Exhibit 10.3

Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

English Translation

Cooperation Agreement

 

 

Between

Wuxi Rongke Zhidi Real Estate Development Co., Ltd.

And

Wuxi Sohu New Momentum Investment Co., Ltd.

September 30, 2010

 

 

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Contents

 

Term

     Page   

1. Definitions and interpretations

     1   

2. Amount and term of borrowing

     2   

3. Interest of borrowing

     2   

4. Right to enjoy dividends

     3   

5. Share transformation

     4   

6. Loan mortgage

     4   

7. Handling and issuance of loan

     5   

8. Purpose of loan

     5   

9. Repayment of Loan

     5   

10. Rights and obligations

     6   

11. Liabilities for breach of contract

     7   

12. Confidentiality

     8   

13. Applicable Law and Dispute Resolution

     9   

14. Notice

     10   

15. Other terms

     12   

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

This cooperation agreement (herein refer to “the Agreement”) is signed between
parties as below on September 30, 2010:

 

A Wuxi Sohu New Momentum Investment Co., Ltd., a foreign-funded company
incorporated and existing according to the laws of China with registered
address: No. 8, Anguo Road, Anzhen Street, Xishan District, Wuxi (“Sohu New
Momentum”);

 

B Wuxi Rongke Zhidi Real Estate Development Co., Ltd., a real estate development
company incorporated and existing according to the laws of China with registered
address: No. 88, Zhouxin Middle Road, Taihu Street, Binhu District, Wuxi (“Wuxi
Rongke”);

Whereas

 

1 Wuxi Rongke intends to develop * real estate project and * residence project
(“Real Estate Projects”) in Wuxi ;

 

2 Wuxi Rongke hopes to introduce funds to its development of the Real Estate
Projects and Sohu New Momentum has agreed to provide funds.

Therefore, both parties enter an Agreement as follows:

 

1. Definitions and interpretations

 

  1.1 Unless specified otherwise, the following terms are defined as below:

“Loan” refers to a loan of RMB 500 million in total provided by Sohu New
Momentum to Wuxi Rongke according to provisions of this Agreement. The Loan can
be provided by Sohu New Momentum through Wuxi Branch of Shanghai Pudong
Development Bank Co., Ltd. (“Pudong Development Bank”) in the form of a
consignment loan.

“Loan Pledge Agreement” refers to “Equity Pledge Agreement” signed between
Beijing Rongke Zhidi Real Estate Development Co., Ltd. the shareholder of Wuxi
Rongke, and Sohu New Momentum.

“China” refers to People’s Republic of China.

 

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

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  1.2 The laws of China

“The laws of China” as referred to in this Agreement includes any public
promulgation of laws, regulations, rules, and regulatory documents officially
issued by any authority of China (including central government, provinces,
municipalities and others) and should be interpreted with terms corrected or
modified from time to time. For purposes of this Agreement, “the laws of China”
should exclude the laws of Hong Kong Special Administrative Zone, Macao Special
Administrative Zone and Taiwan.

 

  1.3 Titles

The titles of the terms in this Agreement are for reference only and should not
affect the interpretation of this Agreement.

 

2. Amount and term of borrowing

 

  2.1 The Loan provided by Sohu New Momentum to Wuxi Rongke is 500 million Yuan
(RMB 500,000,000.00) in total. Sohu New Momentum may provide the Loan through
Pudong Development Bank in the form of a consignment loan. Sohu New Momentum and
Wuxi Rongke signed a consignment loan agreement with Pudong Development Bank.
Both parties confirm that the agreed upon interest rate and term of the
consignment loan agreement is consistent with this Agreement;

 

  2.2 The borrowing term under this Agreement is one year from the date on which
Sohu New Momentum issues the Loan to Wuxi Rongke to the one year anniversary
(“Borrowing Term”) unless as provided below.

 

  2.3 Notwithstanding the provisions above, within 30 days before the Borrowing
Term expires, if Sohu New Momentum provides unilateral written notice, this
Agreement shall be extended up to 6 months from the day after the expiration of
the Borrowing Term. In the same way, within 30 days before the expiration of
each extended Borrowing Term, if Sohu New Momentum provides unilateral written
notice , this Agreement should be extended according to principles foresaid
until the earlier of the following dates: (1) Sohu New Momentum to give written
notice to Wuxi Rongke not to extend; or (2) Wuxi Rongke breaches the terms of
this Agreement or requests termination of this Agreement before the schedule for
any other reason that is reasonable in the opinion of Sohu New Momentum. The
extension of the agreement shall become effective from the date on which Sohu
New Momentum sends an extension notice to Wuxi Rongke.

