F-1

As filed with the Securities and Exchange Commission on October 7, 2004.

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

eLong, Inc.

(Exact Name of Registrant as Specified in its Charter)

Cayman Islands (State or Other Jurisdiction of Incorporation or Organization)	7389 (Primary Standard Industrial Classification Code Number)	Not Applicable (IRS Employer Identification Number)
	Block B, Xing Ke Plaza 10 Jiuxianqiao Zhonglu Chaoyang District, Beijing 100016 People’s Republic of China Attn: Justin Tang, Chief Executive Officer Tel: +86 (10) 5860-2288

(Address, including zip code, and telephone number, including area code of Registrant’s principal executive offices)

CT Corporation System,

111 Eighth Avenue,

New York, New York 10011

Tel: (212) 894-8440

(Name, address, including zip code, and telephone number, including area code of agent for service)

Copies to:

Jon L Christianson Gregory G. Miao Skadden, Arps, Slate, Meagher & Flom LLP East Wing Office, Level 4 China World Trade Center 1 Jianguomenwai Dajie Chaoyang District Beijing 100004, PRC Tel: +86 (10) 6505-5511 Fax: +86 (10) 6505-5522 Lee Edwards Leiming Chen Shearman & Sterling LLP Suite 2318 China World Tower Two 1 Jianguomenwai Dajie Chaoyang District Beijing 100004, PRC Tel: +86 (10) 6505-3399 Fax: +86 (10) 6505-1818

Approximate date of commencement of proposed sale to the public:    As soon as practicable after the Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act of 1933, please check the following box. ¨

CALCULATION OF REGISTRATION FEE

Title of each class of Securities to be registered	Amount to be registered(1)(2)	Proposed maximum offering price per unit		Proposed maximum aggregate offering price(1)(2)		Amount of registration fee
Ordinary shares, par value US$0.01 per share(3)	10,085,860	$	6.75	US$	68,079,555	US$	8,742.30

(1) Includes (a) shares that may be purchased by the underwriters pursuant to an over-allotment option and (b) all shares initially offered and sold outside the United States that may be resold from time to time in the United States. The shares are not being registered for the purpose of sales outside the United States.

(2) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(a) and Rule 457(c) under the Securities Act of 1933, as amended.

(3) American Depositary Shares issuable on deposit of the shares registered hereby will be registered under a separate registration statement on Form F-6. Each American Depositary Share represents two ordinary shares.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject To Completion, Dated October 7, 2004

eLong, Inc.

4,385,156 American Depositary Shares

Representing 8,770,312 Ordinary Shares

This is the initial public offering of eLong, Inc. We are offering 3,623,235 American Depositary Shares, or ADSs, and the selling shareholders are offering 761,921 ADSs. Each ADS represents two ordinary shares. We anticipate that the initial public offering price will be between $11.50 and $13.50 per ADS. We have applied to have the ADSs quoted on the Nasdaq National Market under the symbol “LONG.”

Investing in our ADSs involves risks. See “ Risk Factors” beginning on page 14.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

	Per ADS	Total
Public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds, before expenses, to eLong, Inc.	$	$
Proceeds, before expenses, to the selling shareholders	$	$

The selling shareholders have granted the underwriters the right to purchase up to an aggregate of 657,774 additional ADSs to cover over-allotments.

Deutsche Bank Securities

WR Hambrecht + Co

The date of this prospectus is                     , 2004.

CONVENTIONS THAT APPLY TO THIS PROSPECTUS

Unless otherwise indicated, references in this prospectus to:

Ÿ “ADRs” are to the American depositary receipts that evidence our ADSs;

Ÿ “ADSs” are to our American depositary shares, each of which represents                      ordinary shares;

Ÿ “CAGR” are to compound annual growth rate;

Ÿ “China” or the “PRC” are to the People’s Republic of China, excluding for the purpose of this prospectus Hong Kong, Macau and Taiwan;

Ÿ “Nasdaq” are to the Nasdaq National Stock Market, Inc.;

Ÿ “RMB” are to Renminbi, the legal currency of China;

Ÿ “shares” or “ordinary shares” are to our ordinary shares, with par value US$0.01 per share;

Ÿ “U.S. GAAP” are to generally accepted accounting principles in the United States of America;

Ÿ “US$” are to U.S. dollars, the legal currency of the United States; and

Ÿ “we”, “us”, “our company”, “our” and “eLong” are to eLong, Inc., its predecessor entities and subsidiaries, and additionally, in the context of describing our operations, our affiliated Chinese entities.

Unless otherwise indicated, our financial information presented in this prospectus has been prepared in accordance with U.S. GAAP.

Solely for your convenience, this prospectus contains translations of certain Renminbi amounts into U.S. dollars at specified rates. All translations from Renminbi to U.S. dollar amounts are made at the noon buying rate in the City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York. Unless otherwise stated, the translation from Renminbi into U.S. dollars and from U.S. dollars into Renminbi has been made at the noon buying rate in effect on June 30, 2004, which was RMB 8.2766 to US$1.00. No representation is made that the Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollar or Renminbi amounts, as the case may be, at any particular rate or at all. See “Risk Factors—Risks Related to Doing Business in the People’s Republic of China—Governmental control of currency conversion may affect the value of your investment” and “Risk Factors—Risks Related to Doing Business in the People’s Republic of China—The fluctuation of the Renminbi may materially and adversely affect the value of your investment” for discussions of the effects of currency control and fluctuating exchange rates on the value of our ADSs. On October 6, 2004, the noon buying rate was RMB 8.2766 to US$1.00.

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PROSPECTUS SUMMARY

The following summary should be read in conjunction with the more detailed information, including the “Risk Factors” section and the financial statements and related notes, appearing elsewhere in this prospectus. You should read the entire prospectus carefully in evaluating an investment in our securities.

Overview

We are a leading online travel service provider in China. We utilize a centralized modern call center and web-based distribution technologies to provide our services. We seek to serve China’s emerging class of frequent independent travelers, or FITs, who engage in business and leisure travel. We believe FITs to be a fast-growing, yet relatively underserved, segment of the approximately RMB388 billion (US$46.9 billion) domestic travel market in China. Through our nationwide 24-hour toll-free call center, our user-friendly Chinese and English language websites and our extensive reseller network, we provide our customers with consolidated travel information and the ability to book rooms at discounted rates at over 2,600 hotels in more than 220 cities across China. The majority of our hotel suppliers are three-, four- or five-star hotels, as rated by the China National Tourism Bureau, catering to higher-end travelers. We also offer convenient air ticketing and other travel related services, such as rental cars, vacation packages and corporate travel services, at competitive prices.

Since our inception in April 2001, we believe we have built one of the largest travel service distribution networks in China. We offer our customers a wide selection of hotel rooms in all major cities in China, usually at significant discounts to published rates, and guaranteed year-round room availability at many hotels. Our hotel booking volume has increased from approximately 389,000 room-nights in 2001 to approximately 1,032,000 room-nights in 2003. In the six months ended June 30, 2004, we booked approximately 847,300 room-nights, compared to the approximately 343,600 room-nights we booked in the six months ended June 30, 2003. For the three months ended September 30, 2004, we booked approximately 538,000 room-nights. We offer our travel suppliers access to aggregated consumer demand, giving them the ability to promote their hotels and other travel related services to a large and growing base of customers at low incremental cost.

We also sell air tickets for all major airlines in China and many international airlines that operate flights originating from China. We issue and deliver air tickets using a network of local agents throughout major cities in China. In the six months ended June 30, 2004, we sold approximately 93,600 air tickets, compared to approximately 20,700 air tickets we sold in the six months ended June 30, 2003. For the three months ended September 30, 2004, we sold approximately 81,000 air tickets.

We have experienced significant growth since we began operations in 2001. For the six months ended June 30, of 2004, we generated revenues of RMB60.1 million (US$7.3 million), an increase of 146.3% over RMB24.4 million (US$2.9 million) generated in the six months ended June 30, of 2003. We generated revenues of RMB74.4 million (US$9.0 million) for the year ended December 31, 2003, an increase of 33.3% from 2002. We recorded net income of RMB1.6 million (US$0.2 million) for the year ended December 31, 2003 and net loss of RMB5.4 million (US$0.7 million) for the six months ended June 30, 2004. Approximately 81.0% of our total revenues in 2003 and 79.9% of our total revenues for the six months ended June 30, 2004 were derived from our hotel booking business with the remainder of our revenues being largely derived from sales of air tickets, short messaging services, Internet advertising, the sale of co-branded and VIP membership cards and Internet services to hotels.

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Recent Developments

On August 4, 2004 we issued and sold 11,188,570 Series B preferred shares to a wholly-owned subsidiary of IAC/InterActiveCorp, or IAC. In addition to its other businesses, IAC owns and operates, through its IAC Travel division, various online travel businesses, including Expedia, Hotels.com, Hotwire and the WWTE private label. We used approximately one-half of the proceeds of the sale of the Series B preferred shares to repurchase securities from our existing shareholders. In addition, we granted IAC options to purchase additional ordinary shares, and a warrant to purchase a number of our high-vote ordinary shares that, if exercised, would result in IAC’s holding approximately 52% of our outstanding shares and approximately 96% of our voting power on a fully-diluted basis. See “Investment by IAC/InterActiveCorp” for a more detailed description of the IAC investment and “Description of Share Capital—Ordinary Shares and High-Vote Ordinary Shares” for a description of our high-vote ordinary shares.

Our Opportunity

We expect the travel and tourism industry in China to continue to grow rapidly as China’s economy continues to expand. China’s travel service industry is fragmented and inefficient. This fragmentation creates a market opportunity for our centralized reservation platform offering comprehensive travel information and favorable terms negotiated with travel service suppliers across China. See “The Travel and Tourism Industry in China.”

Our Strengths

We have quickly become one of the leading travel service providers in China by capitalizing on the following competitive strengths.

Brand leadership.    As one of the early movers in the industry to adopt modern communications and Internet technologies, we believe we have one of the best-known brands for travel services in China. We believe our customers associate the eLong brand with value, convenience and innovation.

Nationwide reach for nationwide travel destinations.    Our customers can make reservations for accommodation at over 2,600 hotels in more than 220 cities across China, and book domestic and international air tickets, vacation packages and rental cars by calling our 24-hour call center from anywhere in China, or by booking through our websites or nationwide reseller network.

Total customer focus.    We provide our customers with comprehensive travel information, allowing them to conveniently compare prices, browse availability and amenity options, and select the price and supplier that best meet their individual travel needs. We enhance customer experience through personalized care, loyalty rewards and continuous service improvements.

Strong supplier value.    We offer our travel suppliers access to aggregated consumer demand and the ability to promote their services at low incremental cost to a large and growing base of frequent independent travelers seeking higher-end travel services.

Streamlined business operations through tailored information management systems.    We have drawn on our in-depth knowledge of the business practices unique to China’s travel service industry to develop proprietary processes and technology-based systems that enable us to coordinate effectively the activities of our staff, suppliers, agents and resellers. This results in

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streamlined operations and stronger customer relationships through enhanced customer service.

Scalable and cost-efficient platform.    Our technology-enabled platform is highly scalable, allowing us to expand our range of services and extend our geographical reach without making major changes to our existing infrastructure or incurring significant capital costs.

Experienced management.    We believe that our management team, which includes Justin Tang, our Chairman, President and Chief Executive Officer, and a seasoned team of senior managers with significant experience in the areas of travel service operations, marketing, technology and finance, is one of the strongest management teams in the travel service industry in China.

Relationship with IAC/InterActiveCorp.    IAC’s investment in our company has provided us with additional financial resources consisting of up to approximately US$58.7 million from the proceeds of the sales of our Series B preferred shares, of which US$29.3 million was used to repurchase securities from our existing shareholders. In addition, we believe that our business will benefit from being aligned with IAC, which we believe is one of the leading global companies in online travel with what we believe to be a broad product offering, strong technology platform, well-known brand, experienced management team and track record of success.

Our Strategy

Our mission is to become the leading provider of travel services in China. We seek to achieve superior revenue and earnings growth by pursuing the following key business strategies.

Strengthen brand awareness and marketing.    We seek to strengthen consumer awareness of our brand by pursuing an aggressive marketing strategy, which includes the following principal elements:

Ÿ entering into marketing agreements with top Internet portals in China including Yahoo!China, Sohu.com and Tom.com;

Ÿ co-marketing programs with prominent consumer brands;

Ÿ promoting the eLong membership card in leading Chinese business publications;

Ÿ entering into arrangements with commercial banks in their offering of co-branded credit cards; and

Ÿ entering into arrangements with major Chinese telecommunications companies under which travel booking enquiries are diverted to us from their service hotlines.

Expand our range of travel services.    We intend to capitalize on our leadership in hotel reservations utilizing a centralized, modern call center and web-based distribution technologies and leverage the reach and efficiency of our distribution platform by growing our air ticketing and other travel related services, such as vacation packages, car rentals and corporate travel services.

Enhance customer experience.    We seek to enhance our customers’ experience by providing more personalized care, and by strengthening and expanding travel supplier relationships to offer our customers a wider range of travel services.

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Enhance efficiency and profitability.    We seek to enhance the efficiency of our operations and the profitability of our business by taking advantage of our cost-effective call center and web-based distribution technologies.

Develop complementary merchant business.    We seek to further enhance our profitability by developing a complementary merchant business. We intend to begin selling pre-purchased hotel rooms and other services from selected suppliers, which we believe will result in higher profit margins per transaction.

Enhance our technology infrastructure.    We design and maintain our systems with a view to enhancing consumer-friendliness and providing adaptive solutions for our hotel and other travel service suppliers. We seek to streamline our transaction processes through ongoing technology upgrades to our transaction and service platform.

Selectively pursue complementary acquisitions.    We seek to capitalize on the opportunities for consolidation in China’s fragmented and inefficient travel service industry by selectively exploring opportunities to acquire other travel service businesses such as air-ticketing agencies, hotel-room consolidators, tour-package agencies and corporate travel providers.

Increase benefits from our relationship with IAC/InterActiveCorp.    Over time, we seek to derive additional strategic benefits from our relationship with IAC as a significant shareholder, including the potential to cross-market and cross-sell our bases of consumers and suppliers, share enabling technologies and work closely with IAC management and personnel.

Risk of Investment

An investment in our ADSs or in our ordinary shares involves a high degree of risk that includes risks related to our company, risks related to the travel industry, risks related to the PRC and risks related to the ownership of our ADSs or ordinary shares. Specifically, risks include those relating to the following areas:

Our limited operating history.    We have only a limited operating history from which you can evaluate our business and our prospects for future success.

Our ability to sustain our profitability.    We have sustained losses in the past and cannot assure you that we will be profitable in the future.

Our ability to compete against current or future competitors.    We face many sources of competition and cannot assure you that we will be able to successfully compete against current or future competitors.

Our corporate structure may pose certain risks.    We depend substantially, through a series of agreements, on our affiliated Chinese entities to conduct our operations. Our affiliated Chinese entities are controlled by Justin Tang, our Chairman, President and Chief Executive Officer. Potential conflicts of interests may exist due to our corporate structure. In addition, if our affiliated Chinese entities violate their agreements with us, our business, operating results and financial conditions may be materially and adversely affected.

Our ability to effectively promote our brand.    We believe that we must be successful in promoting our eLong brand in order to continue to grow our business. We cannot assure you that we will be successful in effectively promoting our brand image.

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Declines or disruptions in the travel industry can adversely affect us.    We are affected by the health of the travel industry in China. Our industry is sensitive to the general business climate, personal discretionary spending levels, serious epidemics such as SARS and catastrophic events. We cannot assure you that adverse trends or events will not occur or that those adverse trends or events will not adversely affect our operating results and financial conditions.

Possible slowdown of economic growth in China.    We cannot assure you that the growth of the economy in China will continue or that any slowdown will not have a negative effect on our business.

Risks associated with our relationship with IAC/InterActiveCorp.    We cannot assure you that IAC will exercise its warrant to purchase our shares, which would result in IAC’s holding approximately 52% of our equity and approximately 96% of our voting power. If IAC does not exercise its warrant, we may lose the benefit of IAC’s experience and strength in the international online travel service industry. Furthermore, regardless of whether IAC exercises its warrant, IAC is under no contractual obligation to provide such benefits to us, and we cannot assure you as to when or whether any of these expected benefits will be realized. Subject to restrictions in our agreements with IAC, IAC may be able to compete with us, through its various subsidiaries and affiliates such as Expedia and Hotels.com, in the online travel industry in China.

In addition, if IAC does exercise its warrant, it will control our company and will be able to, among other things, prevent business combination transactions, such as a merger or sale of the company, even when such a transaction may be desired by other shareholders. Even if IAC does not exercise its warrant, it will still have a substantial equity stake and presence on our board, which will make it more difficult for us to enter into certain business combination transactions without IAC’s consent, and IAC will continue to have substantial contractual rights relating to our business, including the right to replace the shareholders of our affiliated Chinese entities and the right to direct us or our subsidiary to acquire additional equity interests in our affiliated Chinese affiliates. IAC’s exercise of these rights may be in conflict with the views of our management or interests of our other shareholders.

The market price of our ADSs may be volatile.    The market prices of the securities of Internet-related companies have been extremely volatile and may be subject to fluctuation. In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. In particular, securities offered by a number of PRC companies have experienced volatility. We cannot assure you that the market price of our ADSs will not decline below the initial public offering price.

See “Risk Factors” beginning on page 14 for a more detailed description of these and other risks related to an investment in our ADSs or ordinary shares.

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Corporate Structure and Information

Foreign ownership in the Internet content provision, advertising, and air-ticketing businesses is subject to significant restrictions under current PRC laws and regulations. As a result, we have a wholly owned subsidiary in China that conducts its operations in China through a series of contractual arrangements with a number of our affiliated Chinese entities. We do not have any direct ownership interests or voting rights in our affiliated Chinese entities. Under these contractual arrangements, we have management control over these entities. We also bear economic risks with respect to, and derive economic benefits from, their operations. Accordingly, the financial statements of our affiliated Chinese entities are consolidated with our financial statements. See “Corporate Structure and Related Party Transactions.”

We are a limited liability company that was incorporated in the British Virgin Islands on April 4, 2001 and continued in the Cayman Islands in May 2004. Our principal executive office is located at:

Block B, Xingke Plaza Building

10 Jiuxianqiao Zhonglu

Chaoyang District

Beijing 100016, People’s Republic of China

Telephone: +86 (10) 5860-2288

Investor inquiries should be directed to us at the above address and telephone number. Our websites are www.eLong.com and www.eLong.net. The information contained on our websites does not constitute part of this prospectus.

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The Offering

American depositary shares offered 4,385,156 ADSs, representing 8,770,312 ordinary shares

By us 3,623,235 ADSs, representing 7,246,470 ordinary shares

By the selling shareholders 761,921 ADSs, representing 1,523,842 ordinary shares

Price per ADS We currently estimate that the initial public offering price per ADS will be between US$11.50 and US$13.50.

