Changyou Alliance : (1) CONTINUING CONNECTED TRANSACTION IN RELATION TO THE GRANT OF REVOLVING LOAN FACILITY AND (2) NOTICE OF EXTRAORDINARY GENERAL MEETING

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Changyou Alliance Group Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

CHANGYOU ALLIANCE GROUP LIMITED

暢 由 聯 盟 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1039)

(1) CONTINUING CONNECTED TRANSACTION IN RELATION TO

THE GRANT OF REVOLVING LOAN FACILITY

AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

Capitalised terms used in this cover page shall have the same meanings as those defined in this circular.

A letter from the Board is set out on pages 6 to 15 of this circular and a letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 16 to 17 of this circular. A letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 18 to 34 of this circular.

A notice convening the EGM to be held at Rooms 1908-1916, 19/F, Sun Hung Kai Centre, 30 Harbour Road, Wan Chai, Hong Kong on Monday, 31 May 2021 at 10:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular. A proxy form for use by the Shareholders for the EGM is enclosed with this circular. Whether or not you are able to attend the EGM in person, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return the same to the Company's Hong Kong share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). The completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjourned meeting thereof (as the case may be) should you so wish, and in such event, the instrument appointing a proxy shall be deemed to be revoked.

PRECAUTIONARY MEASURES FOR THE EGM

Please refer to the section headed "Precautionary Measures for the EGM" of this circular for the precautionary measures being implemented by the Company in order to safeguard the health and safety of the Shareholders and all attendees at the EGM and to prevent the spread of the coronavirus ("COVID-19"), including:

• compulsory body temperature checks will be conducted at the entrance of the EGM venue. Any person with a body temperature of 37.4 degrees Celsius or above, or is exhibiting flu-like symptoms, may be denied entry into the EGM venue and may be required to leave the EGM venue but may be allowed to vote by submitting a voting slip to the scrutineer at the entrance of the EGM venue;
• every attendee will be required to wear a surgical face mask throughout the EGM and at all times within the EGM venue;
• appropriate social distancing and seating arrangements in line with the Regulation (as defined below) will be maintained; and
• no refreshment or drinks will be served at the EGM.

Any person who does not comply with the precautionary measures above or is subject to any Hong Kong Government prescribed quarantine may be denied entry to the EGM venue. The Company would like to further remind the Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights. Shareholders are encouraged to appoint the chairman of the EGM as their proxy to vote on the relevant resolution at the EGM, as an alternative to attending the EGM in person.

12 May 2021

CONTENTS
	Page
Precautionary Measures for the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . .	16
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . .	18
Appendix - General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

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PRECAUTIONARY MEASURES FOR THE EGM

To safeguard the health and safety of the Shareholders and all attendees at the EGM and to prevent the spread of COVID-19, the following precautionary measures will be implemented at the EGM, including:

1. compulsory body temperature checks will be conducted for every attendee at the entrance of the EGM venue. Any person with a body temperature of 37.4 degrees Celsius or above, or is exhibiting flu-like symptoms, may be denied entry into the EGM venue and may be required to leave the EGM venue but may be allowed to vote by submitting a voting slip to the scrutineer at the entrance of the EGM venue;
2. every attendee will be required to wear# a surgical face mask throughout the EGM and at all times within the EGM venue;
3. in view of the Prevention and Control of Disease (Prohibition on Group Gathering) Regulation (Chapter 599G of the Laws of Hong Kong) (the "Regulation"), the Shareholders attending in person at the venue of the EGM in excess of the 20 persons limit (or such other prevailing limit from time to time) under the Regulation will be accommodated in separate room(s) and/or partitioned area(s) in the same room at the venue of the EGM, with not more than 20 (or such other number of persons allowed under the Regulation) persons (including supporting staff for the EGM) in each such room and/or partitioned area; and
4. no refreshment or drinks will be served at the EGM.

Any person who does not comply with the precautionary measures above or is subject to any Hong Kong Government prescribed quarantine may be denied entry to the EGM venue.

The Company would like to remind the Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights. Shareholders are encouraged to appoint the chairman of the EGM as their proxy to vote on the relevant resolution at the EGM, as an alternative to attending the EGM in person. In order to be valid, a proxy form together with the power of attorney or other authority (if any) under which it is signed or a certified copy thereof shall be deposited at the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wan Chai, Hong Kong not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof (as the case may be).