 

3. Interest of borrowing

 

  3.1 Unless otherwise agreed upon, the annual interest rate of the Loan
provided by Sohu New Momentum to Wuxi Rongke is 3.8% under this Agreement.

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  3.2 Wuxi Rongke shall pay interest (the payment shall be paid through Pudong
Development Bank for the consignment loan) to Sohu New Momentum on or before the
20th day of the end of each calender quarter. If this Agrement is terminated
before the schedule, Wuxi Rongke shall pay interest pro rata on the day when the
principal of the Loan is repaid. All amounts under this Agrement shall be used
to pay interest due first and then used to pay the outstanding Loan principal.
If Wuxi Rongke fails to pay the interest due, interest will be accrued on such
overdue interest from the due date of such interest and will be calculated at
the same interest rate of the principal. Wuxi Rongke should remit all interests
to a domestic RMB account designated by Sohu New Momentum and should not deduct
bank commission charges, transfer fees, taxes or similar fees, except the fees
allowed to be deducted under this Agreement.

 

4. Right to enjoy dividends

 

  4.1 Under this Agreement, if the Borrowing Term is extended to March 31, 2014
through a written notice sent by Sohu New Momentum to Wuxi Rongke, Sohu New
Momentum will enjoy 20% of after-tax profits of each of * (“ * ” which is an
affiliate of Wuxi Rongke and has obtained the ownership of * and is developing
the * real estate project) and * (“ * ” which is a subsidiary of Wuxi Rongke,
which owns and is developing the * real estate project) as dividends. The key
points of * and * real estate projects developed by * and * that have been
confirmed by both parties will be found in Appendix 1 of this Agreement.

 

  4.2 If Sohu New Momentum enjoys right over dividends according to this term,
it may choose the higher one between (1) interest that should be acquired at
current year and (2) dividends of * and * that should be acquired according to
this term as incomes receivable of Sohu New Momentum from lending funds to Wuxi
Rongke. If Sohu New Momentum chooses dividends, the interest paid by Wuxi Rongke
will become an integral part of the dividend and be deducted from the dividend.

 

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

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  4.3 If Sohu New Momentum choose dividends, Wuxi Rongke shall begin to
calculate the dividends payable to Sohu New Momentum in terms of the following
formula: “Dividends = (sale income at the current period X anticiapted net
profit of overall project – income tax belonging to current period) X 20%” and
shall pay Sohu New Momentum on a quarterly basis. Sohu New Momentum has the
right to require Wuxi Rongke, * and * to provide sale breakdowns and relevant
financial data and to verify such information. Wuxi Rongke shall be responsible
for coordinating and ensuring that * and * satisfy requirements of Sohu New
Momentum and provide all relevant materials. Wuxi Rongke shall be responsible
for coordinating and ensuring that * and * commit that no dividend is
distributed before March 31, 2014.

 

5. Share transformation

If Sohu New Momentum choose dividends, in order to realize the dividend, Wuxi
Rongke agrees after March 31, 2014 to urge shareholders of each of * and * to
grant Sohu New Momentum the right for Sohu New Momentum or any third party
appointed by Sohu New Momentum to purchase 20% of equity shares of * and /or *
(the “Option”). Among them, the purchase price of the 20% of equity shares of *
is RMB 350 million and the purchase price of the 20% of equity shares of * is
RMB 150 million. Sohu New Momentum may exercise the Option to purchase 20% of
equity shares of either of * and * or both. Wuxi Rongke agrees to require * and
* and their shareholders to sign a “Letter of Agreement” specified in Appendix 2
when signing this Agreement.

 

6. Loan mortgage

 

  6.1 To guarantee the repayment of the Loan, Wuxi Rongke shall provide Sohu New
Momentum with the following loan mortgages:

 

  (a). Wuxi Rongke will cause its shareholder, Rongke Zhidi Real Estate Co.,
Ltd. to pledge 100% of the equity shares of Wuxi Rongke held by it to Sohu New
Momentum. In connection therewith, Wuxi Rongke will cause its shareholder to
sign an “Equity Pledge Agreement” with Sohu New Momentum as provided in Appendix
3 of this Agreement.

 

  (b). The effectiveness of above loan mortgage and relevant Equity Pledge
Agreement should be independent form this Agreement. In any event, the
invalidity of this Agreement does not affect the validity of any Equity Pledge
Agreement.

 

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

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

7. Handling and Issuance of Loan

Within 20 business days after this Agreement becomes effective, Sohu New
Momentum, Wuxi Rongke and Pudong Development bank shall work together to
complete all procedures of the consignment loan.