The ADSs Each ADS represents two ordinary shares, par value US$0.01 per share. The ADSs will be evidenced by American Depositary Receipts, or ADRs. A nominee of the depositary will be the registered holder of the ordinary shares underlying your ADSs. You will have the rights of an ADR holder as provided in a deposit agreement among us, the depositary and holders and beneficial owners of ADSs from time to time, dated     , 2004. Under the deposit agreement, you may instruct the depositary to vote the ordinary shares underlying your ADSs, but only if we ask the depositary to ask for your instructions. Otherwise you will not be able to exercise your right to vote unless you withdraw the ordinary shares deposited with the depositary.

You will be required to pay up to US$5.00 per 100 ADS for each issuance or cancellation of an ADS, a fee for each distribution of securities by the depositary based on the number of ordinary shares deposited for issuance of ADSs, up to US$0.02 per ADS per year for depositary services, fees for transfer and registration of your ordinary shares, and certain expenses incurred by the depositary.

To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus. We may amend or terminate the deposit agreement for any reason without your consent. If an amendment becomes effective, you will be considered, by continuing to hold your ADSs, to have agreed to be bound by the deposit agreement as amended.

Over-allotment option The selling shareholders have granted a 30-day option to the underwriters to purchase up to an aggregate of 657,774 additional ADSs to cover over-allotments of ADSs.

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Ordinary shares outstanding after the offering 28,525,200 ordinary shares (or 28,652,551 ordinary shares if the underwriters exercise the over-allotment in full) immediately after the offering. In addition, a total of 8,205,620 Series A preferred shares will have been automatically converted into 8,205,620 ordinary shares upon the completion of this offering. Effective 31 business days after the completion of this offering, a total of 11,188,570 Series B preferred shares will be automatically converted on a one-to-one conversion ratio (subject to certain anti-dilution adjustments, if applicable) into either 11,188,570 ordinary shares (if IAC does not exercise its warrant) or 11,188,570 high-vote ordinary shares (if IAC exercises its warrant). If IAC exercises its warrant and assuming we do not issue any of our securities prior to the exercise other than in connection with this offering, we will issue to IAC 28,576,352 high-vote ordinary shares upon IAC’s exercise of its warrant, which number represents that number of high-vote ordinary shares as will cause IAC to hold 51% of our outstanding ordinary shares on a fully-diluted basis after giving effect to our repurchase, in connection with the warrant exercise, from certain existing shareholders of the company of a number of ordinary shares equal to one-half of the shares IAC purchases upon exercise of the warrant. If IAC exercises its warrant, there will be 48,634,003 ordinary shares outstanding, of which 28,576,352 will be high-vote ordinary shares.

Use of proceeds We estimate that we will receive net proceeds from this offering of approximately US$40.3 million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming an initial public offering price of US$12.50 per ADS, the midpoint of the estimated range of the initial public offering price.

We intend to use the net proceeds we will receive from this offering for general corporate purposes, including working capital and capital expenditures, as well as for potential acquisitions.

We will not receive any of the proceeds from the sale of the ADSs by the selling shareholders.

Risk factors See “Risk Factors” and other information included in this prospectus for a discussion of the factors you should carefully consider before deciding to invest in our ADSs.

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Listing We have applied for approval to have our ADSs included for quotation on the Nasdaq National Market. Our ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system.

Proposed Nasdaq National Market symbol “LONG”

Depositary JPMorgan Chase Bank

Lock-up We have agreed with the underwriters to a lock-up of shares for a period of 180 days after the date of this prospectus. In addition, our executive officers, directors, the selling shareholders and certain other existing shareholders have also agreed with the underwriters to a lock-up of shares for a period of 180 days after the date of this prospectus. See “Underwriting.”

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SUMMARY CONSOLIDATED FINANCIAL DATA

You should read the following information with our consolidated financial statements and related notes, “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

The summary consolidated statements of operations and cash flow data for the period from April 4, 2001, the date of our inception, through December 31, 2001 and for the years ended December 31, 2002 and 2003, and the summary consolidated balance sheet data as of December 31, 2002 and 2003, are derived from our audited consolidated financial statements included elsewhere in this prospectus and should be read in conjunction with, and are qualified in their entirety by reference to, these consolidated financial statements and related notes. These consolidated financial statements are prepared in accordance with U.S. GAAP. The summary consolidated statements of operations and cash flow data for the six months ended June 30, 2003 and 2004 and the summary consolidated balance sheet data as of June 30, 2004 are derived from our unaudited consolidated financial statements included elsewhere in this prospectus. We have prepared the unaudited information on the same basis as the audited consolidated financial statements, and have included, in our opinion, all adjustments, consisting only of normal and recurring adjustments that we consider necessary for a fair representation of the financial information set forth in those statements. Our historical results do not necessarily indicate results expected for any future periods.

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	April 4, 2001 to December 31, 2001		Year ended December 31,						Six months ended June 30,
			2002		2003		2003		2003		2004		2004
	RMB		RMB		RMB		US$		RMB		RMB		US$
	(in thousands, except for per share data)
Summary Consolidated Statements of Operations Data
Revenues
Travel	18,734		48,401		66,230		8,002		21,495		52,544		6,348
Others	9,104		7,349		8,160		986		2,945		7,565		914
Total revenues	27,838		55,750		74,390		8,988		24,440		60,109		7,262
Cost of services	(9,528	)	(10,079	)	(9,370	)	(1,132	)	(4,376	)	(7,068	)	(854	)
Gross profit	18,310		45,671		65,020		7,856		20,064		53,041		6,408
Operating expenses
Service development	(1,174	)	(1,528	)	(2,022	)	(245	)	(765	)	(4,249	)	(514	)
Sales and marketing	(21,130	)	(35,142	)	(44,903	)	(5,425	)	(16,980	)	(39,188	)	(4,735	)
General and administrative	(5,898	)	(10,542	)	(10,513	)	(1,270	)	(3,976	)	(10,795	)	(1,304	)
Stock-based compensation (1)	(3,167	)	(4,471	)	(1,353	)	(164	)	(1,304	)	(730	)	(88	)
Amortization of goodwill and intangibles	(583	)	—		(20	)	(2	)	—		(120	)	(14	)
Business tax and surcharges	(1,360	)	(2,816	)	(4,109	)	(496	)	(1,350	)	(3,062	)	(370	)
Total operating expenses	(33,312	)	(54,499	)	(62,920	)	(7,602	)	(24,375	)	(58,144	)	(7,025	)
Profit (loss) from operations	(15,002	)	(8,828	)	2,100		254		(4,311	)	(5,103	)	(617	)
Other expenses, net	(42	)	(690	)	(21	)	(3	)	(46	)	(23	)	(3	)
Income (loss) before income tax expense	(15,044	)	(9,518	)	2,079		251		(4,357	)	(5,126	)	(620	)
Income tax benefit (expense)	(71	)	(580	)	(463	)	(56	)	971		(284	)	(34	)
Net income (loss)	(15,115	)	(10,098	)	1,616		195		(3,386	)	(5,410	)	(654	)
Earnings (loss) per ordinary share
Basic	(0.94	)	(0.63	)	0.09		0.01		(0.21	)	(0.32	)	(0.04	)
Diluted	(0.94	)	(0.63	)	0.07		0.01		(0.21	)	(0.32	)	(0.04	)
Proforma earnings per ordinary share
Basic					0.01		0.00				(0.19	)	(0.02	)
Diluted(2)					0.00		0.00				(0.19	)	(0.02	)
Earnings (loss) per ADS(3)
Basic	(0.47	)	(0.32	)	0.05		0.01		(0.11	)	(0.16	)	(0.02	)
Diluted(2)	(0.47	)	(0.32	)	0.04		0.01		(0.11	)	(0.16	)	(0.02	)
Proforma earnings per ADS(3)
Basic					0.01		0.00				(0.10	)	(0.01	)
Diluted(2)					0.01		0.00				(0.10	)	(0.01	)

	As of December 31,						As of June 30,				Condensed Pro forma June 30,
	2002		2003		2003		2004		2004		2004		2004
	RMB		RMB		US$		RMB		US$		RMB(5)		US$
	(in thousands)
Consolidated Balance Sheet Data
Cash and cash equivalents	5,344		73,132		8,836		52,448		6,337		258,893		31,280
Working capital (4)	7,007		80,677		9,747		74,185		8,963		317,062		38,308
Equipment and software, net	6,288		8,108		980		10,174		1,229		10,174		1,229
Total assets	36,570		130,561		15,775		142,842		17,259		385,719		46,604
Accumulated deficit	(25,213	)	(24,223	)	(2,927	)	(29,633	)	(3,580	)	(29,633	)	(3,580	)
Shareholders’ equity	19,685		100,607		12,156		96,061		11,606		338,938		40,951

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	April 4, 2001 to December 31, 2001	Year ended December 31,						Six months ended June 30,
		2002		2003		2003		2003		2004		2004
	RMB	RMB		RMB		US$		RMB		RMB		US$
	(in thousands)
Consolidated Cash Flow Data
Net cash provided by (used in) operating activities	(7,910)	1,621		(7,429	)	(898	)	1,803		(12,285	)	(1,484	)
Net cash used in investing activities	(23,305)	(494	)	(1,628	)	(197	)	(616	)	(7,293	)	(881	)
Net cash provided by (used in) financing activities	36,649	(1,218	)	76,856		9,286		(138	)	(1,084	)	(131	)
Depreciation and amortization	4,345	5,920		3,006		363		2,151		1,248		151
Capital expenditures	810	2,994		5,180		626		616		3,193		386

⁽¹⁾ Stock-based compensation is all related to general and administrative expenses.

⁽²⁾ All dilutive potential ordinary shares arise from (a) the stock options granted to our directors and employees under our stock option plans, (b) the stock warrants granted to non-employees, (c) stock options to purchase up to 971,633 ordinary shares granted to IAC, (d) the automatic conversion of 8,205,620 existing Series A preferred shares into 8,205,620 ordinary shares upon the completion of this offering and giving effect to the repurchase of Series A preferred shares and ordinary shares in connection with the issuance of Series B preferred shares, and (e) the automatic conversion of 11,188,570 Series B preferred shares on a one-to-one conversion ratio (subject to certain anti-dilution adjustments, if applicable) into 11,188,570 ordinary shares (if IAC does not exercise its warrant) or 11,188,570 high-vote ordinary shares (if IAC exercises its warrant) 31 business days after the completion of this offering. For the purpose of computing pro forma diluted income per share, dilutive potential ordinary shares arise from (a) conversion of the 9,787,494 Series A preferred shares of outstanding ordinary shares that will be issued for the preferred shares, as if the preferred shares issuance and the conversion of these shares upon the occurrence of the IPO had both taken place on January 1, 2003 and (b) the issuance of Series B preferred shares and repurchase of ordinary shares and Series A preferred shares from existing shareholders. For the year ended December 31, 2003, the pro forma diluted income per share computation was based on the net income available to ordinary shareholders of RMB173,618, divided by the weighted average ordinary shares outstanding on a pro forma basis of 32,969,281, adjusted for the dilutive effect of non-vested ordinary shares and stock options and warrants of 3,866,430, but exclusive of the effect of stock options and warrants granted subsequent to December 31, 2003 which were granted in the ordinary course of business or in connection with the issuance of Series B preferred shares on August 4, 2004. For the six-month period ended June 30, 2004, the pro forma diluted loss per share computation was based on the net loss available to ordinary shareholders of RMB6,131,028, divided by the weighted average ordinary shares outstanding on a pro forma basis of 32,169,285. The pro forma diluted loss per share for the six-month period did not include the effect of non-vested ordinary shares and stock options and warrants as the effect will be anti-dilutive. In addition, the pro forma diluted loss per share for the six-month period did not include the effect of stock options and warrants granted subsequent to December 31, 2003 which were granted in the ordinary course of business or in connection with the issuance of Series B preferred shares on August 4, 2004. In addition, the pro forma diluted income (loss) per share data for the year ended December 31, 2003 and for the six-month

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period ended June 30, 2004 gives effect to the 260,204 options granted to IAC on October 1, 2004 as if such options had been granted on January 1, 2003 at the same terms and exercise price. For more information regarding the issuance of options to IAC, see “Investment by IAC/InterActiveCorp—Stock Options.” On the date of grant, the fair value of the 260, 204 options is RMB5,769,047 and will be recorded as a deduction in arriving at net income available to ordinary shareholders over the vesting term.

⁽³⁾ Each ADS represents two ordinary shares.

⁽⁴⁾ Represents the amount of total current assets less total current liabilities.

⁽⁵⁾ Represents the issuance of Series B preferred shares and giving effect to the repurchase of Series A preferred shares and ordinary shares in connection with the issuance of Series B preferred shares.

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RISK FACTORS

An investment in our ADSs or ordinary shares involves a high degree of risk of which you should be aware. You should carefully consider the risks described below, in conjunction with other information and our consolidated financial statements and related notes included elsewhere in this prospectus, before making an investment decision. You should pay particular attention to the fact that we conduct our operations in China and are governed by a legal and regulatory environment that in some respects differs significantly from the environment that may prevail in other countries that you may be familiar with. Our business, financial condition and operating results could be affected materially and adversely by any or all of these risks. The trading price of our ADSs could decline due to any or all of these risks, and you may lose part or all of your investment.

Risks Related to Our Business

Our limited operating history may not serve as an adequate basis to judge our future prospects and operating results.

We have only a limited operating history from which you can evaluate our business and our prospects. We have encountered and will continue to encounter risks and difficulties frequently experienced by early-stage companies in evolving industries such as the travel service industry in China. Some of the risks relate to our ability to:

Ÿ attract and retain customers and encourage our customers to engage in repeat transactions;

Ÿ retain our existing agreements with travel suppliers such as hotels and airlines and to expand our service offerings on satisfactory terms with our travel suppliers;

Ÿ operate, support, expand and develop our operations, our call center, our websites, and our communications and other systems;

Ÿ diversify our sources of revenue;

Ÿ maintain effective control of our expenses;

Ÿ attract and retain qualified employees;

Ÿ raise additional capital;

Ÿ respond to changes in our regulatory environment; and

Ÿ respond to competitive market conditions.

If we are not successful in addressing any or all of these risks, our business may be materially affected in an adverse manner.

We have sustained losses in the past and cannot guarantee profitability in the future.

We sustained net losses in 2001, 2002 and for the first six months ended June 30, 2003 and 2004. Although we achieved profitability for the six months ended December 31, 2003, we cannot assure you that we will be profitable in future periods. A variety of factors may cause our operating results to fluctuate and financial condition to change, including:

Ÿ changes in general economic conditions in China;

Ÿ unforeseen disruptive events in the travel and tourism industry;

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Ÿ unanticipated rises in operating costs and capital expenditures;

Ÿ changes in our regulatory environment;

Ÿ changes in our management team and other key personnel; and

Ÿ intensified competition from our competitors.

Our operating costs have increased significantly principally as a result of increases in our sales and marketing expenses in the third quarter of 2003 and we expect that due to our anticipated organizational growth and our ongoing efforts to expand our customer base, our operating expenses will continue to increase. Any decrease or delay in achieving additional sales and revenues or failure to control our costs as our business grows could result in substantial operating losses. As a result, we cannot assure you that our company will remain profitable in the future.

We may not be able to compete successfully against our current or future competitors.

We face many sources of competition, including other consolidators of hotel and flight reservation services, such as Ctrip.com International, Ltd., and traditional travel agencies, such as China Travel Services, China International Travel Services and China Youth Travel Services. Because we do not have exclusive arrangements with our suppliers and our business involves relatively low fixed costs, new competitors face low entry barriers to our industry. We could face increasing competition from hotels and airlines if they decide to increase their efforts to sell directly to consumers or to engage in alliances with other travel service providers. Moreover, established international players may choose to enter into China in the future, either as sole entrants or in conjunction with our existing competitors. Our potential and existing competitors may have competitive advantages over us including longer operating histories, larger customer bases and greater financial, marketing and other expertise and resources. If we do not successfully compete against our current or potential competitors, our operating results and financial condition may be adversely affected.

If we fail to attract and retain customers in a cost-effective manner, our ability to grow and maintain profitability may be impaired.

Our business strategy is substantially dependent on our ability to increase the overall number of customer transactions with us in a cost-effective manner. In order to increase the number of transactions, we must attract new visitors to our call center and websites, convert these visitors into paying customers and capture repeat business from existing customers. Similarly, our corporate travel service is dependent on enlisting new corporate customers and attracting their travel-booking activity. Although we have spent significant financial and other resources on sales and marketing and plan to continue to do so, we cannot assure you that these efforts will be cost-effective in attracting new customers or increasing transaction volume. If we do not achieve our marketing objectives, our ability to grow our revenues and maintain profitability may be impaired.

Our business may be harmed if we fail to strengthen our brand recognition among current and potential customers, suppliers and business partners.

We believe that we must be successful in the promotion of our eLong brand in order to continue to grow our business and secure new business relationships. We must introduce new consumers to our eLong brand and ensure that the eLong brand is associated with quality and value. We cannot assure you that we will be successful in our efforts to introduce the eLong

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brand to a wider group of consumers or that we will be successful in establishing our brand image among consumers. If we fail to strengthen our brand recognition among our current and potential customers, suppliers and business partners, our operating results and financial condition may be adversely affected.

We may suffer losses as we supplement our agent business model with a merchant business model if we are unable to predict accurately the amount of inventory we need.

We plan to supplement our current agency business model with a merchant business model. Under a merchant business model, we would purchase travel services in advance at lower prices before reselling them to our customers at higher prices. Our ability to accurately predict inventory demand will be crucial to our ability to generate higher margins and minimize losses from excess inventory. If we overestimate the demand for hotel rooms or other services, we may be exposed to excess inventory and may be forced to cover the costs for the services we have committed to purchase. Our operating results and financial condition may be adversely affected if we are unable to predict accurately the amount of inventory we may need.

We face a greater risk of doubtful accounts as our corporate travel business increases in scale.

As our corporate travel business increases in scale, we expect our accounts receivable to show a corresponding increase. We cannot assure you that we will be able to collect payment fully on our outstanding accounts receivable from our corporate travel service customers. As a result, we may face a greater risk of larger non-payments in our accounts receivable and, as our corporate travel business grows in scale, we may need to make increased provisions for doubtful accounts. Our operating results and financial condition may be materially and adversely affected if we are unable to successfully manage our accounts receivable.

We may experience difficulties managing our growth because our rapid growth may present significant challenges to our management and administrative systems and resources.

We have experienced rapid growth since our inception in 2001. On June 30, 2004, we had approximately 1,230 employees, compared to approximately 380 employees on December 31, 2001. Our continued expansion may present significant challenges to our management and administrative systems and resources. In order to be successful, we must:

Ÿ maintain an effective management team;

Ÿ adequately train our employees;

Ÿ improve our information management, administrative systems and internal controls; and

Ÿ address investor relations and required disclosure issues associated with being a public company.

If we fail to address any of the foregoing concerns, our operating results and financial condition could be adversely affected.

We are dependent on our ability to establish and maintain favorable arrangements with our travel suppliers.

