Common use of Loss Sharing Clause in Contracts

Loss Sharing. Under current PRC Laws, neither our Company nor WFOE is legally required to share losses of, or provide financial support to, Onshore Holdco. Further, Onshore Holdco is a limited liability company that is solely liable for its own debts and losses in relation to its assets and liabilities. Notwithstanding this, WFOE intends to provide continuous support and assistance to Onshore Holdco and its subsidiaries, as necessary, and their financial performance will be consolidated into our Company’s accounts. As such, our operational and financial performance would be materially and adversely affected if Onshore Holdco suffers loss. To minimize the risk of loss, we have undertaken a number of measures under the Contractual Arrangements. In particular, see “Option agreement” and “Share pledge agreements” in the sub-section “—Arrangements that provide us with effective control over our Consolidated Affiliated Entities” above for more information.