Subject to the development of the COVID-19 pandemic and any directive(s) that may be further issued by the Hong Kong Government, the Company may implement further changes and precautionary measures and may issue further announcement(s) on such measures as and when appropriate.

• A reference to a person wearing a mask is a reference to the person wearing a mask over and covering the person's nose and mouth, with the mask touching the person's nose, chin and cheeks.

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DEFINITIONS

In this circular, unless the context requires otherwise, capitalised terms used shall have the following meanings:

"2019 Facility Agreement"	the facility agreement dated 3 September 2019 and
	entered into between the Company as the lender and
	PCL as borrower in relation to the 2019 Revolving
	Loan Facility, the details of which are set out in the
	announcement of the Company dated 3 September 2019
	and the circular of the Company dated 15 October 2019
"2019 Revolving Loan Facility"	an unsecured revolving loan facility of a total principal
	amount not exceeding HK$100 million as set out in the
	2019 Facility Agreement, the details of which are set
	out in the announcement dated 3 September 2019 and
	the circular dated 15 October 2019 of the Company
"2021 Facility Agreement"	the facility agreement dated 20 April 2021 and entered
	into between the Company (as lender) and PCL (as
	borrower) in relation to the 2021 Revolving Loan
	Facility
"2021 Revolving Loan Facility"	an unsecured revolving loan facility of a total principal
	amount not exceeding HK$100 million on the terms,
	and subject to the conditions, set out in the 2021
	Facility Agreement, the details of which are set out in
	the paragraph headed "2021 Facility Agreement" in the
	section headed "Letter from the Board" in this circular
"Announcement"	the announcement of the Company dated 20 April 2021
	in respect of the 2021 Facility Agreement (including
	the proposed Annual Caps) and the transactions
	contemplated thereunder
"Annual Caps"	the maximum annual amount in relation to the
	transactions contemplated under the 2021 Facility
	Agreement, as required under Rule 14A.53 of the
	Listing Rules
"associate(s)"	has the meaning ascribed to it under the Listing Rules
"Available Facility"	the total principal amount of the 2021 Revolving Loan
	Facility available for drawing from time to time
	pursuant to the 2021 Facility Agreement
"Board"	the board of Directors

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	DEFINITIONS
"Business Day"	a day (other than a Saturday, Sunday or public holiday)
	on which commercial banks are open for general
	business in Hong Kong
"Chance Talent"	Chance Talent Management Limited, a business
	company incorporated in the British Virgin Islands with
	limited liability and an indirect wholly-owned special
	purpose vehicle of CCB International (Holdings)
	Limited
"CIH"	Century Investment (Holding) Limited, a company
	incorporated in the British Virgin Islands with limited
	liability, and a substantial shareholder of the Company.
	It is wholly-owned by Ms. Pun Tang
"Company"	Changyou Alliance Group Limited, a company
	incorporated in the Cayman Islands with limited
	liability, the Shares of which are listed on the Main
	Board of the Stock Exchange
"connected subsidiary(ies)"	has the meaning ascribed thereto in the Listing Rules
"Director(s)"	director(s) of the Company
"Drawdown Date"	the date of the first drawdown of each Loan by PCL
"Eastern E-Commerce"	China Eastern Airlines E-Commerce Co., Ltd（東方航空
	電子商務有限公司）, a company established in the PRC
	and a wholly-owned subsidiary of China Eastern
	Airlines Corporation Limited
"Easylink"	Easylink Payment Network (Hong Kong) Company
	Limited, a company incorporated in Hong Kong with
	limited liability and an indirect wholly-owned
	subsidiary of China UnionPay Merchant Services
	Company Limited
"EGM"	an extraordinary general meeting of the Company to be
	convened and held on Monday, 31 May 2021 at 10:00
	a.m. to consider, and if thought fit, approve, among
	other things, the 2021 Facility Agreement, the proposed
	Annual Caps and the transactions contemplated
	thereunder
"Extra Step"	Extra Step Investments Limited, a company
	incorporated in the British Virgin Islands with limited
	liability, and a wholly-owned subsidiary of China
	Mobile (Hong Kong) Group Limited

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