We are dependent on our continued relationships on favorable terms with our hotel and airline suppliers. In particular, the ability to contract in advance for the guaranteed availability of

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hotel rooms on a discounted basis is crucial to our business. However, we do not have exclusive contractual arrangements with our travel suppliers, and we must renew these contracts on an ongoing basis. We cannot assure you that we will be able to maintain satisfactory relationships and obtain favorable contractual terms with our travel suppliers. All of our relationships with travel suppliers are freely terminable by the supplier. None of these arrangements are exclusive, and our travel suppliers could enter into, and in many cases have already entered into similar agreements with our competitors. If we lose existing relationships or fail to establish new relationships with travel suppliers on terms satisfactory to us, our operating results and financial condition could be adversely affected.

Our commission income and revenues may decrease if our hotel suppliers fail to accurately report data concerning our customers’ stay.

A substantial portion of our revenues is currently generated through commissions received from hotels for room nights booked through us. We do not receive direct payments for hotel bookings from our customers. Our revenues are dependent on the hotel supplier accurately reporting the customer’s subsequent stay. In order to verify the hotel supplier’s report, we make periodic inquiries with the hotel and the customer. We rely on the hotel and the customer to give us truthful information regarding the customer’s check-in and checkout dates, which form the basis for calculating the commission we are entitled to receive from the hotel supplier. While we rank hotel suppliers and impose a ranking penalty on hotel suppliers who report inaccurate information, we cannot guarantee that all hotel supplier reports will be completely accurate. If our hotel suppliers provide us with untrue information with respect to our customers’ length of stay, our revenues derived from hotel bookings may be materially and adversely affected.

Our business depends substantially on the continuing efforts of our senior executive and other key employees, and our business may be severely disrupted if we lose their services.

Our future success heavily depends on the performance and continued service of our Chairman, President and Chief Executive Officer, Justin Tang, our Chief Technology Officer, Richard Chen, our Vice President for Business Development and Strategy, Richard Xue, our Chief Financial Officer, Derek Palaschuk, and other members of our senior management. We rely on their expertise in business operations, finance, technology and travel services and we depend on their relationships with our shareholders, suppliers and regulators. In addition, competition for highly skilled employees with technical, management, marketing, sales and other specialized training is intense, and we cannot assure you that we will be successful in attracting or retaining such personnel. Therefore, our business and results of operations may be materially and adversely affected, and we may incur additional expenses to recruit and train replacement personnel if one or more of our key employees is unwilling or unable to continue his or her employment with us.

In addition, if any of our key executives joins a competitor or forms a competing company, we may lose customers and suppliers. While each of our executive officers has entered into an employment agreement that contains confidentiality and non-competition provisions, we cannot guarantee that we will be able to successfully enforce these employment agreements in court.

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The PRC legal system embodies uncertainties which could limit the legal protections available to us and to you.

The PRC legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which decided legal cases have little value as precedents. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. Our subsidiaries in the PRC and our affiliated Chinese entities are subject to laws and regulations applicable to their operations in the PRC. However, these laws, regulations and legal requirements are relatively recent, and their interpretation and enforcement involve uncertainties. These uncertainties could limit the legal protections available to us and our foreign investors, including you. In addition, we cannot predict the effect of future developments in the PRC legal system, particularly with respect to the travel industry or the Internet, including the introduction of new laws, changes to existing laws or the interpretation or enforcement of current or future laws and regulations, or the preemption of local regulations by national laws.

The laws and regulations of the PRC restrict foreign investment in the air-ticketing, travel agency, Internet content provision and advertising business and substantial uncertainties and restrictions exist with respect to the interpretation and application of PRC laws and regulations as they relate to our ownership structure.

We are a Cayman Islands corporation, and are therefore treated as a foreign person under applicable PRC laws and regulations. The PRC government regulates Internet access, the distribution of online information, the conduct of online commerce, advertising, and the provision of travel agency services through strict business licensing requirements and other regulations. These regulations include limiting foreign ownership in PRC companies providing Internet information and other online Internet services, travel agency services and advertising services. As a result, we conduct our business through contractual arrangements with our affiliated Chinese entities. These entities hold licenses and approvals that are essential for our business operations. See “Corporate Structure and Related Party Transactions—Corporate Structure and Arrangements with Affiliated Chinese Entities” for a detailed discussion of our affiliated Chinese entities.

In the opinion of our PRC legal counsel, Commerce & Finance Law Offices, our current ownership structure, the ownership structure of our wholly-owned subsidiaries and our affiliated Chinese entities, the contractual arrangements among us, our wholly-owned subsidiaries, our affiliated Chinese entities and their shareholders, and our business operations as described in this prospectus, are in compliance with all existing PRC laws, rules and regulations. See “Our Corporate Structure and Related Party Transactions” for a detailed description of our corporate structure and these contractual arrangements. There are, however, substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations as they relate to our ownership structure. Accordingly, we cannot assure you that the relevant government authorities will not determine that our current ownership structure and these contractual arrangements are not in compliance with the relevant laws and regulations.

If we and our affiliated Chinese entities are found to be in violation of any existing or future PRC laws or regulations, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation:

Ÿ levying fines, confiscating our income, or the income of our affiliated Chinese entities;

Ÿ revoking our business licenses, or the business licenses of our affiliated Chinese entities;

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Ÿ requiring us and our affiliated Chinese entities to restructure our ownership structure or operations; and

Ÿ requiring that we discontinue any or all portions of our Internet content provision, air-ticketing, travel agency or advertising businesses.

Any of the above could cause significant disruptions to our operations and may materially and adversely affect our business, operating results and financial condition.

Our affiliated Chinese entities are controlled by Justin Tang, which may pose potential conflicts of interests, and if these affiliated Chinese entities violate their contractual agreements with us, our business could be harmed, our reputation could be damaged and we might have to resort to litigation to enforce our rights, which could be time-consuming and expensive.

We depend substantially on our affiliated Chinese entities to conduct our operations. While we have no direct ownership interest in these entities, we have attempted to establish effective control through a series of agreements. Although we have been advised by our PRC legal counsel, Commerce & Finance Law Offices, that these agreements have been duly authorized, executed and delivered, and are enforceable under current PRC law, these agreements may not be as effective in providing control as direct ownership of these businesses.

Under our current structure, Justin Tang, our Chairman, President and Chief Executive Officer, directly or indirectly owns a controlling interest in our affiliated Chinese entities. The potential exists for conflicts of interests between his duties to us and his ownership interests in our affiliated Chinese entities. In particular, Mr. Tang may be able to cause our agreements with our affiliated Chinese entities to be performed or amended in a manner adverse to us by, among other things, failing to remit payments to us on a timely basis or operating the affiliated Chinese entities so as to cause harm to our business. We can provide no assurance that if potential conflicts of interests arise, these conflicts will not result in a significant loss in corporate opportunities for us or a diversion of our resources to the affiliated Chinese entities, which may not be in the best interest of eLong, Inc. or of the other shareholders of eLong, Inc.

Our agreements with our affiliated Chinese entities are for limited terms and generally provide that the compensation we receive for the services that we provide to them will be based on “market rates.” Certain provisions of these agreements, such as price and payment terms, are subject to adjustment and may also be subject to differing interpretations. In particular, the term “market rates” is not clearly defined in the agreements and there may not be a clearly defined “market” for the services we provide.

In the event that there is a dispute with respect to our agreements with our affiliated Chinese entities, we would have to rely on the PRC legal system for remedies, which might not be as effective as that in the United States or other more developed countries. Because we rely on our affiliated Chinese entities for our business operations, the realization of any of these risks could result in a material disruption of our business, damage to our reputation, diversion of our resources and the incurrence of substantial costs, any of which could materially and adversely affect our operating results and financial condition.

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If our affiliated Chinese entities do not extend their contractual agreements with us, our business could be harmed, our reputation could be damaged and we could spend time and resources in establishing alternative arrangements.

We depend substantially on our affiliated Chinese entities to conduct our operations, and our business could therefore be disrupted if our affiliated Chinese entities do not extend our contractual arrangements with them. Our possible need to search for alternative arrangements could require time and resources that would divert our attention from our business. As a result, our operating results and financial condition could be materially and adversely impacted.

Our business operations may be materially and adversely affected if we or our affiliated Chinese entities fail to obtain or maintain all pertinent permits and approvals in the heavily regulated air-ticketing, travel agency, advertising and Internet industries.

The Chinese government extensively regulates the air-ticketing, travel agency and advertising industries, as well as most Internet related activities. In order to conduct our business, we or our affiliated Chinese entities must possess and maintain valid permits or approvals from different regulatory authorities. Any failure to obtain or maintain any of the required permits or approvals may subject us to various penalties, such as fines or suspension of operations in these regulated businesses, which could severely disrupt our business operations and materially and adversely affect our operating results and financial condition.

Our business depends on maintaining the integrity of our systems and information infrastructure.

We depend on our systems and information infrastructure to facilitate transactions between our consumers and suppliers, to develop new customers, to deliver service improvements and to perform other operational functions. As our operations grow both in size and scope, we will need to upgrade and expand the capacity of our call center and online systems. If we are unable to upgrade our system to keep pace with our business growth, we may experience capacity constraints, system obsolescence or other unintended system disruptions which may result in slower response times, impaired customer service, delays in fulfilling customer orders and inaccurate reporting of travel information. Any of these factors may cause us to lose customers or suppliers and our operating results and financial condition may be materially and adversely affected.

Our online business is dependent on the continued use and growth of the Internet, a medium that has not yet been proven as an effective means of commerce in China.

A significant portion of our services is targeted toward businesses and consumers who use the Internet. The development and growth of the Internet are subject to a high level of uncertainty and have been characterized by rapid changes, evolving industry standards and continuous new product and service introductions. China has only recently begun to develop the Internet as a commercial medium and has a lower Internet penetration rate compared to most developed countries. Our future operating results from our online distribution channel will depend substantially upon a rising Internet penetration rate and the increased use and acceptance of the Internet for distribution of products and services and for the facilitation of commerce in China. The Internet may not become a viable medium for commercial transactions in China. Major impediments to developing the Internet as a commercial medium in China include:

Ÿ limited use of credit card and other electronic commerce infrastructure;

Ÿ lack of consumer familiarity with the Internet as a sales and distribution channel;

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Ÿ inadequate infrastructure such as the limited access to personal computers, local access points and server capacity to facilitate online commerce;

Ÿ concerns about security, reliability, cost, ease of deployment, administration and quality of service associated with conducting business over the Internet; and

Ÿ the degree to which the PRC government seeks to regulate the dissemination of information over the Internet.

If the Internet does not become a widely accepted medium for commerce in China, our business development and growth may be significantly impeded. Our operating results and financial condition may thus be materially and adversely affected.

We may have to register our encryption software with Chinese regulatory authorities, and if they request that we change our encryption software, our business operations will be disrupted as we develop or license replacement software.

Under the Regulations for the Administration of Commercial Encryption promulgated in 1999, foreign and domestic companies operating in China are required to register and disclose to PRC regulatory authorities the commercial encryption products they use. Because these regulations do not specify what constitutes encryption products, we are unsure whether or how they apply to us and the encryption software we utilize. We have not registered with or disclosed to any PRC regulatory authority our encryption software and we may be required to register or apply for permits with the relevant PRC regulatory authorities for our current or future encryption software. If PRC regulatory authorities request that we change our encryption software, we may have to develop or license replacement software, which would require additional capital expenditures and could disrupt our business operations. In addition, we may be subject to potential liability for using software that is subsequently deemed to be illegal by the relevant PRC regulatory authorities. These potential liabilities include fines, product confiscation and criminal sanctions. We cannot assure you that our business, financial condition and results of operations will not be materially and adversely affected by the application of these regulations.

Our business depends on the technology infrastructure of third parties.

We rely on third-party computer systems and other service providers, including the computerized reservation systems of hotels, airlines and car rental agencies to make reservations and confirmations. Other third parties provide, for instance, our back-up data center, telecommunications access lines, significant computer systems and software licensing, support and maintenance service and air-ticket delivery. Any interruption in these or other third-party services or a deterioration in their performance could impair the quality of our service.

Our online business relies on the existence of an adequate telecommunications infrastructure for continued growth of China’s Internet market.

Although private sector Internet service providers currently exist in China, almost all access to the Internet is maintained through a network owned by China Netcom under the regulatory supervision of China’s Ministry of Information Industry. In addition, the national networks in China connect to the Internet through a government-controlled international gateway. This international gateway is the only channel through which a domestic Chinese user can connect to the international Internet network. We rely on this infrastructure and China Netcom to provide data communications capacity, primarily through local telecommunications lines. We cannot assure you that this infrastructure will be further developed. In addition, we will have no

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access to alternative networks and services, on a timely basis if at all, in the event of any infrastructure disruption or failure. The Internet infrastructure in China may not support the demands associated with continued growth in Internet usage.

We may become involved in costly and time-consuming intellectual property litigation in order to enforce our intellectual property rights, or to prevent third parties from successfully alleging our infringement of their intellectual property rights.

From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources. In addition, third parties may initiate litigation against us for alleged infringement of their proprietary rights. In the event of a successful claim of infringement and our failure or inability to develop non-infringing technology or obtain a license for the infringed or similar technology on a timely basis, our business could suffer. Moreover, even if we are able to obtain a license for the infringed or similar technology, license fees payable to licensors could be substantial or commercially unviable.

The content on our websites may subject us to litigation, which may be time-consuming and costly to defend.

The content on our websites contains information about hotels, flights and popular vacation destinations, as well as customer feedback about certain travel-related services. Third parties could take legal action against us for any false or misleading information accessible on our websites. Any claims could be time consuming to defend, result in litigation and divert management’s attention and resources, any of which could have a material and adverse impact on our operating results and financial condition.

We could be liable for breaches of security on our websites and fraudulent transactions by users of our websites.

Currently, a portion of our customer transactions are conducted through our websites. In such transactions, secured transmission of confidential information (such as customers’ itineraries, hotel and other reservation information, personal information and billing addresses) over public networks is essential to maintain consumer and supplier confidence. Our current security measures may not be adequate. Security breaches, whether through our actions or inaction, or through third party actions, could expose us to litigation and possible liability for failing to secure confidential customer or supplier information and could harm our reputation and ability to attract customers.

We have limited business insurance coverage in China.

Insurance companies in China offer limited business insurance products. As a result, we carry limited business liability or disruption insurance coverage for our operations in China. Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources.

We are controlled by a small group of our existing shareholders, whose interests may not be aligned with the interests of other shareholders.

Upon the completion of this offering, our four largest shareholders will beneficially own approximately 59.5% of our outstanding shares, including our ordinary and preferred shares, or 59.1% if the underwriters exercise their over-allotment option in full. Accordingly, these shareholders will have a significant influence in determining the outcome of any corporate

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transaction or other matter submitted to the shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. Our significant shareholders may also have the power to prevent or cause a change of control of us. In addition, without the consent of these shareholders, we could be prevented from entering into transactions that could be beneficial to us. The interests of these shareholders may differ from the interests of our other shareholders. Until the earlier of 30 business days after the completion of this offering and IAC’s possible exercise of its warrant, our ability to enter into various transactions, including acquisitions, the issuance of securities, and the incurrence of debt, will in most cases require IAC’s consent. See “Investment by IAC/InterActiveCorp—Governance and Other Rights of IAC—Current Rights Attributable to the Warrant and Series B Preferred Shares,” “Description of Share Capital—Series B Preferred Shares” and “Description of Share Capital—Rights of Series B Preferred Shares” for more details of our ability to enter into various transactions.

In addition, our existing shareholders are parties to an investors agreement under which they have agreed to vote their ordinary shares in the election of directors and other matters in the manner provided in the investors agreement, including for the election of directors designated by IAC, by certain former holders of our Series A preferred shares and by other holders of our ordinary shares. See “Management—Board Practices” for a more detailed description of our election of directors under the investors agreement.

We may potentially be controlled by IAC or its affiliates, who may have strategic interests that differ from those of our other shareholders.

Our corporate governance documents and our investors agreement with IAC and our other shareholders provide IAC with a greater degree of control and influence on the operation of our business and the management of our affairs than is typically available to non-majority shareholders of a publicly-traded company. In addition, if IAC exercises its warrant, it or its affiliates will hold a majority of our voting power and its designees will comprise a majority of our board. Upon completion of this offering, IAC or its affiliates will beneficially own, in the aggregate, approximately 28% of our outstanding shares, shares, as IAC’s Series B preferred shares will be automatically converted 31 business days after the completion of this offering into 11,188,570 ordinary shares (subject to certain anti-dilution adjustments, if applicable) if IAC does not exercise its warrant. In the event that IAC exercises its warrant and assuming we do not issue any of our securities prior to the exercise other than in connection with offering, IAC will own approximately 52% of our outstanding ordinary shares on a fully diluted basis, as IAC’s Series B preferred shares will be automatically converted 31 business days after the completion of this offering into 11,188,570 high-vote ordinary shares (subject to certain anti-dilution adjustments, if applicable), with each share being entitled to 15 votes, if IAC exercises its warrant. As a result, IAC would control approximately 96% of the voting power of all shares of voting stock.

Consequently, IAC will be able to exercise control over all matters requiring approval by the board of directors or our shareholders, and this power may be expected to continue even if IAC or its affiliates own a minority economic interest in us. In addition, our existing shareholders are parties to an investors agreement under which they have agreed to vote their ordinary shares in the election of directors and other matters in the manner provided in the investors agreement, including for the election of directors designated by IAC. As a result, if IAC exercises its warrant, IAC or its affiliates will be able to:

Ÿ control the composition of our board of directors, including the right to select six of the eleven members of our board and the ability to nominate the remaining directors and vote their shares to elect them;

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Ÿ control our management and policies; and

Ÿ determine the outcome of significant corporate transactions, including changes in control that may be beneficial to our other shareholders.

Furthermore, IAC may have strategic interests that are different from ours. IAC’s control could keep us from pursuing relationships with other strategic partners and from raising additional capital, which could impede our ability to expand our business and strengthen our competitive position. IAC’s control also gives it a significant ability to influence the business strategy and direction of our company. IAC may choose to cause our company to pursue business opportunities that are different from our current core travel business. In addition, IAC’s control could prevent a sale of our company, which could have been beneficial to our other shareholders. See “Management—Board Practices” for a more detailed description of our board of directors and “Investment by IAC/InterActiveCorp—Governance and Other Rights of IAC,” “Description of Share Capital—Series B Preferred Shares” and “Description of Share Capital—Rights of Ordinary Shares and Series B Preferred Shares” for more detailed descriptions of the rights of IAC.

IAC may exert significant control over our operations and management even if it does not exercise its warrant.