Within 30 business days after this Agreement becomes effective, Sohu New
Momentum shall issue the Loan to the bank account designated by Wuxi Rongke.

 

8. Purpose of Loan

The Loan under this Agreement should be used for development, sale and operation
of the Real Estate Projects of Wuxi Rongke. Without the prior written approval
of Sohu New Momentum, Wuxi Rongke cannot change the purpose of the borrowing
unilaterally.

 

9. Repayment of Loan

 

  9.1 Within 7 business days from the next business day of the expiration date
of the Borrowing Term or termination of this Agreement before schedule, Wuxi
Rongke shall pay off all unpaid principals and interests of the Loan to a bank
account designated by Sohu New Momentum in full by means of one payment.

 

  9.2 If Wuxi Rongke requests to repay the Loan to Sohu New Momentum before
schedule, it should submit a written application to Sohu New Momentum 30 days in
advance and then repay the Loan before the schedule after written agreement of
Sohu New Momentum.

 

  9.3 In the event of any of the following circumstances, Sohu New Momentum has
the right to declare immediate expiration of the Loan, send a written notice to
Wuxi Rongke to require immediate withdrawal of the Loan issued, take
corresponding measures by law simultaneously and require Wuxi Rongke to bear the
liabilities for breach of contract:

 

  (a). Wuxi Rongke refuses to provide Sohu New Momentum with financial data or
provides Sohu New Momentum with financial data that is false or withholds
important financial data, or refuses to accept the supervision of Sohu New
Momentum on the conditions of its Loan use and relevant activities of
production, operation and finance;

 

  (b). Wuxi Rongke clearly expresses or expresses by its conduct that it will
not perform any obligations of this Agreement or fails to perform any obligation
under this Agreement;

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  (c). According to the reasonable judgment of Sohu New Momentum, any event that
may adversely influence Wuxi Rongke’s performance of the obligation under this
Agreement, including without limitation Wuxi Rongke entering or possibly
entering into, bankruptcy or liquidation procedure, insolvency, closure, major
loss or damage, etc.

 

  (d). Wuxi Rongke seriously violates its obligations under other agreement(s),
including without limitation bank borrowing contract, engineering construction
contract, and other contracts, leading to serious legal liability, deteriorate
financial conditions, or threaten its performance of the obligations under this
Agreement;

 

  (e). Without the prior written consent of Sohu New Momentum, Wuxi Rongke
directly or indirectly transfers or disposes all or any part of its Real Estate
Projects or other significant assets; or Rongke Zhidi Real Estate Co., Ltd.
directly or indirectly transfers the shares of Wuxi Rongke held by it.

 

10. Rights and obligations

 

  10.1. The rights and obligations of Wuxi Rongke are as follows:

 

  (a). Wuxi Rongke ensures that the purpose of the Loan under this Agreement
conforms to laws, rules, administrative regulations, regulations of departments,
industrial codes and “Articles of Association” of the company and it has
obtained all necessary related permits and authorizations.

 

  (b). Wuxi Rongke will accept the investigation, understanding and supervision
of Sohu New Momentum on the conditions of use of the Loan under this Agreement.

 

  (c). Wuxi Rongke will actively cooperate with Sohu New Momentum in the
investigation, understanding and supervision of the development, sale, operation
and financial status of its Real Estate Projects; Wuxi Rongke will provide
copies of financial statements of the three companies including Wuxi Rongke, *
and * such as the Balance Sheet, Income Statement and Cash Flow Statement and
corresponding audit report (if any) according to requirements of Sohu New
Momentum.

 

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

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  (d). Wuxi Rongke commits that, it will immediately notify Sohu New Momentum in
writing if any event or circumstance places its normal operation or Real Estate
Projects in danger or cause a significant threat to its performance of repayment
obligation under this Agreement.

 

  (e). Wuxi Rongke should not transfer any of its obligations and debts under
this Agreement to any third party.

 

  (f). Wuxi Rongke is responsible for handling and performing procedures related
to the borrowing, principal repayment and loan mortgage under this Agreement,
including, but not limited to procedures of review, approval, registration,
approval or filing of mortgage. Sohu New Momentum shall provide relevant
coordination and assistance.

 

  10.2. The rights and obligations of Sohu New Momentum are as follows:

 

  (a). Sohu New Momentum ensures that it will issue the Loan to Wuxi Rongke
according to provisions of this Agreement.

 

  (b). If Sohu New Momentum needs to transfer its creditor’s rights under this
Agreement to any third party, it does not need to obtain Wuxi Rongke’s consent,
but it shall notify Rongke after the creditor’s right transfer agreement is
signed.

