SOHU Sohu com Ltd

Amendment to PAB Credit Agreements

As previously described in a Current Report on Form 8-K filed by the registrant on May 19, 2017, the registrant entered into credit agreements (the “ Original PAB Credit Agreements ”) with Ping An Bank Co., Ltd., a commercial bank with headquarters in Shenzhen, PRC (“ Ping An Bank ”), pursuant to which the registrant was entitled to borrow from Ping An Bank from time to time up to a combined aggregate of RMB2.5 billion (or approximately US$383 million) (the “ PAB Loan ”). The PAB Loan was secured by pledges of the registrant’s two buildings in Beijing, including the building that serves as the registrant’s corporate headquarters in Beijing. On September 1, 2017 the registrant and Ping An Bank entered into an amendment to the Original PAB Credit Agreements pursuant to which (i) the maximum amount that the registrant is entitled to borrow under the Original PAB Credit Agreements has been reduced from RMB2.5 billion to RMB600 million (or approximately US$92 million), and (ii) the building that serves as the registrant’s corporate headquarters has been released from the pledge. A copy of the amendment to the Original PAB Credit Agreements is filed herewith as Exhibit 10.1 and is incorporated herein by reference.

New Credit Arrangement with ICBC

On September 7, 2017, the registrant entered into a credit agreement (together with related agreements and documentation, the “ ICBC Credit Agreement ”) with the Industrial and Commercial Bank of China Limited (“ ICBC ”), a commercial bank with headquarters in Beijing, the People’s Republic of China, pursuant to which the registrant is entitled to borrow from ICBC up to an aggregate of RMB800 million (or approximately US$123 million) (the “ ICBC Loan ”).

The registrant may make drawdowns of the ICBC Loan from time to time, with the first drawdown to be made no later than December 31, 2017 and the last drawdown to be made no later than March 31, 2018. The outstanding principal of each drawdown will be payable in four equal installments, with the first installment payable 18 months after the drawdown and the other three installments payable semi-annually at the end of each of the three successive six-month periods after the first installment payment; provided however, that all of the outstanding principal amount of the ICBC Loan must be repaid in full 36 months after the initial drawdown. Interest will accrue on the principal amount of the ICBC Loan outstanding from time to time at an annual rate equal to the Loan Prime Rate (“LPR”) for loans with terms of up to one year as published by the National Interbank Funding Center for the 21st day of the last month of each calendar quarter, plus 1.2%, and will be payable on the first business day after the 20 ^th day of the last month of each calendar quarter. As the LPR is currently 4.3% per year for loans with terms of up to one year, the initial annual interest rate applicable to the initial drawdown is expected to be approximately 5.5%.

The registrant’s obligations under the ICBC Credit Agreement are secured by a pledge of the building in Beijing that serves as the registrant’s corporate headquarters.

In connection with the ICBC Credit Agreement, the registrant entered into an agreement (the “ Commitment Letter ”) with ICBC pursuant to which the registrant has agreed that in the event the registrant is unable to repay in full the outstanding principal and interest of the ICBC Loan, (i) if the registrant has sold ordinary shares of the registrant’s majority-owned subsidiary Changyou.com Limited (“ Changyou ”) beneficially owned by the registrant, the registrant will make the net proceeds of such sale available for payment of the amounts of the ICBC Loan that are then due and payable; and (ii) if the registrant has not sold ordinary shares of Changyou, the registrant will use its best efforts to cause Changyou, subject to applicable law and fiduciary principles, to pay a cash dividend (a “Changyou Dividend”) to Changyou’s shareholders, and will make the registrant’s share of any such Changyou Dividend available for repayment of the ICBC Loan. The registrant has also agreed in the Commitment Letter that, at all times when the ICBC Loan is outstanding, the registrant will maintain a “Net Cash Balance” of the registrant and its consolidated group of not less than US$200 million. “Net Cash Balance” is defined as (a)(i) cash and cash equivalents, plus (ii) restricted cash related to liabilities to third parties for borrowed money, plus (iii) investments in financial instruments, minus (b) the aggregate combined amounts of outstanding liabilities to third parties for borrowed money, including for such purpose amounts of liabilities to third parties that are guaranteed by the registrant or any of its subsidiaries or variable interest entities.

The ICBC Credit Agreement includes customary events of default, including the registrant’s failure to pay any installment of principal or interest when due; changes in business model, capital structure, and other events with respect to the registrant that may impede the registrant’s ability to repay any portion of the ICBC Loan; and the failure of applicable subsidiaries of the registrant to repay other indebtedness for borrowed money when due. Upon the occurrence of an event of default under the ICBC Credit Agreement, ICBC may refuse to make further advances under the ICBC Credit Agreement and demand payment in full of all outstanding principal of the ICBC Loan and all accrued and unpaid interest.

The registrant intends to use the proceeds of the ICBC Loan to finance the registrant’s operations, excluding the operations of the registrant’s subsidiaries Changyou and Sogou Inc.

The foregoing summary is not intended to be complete and is qualified in its entirety by reference to the ICBC Credit Agreement (including related documents), English translations of which are filed herewith as Exhibits 10.2, 10.3, 10.4, and 10.5 and are incorporated herein by reference.