Even if IAC does not exercise its warrant, it will continue to have a number of control rights over the operations and management of our business as a result of the size of its equity interest in us and its rights under various agreements we have entered into with it. If IAC does not exercise its warrant, it will hold approximately 28% of our outstanding shares and approximately 28% of the voting power of our shares (due to the automatic conversion of its Series B preferred shares into 11,188,570 ordinary shares (subject to certain anti-dilution adjustments, if applicable) if IAC does not exercise its warrant and assuming the underwriters exercise their over-allotment option in full). Although IAC will not have the power on its own to control the operations and management of our company or prevent us from taking most actions, it will be considerably more difficult for our other shareholders to approve matters submitted to them without the support of IAC, including some matters which the majority of our non-IAC shareholders support. Similarly, under an investors agreement that we and our existing shareholders entered into in connection with the IAC investment, we, IAC and our existing shareholders who are parties to that agreement are required to do all things necessary to cause two of IAC’s board nominees to be elected to our board and to cause the size of our board to remain at seven members. Although the IAC directors will not have the power on their own to control our board or prevent our board from taking most actions, it will be considerably more difficult for our board to approve actions without the support of the IAC directors, including some actions which the majority of our non- IAC directors support. After the completion of this offering, shareholders who hold             % of the voting power of our ordinary shares will be parties to the investors agreement. Therefore, for so long as shareholders holding a majority of our voting power are parties to the investors agreement, IAC will have the power to designate two of our seven directors. In addition, under the transaction agreement that we entered into with IAC in connection with its investment in us, IAC continues to have certain rights with respect to the operational and ownership structure of us and our affiliated Chinese entities. See “Investment by IAC/InterActiveCorp—Governance and Other Rights of IAC—IAC’s Rights If It Does Not Exercise Its Warrant.”

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Conflicts of interest may arise between IAC and us, which may not be resolved in a manner favorable to us.

Conflicts of interest may arise between IAC and us relating to past, ongoing and future relationships, including corporate opportunities, and potential acquisitions and financing transactions. IAC is engaged in a diverse range of media, electronic and online commerce businesses, including Expedia and Hotels.com, that may compete with us. In addition, IAC or its affiliates may acquire additional businesses in the future that may conflict or compete with us. Under our agreements with IAC, it is prohibited from competing with us in China only so long as it holds directly or indirectly at least 15% of the economic interest in our outstanding shares. In addition, if IAC does not exercise its warrant, it will be permitted to compete with us in China if it transfers to us or our designee(s) all voting rights with respect to the shares it holds. We cannot assure you that such conflicts will not adversely affect our business, financial condition or results of operations.

Potential conflicts of interest may exist because our directors and officers may have interests in IAC or its subsidiaries.

Under the terms of the investors agreement governing IAC’s investment in our company, if it exercises its warrant, IAC has the right to appoint up to six directors to our board of directors and the ability to nominate the remaining directors and vote their shares to elect them. In addition, even if IAC does not exercise its warrant, IAC has the right under the investors agreement to appoint two of our seven board members. As a result some of our directors and officers may have interests in both our company and in IAC. We cannot assure you that these directors will take actions that will benefit us should potential conflicts of interests arise.

We may not be able to execute successfully future acquisitions or manage efficiently any acquired business.

A component of our business strategy is to acquire complementary businesses in areas that provide incremental revenue and earnings growth including air-ticketing agencies, hotel-room consolidators, tour package agencies and corporate travel management companies. This may require a significant commitment of management time, capital investment and other management resources. We cannot assure you that we will be successful in identifying and negotiating acquisitions on terms favorable to us. In addition, we cannot assure you that our proposed acquisition of Beijing Ray Time Business and Tourism Consulting Co., Ltd., or Ray Time, or any other acquisition, if completed, will be successfully integrated into our existing operations. If we are unable to execute our acquisition strategy effectively, our growth, our operating results and financial conditions may be materially and adversely affected.

We may need additional capital which we may not be able to obtain and if we do obtain additional financing, it could result in a dilution of your current investment or otherwise adversely affect the value of your investment.

We cannot assure you that we will obtain any needed financing in the amount or on terms acceptable to us. While we believe that our current cash and cash equivalents, cash flow from operations and the proceeds we will receive from this offering will be sufficient to meet our anticipated cash needs for the foreseeable future, we cannot assure you that we will not require additional capital due to changes in business conditions, our competitive strategy or other developments including any investments or acquisitions we may decide to pursue. If these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. External financing is subject to various factors, including market conditions for a particular financing method, many of which are beyond our

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control. We cannot assure you that we will be able to obtain sufficient external financing to meet our requirements in amounts or on terms satisfactory to us or at all. In addition, the sale of additional equity securities would result in dilution to your investment in our company. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financial covenants which could restrict our operations.

Anti-takeover provisions in our articles of association could make an acquisition of our company, which may be beneficial to our shareholders, more difficult and may prevent attempts by our shareholders to replace or remove our current board of directors.

As a Cayman Islands company, our articles of association include provisions which could make an acquisition of our company more difficult and may prevent attempts by our shareholders to replace or remove our current board of directors. In addition, our memorandum and articles of association provide for high-vote ordinary shares that are entitled to 15 votes for each share on all matters upon which ordinary shares are entitled to vote, compared to ordinary shares that are entitled to one vote for each share. As a result, holders of our high-vote ordinary shares will have the ability to control our company and prevent an acquisition of our company that may be beneficial to other shareholders. See “Description of Share Capital—Anti-takeover provisions” for details regarding the anti-takeover provisions in our articles of association and “—We may potentially be controlled by IAC or its affiliates, who may have strategic interests that differ from those of our other shareholders” for a more detailed description of IAC’s ability to control our company through high-vote ordinary shares.

The discontinuation of any of the preferential tax treatments currently available to us in the PRC could materially and adversely affect our business, financial condition and results of operations.

One of our affiliated Chinese entities, Beijing eLong Information Technology Co. Ltd., currently benefits from a 15% preferential income tax rate and it is expected to be granted a further reduced income tax rate of 7.5% in 2004 and 2005. This affiliated Chinese entity must continue to meet a number of financial and non-financial criteria to qualify for its current and future tax treatment. We cannot assure you that we will continue to enjoy these or other preferential tax treatments. The discontinuation of these preferential tax treatments could materially and adversely affect our business, operating results and financial condition.

Risks Related to the Travel Industry

Declines or disruptions in the travel industry generally could reduce our revenues.

Our business is affected by the health of the travel industry in China. Because travel expenditures are highly sensitive to the general business climate and personal discretionary spending levels, economic downturns and catastrophic events tend to have an adverse impact on the travel industry. Adverse trends or events that tend to reduce travel and are likely to reduce our revenues include:

Ÿ increases in prices in the hotel, airline or other travel-related sectors;

Ÿ increases in the occurrence of travel-related accidents;

Ÿ outbreak of war or conflict across the Taiwan Strait or elsewhere in the Asia-Pacific region;

Ÿ increases in terrorism or the occurrence of a terrorist attack in the Asia-Pacific region or elsewhere;

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Ÿ poor weather conditions or changes in climate throughout a particular region; and

Ÿ man-made or natural disasters that occur in any particular region.

As a result of any of these events, over which we have no control, our operating results and financial conditions could be materially and adversely affected.

The recurrence of a severe acute respiratory syndrome outbreak could materially and adversely affect our operating results and financial conditions

From March to July 2003, China and certain other areas in Asia experienced an outbreak of a new and contagious form of atypical pneumonia now known as severe acute respiratory syndrome, or SARS. According to the World Health Organization, over 8,400 cases of SARS and over 900 deaths were reported in 29 countries from November 2002 to August 2003. In addition, in the spring of 2004, China had several reported cases of deaths caused by SARS. Possible risks associated with SARS include a reduction in travel services used because consumers may elect to reduce their travel and avoid public places such as airports and hotels. Any adverse changes to the travel industry resulting from a recurrence of SARS or similar contagious diseases could severely disrupt our business.

In addition, because our call center contains a large number of employees in a closed environment, we may experience severe disruptions in our business operations if we are required to temporarily close our call center pursuant to health or other government directives due to SARS or other epidemics. We cannot provide you any assurance that there will not be a reoccurrence of SARS or any other epidemics, which may materially and adversely affect our operating results and financial condition.

Our quarterly results are likely to fluctuate because of seasonality in the travel industry in China.

Our business experiences seasonal fluctuations, reflecting seasonal variations in demand for travel services. During the first quarter, demand for travel services generally declines and the number of bookings flattens or decreases, in part due to a slowdown in business activity during the Chinese New Year holiday. Demand for travel services generally peaks during the second half of the year and there may be seasonal fluctuations in allocations of travel services made available to us by travel suppliers. Consequently, our revenues may fluctuate from quarter to quarter.

Risks Related to Doing Business in the People’s Republic of China

A slow-down of economic growth in China may adversely affect our growth and profitability.

Our financial results have been, and are expected to continue to be, affected by the growth in the economy and travel industry in China. Although the economy in China has grown significantly in the past decade, we cannot assure you that growth will continue or that any slow-down will not have a negative effect on our business. Recently, the PRC government has indicated that it intends to introduce measures to control or slow-down the growth of the economy in China. Any slow-down of economic growth in China would reduce expenditures for travel, which in turn will adversely affect our operating results and financial condition.

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Any changes in Chinese laws and regulations may have a material and adverse impact on our business.

Although we believe that our current operations are compliant with applicable PRC laws and regulations, there may be substantial uncertainties regarding the interpretation of existing and new PRC laws and regulations will apply to electronic commerce developed in the future. It is possible that new laws and regulations will affect our existing and future business and that the new laws and regulations may be applied retroactively. The PRC authorities retain broad discretion in dealing with violations of laws and regulations, including levying fines, revoking business licenses and requiring actions necessary for compliance. Any such action could have a material adverse effect on our business, results of operations and financial condition.

You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws against us, our management, the underwriters or the experts named in the prospectus.

We conduct our operations in China and substantially all of our assets are located in China. In addition, our directors, executive officers and experts named in the prospectus reside within China, and some of the assets of these persons are located within China. You should note that it is difficult to effect service of process within the United States or elsewhere outside China upon our directors or executive officers or some of the experts named in the prospectus, including with respect to matters arising under U.S. federal securities laws or applicable state securities laws. Moreover, our PRC legal counsel has advised us that China does not have treaties with the United States or most other western countries providing for the reciprocal recognition and enforcement of judgment of courts. As a result, court judgments obtained in jurisdictions with which the PRC does not have treaties on reciprocal recognition of judgment and in relation to any matter not subject to a binding arbitration provision may be difficult or impossible to be enforced in the PRC. Furthermore, an original action may be brought in the PRC against our directors, executive officers or the underwriters and experts named in this prospectus only if the actions are not required to be arbitrated by PRC law, and only if the facts alleged in the complaint give rise to a cause of action under PRC law. In connection with any such original action, a PRC court may find us liable, and may award monetary damages.

Governmental control of currency conversion may affect the value of your investment.

We receive substantially all of our revenues in Renminbi, which is currently not a fully convertible currency. Under the current plan, our income will primarily be derived from dividend payments and any other distributions by our wholly owned subsidiary in China. Under China’s existing foreign exchange regulations, payments of current account items, including profit distributions and interest payments, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange by complying with certain procedural requirements. The Chinese government, however, may, at its discretion, restrict access in the future to foreign currencies for current account transactions. If this were to occur, we might not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs, which could adversely affect the value of your investment in our ADSs.

Fluctuation of the Renminbi may materially and adversely affect the value of your investment.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the China’s political and economic conditions. Since 1994, the conversion of Renminbi into foreign currencies, including U.S. dollars, has been

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based on rates set by the People’s Bank of China, which are set daily based on the previous day’s interbank foreign exchange market rates and current exchange rates on the world financial markets. Since 1994, the official exchange rate generally has been stable. However, the government may in the future relinquish the dollar peg, or the government may increase the current trading range of the Renminbi to the U.S. dollar. Any changes in the value of the Renminbi, materially and adversely affect the value in foreign currency terms of our ADSs and any dividends payable by us.

Risks Related to Ownership of Our ADSs or Ordinary Shares and Our Trading Market

There has been no public market for our shares or ADSs prior to this offering.

Prior to this offering, there has been no public market for our ordinary shares or ADSs. We cannot predict the extent to which a trading market for our ADSs will develop or how liquid that market may become. The initial public offering price for our ADSs will be determined by negotiations between us and the underwriters and may bear no relationship to the market price for our ADSs after the initial public offering. We cannot assure you that an active trading market will develop.

The market price for our ADSs may be volatile.

The market prices of the securities of Internet-related companies have been extremely volatile and may be subject to wide fluctuations in response to factors including the following:

Ÿ actual or anticipated fluctuations in our quarterly operating results;

Ÿ announcements of new services by us or our competitors;

Ÿ changes in financial estimates by securities analysts;

Ÿ conditions in the travel, Internet and online commerce industries;

Ÿ changes in the economic performance or market valuations of other travel, Internet or online commerce;

Ÿ announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

Ÿ additions or departures of key personnel;

Ÿ release of lock-up or other transfer restrictions on our outstanding ADSs or sales of additional ordinary shares or ADSs; and

Ÿ potential or actual litigation or regulatory investigations.

The securities of a number of PRC companies and companies with substantial operations in the PRC have also experienced volatility in their prices after their initial public offering.

Any of these factors may materially and adversely affect the market price of our ADSs. We cannot assure you that the market price of our ADSs will not decline below the initial public offering price. You may not be able to resell your ADSs above the initial public offering price and you may suffer a loss on your investment.

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The future sales, or perceived sales, by our existing shareholders of a substantial number of our ordinary shares or ADSs in the public market could adversely affect the price of our ADSs.

If our shareholders sell, or are perceived to sell, substantial amounts of our ordinary shares or ADSs, including those issued upon the exercise of outstanding options, in the public market following this offering, the market price of our ADSs could fall. Such sales also might make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate. The 8,770,312 ordinary shares represented by the 4,385,156 ADSs offered in this offering will be eligible for immediate resale in the public market without restrictions, and those held by our existing shareholders may also be sold in the public market in the future, subject to the restrictions contained in Rule 144 under the Securities Act and applicable lock-up agreements. If any existing shareholder or shareholders sell, or are perceived to sell, a substantial amount of ordinary shares after the expiration of the lock-up period, the prevailing market price for our ADSs could be adversely affected. See “Shares Eligible for Future Sale” and “Underwriting” for additional information regarding resale restrictions.

Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement, the depositary of our ADSs will not offer you those rights unless the distribution to ADS holders of both the rights and any related securities are either registered under the U.S. Securities Act of 1933, as amended, or the Securities Act, or exempt from registration under the Securities Act. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

You will experience immediate and substantial dilution in the book value of ADSs purchased.

The public offering price per ADS will be substantially higher than the net tangible book value per ordinary share issued prior to this offering. Purchasers of our ADSs offered in this offering will therefore incur an immediate and substantial dilution in the net tangible book value per ADSs from the initial public offering price. See “Dilution.”

You may not be able to exercise your right to vote your ordinary shares.

As a holder of ADSs, you may instruct the depositary of our ADSs to vote the ordinary shares underlying your ADSs but only if we ask the depositary to ask for your instructions. Otherwise, you will not be able to exercise your right to vote unless you withdraw the ordinary shares deposited with the depositary. However, you may not know about an upcoming shareholders’ meeting sufficiently in advance to withdraw the ordinary shares. If we ask for your instructions, the depositary will notify you of the upcoming vote and will arrange to deliver our voting materials to you. We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your ordinary shares. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote and there may be nothing you can do if the ordinary shares underlying your ADSs are not voted as you requested.

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You may not receive distributions on ordinary shares or any value for them if it is illegal or impractical to make them available to you.

The depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. We have no obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or other securities received through such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. This means that you may not receive the distribution we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you. These restrictions may have a material adverse effect on the value of your ADSs.

You may be subject to limitations on transfer of your ADSs.

Your ADSs represented by the ADRs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary thinks it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

If our subsidiaries were restricted from paying dividends and other distributions to us, our primary internal source of funds would decrease.

We are a holding company and do not have any assets or conduct any business operations other than our holding of the equity interests in China. As a result, we rely on dividends, consulting and other fees paid to us by our subsidiaries and affiliated entities in China. If our subsidiaries incur debts on their own behalf in the future, the instruments governing the debts may restrict their ability to pay dividends or make other distributions to us, which in turn would limit our ability to pay dividends on our ordinary shares. Chinese regulations permit payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting standards and regulations. Our subsidiaries in China are also required to set aside at least 10% of their after-tax profits according to Chinese accounting standards and regulations to fund certain reserve funds that are not distributable as cash dividends.

You may have fewer rights, and may not, as a result, have the same level of protection for your interests as a shareholder as you would if you were a shareholder of a U.S. company.

We are a Cayman Islands company and substantially all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.

Our corporate affairs are governed by our memorandum and articles of association, the Cayman Islands Companies Law and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the

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fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws as compared to the United States, and some states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law.

The Cayman Islands courts are also unlikely:

Ÿ to recognize or enforce against us judgments of courts of the United States based on certain civil liability provisions of U.S. securities laws; and

Ÿ to impose liabilities against us, in original actions brought in the Cayman Islands, based on certain civil liability provisions of U.S. securities laws that are penal in nature.

There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a U.S. company.

Protection of rights through a U.S. court may be limited because we are a Cayman Islands company.

We are a Cayman Islands corporation. Shareholder rights under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States because the Cayman Islands has a less developed body of securities laws as compared to the United States. Shareholders in Cayman Islands companies may not have standing to initiate a shareholder derivative action before the federal courts of the United States. As a result, the ability of shareholders to protect their interests if they are harmed in a manner that would enable them to sue in a United States federal court may be limited.

We will have broad discretion over the use of the proceeds to us from this offering.

We will have broad discretion to use the net proceeds to us from this offering. Although we expect to use the net proceeds we will receive for general corporate purposes, including working capital and capital expenditures, we have not identified any specific uses. We may also use a portion of the net proceeds we will receive to fund possible investments in, or acquisitions of, complementary businesses, products or technologies or establishing joint ventures, including our proposed acquisition of Beijing Ray Time Business and Tourism Consulting Co., Ltd., or Ray Time. Accordingly, you will be relying on the judgment of our board of directors and management regarding the application of these proceeds.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, including in particular the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Our Business,” contains forward-looking statements. These statements relate to future events or our future financial performance, our ability to continue to control our costs and maintain the quality of our services, the expected growth of and change in the travel and online commerce industries in China, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include those listed under “Risk Factors” and elsewhere in this prospectus. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” or the negative of these terms or other comparable terminology. A variety of factors, some of which are outside of our control, may cause our operating results to fluctuate significantly. They include:

Ÿ our ability to successfully grow our air ticketing services and other travel related services, such as vacation packages or corporate travel services;

Ÿ market acceptance of our services;

Ÿ changes in the level of the commissions we receive from travel suppliers;

Ÿ our operating costs and capital expenditures;

Ÿ our potential need for additional capital and the availability of such capital;

Ÿ introduction by our competitors of new or enhanced products or services;

Ÿ price competition in the travel and tourism market in China;

Ÿ anticipated benefits we may derive from the IAC investment;

Ÿ changes in our regulatory environment;

Ÿ outbreaks of SARS or other contagious diseases that may adversely impact the travel industry;

Ÿ changes in our management team and other key personnel; and

Ÿ fluctuations in general economic conditions.

