THIS ASSETS AND BUSINESS RESTRUCTURING AGREEMENT (this "Agreement") is made on this [] day of June 2000 in Beijing, People's Republic of China ("PRC")

by and between

(1) Sohu ITC Information Technology (Beijing) Co., Ltd., a wholly foreign-owned company duly established and registered under the laws of the PRC with its registered address at Suite 1519, Tower 2 Bright China Chang An Building, 7 Jianguomen Nei Avenue, Beijing 100005, PRC ("Party A")

and

(2) Beijing Sohu Online Network Information Services Co., Ltd., a limited liability company duly established and registered under the laws of the PRC with its registered address at No 7, Beibingmasi Hutong, Dongcheng District, Beijing 100027, PRC ("Party B") (individually a "Party" and collectively the "Parties").

WHEREAS

A. Party A is engaged in the development of technology and provision of services relating to Internet portals, e-commerce and on-line advertising, as well as the development and application of Internet software and on-line databases. Party A has accumulated advanced operational and managerial expertise and has acquired related technology and equipment, especially through the development of the Chinese language Internet portal www. Sohu. com (the "Website").

B. Party B is engaged in the development of computer hardware, technical support and services, and has obtained approval to develop as an Internet content provider to engage in the provision of Internet information services, including the collection, classification, editing and supervision of Website content.

C. Based on the requirements of the relevant governmental departments, the Parties, through mutual consultation, agreed to restructure their respective assets and businesses in view of to the establishment of an exclusive cooperative relationship between them and of their respective areas of expertise, as well as to the development stage of the Website.

THE PARTIES THEREFORE AGREE AS FOLLOWS:

1. Transfer of Equipment

1.1 Party A shall transfer to Party B the equipment listed in Appendix I hereto (the "Equipment"), valued according to its net book value on the date first indicated above (as determined by an accredited accounting firm) at RMB seven hundred and forty thousand (740,000)

1.2 Party B shall use the Equipment for the sole purpose of providing information services in relation to the Website.

1.3 Party B shall pay to Party A in six (6) equal monthly instalments in an aggregate of RMB seven hundred forty thousand (740,000) in consideration of the transfer of the Equipment. Such total amount shall be paid in full in this manner within six (6) months of the date first indicated above, at which time the ownership rights to the equipment shall be transferred to Party B. The specific payment method shall be determined jointly by the Parties in a separate agreement.

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