 

  (c). Sohu New Momentum has the right to request the review of financial
statements of Wuxi Rongke such as the Balance Sheet, Income Statement and Cash
Flow Statement and corresponding audit report.

 

11. Liabilities for breach of contract

 

  11.1 If Wuxi Rongke breaches Section 9.3 of this Agreement, according to this
Agreement, Wuxi Rongke shall repay all loans and pay loan interest and a
penalty, i.e., 20% of dividends of profits after tax of the then current year of
* and * .

 

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

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  11.2 Right of offset: whereas Beijing Sohu New Media Information Technology
Co., Ltd. (Sohu New Media) and Beijing Sohu New Momentum Information Technology
Co., Ltd. (Beijing Sohu New Momentum), the related companies of Sohu New
Momentum signed a “Beijing Commercial Housing Pre-sale Contract” with Beijing
Rongke Zhidi Real Estate Development Co., Ltd, a related company of Wuxi Rongke,
about purchasing Rongke Office Building D, and Beijing AmazGame Age Internet
Technology Co., Ltd. (“AmazGame Age”), a related company of Sohu New Momentum
have signed a “Cooperation Agreement” with Beijing Rongke Jingyuan Real Estate
Development Co., Ltd., a related company of Wuxi Rongke to purchase an office
building, according to agreement foresaid, Beijing Sohu New Media Information
Technology Co., Ltd., Beijing Sohu New Momentum Information Technology Co., Ltd.
and Beijing AmazGame Age Internet Technology Co., Ltd. will pay for the building
purchase to Beijing Rongke Zhidi Real Estate Development Co., Ltd. and Beijing
Rongke Jingyuan Real Estate Development Co., Ltd. in phases. Therefore, Sohu New
Momentum and Wuxi Rongke herein agree that, if Wuxi Rongke is required to pay
any amount (including, but not limited to repayment of borrowing and payment of
penalty) to Sohu New Momentum for any violation by Wuxi Rongke of any term of
this Agreement, Sohu New Momentum has the right to deduct the corresponding
amount from the payment for the building purchase that should be paid by Sohu
New Media, Beijing Sohu New Momentum and AmazGame Age to Beijing Rongke Zhidi
Real Estate Development Co., Ltd. and Beijing Rongke Jingyuan Real Estate
Development Co., Ltd. to set off the amount payable by Wuxi Rongke to Sohu New
Momentum. Both parties of this Agreement will urge Beijing Sohu New Media
Information Technology Co., Ltd., and Beijing Sohu New Momentum Information
Technology Co., Ltd., Beijing AmazGame Age Internet Technology Co., Ltd.,
Beijing Rongke Zhidi Real Estate Development Co., Ltd. and Beijing Rongke
Jingyuan Real Estate Development Co., Ltd. to agree to this term and sign the
“Letter of Agreement” provided in Appendix 4.

 

  11.3 During the effective period of this Agreement, any behavior of any party
in violation of any term of this Agreement will constitute a breach of the
Agreement. The breaching party shall compensate for the loss of the non-breach
party caused by such breach.

 

12. Confidentiality

 

  12.1 Both parties agree on that all contents of this Agreement, any
confidential information communicated or provided by another party and the fact
that both parties have signed this Agreement (confidential information in
general) shall be kept secret and not be disclosed or leaked to any third party
in any form or name except in the following circumstances:

 

  (a) Both parties may provide the confidential information to their respective
parent companies/institutions;

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  (b) Both parties may provide the confidential information to their own legal
consultants, financial consultants or professional or voluntary legal
consultants (consultants). However, both parties shall ensure that their own
consultants keep the confidential information secret;

 

  (c) Both parties may provide the confidential information to the government
authorities whose approvals are required for the effectiveness of the
transaction;

 

  (d) Both parties may disclose confidential information according to the
provisions of applicable laws or relevant stock exchanges or requirements of
judiciary authorities;

 

  (e) If confidential information is disclosed or leaked by any third party for
any reason, both parties may in good faith clarify the situation according to
the disclosure or leakage of confidential information;

 

  (f) Both parties agree in writing to disclose any confidential information to
the media or any other third party.