One or more of these factors could materially and adversely affect our operating results and financial condition in future periods. Given our early stage of development, we cannot assure you that we will attain any estimates or maintain profitability or that the assumptions on which they are based are reliable.

Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this prospectus. All forward-looking statements contained in this prospectus are qualified by reference to this cautionary statement.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately US$40.3 million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming an initial public offering price of US$12.50 per ADS, the midpoint of the estimated range of the initial public offering price. If the underwriters exercise their over-allotment option in full, we estimate that our net proceeds will be approximately US$     million.

The principal purposes of this offering are to:

Ÿ provide capital to support the growth of our business;

Ÿ assist us in retaining our key employees by providing a liquid market for shares issued under our share option plan; and

Ÿ create a public market for our ADSs for the benefit of all our shareholders.

We anticipate that we will use the net proceeds we will receive from this offering for general corporate purposes, including working capital and capital expenditures, but we have not allocated any specific portion of the net proceeds for any particular purpose. Accordingly, our management will have broad discretion in applying the net proceeds of the offering to us. We may also use a portion of the net proceeds to us to fund possible future investments in, or acquisitions of, complementary businesses or for establishing joint ventures, including our proposed acquisition of Ray Time. See “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Potential Acquisition” for a description of the Ray Time acquisition.

Pending these uses, we intend to invest the net proceeds to us in certificates of deposit, direct or guaranteed obligations of the U.S. government or other short-term money market instruments.

We will not receive any proceeds from the sale of the ADSs by the selling shareholders.

DIVIDEND POLICY

Since our establishment, we have not declared or paid any dividends on our ordinary shares. We do not intend to pay any dividends in 2004. The timing, amount and form of future dividends, if any, will also depend, among other things, on our future results of operations and cash flow, our growth prospects, our capital requirements, the amount of distributions, if any, received by us from our subsidiaries in China and other factors deemed relevant by our board of directors. Any future cash dividends on the outstanding shares would be declared by and subject to the discretion of our board of directors and must be approved at our annual general meeting of shareholders.

Holders of ADSs would be entitled to receive dividends, if any, subject to the terms of the deposit agreement, to the same extent as holders of ordinary shares, less the fees and expenses payable under the deposit agreement, and after deduction of any applicable taxes.

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EXCHANGE RATE INFORMATION

We conduct our business primarily in China and our revenues and expenses are primarily denominated in Renminbi. This prospectus contains translations of Renminbi amounts into U.S. dollar amounts at specific rates solely for the convenience of the reader. The translations of Renminbi amounts into U.S. dollar amounts in this prospectus are based on the noon buying rate in the City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York. Unless otherwise noted, all translations from Renminbi amounts to U.S. dollar amounts and from U.S. dollar amounts to Renminbi amounts in this prospectus were made at a rate of RMB 8.2766 to US$1.00, the noon buying rate in effect as of June 30, 2004. The noon buying rate as of October 1, 2004 was RMB 8.2766 to US$1.00. We make no representation that any Renminbi or U.S. dollar amounts could have been, or could be, converted into U.S. dollar or Renminbi amounts, as the case may be, at any particular rate, the rates stated below, or at all. The Chinese government imposes control over its foreign currency reserves in part through direct regulation of the conversion of Renminbi into foreign currencies.

The following table sets forth information concerning exchange rates between Renminbi and U.S. dollars for the periods indicated. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this prospectus or will use in the preparation of our periodic reports or any other information to be provided to you. The source of these rates is the Federal Reserve Bank of New York.

	Noon buying rate
	RMB per US$
	High	Low
April 2004	8.2772	8.2768
May 2004	8.2773	8.2768
June 2004	8.2768	8.2766
July 2004	8.2769	8.2766
August 2004	8.2770	8.2766
September 2004	8.2768	8.2766
October 2004 (through October 6)	8.2766	8.2766

The following table sets forth the average noon buying rates between Renminbi and U.S. dollars for each of the periods indicated, calculated by averaging the noon buying rates on the last day of each month of the periods shown.

	Average noon buying rate
	RMB per US$
1999	8.2785
2000	8.2784
2001	8.2772
2002	8.2772
2003	8.2771
2004 (through October 6)	8.2766

35

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2004 presented on:

Ÿ an actual basis;

Ÿ a pro forma basis, to give effect to the issuance of our Series B preferred shares and the repurchase of ordinary shares and Series A preferred shares from some of our existing shareholders; and

Ÿ a pro forma basis, as adjusted, to give effect to (a) the sale of ADSs in this offering at an assumed public offering price of US$12.50 per ADS, the midpoint of the estimated range of the initial public offering price, (b) the conversion of our Series A preferred shares to ordinary shares, (c) the conversion of our Series B preferred shares into high-vote ordinary shares 31 business days after the completion of this offering, (d) the exercise of IAC’s warrant at an exercise price of US$6.25 per share (assuming an initial public offering price of US$12.50 per ADS and assuming the purchase price of the warrant will not be capped at a lower price under the terms of the warrant) and the application of the estimated net proceeds we will receive from such exercise and (e) our repurchase from existing shareholders in connection with the warrant exercise of that number of ordinary shares as is equal to one-half of the high-vote ordinary shares issued to IAC upon the exercise of its warrant.

	As of June 30, 2004
	Actual				Pro forma				Pro forma as adjusted
	RMB		US$		RMB		US$		RMB		US$
	(in thousands)
Shareholders’ equity
Series A preferred shares: US$0.01 par value; 9,787,494 shares authorized and 9,787,494 shares issued and outstanding as of June 30, 2004(1)	113,957		13,768		45,280		5,471
Series B preferred shares: US$0.01 par value; nil shares authorized and nil shares issued and outstanding as of June 30, 2004;	—		—		485,754		58,688
Ordinary shares: US$0.01 par value; 47,000,000 shares authorized 16,787,506 issued and outstanding as of June 30, 2004	1,390		168		1,058		128		1,317	(2)	159	(2)
High-vote ordinary shares: US$0.01 par value; nil shares authorized and nil shares issued and outstanding as of June 30, 2004	—		—		—		—		2,360	(2)	285	(2)
Additional paid-in capital	18,614		2,249		(155,254	)	(18,758	)	1,194,547		144,327
Statutory reserves	625		75		625		75		625		75
Deferred compensation	(8,949	)	(1,081	)	(8,949	)	(1,081	)	(8,949	)	(1,081	)
Receivable from shareholders	(240	)	(29	)	(240	)	(29	)	(240	)	(29	)
Accumulated other comprehensive income	297		36		297		36		297		36
Accumulated deficit	(29,633	)	(3,580	)	(29,633	)	(3,580	)	(29,633	)	(3,580	)
Total shareholders’ equity	96,061		11,606		338,938		40,950		1,160,325		140,192
Total capitalization	96,061		11,606		338,938		40,950		1,160,325		140,192

36

⁽¹⁾ The Series A preferred shares will be automatically converted into ordinary shares upon the completion of this offering.

⁽²⁾ The Series B preferred shares will be automatically converted into either ordinary shares (if IAC does not exercise its warrant) or high-vote ordinary shares (if IAC exercises its warrant) upon the 31st business day after the completion of this offering. The as adjusted figures assume that IAC will exercise its warrant, and hence that the Series B preferred shares will be converted into high-vote ordinary shares. Should IAC choose not to exercise its warrant, the Series B preferred shares would be instead converted into ordinary shares.

37

DILUTION

Our net tangible book value as of June 30, 2004 was RMB            , or US$            , per ordinary share, and US$             per ADS. Net tangible book value per ordinary share represents the amount of total tangible assets, less the amount of total liabilities, divided by the total number of ordinary shares outstanding. After giving effect to the conversion of all outstanding preferred shares into 19,394,190 ordinary shares, dilution is determined by subtracting net tangible book value per ordinary share from the assumed initial public offering price per ordinary share.

Without taking into account any other changes in such net tangible book value after June 30, 2004, other than to give effect to the issuance of Series B preferred and the repurchase of Series A preferred shares and ordinary shares and our sale of the 4,385,157 ADSs offered in this offering at the assumed initial public offering price of US$12.50 per ADS, the mid-point of the estimated public offering price range, the estimated net proceeds to us of US$40.3 million after deduction of underwriting discounts and commissions and the estimated offering expenses, our adjusted net tangible book value at June 30, 2004 would have been US$      per outstanding ordinary share, including ordinary shares underlying our outstanding ADSs, and US$      per ADS. This represents an immediate increase in net tangible book value of US$      per ordinary share, or US$      per ADS, to existing shareholders and an immediate dilution in net tangible book value of US$      per ordinary share, or US$      per ADS, to new investors in this offering.

Giving effect, in addition to the foregoing, to IAC’s exercise of its warrant, exercisable until 30 business days after the completion of this offering, to purchase approximately 17.4 million high-vote ordinary shares (assuming we do not issue any of our securities prior to the exercise of the warrant other than in connection with this offering) at a purchase price of US$6.25 per share (assuming an initial public offering price of US$12.50 per ADS and assuming the purchase price of the warrant will not be capped at a lower price under the terms of the warrant) and our corresponding repurchase from existing shareholders of approximately 8.7 million ordinary shares, also at a purchase price of US$6.25 per share, our adjusted net tangible book value at June 30, 2004 would have been US$             per outstanding ordinary share, including ordinary shares underlying our outstanding ADSs, and US$             per ADS. This represents an immediate increase in net tangible book value of US$             per ordinary share, or US$             per ADS, to existing shareholders and an immediate dilution in net tangible book value of US$             per ordinary share, or US$             per ADS, to new investors in this offering.

To the extent that any of the other outstanding options and stock warrants are exercised, there will be further dilution to new investors in this offering. See “Principal and Selling Shareholders” for more information.

The following table illustrates the dilution on a per ordinary share basis assuming that the estimated initial public offering price per ordinary share is US$6.25, (calculated by the mid-point of the estimated public offering price range for our ADSs), and that all ADSs are exchanged for ordinary shares.

Estimated initial public offering price per ordinary share	US$	6.25
Net tangible book value per ordinary share, as adjusted for this offering	US$
Amount of dilution in net tangible book value per ordinary share to investors in this offering	US$
Amount of dilution in net tangible book value per ADS to investors in this offering	US$

38

The following table summarizes on a pro forma basis the differences as of June 30, 2004 between our shareholders at June 30, 2004 and the new investors with respect to the number of ordinary shares represented by the ADSs purchased from us in this offering, the total consideration paid and the average prices per ordinary share equivalent and per ADS paid.

	Ordinary share purchased			Total Consideration			Average price per ordinary share equivalent		Average price per ADS
	Number	%		Amount	%
				US$			US$		US$
Shareholders as of June 30, 2004	32,319,786	81	%	91,070,752	66		$	2.82	$	5.64
New investors	7,393,984	19	%	46,212,400	34		$	6.25	$	12.50
Total		100.0	%		100.0	%				100.0	%

The following table illustrates the dilution on a per ordinary share basis assuming that the initial public offering price per ordinary share is US$             , (calculated by the mid-point of the estimated public offering price range for our ADSs by ), that all ADSs are exchanged for ordinary shares, that IAC exercises its warrant to purchase              high-vote ordinary shares (assuming we do not issue any our securities prior to the exercise of the warrant other than in connection with this offering) at a purchase price of US$             per share (assuming an initial public offering price of US$             per ADS and assuming the purchase price of the warrant will not be capped at a lower price under the terms of the warrant), and that we repurchase from existing shareholders              ordinary shares, also at a purchase price of US$             per share.

Estimated initial public offering price per ordinary share	US$
Net tangible book value per ordinary share, as adjusted for this offering . .	US$
Amount of dilution in net tangible book value per ordinary share to investors in this offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . .	US$
Amount of dilution in net tangible book value per ADS to investors in this offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .	US$

The following table summarizes on a pro forma basis the differences as of June 30, 2004 between our shareholders at June 30, 2004 and the new investors with respect to the number of ordinary shares represented by the ADSs purchased from us in this offering, the total consideration paid and the average prices per ordinary share equivalent and per ADS paid, assuming that IAC exercises its warrant to purchase              high-vote ordinary shares (assuming we do not issue any our securities prior to the exercise of the warrant other than in connection with this offering) at a purchase price of US$             per share (assuming an estimated initial public offering price of US$             per ADS and assuming the purchase price of the warrant will not be capped at a lower price under the terms of the warrant), and we repurchase from existing shareholders              ordinary shares, also at a purchase price of US$             per share.

	Ordinary share purchased			Total Consideration			Average price per ordinary share equivalent	Average price per ADS
	Number	%		Amount	%
				US$			US$	US$
Shareholders as of June 30, 2004	32,319,786	67	%	91,070,752	48		2.82	5.64
New investors	16,087,875	33	%	100,549,219	52		6.25	12.50
Total		100.0	%		100.0	%		100.0	%

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The discussion and tables above are based on the number of ordinary shares outstanding as of June 30, 2004, excluding              underlying options and stock warrants outstanding as of June 30, 2004, assuming conversion of 19,394,190 preferred shares to 19,394,190 ordinary shares and, as indicated, the exercise of IAC’s warrant to purchase additional high-vote ordinary shares.

40

SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following information with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

The selected consolidated statements of operations and cash flow data for the period from April 4, 2001, the date of our inception, through December 31, 2001 and for the years ended December 31, 2002 and 2003, and the selected consolidated balance sheet data as of December 31, 2002 and 2003, are derived from our audited consolidated financial statements included elsewhere in this prospectus and should be read in conjunction with, and are qualified in their entirety by reference to, these consolidated financial statements and related notes. The selected consolidated balance sheet data as of December 31, 2001 are derived from our audited consolidated balance sheet and the related notes which are not included in this prospectus. These consolidated financial statements are prepared in accordance with U.S. GAAP. The selected consolidated statements of operations and cash flow data for the six months ended June 30, 2003 and 2004 and the selected consolidated balance sheet data as of June 30, 2004 are derived from our unaudited consolidated financial statements for these periods and as of these dates included elsewhere in this prospectus. We have prepared the unaudited information on the same basis as the audited consolidated financial statements, and have included, in our opinion, all adjustments, consisting only of normal and recurring adjustments that we consider necessary for a fair presentation of the financial information set forth in those statements. Our historical results do not necessarily indicate results expected for any future periods.

On April 23, 2001, we purchased all of the shares of eLong Information Technology (Beijing) Co., Ltd, our predecessor. This acquisition was accounted for as a business combination using the purchase method of accounting. Accordingly, the following table also presents selected consolidated financial data of our predecessor as of and for each of the periods indicated. From April 4, 2001 to April 22, 2001, we had no business operations. The selected historical financial data of our predecessor as of December 31, 1999 and 2000 and for the period from August 17, 1999, the date of the inception of the predecessor, to December 31, 1999, for the year ended December 31, 2000 and for the period from January 1, 2001 to April 22, 2001 have been derived from unaudited financial statements, containing all normal and recurring adjustments, which, in the opinion of our management, are necessary to present fairly the financial position of the predecessor as of December 31, 1999 and 2000, and its results of operations for the period from August 17, 1999 to December 31, 1999, for the year ended December 31, 2000 and for the period from January 1, 2001 to April 22, 2001 in accordance with U.S. GAAP. As the business of our predecessors during 1999 and part of 2000 was different from ours, the historical results of our predecessor may not be comparable to our results.

41

	Predecessor						eLong, Inc.
	August 17, 1999 to December 31, 1999		Year ended December 31, 2000		January 1, 2001 to April 22, 2001		April 4, 2001 to December 31, 2001		Year ended December 31,						Six months ended June 30,
									2002		2003		2003		2003		2004		2004
	RMB		RMB		RMB		RMB		RMB		RMB		US$		RMB		RMB		US$
	(in thousands, except for per share data)
Selected Consolidated Statements of Operations Data
Revenues
Travel	—		5,595		3,390		18,734		48,401		66,230		8,002		21,495		52,544		6,348
Others	—		11,187		8,276		9,104		7,349		8,160		986		2,945		7,565		914
Total revenues	—		16,782		11,666		27,838		55,750		74,390		8,988		24,440		60,109		7,262
Cost of services	—		(21,132	)	(5,391	)	(9,528	)	(10,079	)	(9,370	)	(1,132	)	(4,376	)	(7,068	)	(854	)
Gross profit	—		(4,350	)	6,275		18,310		45,671		65,020		7,856		20,064		53,041		6,408
Operating expenses
Service development	(62	)	(2,085	)	(716	)	(1,174	)	(1,528	)	(2,022	)	(245	)	(765	)	(4,249	)	(514	)
Sales and marketing	(1,327	)	(44,660	)	(10,430	)	(21,130	)	(35,142	)	(44,903	)	(5,425	)	(16,980	)	(39,188	)	(4,735	)
General and administrative	(1,070	)	(11,898	)	(2,859	)	(5,898	)	(10,542	)	(10,513	)	(1,270	)	(3,976	)	(10,795	)	(1,304	)
Stock-based compensation(1)	—		—		—		(3,167	)	(4,471	)	(1,353	)	(164	)	(1,304	)	(730	)	(88	)
Amortization of goodwill and intangibles	—		(859	)	(699	)	(583	)	—		(20	)	(2	)	—		(120	)	(14	)
Business tax and surcharges	—		(782	)	(596	)	(1,360	)	(2,816	)	(4,109	)	(496	)	(1,350	)	(3,062	)	(370	)
Total operating expenses	(2,459	)	(60,284	)	(15,300	)	(33,312	)	(54,499	)	(62,920	)	(7,602	)	(24,375	)	(58,144	)	(7,025	)
Profit (loss) from operations	(2,459	)	(64,634	)	(9,025	)	(15,002	)	(8,828	)	2,100		254		(4,311	)	(5,103	)	(617	)
Other income (expenses), net	(9	)	77		(28	)	(42	)	(690	)	(21	)	(3	)	(46	)	(23	)	(3	)
Income (loss) before income tax expense	(2,468	)	(64,557	)	(9,053	)	(15,044	)	(9,518	)	2,079		251		(4,357	)	(5,126	)	(620	)
Income tax benefit (expense)	—		—		—		(71	)	(580	)	(463	)	(56	)	971		(284	)	(34	)
Net income (loss)	(2,468	)	(64,557	)	(9,053	)	(15,115	)	(10,098	)	1,616		195		(3,386	)	(5,410	)	(654	)
Earnings (loss) per ordinary share
Basic							(0.94	)	(0.63	)	0.09		0.01		(0.21	)	(0.32	)	(0.04	)
Diluted							(0.94	)	(0.63	)	0.07		0.01		(0.21	)	(0.32	)	(0.04	)
Proforma earnings per ordinary share
Basic											0.01		0.00				(0.19	)	(0.02	)
Diluted(2)											0.00		0.00				(0.19	)	(0.02	)
Earnings (loss) per ADS(3)
Basic							(0.47	)	(0.32	)	0.05		0.01		(0.11	)	(0.16	)	(0.02	)
Diluted(2)							(0.47	)	(0.32	)	0.04		0.01		(0.11	)	(0.16	)	(0.02	)
Proforma earnings per ADS(3)
Basic											0.01		0.00				(0.10	)	(0.01	)
Diluted(2)											0.01		0.00				(0.10	)	(0.01	)

42

	Predecessor				eLong, Inc.
	As of December 31,				As of December 31,								As of June 30,				Condensed Pro Forma June 30,
	1999		2000		2001		2002		2003		2003		2004		2004		2004		2004
	RMB		RMB		RMB		RMB		RMB		US$		RMB		US$		RMB		US$
	(in thousands)
Consolidated Balance Sheet Data
Cash and cash equivalents	1,300		8,393		5,434		5,344		73,132		8,836		52,448		6,337		258,893		31,280
Working capital(4)	(1,026	)	(406	)	8,626		7,007		80,677		9,747		74,185		8,963		317,062		38,308
Equipment and software, net	1,878		11,815		9,597		6,288		8,108		980		10,174		1,229		10,174		1,229
Total assets	3,587		39,891		38,207		36,570		130,561		15,775		142,842		17,259		385,719		46,604
Long-term obligation	—		534		674		—		—		—		—		—		—		—
Accumulated deficit	(2,468	)	(67,025	)	(15,115	)	(25,213	)	(24,223	)	(2,927	)	(29,633	)	(3,580	)	(29,633	)	(3,580	)
Shareholders’ equity	852		27,108		25,312		19,685		100,607		12,156		96,061		11,606		338,938		40,951

	eLong, Inc.
	April 4, 2001 to December 31, 2001		Year ended December 31,						Six months ended June 30,
			2002		2003		2003		2003		2004		2004
	RMB		RMB		RMB		US$(4)		RMB		RMB		US$
	(in thousands)
Consolidated Cash Flow Data
Net cash provided by (used in) operating activities	(7,910	)	1,621		(7,429	)	(898	)	1,803		(12,285	)	(1,484	)
Net cash used in investing activities	(23,305	)	(494	)	(1,628	)	(197	)	(616	)	(7,293	)	(881	)
Net cash provided by (used in) financing activities	36,649		(1,218	)	76,856		9,286		(138	)	(1,084	)	(131	)
Depreciation and amortization	4,345		5,920		3,006		363		2,151		1,248		151
Capital expenditures	810		2,994		5,180		626		616		3,193		386

⁽¹⁾ Stock-based compensation is all related to general and administrative expenses.

