Exhibit 10.3

 

Hosting Service Agreement

 

Party A : Beijing Sohu New Era Information Technology Co., Ltd.

Address: 15/F, Tower 2, Bright China Chang’an Building, 7 Jianguomen Nei Avenue,
Beijing

Legal Representative: Zhang Chaoyang

 

Party B: Beijing Communication Corporation of China Telecom

Address: No. 107 Xidan North Avenue, Xicheng District, Beijing

Legal Representative: Liu Bo

 

Whereas:

 

1. Party A desires to have Party B host its equipments, which shall be linked to
the public Internet via the band width leased from Party B; and

 

2. Party B agrees to provide to Party A server hosting and band width services.

 

Based on the principles of mutual benefits, trust in each other, paid services
and joint development of both parties, Party A and Party B have reached the
following agreement after friendly negotiation:

 

I. Content of Services

 

1.1 During the term of cooperation, Party B shall be responsible to provide the
following service, for detailed numbers, please refer to Article 4.1:

 

(A) to provide Party A exclusive band width connecting to Internet;

 

(B) to provide Party A optical fiber, which shall be connected from Vision
International center to Beijing Telecom Zhaowei IDC Vipll;

 

(C) to provide Party A 100M digital domestic electric circuits which shall be
used as special temporary maintenance line; and

 

(D) to provide Party A certain numbers of chassis.

 

1.2 Party B agrees to provide services to Party A according to this Agreement.
The detailed list of the equipments that are placed in the server booth shall be
referred to the IDC Server Hosting Working Sheet issued by Party A to Party B.

 

II. Server Hosting

 

2.1 Party A shall move its servers into Party B’s server booth (Beijing Telecom
Zhaowei IDC Server Booth). Party B shall check upon delivery according the items
on the Registration Form. Both parties shall perform the hand-over and
inspection according to the contents on the equipments list.

 

2.2 Server Hosting means that Party B shall host the server for Party A
according to this Agreement.

 

2.3 When the server hosting is connected, both parties shall sign a confirmation
letter (Confirmation Letter).

 

III. Period of Server Hosting

 

3.1 The period for server hosting shall start from October 8, 2004 and end on
March 31, 2006.

 

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3.2 Upon the expiration of the server hosting period, this Agreement shall be
deemed renewed for one more year, if Party A does not file a written application
with Party B within 30 days before the expiration of this Agreement, which shall
be deemed as Party A’s agreement on the server hosting.

 

3.3 If Party A wishes to terminate the server hosting upon the expiration of
this Agreement, Party B shall disconnect Party A’s servers to public Internet.
Before such disconnection, Party B shall inform Party A’s contact point with 5
days notice and keep the physical line connection.

 

3.4 Party A shall perform the hand-over process with Party A according to the
Equipment list within 10 days upon the expiration of this Agreement and
thereafter move the servers out of Party A’s server booth.

 

3.5 If Party A wishes to terminate this Agreement before its expiration, it
shall provide Party B written notice with 30 day’s notice. Upon receiving Party
B’s termination notice, Party A shall disconnect the servers to the Internet
according to the time informed by Party A.

 

3.6 During the server hosting period of this Agreement, if Party A wishes to
assign its rights and obligations to a third party, it shall be deemed as early
termination of the agreement and therefore 30 day’s prior written notice to
Party B is required. Party B will then enter into a new agreement with such
third party.

 

IV. Fees and Payment Method

 

4.1 The payment under this Agreement include lump sum payment and service fees,
among them: [*]

 

4.2 Payment Method and Term

 

4.2.1 The service fees shall be calculated as of the effective date of this
Agreement;

 

4.2.2 The payment shall be made according to the following methods:

 

Parry B shall send to Party A a bill for the service rendered in last month.
After receiving the bill, Party A shall confirm its reasonableness and settle
the bill by check no later than the 20th day of each month.

 

4.2.3 For the first month of the fees for server hosting, if Party A does not
have a full month services, Party B shall calculate the actual service fees
according to the actual days that Party A use such services: Service Fee =
(monthly rent/numbers of the days of the Month)* Actual Days.

 

4.2.4 For the last month of the fees for server hosting, if Party A terminate
the lease and it does not have a full month services, Party B shall calculate
the actual service fees according to the actual days that Party A use such
services: Service Fee = (monthly rent/numbers of the days of the Month)* Actual
Days.

