>IN WITNESS WHEREOF<\/b>, the Parties hereto have executed or caused this Agreement to be executed by their duly authorised representatives (as the case may be) as of the date first indicated above.<\/font><\/p>\n<p align=\"right\">\n<table cellspacing=\"0\" cellpadding=\"0\" width=\"40%\" border=\"0\">\n<p><ttd valign=\"top\" colspan=\"3\" width=\"43%\"> <\/p>\n<p><font face=\"Times New Roman\" size=\"2\">F<small>OR<\/small> <small>AND<\/small> <small>ON<\/small> <small>BEHALF<\/small> <small>OF<\/small> S<small>OHU<\/small>.<small>COM<\/small>, I<small>NC<\/small>.<\/font><\/p>\n<p>r&gt;<br \/>\n<ttd height=\"16\">r&gt;<br \/>\n<ttd valign=\"top\" width=\"3%\"><\/p>\n<p style=\"margin-left:13px; text-indent:-13px\"><font face=\"Times New Roman\" size=\"2\">By:<\/font><\/p>\n<td valign=\"bottom\" width=\"3%\"><font face=\"Times New Roman\" size=\"1\"> <\/font><\/td>\n<td valign=\"top\" align=\"center\" width=\"43%\">\n<p align=\"center\"><font face=\"Times New Roman\" size=\"2\">\/s\/    D<small>EREK<\/small> P<small>ALASCHUK<\/small><\/font><\/p>\n<hr noshade color=\"#000000\" align=\"left\"><\/td>\n<p><ttd> <\/ttd><\/ttd><\/ttd><\/ttd><\/table>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8856],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9560,9567],"class_list":["post-41140","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-sohucom-inc","corporate_contracts_industries-technology__programming","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41140","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41140"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41140"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41140"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}