⁽²⁾ All dilutive potential ordinary shares arise from (a) the stock options granted to our directors and employees under our stock option plans, (b) the stock warrants granted to non-employees, (c) stock options to purchase up to 971,633 ordinary shares granted to IAC, (d) the automatic conversion of 8,205,620 existing Series A preferred shares into 8,205,620 ordinary shares upon the completion of this offering and giving effect to the repurchase of Series A preferred shares and ordinary shares in connection with the issuance of Series B preferred shares, and (e) the automatic conversion of 11,188,570 Series B preferred shares into 11,188,570 ordinary shares (if IAC does not exercises its warrant) or 11,188,570 high-vote ordinary shares (if IAC exercises its warrant), subject in each case to certain anti-dilution adjustments, if applicable, 31 business days after the completion of this offering. For the purpose of computing pro forma diluted income per share, dilutive potential ordinary shares arise from (a) conversion of the 9,787,494 Series A preferred shares of outstanding ordinary shares that will be issued for the preferred shares, as if the preferred shares issuance and the conversion of these shares upon the occurrence of the IPO had both taken place on January 1, 2003 and (b) the issuance of Series B preferred shares and repurchase of ordinary shares and Series A preferred shares from existing shareholders. For the year ended December 31, 2003, the pro forma diluted income per share computation was based on the net income available to ordinary shareholders of RMB173,618, divided by the weighted average ordinary shares outstanding on a pro forma basis of 32,969,281, adjusted for the dilutive effect of non-vested ordinary shares and stock options and warrants of 3,866,430, but exclusive of the effect of stock options and warrants granted subsequent to December 31, 2003 which were granted in the ordinary course of business or in connection with the issuance of Series B preferred shares on August 4, 2004. For the six-month period ended June 30, 2004, the pro forma diluted loss per share computation was based on the net loss available to ordinary shareholders of RMB6,131,028, divided by the weighted average ordinary shares outstanding on a pro forma basis of 32,169,285. The pro forma diluted loss per share for the six-month period did not include the effect of non-vested ordinary shares and stock options and warrants as the effect will be anti-dilutive. In addition, the pro forma diluted loss per share for the six-month period did not include the

43

effect of stock options and warrants granted subsequent to December 31, 2003 which were granted in the ordinary course of business or in connection with the issuance of Series B preferred shares on August 4, 2004. In addition, the pro forma diluted income (loss) per share data for the year ended December 31, 2003 and for the six-month period ended June 30, 2004 gives effect to the 260,204 options granted to IAC on October 1, 2004 as if such options had been granted on January 1, 2003 at the same terms and exercise price. For more information regarding the issuance of options to IAC, see “Investment by IAC/InterActiveCorp—Stock Options.” On the date of grant, the fair value of the 260,204 options is RMB5,769,047 and will be recorded as a deduction in arriving at net income available to ordinary shareholders over the vesting term.

⁽³⁾ Each ADS represents two ordinary shares.

⁽⁴⁾ Represents the amount of total current assets less current liabilities.

44

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations is based upon and should be read in conjunction with our consolidated financial statements and their related notes included in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. We caution you that our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information provided under the caption “Risk Factors” beginning on page 13 in this prospectus.

Overview

We are a leading online travel service provider in China. We utilize a centralized modern call center and web-based distribution technologies to provide our services. We seek to serve China’s emerging class of frequent independent travelers, or FITs, who engage in business and leisure travel. According to the China Statistical Yearbook 2003, China’s domestic tourism spending totaled approximately RMB388 billion in 2002, and we believe FITs to be a fast-growing, yet relatively underserved, segment of this market. FITs are defined as travelers who do not travel with tour groups and who require flexibility in the selection of accommodations and transportation. Through our nationwide 24-hour toll-free call center, our user-friendly Chinese and English language websites, and our extensive reseller network, we provide our customers with consolidated travel information and the ability to book rooms at discounted rates at over 2,600 hotels in more than 220 cities across China. The majority of our hotel suppliers are three-, four- or five-star hotels, as rated by the China National Tourism Bureau, catering to higher-end travelers. We also offer convenient air ticketing and other travel related services, such as rental cars, vacation packages and corporate travel services at competitive prices.

We have experienced significant growth since our inception in April 2001. For the six months ended June 30, 2004, we generated revenues of RMB60.1 million (US$7.3 million), an increase of 146.3% over RMB24.4 million generated in the six months ended June 30, 2003. In 2003, we generated RMB74.4 million (US$9.0 million) in revenues, compared to RMB55.8 million in 2002, representing an increase of 33.3%. Our increase in revenues during this period was due to an increase in the number of hotel room-nights booked and an increase in our average commission per hotel room-night booked. We recorded a net income of RMB1.6 million (US$0.2 million) for the year ended December 31, 2003 and a net loss of RMB5.4 million (US$0.7 million) for the six months ended June 30, 2004. Approximately 79.8% of our total revenues for the six months ended June 30, 2004 were derived from our hotel booking business.

Foreign ownership in the Internet content provision, advertising and air-ticketing businesses is subject to significant restrictions under current PRC law. As a result, we have a wholly owned subsidiary in China that conducts its operations in China through a series of contractual arrangements with our affiliated Chinese entities solely to facilitate our operations. We do not have any direct ownership interests or voting rights in our affiliated Chinese entities. Under these contractual arrangements, we have management control over these entities. We also bear economic risks with respect to, and derive economic benefits from, their operations.

45

Accordingly, the financial statements of our affiliated Chinese entities are consolidated with our financial statements. See “Corporate Structure and Related Party Transactions.”

Major Factors Affecting the Travel Industry

A variety of factors affect the travel industry in China, and hence our results of operations and financial condition, including:

The growth in the overall economy and demand for travel services in China.    We expect that our financial results will continue to be affected by the overall growth of the economy and demand for travel services in China. According to the China Statistical Yearbooks 2001, 2002 and 2003, the gross domestic product, or GDP, of China grew from RMB8.9 trillion (US$1.1 trillion) in 2000 to RMB10.5 trillion (US$1.3 trillion) in 2002, representing a compound annual growth rate of 8.2%. GDP per capita in the same period rose from RMB7,086 (US$856) to RMB8,184 (US$989), representing a 7.5% compound annual growth rate. At the same time, according to the China Statistical Yearbook 2001, 2002 and 2003, domestic tourism spending grew from RMB317.6 billion (US$38.4 billion) in 2000 to RMB387.8 billion (US$46.9 billion) in 2002, representing a compound annual growth of 10.5%. We anticipate that demand for travel services in China will continue to increase substantially in the foreseeable future as the economy in China continues to grow.

Seasonality in the travel service industry.    The travel service industry is characterized by seasonal fluctuations and accordingly our revenues may vary from quarter to quarter. We typically generate a larger portion of our revenues in the second half of the year. The first quarter of each year generally contributes the smallest portion of our annual revenues due to reduced business activity during the Chinese New Year holiday. These seasonality trends are difficult to discern in our historical results since our revenues have grown steadily since inception. However, our results in the future may be affected by seasonal fluctuations in the use of our services by our customers.

Disruptions in the travel industry.    Individual travelers tend to modify their travel plans based on the occurrence of events such as:

Ÿ the outbreak of serious epidemics;

Ÿ travel-related accidents;

Ÿ bad weather;

Ÿ natural disasters;

Ÿ threats of war or incidents of terrorism;

Ÿ general economic downturns; and

Ÿ increased prices in the hotel, airline or other travel-related industries.

During the period from March 2003 through June 2003, the economies of several countries in Asia, including China, were severely affected by the outbreak of SARS. In addition, several reported cases of SARS have also emerged from China within recent months. Our business and our operating results were also adversely affected. Total room-nights booked through us decreased from approximately 59,000 and 58,000 in May and June 2002, respectively, to approximately 16,000 and 41,000 in May and June 2003, respectively.

Except for the first half of 2003, we have not experienced any decline in our quarterly revenues.

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Principal Factors Affecting Our Results of Operations

Revenues.    Our revenues are generated predominantly through our hotel reservation and to a lesser extent, air-ticketing businesses. We act as agents for the travel services that we provide, and recognize the commissions that we earn. We have achieved significant growth since our inception, primarily due to steady increases in our hotel room booking and air-ticketing volumes. For the six months ended June 30, 2004, we generated revenues of RMB60.1 million (US$7.3 million), an increase of 146.3% over RMB24.4 million generated in the six months ended June 30, 2003. The outbreak of SARS in early 2003 had a significant negative impact on our revenues during the six months ended June 30, 2003. As a result, our growth rate of approximately 146% in our revenues for the first six months of 2004 compared to the first six months of 2003 reflects to a significant extent the effect of SARS in the first six months of 2003. Our revenues grew from RMB55.8 million in 2002 to RMB74.4 million (US$9.0 million) in 2003, representing an annual growth of 33.3%.

We believe that we have achieved significant revenue growth as a result of our improved marketing and broader advertising, accompanied by an increased sales force. Going forward, we intend to continue to focus on marketing by targeting frequent travelers at locations with high volumes of travelers such as airports and other transportation hubs and intend to increase our advertising efforts to include more advertising at these locations, as well as other mediums such as business and leisure travel oriented publications. In addition, we plan to leverage our extensive customer database into focused telemarketing efforts.

Because we currently do not pre-purchase the travel services that we book for our customers, we generally do not carry inventory risk. However, as we supplement our current agent business model with a merchant business model, we may suffer losses if we are unable to accurately predict the inventory we need. See “Risk Factors—Risks Related to Our Business—We may suffer losses when and if we supplement our agent business model with a merchant business model if we are unable to predict accurately the amount of inventory we need.

Our other sources of revenues during the three-year period ended December 31, 2003 and for the six months ended June 30, 2004 included revenues derived from advertising on our websites, the sale of our VIP and co-branded membership cards and our short messaging services. The table below sets forth the revenues from our services, as well as the percentage of our total revenues for the periods indicated.

	April 4, 2001 to December 31, 2001			Year ended December 31,						Six months ended June 30,
				2002			2003			2003			2004
	(in thousands of RMB, except percentage data)
Revenues
Hotel reservation	14,038	50.4	%	40,004	71.8	%	60,253	81.0	%	19,406	79.4	%	48,024	79.8	%
Air ticketing	1,049	3.8		2,026	3.6		3,744	5.0		1,244	5.1		3,817	6.4
Other travel related services	3,647	13.1		6,371	11.4		2,234	3.0		846	3.5		703	1.2
Other services	9,104	32.7		7,349	13.2		8,159	11.0		2,944	12.0		7,565	12.6
	27,838	100.0	%	55,750	100.0	%	74,390	100.0	%	24,440	100.0	%	60,109	100.0	%

Revenues from our hotel reservation service are determined by the number of room-nights we book and the commission we earn, ranging from 10% to 20% of the room price. Our customers pay the hotels directly, and we collect our commissions based on the number of room-nights our customers stayed. Under our agreements with many hotels that generate a substantial portion of our revenues, we receive an escalating commission rate that is subject to

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specific performance targets such as the number of room-nights booked during a defined period. Our commission from hotel reservation services is recognized after hotel customers have completed their stay at the hotel and upon confirmation by the hotel of the customer’s stay. Because we act as an agent in transactions with no risk of losses due to obligations for cancelled visits, we recognize our revenues from hotel transactions on a net basis in our statements of operations.

We have a diversified base of customers. No individual customer accounted for more than 2% of our revenues in 2003 or during the six months ended June 30, 2004. In addition, no one hotel room-night supplier or hotel room-night supplier chain provides room-night inventory representing more than 3% of our revenue.

Revenues derived from our air-ticketing service currently represent the second largest component of our travel-related revenues. We conduct our air-ticketing business through contractual arrangements with Beijing eLong Airline Service Co., Ltd., one of our affiliated Chinese entities, and we use a network of local agents to issue and deliver air tickets and collect air-ticketing fares. Our customers pay the local agents directly for the air ticket and we settle our commission payments with these agents periodically. Our commission from our air-ticketing service, ranging from 3% to 10% of the net ticket price, is recognized after the air ticket is delivered to and paid for by the customer. We recognize our revenues from such transactions on a net basis in our statements of operations since we act as an agent in these transactions with no risk of losses due to obligations for cancelled service.

We also provide corporate travel services to our corporate customers. We prepay travel service suppliers for the cost of the hotel room-nights and air tickets already booked by our corporate customers. We subsequently bill our corporate customers for the cost plus a fixed commission. As we act as an agent in these transactions, revenues earned from reservations made for corporate customers are recorded on a net commission basis.

We also derive travel revenues from vacation package services and sales of our VIP and co-branded membership cards. Currently, revenues from these services represent a small portion of our total revenues. In 2003 and for the six months ended June 30, 2004, other travel revenues decreased, primarily due to a decline in the number of membership cards sold compared to 2002. We believe that our hotel reservation and air-ticketing businesses will remain our principal sources of revenues, and that our other travel related services will allow our customers to choose from more travel options.

Our sources of non-travel revenues include short messaging service revenues derived from Internet advertising, and to a lesser extent, Internet services to hotels to integrate them into our network, and revenues from small merchants who use our services to promote their establishments through advertising on our websites. Revenues generated from Internet advertising decreased in 2003 compared to 2002 primarily due to our increased focus on our core travel services. We believe that going forward, we will continue to focus growth on our travel revenues.

As our revenues have grown, our accounts receivable have also increased correspondingly. Our accounts receivable balance mainly represents unsettled amounts with our corporate travel service customers and our earned commissions outstanding from travel suppliers. For our corporate travel service customers, our accounts receivable include both our commission and the gross value of the hotel and airline services provided. We bill our corporate customers for the gross value of travel services provided and then settle with the suppliers on behalf of the corporate customers. These accounts receivable are typically unsecured. We perform periodic

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credit evaluations of the financial condition of our suppliers and corporate customers. We make provisions for doubtful accounts, individually and collectively, based on an assessment of the recoverability of individual accounts by considering the age of the receivable, our historical write-off experience with the account and the general credit history of the supplier or corporate customer. Our accounts receivable increased significantly from RMB12.0 million as of December 31, 2002 to RMB28.5 million (US$3.4 million) as of December 31, 2003 and to RMB41.5 million (US$5.0 million) as of June 30, 2004, principally as a result of the increased volume of our corporate travel service provided in 2003 and during the six months ended June 30, 2004.

In our corporate travel service business, we make a hotel room reservation after receiving an order from a corporate customer. On our corporate customer’s behalf, we make a prepaid deposit to the hotel for the room nights requested by the corporate customer. After our corporate customers complete his or her stay at the hotel, we bill our customer for the cost of the room nights and the commission earned on the transaction. We also bill our corporate customers for the full value of air tickets and then settle with each air ticket supplier. As a result we expect the growth of this business to lead to significant increases in accounts receivable relative to its revenue contribution.

We receive our commissions from our suppliers based on the number of hotel room-nights that we book. As we increase our revenues and the number of hotel room-night suppliers with whom we have relationships, we expect our account receivable from our suppliers to increase.

We have taken steps to enforce an accounts receivable collection policy and typically require our hotel room-night suppliers and corporate customers to pay the commissions due to us within 45 days. We seek to minimize the working capital requirement and our accounts receivable risk by substituting partial deposits with periodic settlement for full prepayment and by focusing on large creditworthy corporate clients. In addition, our deposits for rooms can be utilized by our corporate customers booking hotel rooms, minimizing our risk.

Cost of services.    Our cost of services consists primarily of payroll compensation, telecommunications expenses, rentals and related expenses incurred by our transaction and service platform which are directly attributable to the provision of our travel services and other related services. From our inception in April 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 and for the six months ended June 30, 2004, our cost of services accounted for 34.2%, 18.1%, 12.6% and 11.8% of our total revenues, respectively, with our call center accounting for 41.2%, 56.3%, 61.7% and 78.3% of our cost of services in the same periods, respectively. Because we provide the bulk of our services directly to customers from our call center, the principal components of our cost of services are our payroll compensation for our call center employees and our telecommunications expenses relating to customer transactions. Because these costs are largely variable in nature, we expect that our cost of services in future periods will generally increase in line with our expanding business operations.

We participate in various government-mandated multi-employer defined contribution plans. Our government mandated contributions include unemployment insurance, medical insurance, pension benefits and housing assistance. All of our full-time employees are eligible for full benefits after a three month probationary period of employment. We are required to make monthly contributions to these plans at rates ranging from 33.0% to 44.5% of the base salaries, bonuses and certain allowances of our employees. Under these plans, we have no obligation to provide retirement benefits beyond the contributions we have made. Contributions to these plans are expensed as incurred. During the period from April 4, 2001 to December 31, 2001, we

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contributed RMB2,453,151. In 2002 and 2003 and for the six months ended June 30, 2004, we contributed RMB2,105,224, RMB3,126,707 (US$377,777) and RMB5,348,034 (US$646,163), respectively.