 

V. Rights and Obligations of Both Parties

 

5.1 Party A’s rights and Obligations

 

5.1.1 Party B represent that it shall not use the backup line for business
operation during normal course of business. Only when there is breakdown with
the main line, which could not be properly connected, Party A will use the
backup lines. During normal business operation, Party A shall not use the band
width that are more than agree. If within each month, the volume of the band
width exceeds the agreed volume in most of the days (25% of that month), Party A
agree to negotiate with Party A separately regarding the exceeds service fees.

 

5.1.2 Party A shall provide proofs of qualification for provision of Internet
information Services and evidence that Party A is allowed to publish information
on Website (attachment I).

 

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5.1.3 Party A, as publisher of information on Internet, shall abide by
applicable laws and regulations related to Internet Information Service
Provision and shall not engage in any illegal activities. Party A shall make
contents published and provided on its website consistent with relevant laws and
regulation and social ethics.

 

5.1.4 Party A shall be entitled to manage its servers via remote access tools
such as FTP, Telnet, PCAnywhere, SSH and etc.

 

5.1.5 During the leasing period, Party A could come to Party B’s server booth by
using the Maintenance Certification to adjust and maintain its servers. But
Party A shall observe Party B’s regulations and provisions.

 

5.1.6 Party A shall make payment to Party B according to this Agreement. *

 

5.1.7 Party A shall use and administrate its servers according to the provisions
of the Article 1.1 of this Agreement;

 

5.1.8 If Party A wishes to increase the band width or the numbers of racks
rented, Party A shall inform Party B with 10 days prior written notice.

 

5.1.9 Party A shall be entitle to enter Party B’s server booth according to the
temporary Pass provided by Party B and to operate server hosting equipments
itself, provided that Party A shall observe the Server Booth Administration
Rules.

 

5.1.10 Party A shall fill in the Server Hosting Registration Form, Equipment
List and Confirmation Letter when starting its server hosting.

 

5.1.11 The chassis, band width and optical fiber that are provided to Party A by
Party B shall be only used for Party A’s server hosting services. Party A shall
not sub-lease them to any third party.

 

5.2 Party B’s rights and Obligations

 

5.2.1 To provide main gateway and backup gateway so as to connect to public
Internet;

 

5.2.2 To provide double band width so as to ensure smooth connection for higher
volume during emergency;

 

5.2.3 To ensure the server booth which where the servers are hosted satisfied
the national published requirements;

 

5.2.4 To adopt corresponding measures so as to ensure the safety of the servers;

 

5.2.5 To assist Party A’s administration of servers according to the
authorization scope by Party A’s written authorization.

 

VI. Service Standard

 

6.1 Party B shall provide services according to the standards issued by the
Ministry of Information Industry. If there is any new laws, regulations or
services standards issued during the period of this Agreement, Party B shall
adopt the new standards.

 

6.2 If the breakdown of server is caused by Party A’s mal-operation, Party A
shall bear the responsibilities itself;

 

6.3 Party B shall be liable for any damages if the breakdown is caused by Party
B and Party B shall check the reason and resolve such breakdown.

 

6.4 Party B shall compensate Party A’ any and all economic losses, if the
servers’ data are lost due to Party B’s reason;

 

6.5 If due to construction, internet connection adjustment which may affect the
normal usage of the servers, Party B shall inform Party B at least one day in
advance and shall be responsible for eliminating the breakdowns and resume line
connection. If Party A fails to inform Party B or actual affecting period
exceeds the period as informed by Party B, Party B shall be held liable for any
damages caused. For details, please refer to Attachment II.

 

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6.6 If Party A’s servers are suspended due to Party B’s reason, Party B shall
extend Party A’s server hosting period, the expansion shall be equal to 5 times
of the suspension, so as to compensate Party A.

 

VII. Liability for Breach of Contract

 

7.1 Should any party fails to perform its obligation under this Agreement, it
shall be deemed as breach of this Agreement. The party in breach shall be held
liable for losses caused to the other party.

 

7.2 If due to Party A’s reason, Party A fails to make payment on time, Party B
shall send a notice to Party A. If Party A fails to make payment to Party B
within 5 working days upon receiving such notice, Party A shall be liable to pay
the penalty charges, which equals to 0.3% fo the due amount.

 

7.3 If due to Party A’s reason, the delay in payment exceeds 30 days, Party B
shall reserve the right to temporarily suspend its service of Party A. Should
such delay exceeds 90 days, Party B shall have the right to terminate this
Agreement and to hold the servers.

 

7.4 Should the illegal operation of Party A lead to the following situation,
Party B shall have the right to temporarily suspend part or all servers provide
to Party A and shall be entitled to require Part A to delete or amend those
contents that are deemed inappropriate by Party B. After Party A delete or
revise the content and take any effective measures, Party B shall then resume
services. Such time of suspension shall be included in the server time.