 

  12.2 This term will survive the termination of this Agreement.

 

13. Applicable law and dispute resolution

 

  13.1 The agreement is governed and interpreted with laws of China.

 

  13.2 Both parties should make all reasonable efforts to amicably settle any
dispute arising out of or related to this Agreement, including any problems
(disputes) related to its existence, effectiveness, performance or termination.
If one party notifies the other party that a dispute has occurred and both
parties fail to settle the dispute within 30 business days from the date on
which the notice arrives, the dispute shall be submitted to the China
International Economic and Trade Arbitration Commission (Arbitration Commission)
and arbitrated according to the arbitration rules applicable when the applying
for arbitration in Beijing. The rules will be deemed as an integral part of this
Agreement during its period of its effectiveness. The arbitration court is
composed of three arbitrators. Among them two are selected by applicant and
respondent respectively or appointed by director of Arbitration Commission under
consignment within 15 days from the date on which the arbitration notices are
received by the parties. If applicant and respondent fail to select or entrust
the director of Arbitration Commission with appointing the arbitrators, the
director of Arbitration Commission will appoint the arbitrators. The third
arbitration, the chief arbitrator, should be jointly selected by both parties or
appointed by the director of Arbitration Commission under joint consignment of
both parties. The arbitration language is Chinese.

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

  13.3 Decision of arbitration should be final and binding upon both parties
(whether or not they are parties to the arbitration proceedings), and can be
enforced by any court or judiciary authority with jurisdiction over the
arbitration decision and the parties and their properties.

 

  13.4 During arbitration, this Agreement shall be performed continually except
the part in dispute and arbitration.

 

14. Notice

 

  14.1 Any notice or communication under this Agreement shall be prepared in
writing and written in Chinese, signed by the party to deliver or communicate,
and sent to the address of the other party specified in Section 14 or as updated
from time to time by fax, registration letter, express mail or email. In the
absence of evidence of receipt at an earlier time, the notice sent by fax,
registered letter, express or email should be deemed to be served as follows:

 

  (a). 12 hours after the notice is sent by fax;

 

  (b). 7 business days after the notice is posted by registered letter for non
international letter and 10 business days for international letter;

 

  (c). 5 business days after the notice is sent by express for non international
letter and 10 business for international letter;

 

  (d). 12 hours after the notice is sent by email.

 

  14.2 For the purpose of Term 11, the addresses of both parties are as follows:

Wuxi Sohu New Momentum Investment Co., Ltd.:

address: F 15, Sohu Network Building, Zhongguancun East Road No.1, Haidian
District, Beijing

Recipient: Zhou Jing         E-mail: jasminezhou@sohu-inc.com

Mobile phone: 13910923092         Fax: 010-62726588

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

Wuxi Rongke Zhidi Real Estate Development Co., Ltd.:

address: Old Building of Hubin Hotel, Huanhu Road No. 1, Hubin District, Wuxi

Recipient: Fu Liping         E-mail: fulp@raycomchina.com

Mobile phone: 15061580017         Fax: 0510-85132805

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

15. Other terms

 

  15.1 This agreement shall be binding on inheritor(s) and assignee(s) of both
parties. Without the written consent of the other party, no party should
transfer any of its rights and obligations under this Agreement to any third
party.

 

  15.2 Any omission or delay of any party for any right, power or privilege
under this Agreement shall not be deemed as wavier of this right, power or
privilege. Any wavier or partial wavier of any right, power or privilege shall
not influence any future exercise of the right, power and privilege.

 

  15.3 Invalidation or unenforceability of any term or any part of a term in
this Agreement shall not influence the validity or enforceability of the other
terms or the uninfluenced parts of the terms, or the validity or enforceability
of this Agreement. Especially if any or all terms of this Agreement are invalid
according to decision of the arbitration court or a court with jurisdiction for
any reason, the effectiveness of the other terms of this Agreement or loan
mortgage agreement signed by related parties will not be influenced or impaired.

 

  15.4 This Agreement is effective from the date on which the respective legal
representatives or authorized representatives of both parties sign it to the
date when all rights and obligations under this Agreement have been performed.
No modification is allowed without the written consent of both parties.

 

  15.5 If during the performance of this Agreement, this Agreement needs to be
modified and both parties agree to modify the Agreement, both parties will sign
a separated supplementary agreement.

 

  15.6 This Agreement is written in Chinese in four copies. Each party holds two
copies with the same legal effect.

 

  15.7 If there is any conflict between any term of this Agreement and any
agreement (such as the consignment loan contract) signed between both parties of
this Agreement about a loan matter, this Agreement shall prevail.

(No text below)

 

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Confidential Treatment Requested. Confidential portions of this document have
been redacted and have been separately filed with the SEC.

 

This Agreement is signed by the legal representatives or the duly authorized
representatives of both parties on the date specified on the first page.

Wuxi Sohu New Momentum Investment Co., Ltd. (seal)

 

 

Authorized representative: Yu Chuyuan Position: Chairman

Wuxi Rongke Zhidi Real Estate Development Co., Ltd. (seal)

Authorized representative:     Sun Jie

Position: Chairman

 

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