Operating expenses.    Our operating expenses primarily consist of service development, sales and marketing, general and administrative, which includes stock-based compensation, and business tax expenses.

Our service development expenses primarily consist of expenses we incur to develop our transaction and service platform, as well as to maintain, monitor and manage our websites. We expect our service development expenses to increase as we continue to upgrade our transactions platform and obtain additional necessary software licenses for our information technology system.

Our sales and marketing expenses include advertising expenses, commissions payable to our co-marketers and resellers, expenses associated with the production of marketing materials and our loyalty program, and the payroll and other expenses for our marketing personnel. Our sales and marketing expenses as a percentage of our revenues declined from 75.9% for the period from our inception in April 2001 to December 31, 2001 to 63.0% and 60.4%, respectively, for the years ended December 31, 2002 and 2003, as we achieved greater efficiency in our marketing expenditures. For the six month ended June 30, 2004, our sales and marketing expenses increased to 65.2% as a percentage of our revenues as we significantly increased our marketing and promotional efforts with a view to strengthening our brand and generating further growth in our sales. We expect our total sales and marketing expenses to increase in 2004 as compared to 2003.

Our general and administrative expenses include our payroll, benefits and travel expenses for our Chief Executive Officer, other senior management, and our administrative staff. Our general and administrative expenses as a percentage of revenues declined from 21.1% for the period from our inception in April 2001 to December 31, 2001 to 14.1% for the year ended December 31, 2003, as we benefited from the economies of scale in our growing business. For the six months ended June 30, 2004, our general and administrative expenses as a percentage of revenues increased to 18.0% primarily because our board of directors approved for us to pay the individual income tax obligations of our chief executive officer and three other senior managers totalling RMB3.3 million. We expect in the future that as we continue to grow our business, our general and administrative costs will increase in absolute terms. In addition, we expect our general and administrative costs to increase in absolute terms as we increased the compensation of our Chief Executive Officer and other members of senior management in accordance with our new employment contracts with these employees. See “Management— Employment Agreement with Executive Officers—Compensation and Benefits” for more details regarding our compensation arrangement with each senior members of our management team.

Under PRC law, our services related revenues are subject to a 5% business tax. In addition, our advertising service revenue is subject to a cultural development surcharge of 3% of the advertising service revenue.

Income tax.    Because we, our wholly owned foreign subsidiary and our affiliated Chinese entities are incorporated in different jurisdictions, we file separate income tax returns. We were previously incorporated in the British Virgin Islands and hence our financial statements in 2001, 2002 and 2003 reflect the taxation in the British Virgin Islands, and in the PRC. In May 2004, we reincorporated our corporate domicile in the Cayman Islands.

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Under the laws of the British Virgin Islands and Cayman Islands, we are exempt from income tax. In addition, there are no withholding taxes in the British Virgin Islands or Cayman Islands.

In accordance with the “Income Tax Law of China for Enterprises with Foreign Investment and Foreign Enterprises”, our wholly owned subsidiary, eLongNet Information Technology (Beijing) Co., Ltd., as a foreign invested enterprise, is subject to enterprise income tax, or EIT, at a rate of 33%.

As domestic companies in China, three of our affiliated Chinese entities, namely Beijing Asia Media Interactive Advertising Co., Ltd., Beijing eLong Airline Service Co., Ltd. and Jiangsu General Chinese Hotel Reservation Network, Ltd., or GCH, are subject to EIT at the rate of 33%.

Beijing eLong Information Technology Co., Ltd., or Beijing Information, has obtained the status of a “New High Technology Development Enterprise” which entitles it to an EIT rate of 15%. In addition, it enjoyed an exemption of EIT for three years from 2001 to the end of 2003. Beijing Information is also expected to be granted a preferential tax treatment at a reduced EIT rate of 10% for 2004 and 2005.

As of December 31, 2003, we had operating loss carryforwards against which we have provided a full valuation allowance. The valuation allowance provided was based upon our assessment of the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible or can be utilized. The gross amount of operating loss carryforwards, pre-acquisition and post-acquisition, pertain to eLongNet Information Technology (Beijing) Co., Ltd., and will expire from 2005 to 2008 as follows:

	Pre-acquisition	Post-acquisition
	(in thousands of RMB)	(in thousands of RMB)
2005	54,297	—
2006	—	5,284
2007	—	1,464
2008	—	1,212
Total	54,297	7,960

The ultimate utilization of operating loss carryforwards will depend upon our ability to generate sufficient future taxable income prior to their expiration. Under PRC tax rules and regulations, our post-acquisition operating loss carry forwards may be utilized only after we have fully utilized our pre-acquisition operating loss carry forwards.

The utilization of net operating loss carryforwards will reduce our income tax payment. However, if we utilize our pre-acquisition loss carryforwards to offset against our future taxable income, we will incur an accounting tax expense in our consolidated statement of operations until such time as the goodwill and other non-current intangible assets related to the acquisition have been reduced to zero. The amount of income tax expense incurred will be equivalent to the amount of the savings of income tax payment resulting from the utilization of such pre-acquisition operating loss carry forwards.

Recent Acquisition

In December 2003, two of our affiliated Chinese entities acquired a 100% interest in GCH. The total consideration for the acquisition was RMB6.0 million (US$0.7 million) in cash, payable over a two-year payment term. We have paid RMB2.5 million (US$0.3 million) and are obligated

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to pay RMB2.5 million (US$0.4 million), RMB0.5 million (US$0.1 million) and RMB0.5 million (US$0.1 million) in 2004, 2005, and 2006, respectively.

GCH is a regional hotel reservation company with its main presence in Shanghai and surrounding areas. We are the sole beneficiary and have effective control over GCH through contractual agreements between us and our affiliated Chinese entities. Accordingly, the results of operations of GCH are consolidated with our financial statements from December 2003 onward.

Potential Acquisition

On December 23, 2003, we signed a non-binding letter of intent to purchase 80% of the outstanding equity interest of Ray Time. Ray Time operates one of the leading hotel VIP card businesses that distribute membership cards with entitlements to free room-nights and other benefits at participating hotels in China. Ray Time currently operates 15 individual VIP card programs in 14 major cities in China. The proposed consideration for the acquisition based on current negotiations consists of a cash consideration of up to RMB27.8 million (US$3.4 million). The proposed payment schedule includes:

Ÿ RMB12.5 million (US$1.3 million) in cash, due upon closing of the acquisition;

Ÿ Two cash payments of RMB2.0 million each, with one cash payment due 18 months after the closing and one cash payment due 24 months after the closing;

Ÿ Earnout payment of RMB5.7 million (US$0.7 million) payable one year after the closing of the transaction based on Ray Time’s revenue and net income for such year; and

Ÿ Earnout payments of up to RMB5.6 million (US$0.7 million) based on Ray Time’s revenue and net income for two years following the closing of the transaction.

In addition, both we and the existing shareholders of Ray Time are expected to invest an additional RMB2.5 million each directly into Ray Time at closing for working capital purposes.

We believe we have sufficient funding to meet our payment obligations if the proposed acquisition is consummated.

Our original letter of intent specified that the acquisition would be completed by February 23, 2004. Prior to the expiration of our original letter of intent dated December 23, 2003, we entered into a subsequent non-binding letter of intent dated February 21, 2004 to extend the effective period in which we may acquire Ray Time. Under the terms of our subsequent non-binding letters of intent, the deadline to acquire Ray Time was extended to and expired on June 23, 2004. We have a non-binding, oral understanding with Ray Time that we will continue our negotiations with them. In the second quarter of 2004, we made a RMB2.0 million refundable deposit to Ray Time under our oral understanding to continue negotiations with respect to our acquisition of Ray Time. Our oral understanding with Ray Time is that our deposit will be returned upon demand. Neither the letters of intent entered into between us and Ray Time nor our oral understanding with Ray Time obligates either party to continue with negotiations, enter into any definitive agreements or complete a transaction. We will incur no penalty if we choose not to continue with our acquisition, but we cannot provide any assurance that Ray Time will immediately return our deposit. In addition, we cannot provide any assurance as to whether, or when, we will reach an agreement with respect to, or complete, the acquisition of Ray Time. Furthermore, even if we decided we wanted to acquire Ray Time and had agreed to terms with respect to an acquisition of Ray Time, under the terms of our agreement with IAC, we would not be permitted to complete the acquisition without the prior written consent of IAC.

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For more information about IAC’s investment in our company, see “Investment by IAC/InterActiveCorp.” To date, IAC has not given us its consent to the potential Ray Time acquisition and we cannot provide any assurance that IAC will do so in the future.

Critical Accounting Policies

The discussion and analysis of our operating results and financial condition are based on our audited financial statements, which have been prepared in accordance with U.S. GAAP. Our operating results and financial condition are sensitive to accounting methods, assumptions and estimates that underlie the preparation of our financial statements. We base our assumptions and estimates on historical experience and on various other assumptions that we believe to be reasonable and which form the basis for making judgments about matters that are not readily apparent from other sources. Our management evaluates these estimates on an ongoing basis. Actual results may differ from these estimates as facts, circumstances and conditions change or as a result of different assumptions.

Our management considers the following factors in reviewing our financial statements:

Ÿ the selection of critical accounting policies; and

Ÿ the judgments and other uncertainties affecting the application of those critical accounting policies;

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors to be considered when reviewing our financial statements. Our principal accounting policies are set forth in detail in Note 2 to our audited financial statements included elsewhere in this prospectus. We believe the following critical accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements.

Depreciation.    Our equipment and software are depreciated on a straight-line basis over the estimated useful lives of the assets, after taking into account their estimated residual value. We review periodically our policies with regard to the estimated useful lives of the assets. The useful lives are based on our historical experience with similar assets and taking into account anticipated technological changes.

Impairment.    We review periodically the carrying amounts of long-lived assets, including equipment and intangible assets, to assess whether they are impaired. We test these assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. When such a decline has occurred, we adjust the carrying amount to the recoverable amount. We measure the recoverability of assets by comparing the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. In determining estimates of future cash flows, significant judgment in terms of projection of future cash flows and assumptions is required. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Goodwill and certain intangible assets.    We test annually whether goodwill and intangible assets, which are not subject to amortization, have been impaired. Such tests are performed more frequently if events and circumstances indicated that the assets might be impaired. An impairment loss is recognized to the extent that the reporting unit’s carrying amount, including the amount of the goodwill, exceeds the reporting unit’s fair value. Where quoted market prices

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are not available, fair value is determined using valuation techniques such as discounted cash flows and earnings and revenue multiples.

Provision for doubtful accounts.    We maintain an allowance for doubtful accounts for estimated probable losses resulting from the inability of our customers to make required payments. We base our estimates on the aging of our accounts receivable balance, customer credit-worthiness, and historical write-off experience. If the financial condition of our customers were to deteriorate, actual write-offs might be higher than expected, which could adversely affect our operating results and financial condition through the recording of a higher level of provisions.

Deferred tax assets.    We recognize deferred tax assets for all deductible temporary differences and operating loss carryforwards for regular tax purposes. At each reporting date, we assess whether a valuation allowance is required to reduce the amount of the deferred tax amount to a remaining amount that is more likely than not to be realized. In assessing the need for a valuation allowance, we consider all available evidence, including projected future taxable income, tax planning strategies, historical taxable income, and the expiration period of the operating loss carryforwards. Differences in actual results from projections used in determining the valuation allowances could result in future adjustments to the allowances which could adversely affect our operating results and financial condition.

Provision for loyalty points.    Cardholders of our eLong membership program can earn loyalty points based on their usage of the cards. We award travel services and other non-cash gifts to the cardholders upon the redemption of loyalty points that are accumulated based on the cardholders’ transactions. We estimate the costs to provide free travel and other non-cash gifts based on historical redemption data and recognize such costs as sales and marketing expenses in the statements of operations. If actual redemption differs significantly from our estimates, it will result in an adjustment to our liabilities and the corresponding expenses.

Stock-based compensation.    We have adopted the preferred fair value recognition provision of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” or SFAS No. 123. Under the fair value based method, compensation cost related to employee stock options or similar equity instruments is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. We determine fair value using the Black-Scholes model. Under this model, certain assumptions, including the risk-free interest rate, the expected life of the options and the estimated fair value of our ordinary shares, are required to determine the fair value of the options. If different assumptions had been used, the fair value of the options would have been different from the amount we computed and recorded, which would have resulted in either an increase or decrease in the compensation expense.

We account for equity instruments issued to non-employee vendors in accordance with the provisions of SFAS No. 123 and Emerging Issues Task Force, or EITF, Issue No. 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is complete. We believe that our assumptions, including the risk-free interest rate and expected life used to determine fair value, are appropriate. However, if different assumptions had been used, the fair value of the equity instruments issued to non-employee vendors would have been different from the amount we computed and recorded, which would have resulted in either an increase or decrease in the compensation expense.

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Revenue recognition.    Our revenues are principally derived from the provision of travel services, including hotel reservation, air ticketing and other related travel services. In general, we recognize revenues when all of the following have occurred:

Ÿ persuasive evidence of an agreement with the customer exists;

Ÿ the fees for services performed are fixed or determinable;

Ÿ the services that the customer booked have been performed; and

Ÿ there is reasonable assurance that the fees will be collected.

We believe our revenue recognition policies are consistent with Staff Accounting Bulleting No. 104, “Revenue Recognition in Financial Statements” and EITF 99-19 “Reporting Revenue Gross as a Principal Versus Net as an Agent.” As we operate as an agent of our travel suppliers, we have no risk of loss due to obligations for cancelled services. We therefore recognize commissions on a net basis.

Quarterly Financial and Operating Data

The following table presents certain unaudited financial and operating data for the nine quarters ended June 30, 2004. You should read the following table in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus. We have prepared the unaudited quarterly financial information on the same basis as our audited consolidated financial statements. This information includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for fair presentation of our financial position and operating results for the quarters presented. Because the travel service industry in China is evolving, and our business is relatively new, our operating results for any quarter are not necessarily indicative of results for any future quarter.

	Three months ended
	June 30, 2002		September 30, 2002		December 31, 2002		March 31, 2003		June 30, 2003		September 30, 2003		December 31, 2003		March 31, 2004		June 30, 2004		June 30, 2004
	RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		RMB		US$
	(in thousands, except for percentage data and operating data)
Financial Data
Revenues
Travel	11,367		12,790		15,858		12,032		9,463		21,059		23,676		22,807		29,737		3,593
Others	1,819		1,028		2,634		1,813		1,132		1,732		3,483		3,905		3,660		442
Total revenues	13,186		13,818		18,492		13,845		10,595		22,791		27,159		26,712		33,397		4,035
Cost of services	(2,567	)	(2,667	)	(2,601	)	(2,293	)	(2,083	)	(2,162	)	(2,832	)	(3,019	)	(4,049	)	(489	)
Gross profit	10,619		11,151		15,891		11,552		8,512		20,629		24,327		23,693		29,348		3,546
Operating expenses	(13,655	)	(12,602	)	(16,780	)	(13,310	)	(11,064	)	(15,986	)	(22,560	)	(21,773	)	(36,371	)	(4,394	)
Profit (loss) from operations	(3,036	)	(1,451	)	(889	)	(1,758	)	(2,552	)	4,643		1,767		1,920		(7,023	)	(848	)
Other income (expenses), net	(24	)	(23	)	(619	)	(22	)	(24	)	43		(18	)	(27	)	4		1
Income (loss) before income tax expense	(3,060	)	(1,474	)	(1,508	)	(1,780	)	(2,576	)	4,686		1,749		1,893		(7,019	)	(847	)
Income tax benefit (expense)	(186	)	(90	)	(92	)	396		574		(1,044	)	(390	)	(284	)	—		—
Net income (loss)	(3,246	)	(1,564	)	(1,600	)	(1,384	)	(2,002	)	3,642		1,359		1,609		(7,019	)	(847	)
Gross margin	80.5	%	80.7	%	85.9	%	83.4	%	80.3	%	90.5	%	89.6	%	88.7	%	87.9	%	87.9	%
Operating margin	(23.0	)%	(10.5	)%	(4.8	)%	(12.7	)%	(24.1	)%	20.4	%	6.5	%	7.2	%	(21.0	)%	(21.0	)%
Depreciation and amortization	1,530		1,384		1,495		1,455		696		415		440		636		612		74
Operating Data
Number of room-nights	171,161		212,487		227,681		226,772		116,839		315,353		373,105		374,975		472,349		N/A
Number of air tickets	5,199		15,124		12,965		13,834		6,876		23,478		28,959		38,105		55,484		N/A

55

Our quarterly revenues have experienced continued sequential growth since the first quarter of 2002, with the exception of the first and second quarters of 2003, during which our revenues were materially adversely affected by SARS, and the first quarter of 2004, during which our revenues were affected by seasonality. The growth of our revenues was consistent with the increase in the number of room-nights booked during the quarterly periods presented. Our gross margins have remained at or above 80% in the past nine quarters, primarily due to the low cost of labor in China and the relatively high efficiency of our transaction platform.

Our gross profit and income from operations for the quarter ended September 30, 2003 increased substantially compared to the preceding quarters. The increase is attributable to the rebound of the travel industry in China following a downturn during the SARS period.

During the second quarter of 2004, we experienced a net loss of RMB7.0 million (US$0.8 million) after recording a net income of RMB1.6 million (US$0.2 million) during the first quarter of 2004. Our net loss for the second quarter of 2004 was attributable to the following expenses incurred in the second quarter of 2004 with no comparable expenses in the first quarter of 2004:

Ÿ a one-time payment approved by the board of directors for our company to pay the individual income tax obligations of our chief executive officer and four other senior members of our management team, totaling RMB4.5 million (US$0.5 million), of which RMB3.3 million (US$0.4 million) is included in our general and administrative expenses and RMB1.2 million (US$0.1 million) is included in our service development expenses;

Ÿ additional expenses of RMB2.9 million (US$0.4 million) for our increased contribution to government-mandated multi-employer defined contribution plans;

Ÿ provisions for doubtful accounts and supplier deposits of RMB1.7 million (US$0.2 million); and

Ÿ a performance bonus to non-senior management of RMB0.6 million (US$0.1 million).