 

7.4.1 The servers contain any program or software that attack other or prevent
other from working normally;

 

7.4.2 The servers are occupies or exploited to attack other or prevent other
from working normally;

 

7.4.3 Party A is engaged in or distribute the junk email in any matter;

 

7.4.4 The servers contain any contents that may infringe others’ legal interests
or cause inappropriate affect;

 

7.5 Party B shall be entitled to terminate this Agreement and compensation of
any losses, if it is a subject of complaint or punished due to Party A’s above
mentioned activities in Article 7.4;

 

7.6 Party B shall be entitled to get compensation from Party A if any equipment
was damages or any third parties’ equipment in Party B’s server booth could not
be operated normally due to Party A’s illegal editing, operating or using
program or software;

 

7.7 One party shall compensate the other party for the actual losses due to the
breach of this Agreement;

 

7.8 Party B shall compensate Party A if Party A’s servers could not operate
normally due to Party B’s reason. Detailed provision shall refer to Attachment
II.

 

VIII. Force Majeure

 

8.1 The force Majeure shall be refer to earthquake, floods, hurricanes,
explosions, fire, war or other situation that can not be predicted and the
occurrence and result of such situation could not be prevented or avoided.

 

8.2 In the event of such force majeure, either one or both parties can not
perform its obligations under this Agreement, neither party shall be held for
the other party. However, the party affected shall inform the other party with
15 days upon the occurrence of such force majeure event and shall provide proof
issued by relevant authority.

 

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8.3 Within a reasonable time after such force majeure event eliminated, Party B
shall have the right to decided whether to continue to perform this Agreement
and shall provide written notice to Party A.

 

IX. Dispute Resolution

 

9.1 Any disputes arising from the execution of this Agreement shall be settled
through friendly consultations between the parties. In case no settlement can be
reached through consultations, either party may submit the disputes to Beijing
Arbitration Commission for arbitration in accordance with its rules of
procedure. The arbitration award shall be final and binding on both parties. The
arbitration costs shall be born by the losing party.

 

9.2 When there is any dispute subject to arbitration, except to the disputed
matters, both parties shall continue to perform this agreement.

 

X. Amendment and Termination

 

10.1 Any amendment or termination shall be made in written.

 

XI. Effectiveness of the Agreement and Miscellaneous

 

11.1 Should any terms of this Agreement becomes invalid or unenforceable, it
shall not affect the entire legal effect of this Agreement.

 

11.2 The titles of this Agreement are for reference only. The rights and
obligations of both parties shall be determined by the contents of clauses.

 

11.3 Without written approval, neither party shall use or copy the other party’s
business name, trademark, logo, service mark, symbol and etc. Neither party
shall claim that its owns the other party’s business name, trademark, logo,
service mark, symbol and etc.

 

11.4 None of this Agreement shall be interpreted to establish any joint venture
or partnership between both parties.

 

11.5 This Agreement shall supersede all prior written or oral memorandum,
minutes, agreements or contracts in this regards;

 

11.6 This Agreement shall have six copies with each party holding two copies and
shall be equally authentic.

 

11.7 For any notice shall be delivered to the addresses specified in this
Agreement, via fax, courier or other similar transmission methods that are
confirmed by both parties. Any facsimile or other similar communication method
shall be deemed received by either party on the date of informing. In case of
courier, the date of informing shall be the date on the receipt that the post
office stamped.

 

11.8 Address of notices

 

Party A: Beijing Sohu New Era Information Technolgy Co., Ltd    Party B: Beijing
Communication Cooperation Of China Telecom

Address: Level 12,

Vision International Center, Haidian

District, Beijing

  

No. 107, Xidan North

Avenue, Xichang District,

Beijing

Contact: Qiu Wei    Contact: Ma Licheng, Song Fei Telephone: 62728816   
Telephone: 58503468, 58503717 Fax:    Fax: 58503248

E-mail:

williamqui@sohu-inc.com

  

Email:

malch@bjtelecomnet

Postcode: 100084    Postcode: 100032

 

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11.9 This Agreement shall become effective upon signing and chopping by both
parties;

 

11.10 This Agreement has the following attachments:

 

11.10.1 Qualification Proofs of both parties;

 

11.10.2 Service Quality Agreement by Date Center

 

11.10.3 User Agreement

 

Party A: (Seal)

 

Legal Representative: (Signature)

 

Party B: (Seal)

 

Legal Representative: (Signature)

 

The symbol ‘*’ on this page indicates places where information has been omitted
pursuant to a request for confidential treatment and filed separately with the
Commission.

 

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