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Results of Operations

The following table sets forth certain information relating to our results of operations as of the dates and for the periods indicated:

	April 4, 2001 through December 31, 2001				Year ended December 31,										Six months ended June 30,
					2002				2003						2003				2004
	RMB		% of revenues		RMB		% of revenues		RMB		US$		% of revenues		RMB		% of revenues		RMB		US$		% of revenues
	(in thousands, except percentage data)
Revenues
Travel	18,734		67.3	%	48,401		86.8	%	66,230		8,002		89.0	%	21,495		88.0	%	52,544		6,348		87.4	%
Others	9,104		32.7		7,349		13.2		8,160		986		11.0		2,945		12.1		7,565		914		12.6
Total revenues	27,838		100.0	%	55,750		100.0	%	74,390		8,988		100.0	%	24,440		100.0	%	60,109		7,262		100.0	%
Cost of services	(9,528	)	(34.2	)	(10,079	)	(18.1	)	(9,370	)	(1,132	)	(12.6	)	(4,376	)	(17.9	)	(7,068	)	(854	)	(11.8	)
Gross profit	18,310		65.8	%	45,671		81.9	%	65,020		7,856		87.4	%	20,064		82.1	%	53,041		6,408		88.2	%
Operating expenses
Service development	(1,174	)	(4.2	)%	(1,528	)	(2.7	)%	(2,022	)	(244	)	(2.7	)%	(765	)	(3.1	)%	(4,249	)	(514	)	(7.1	)%
Sales and marketing	(21,130	)	(75.9	)	(35,142	)	(63.0	)	(44,903	)	(5,425	)	(60.4	)	(16,980	)	(69.5	)	(39,188	)	(4,735	)	(65.2	)
General and administrative	(5,898	)	(21.2	)	(10,542	)	(18.9	)	(10,513	)	(1,270	)	(14.1	)	(3,976	)	(16.3	)	(10,795	)	(1,304	)	(18.0	)
Stock-based compensation	(3,167	)	(11.4	)	(4,471	)	(8.0	)	(1,353	)	(163	)	(1.8	)	(1,304	)	(5.3	)	(730	)	(88	)	(1.2	)
Amortization of goodwill and intangibles	(583	)	(2.1	)	—		—		(20	)	(2	)	—		—		—		(120	)	(14	)	(0.2	)
Business tax and surcharges	(1,360	)	(4.9	)	(2,816	)	(5.1	)	(4,109	)	(496	)	(5.5	)	(1,350	)	(5.5	)	(3,062	)	(370	)	(5.1	)
Total operating expenses	(33,312	)	(119.7	)%	(54,499	)	(97.8	)%	(62,920	)	(7,602	)	(84.6	)%	(24,375	)	(99.7	)%	(58,144	)	(7,025	)	(96.7	%)
Profit (loss) from operations	(15,002	)	(53.9	)%	(8,828	)	(15.8	)%	2,100		254		2.8	%	(4,311	)	(17.6	)%	(5,103	)	(617	)	(8.5	)%
Other expenses, net	(42	)	(0.2	)	(690	)	(1.2	)	(21	)	(3	)	—		(46	)	(0.2	)	(23	)	(3	)	(0.0	)
Income (loss) before income tax expense	(15,044	)	(54.0	)%	(9,518	)	(17.1	)%	2,079		251		2.8	%	(4,357	)	(17.8	)	(5,126	)	(620	)	(8.5	)
Income tax benefit (expense)	(71	)	(0.3	)	(580	)	(1.0	)	(463	)	(56	)	(0.6	)	971		4.0	%	(284	)	(34	)	(0.5	)%
Net income (loss)	(15,115	)	(54.3	)%	(10,098	)	(18.1	)%	1,616		195		2.2	%	(3,386	)	(13.8	)%	(5,410	)	(654	)	(9.0	)%

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Six months Ended June 30, 2004 Compared to Six months Ended June 30, 2003

Revenues.    The following table sets forth certain information relating to our revenues for the six months ended June 30, 2003 and 2004.

	Six-months ended June 30,
	2003			2004
	RMB	% of revenues		RMB	US$	% of revenues		% growth
	(in thousands, except percentage data)
Travel
Hotel reservations	19,406	79.4	%	48,024	5,802	79.9	%	147.5	%
Air ticketing	1,244	5.1		3,817	461	6.3		206.8
Other travel related services	846	3.5		703	85	1.2		(16.9	)
Other revenues	2,944	12.0		7,565	914	12.6		157.0
Total revenues	24,440	100.0	%	60,109	7,262	100.0	%	145.9	%

The following table sets forth the number of room-nights booked and the average commission per room-night, as well as the number of air tickets sold, for the six month periods ended June 30, 2003 and 2004.

	Six-months ended June 30,
	2003	2004	% growth
Number of room-nights booked	343,611	847,324	146.6	%
Average commission per room-night (RMB)	57	57	0.4
Number of air tickets sold	20,710	93,589	351.9	%

We had revenues of RMB60.1 million (US$7.3 million) for the six months ended June 30, 2004, an increase of 146.3% over RMB24.4 million for the six months ended June 30, 2003. The outbreak of SARS in early 2003 had a significant negative impact on our revenues during the six months ended June 30, 2003. As a result, our growth rate of approximately 146% in our revenues for the first six months of 2004 compared to the first six months of 2003 reflects to a significant extent the effect of SARS during the first six months of 2003. Our total revenues increased primarily as a result of increases in our hotel booking and air-ticketing businesses, partially offset by a decrease in our other travel related services. During the same period, revenues from our hotel reservations increased from RMB19.4 million for the six months ended June 30, 2003 to RMB48.0 million (US$5.8 million) for the six months ended June 30, 2004, representing a 147.4% increase, and revenues from air ticketing increased from RMB1.2 million for the six months ended June 30, 2003 to RMB3.8 million (US$0.5 million) for the six months ended June 30, 2004, representing a 216.7% increase.

The increases in our hotel reservation revenues reflect an increase in the number of hotel room-nights we booked due to growth in the industry and the absence of the negative impact of SARS in the six months ended June 30, 2003, as well as a slight increase in our average commission per hotel room-night. We generated a higher average commission by triggering escalating commissions for booking greater room-night volumes and through experiencing a general rise in room rates. The increase in air-ticketing revenues was due to an increase in the number of air tickets we sold in the six months ended June 30, 2004, as well as growth in the travel industry in China in general and the absence of the negative impact of SARS in the six months ended June 30, 2004. In addition, our other revenues increased in the six months ended June 30, 2004 due primarily to an increase in revenues from our short messaging service.

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Cost of services.    Our cost of services which mainly includes the cost of the call center. Our cost of services increased 61.4% from RMB4.4 million for the six months ended June 30, 2003, to RMB7.1 million (US$0.9 million) for the six months ended June 30, 2004 as we expanded our operations by hiring more staff and expanding our call center in order to meet the greater demand for call center operations associated with our increased hotel reservation and air-ticketing businesses.

Gross profit.    As a result of the above factors, we had a gross profit of RMB53.0 million (US$6.4 million) for the six months ended June 30, 2004, an increase of 163.7% over RMB20.1 million for the six months ended June 30, 2003.

Operating expenses.    The following table sets forth breakdown of our operating expenses for the six months ended June 30, 2003 and 2004.

	Six months ended June
	2003			2004
	RMB	% of revenues		RMB	US$	% of revenues		% growth
	(in thousands, except percentage data)
Operating expenses
Service development	765	3.1	%	4,249	514	7.1	%	455.4	%
Sales and marketing	16,980	69.5		39,188	4,735	65.2		130.8
General and administrative	3,976	16.3		10,795	1,304	18.0		171.5
Stock-based compensation	1,304	5.3		730	88	1.2		(44.0	)
Amortization of goodwill and intangibles	—	—		120	14	0.2		—
Business tax and surcharges	1,350	5.5		3,062	370	5.1		126.8
Total operating expenses	24,375	99.7	%	58,144	7,025	96.7	%	138.5	%

Our operating expenses were RMB 58.1 million (US$7.0 million) for the six months ended June 30, 2004, representing an increase of 138.5% over RMB24.4 million for the six months ended June 30, 2003. Due to the negative impact of SARS during the first six months ended June 30, 2003, we had significantly reduced our spending in 2003 by reducing staff and promotional expenditures. As a result, our 138.5% increase in operating expenses for the first six months of 2004 reflects the lower operating costs that we incurred as a result of the negative impact of SARS during the first six months of 2003. Our total operating expenses as a percentage of our total revenues remained relatively stable for the six months ended June 30, 2004 compared to the six months ended June 30, 2003.

Our service development expenses grew higher for the first six months of 2004 due to the fact that our service development expenses for the six months ended June 30, 2003 were lower as a result of our cost-cutting measures implemented during the SARS outbreak in 2003. After the SARS outbreak in 2003, we increased our service development expenses to accommodate the growth of our business. In addition, during the second quarter of 2004, our board of directors approved for us to pay the individual income tax obligation of one senior member of our management team, totalling RMB1.2 million (US$0.1 million). Such expense is included in our service development expenses.

Our sales and marketing expenses for the six months ended June 30, 2003 were significantly reduced as a result of the SARS outbreak and therefore are not comparable to our sales and marketing expenses for the six months ended June 30, 2004. During the SARS outbreak in 2003 we stopped our major sales and marketing efforts and significantly reduced

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staff in our sales and marketing department. For the six months ended June 30, 2004, we returned our sales and marketing expenses to higher levels to provide for the growth of our business. As a result of higher sales during the six months ended June 30, 2004, we paid more commissions to our resellers as they generated higher booking volumes during the six-months ended June 30, 2004 compared to the six months ended June 30, 2003. We also incurred additional expenses of approximately RMB2.9 million (US$0.4 million) for our increased contribution to our government-mandated multi-employer defined contribution plans, of which RMB1.7 million (US$0.2 million) was attributable as sale and marketing expenses, during the six months ended June 30, 2004 as compared to expenses of RMB1.5 million for the six months ended June 30, 2003.

Our general and administrative expenses increased in the six months ended June 30, 2004 compared to the six months ended June 30, 2003. During the second quarter of 2004, our board of directors approved for us to pay the individual income tax obligations of our Chief Executive Officer and three other senior members of our management team, which totaled RMB 3.3 million (US$0.4 million). Our remaining increase in general and administrative expenses was due to our additional provisions for doubtful accounts and supplier deposits of RMB1.7 million (US$0.2 million) during the six months ended June 30, 2004.

Our stock-based compensation expense results from amortization of vesting ordinary shares and stock options granted to directors and executive officers. The decrease in our stock-based compensation expense in the six months ended June 30, 2004 compared to the six months ended June 30, 2003 was due to full vesting in 2003 of most of the stock previously granted resulting in a lower amortization amount being recognized in the six months ended June 30, 2004.

We incurred an amortization of intangibles in the amount of RMB120,000 (US$14,499) due to our acquisition of GCH.

We paid more business taxes and surcharges in for the six months ended June 30, 2004 compared to the six months ended June 30, 2003 in line with increases in our revenues.

Other expenses, net.    We recorded other expenses of RMB22,602 (US$2,731) for the six months ended June 30, 2004, compared to RMB46,168 (US$5,578) for the six months ended June 30, 2003.

Income tax expense.    We incurred a tax expense of RMB0.3 million (US$0.1 million) for the six months ended June 30, 2004, compared to RMB1.0 million for the six months ended June 30, 2003. Our effective tax rate differs from the statutory tax rate of 33% primarily due to the preferential tax status of one of our affiliated Chinese entities, foreign tax differentials and certain non-deductible expenses.

Net loss.    We had net loss of RMB5.4 million (US$0.7 million) for the six months ended June 30, 2004, compared to a net loss of RMB3.4 million for the six months ended June 30, 2003. The increase in net loss was due to a significant increase in our sales and marketing expenses in the first six months of 2004.

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Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Revenues.    The following table sets forth certain information relating to our revenues for the two years ended December 31, 2002 and 2003.

	Year ended December 31,
	2002			2003				% growth
	RMB	% of revenues		RMB	US$	% of revenues
	(in thousands, except percentage data)
Travel Revenues
Hotel reservations	40,004	71.8	%	60,253	7,280	81.0	%	50.6	%
Air ticketing	2,026	3.6		3,744	452	5.0		84.8
Other travel related revenues	6,371	11.4		2,233	270	3.0		(64.9	)
Other revenues	7,349	13.2		8,160	986	11.0		11.0
Total revenues	55,750	100	%	74,390	8,988	100	%	33.3	%

The following table sets forth the number of room-nights booked and the average commission per room-night and the number of air tickets sold for the two years ended December 31, 2002 and 2003.

	2002	2003	% growth
Number of room-nights booked	742,175	1,032,069	39.1	%
Average commission per room-night (RMB)	54	58	7.4
Number of air tickets sold	37,972	73,147	92.6	%

We had revenues of RMB74.4 million (US$9.0 million) in 2003, an increase of 33.3% over RMB55.8 million in 2002. Our total revenues increased primarily as a result of increases in our hotel booking and air-ticketing businesses, partially offset by decreases in our other travel related services. During the same period, revenues from our hotel reservations increased from RMB40.0 million in 2002 to RMB60.3 million (US$7.3 million) in 2003, representing a 50.6% growth, and revenues from air ticketing increased from RMB2.0 million in 2002 to RMB3.7 million (US$0.4 million) in 2003, representing an 84.8% growth. Our revenue growth was adversely affected by the outbreak of SARS, primarily during the second quarter of 2003. However, our hotel reservation and air-ticketing businesses experienced a strong rebound during the second half of the year.

The increases in our hotel reservation revenues reflect an increase in the number of hotel room-nights we booked, together with an increase in our average commission per hotel room-night. We generated a higher average commission by triggering escalating commissions for booking greater room-night volumes and experiencing a general rise in room rates. We generated higher air-ticketing revenues by booking more air tickets. With the exception of our short messaging service, our revenues from our non-travel related services have shown decreases as we continue to focus on our core travel business.

Cost of services.    Our cost of services declined 7.0% from RMB10.1 million in 2002, to RMB9.4 million (US$1.1 million) in 2003. Our cost of services decreased as a result of decreases in our payroll compensation during SARS when we implemented a policy of unpaid vacations, which was partially offset by higher telecommunication expenses resulting from an increase in toll-free phone calls.

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Gross profit.    As a result of the above factors, we had a gross profit of RMB65.0 million (US$7.9 million) in 2003, an increase of 42.2% over RMB45.7 million in 2002.

Operating expenses.    The following table sets forth breakdown of our operating expenses for the two years ended December 31, 2002 and 2003.

	Year ended December 31,
	2002			2003
	RMB	% of revenues		RMB	US$	% of revenues		% growth
	(in thousands, except for percentage data)
Operating expenses
Service development	1,528	2.7	%	2,022	244	2.7	%	32.3	%
Sales and marketing	35,142	63.0		44,903	5,425	60.4		27.8
General and administrative	10,542	18.9		10,513	1,270	14.1		(0.3	)
Stock-based compensation	4,471	8.0		1,353	163	1.8		(69.7	)
Amortization of goodwill and intangibles	—	—		20	2	—		N/A
Business tax and surcharges	2,816	5.1		4,109	496	5.5		45.9
Total operating expenses	54,499	97.8	%	62,920	7,602	84.6	%	15.5	%

Our operating expenses were RMB62.9 million (US$7.6 million) in 2003, an increase of 15.5% over RMB54.5 million in 2002. As we achieve greater economies of scale, we expect that our operating expenses will continue to decrease as a percentage of our total revenues.

Our service development expenses grew in line with our revenues and reflect the expanding number of hotel supplier and air-ticketing supplier relationships, as well as higher maintenance costs on our expanded websites in 2003. We also incurred service development expenses as we upgraded the software used for our service platform in 2003.

Our sales and marketing expenses increased in 2003 because we significantly increased our promotion and marketing efforts in 2003. These efforts included the distribution of more eLong membership cards, additional online marketing programs, and other service promotional activities. We also paid more commissions to our resellers as they generated higher booking volumes. The increase in sales and marketing expenses was partially offset by reduced depreciation charges as a portion of our fixed assets became fully depreciated.

Our general and administrative expenses remained stable as a result of the increased expenses related to the hiring of additional administrative staff in the fourth quarter of 2003 and higher rental expenses resulting from the expansion of our business in 2003, offset by reduced depreciation charges as a portion of our fixed assets become fully depreciated.

Our stock-based compensation expense results from amortization of vesting ordinary shares and stock options granted to directors and executive officers. The decrease in our stock-based compensation expense in 2003 was due to the full vesting of the ordinary shares in May 2003.

We paid more business taxes and surcharges in 2003 compared to 2002 due to increases in our revenues.

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Other expenses, net.    We recorded other expenses of RMB21,043 (US$2,542) in 2003, compared to RMB690,232 in 2002. Other expenses decreased in 2003 primarily as a result of an impairment charge of RMB591,000 we recognized in 2002 due to the other-than-temporary decline in the market value of an investment security that we held, which was partially offset by an increase in the interest income we earned in 2003. Our interest income earned on cash deposits increased from RMB30,173 in 2002 to RMB118,663 (US$14,336) in 2003, reflecting the interest earned on the proceeds from our Series A preferred share private placement.

Income tax expense.    We incurred a tax expense of RMB0.5 million (US$0.06 million) in 2003, compared to RMB0.6 million in 2002. Our effective tax rate differs from the statutory tax rate of 33% primarily due to the tax holiday and the preferential tax status of one of our affiliated Chinese entities, foreign tax differentials and certain non-deductible expenses.

Net income (loss).    We had net income of RMB1.6 million (US$0.2 million) in 2003, compared to a net loss of RMB10.1 million in 2002. Our net income was achieved as a result of a significant increase in revenues, decreases in stock-based compensation expense and in cost of services, offset by proportionately smaller increases in service development expenses, sales and marketing expenses and business taxes and surcharges. Our general and administrative expenses remained steady from 2002 to 2003.

Year Ended December 31, 2002 Compared to the Period from April 4, 2001 to December 31, 2001

We were incorporated in April 2001. Consequently, our results for the period from April 4, 2001 to December 31, 2001 are not comparable to our full year results when compared to the year ended December 31, 2002.

Revenues.    The following table sets forth certain information relating to our revenues for the period from April 4, 2001 to December 31, 2001 and the year ended December 31, 2002.

	Period from April 4, 2001 to December 31, 2001			Year ended December 31, 2002
	RMB	% of revenues		RMB	% of revenues
	(in thousands, except percentage data)
Travel Revenues
Hotel reservations	14,038	50.4	%	40,004	71.8	%
Air ticketing	1,049	3.8		2,026	3.6
Other travel related revenues	3,647	13.1		6,371	11.4
Other revenues	9,104	32.7		7,349	13.2
Total revenues	27,838	100	%	55,750	100	%

The following table sets forth the number of room-nights booked and the average commission per room-night for the period from April 4, 2001 to December 31, 2001 and the year ended December 31, 2002.

	2001	2002	% growth
Number of room-nights	388,677	742,175	90.9	%
Average commission per room-night (RMB)	47	54	14.9	%

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We had revenues of RMB55.8 million in 2002 and RMB27.8 million in 2001. Our total revenues increased primarily as a result of a full year operating period in 2002 compared to an abbreviated operating period in 2001, as well as increases in revenues from our travel related services. The increases in our hotel reservation revenues reflect an increase in the number of hotel room-nights we booked, together with an increase in our average commission per hotel room-night. We generated a higher average commission by triggering escalating commissions for booking greater room-night volumes and experiencing a general rise in room rates. We generated higher air-ticketing revenues in 2002 by booking more air tickets. With the exception of advertising revenues, our revenues from our non-travel related services have shown increases primarily as a result of the longer period of operations in 2002.

Cost of services.    Our cost of services were RMB10.1 million in 2002 and RMB9.5 million in 2001. Our cost of services included our call center costs, which consist predominantly of cost of labor and telecommunications expenses. Our cost of services increased as a result of a longer operating period in 2002, the hiring of more staff in 2002 as we expanded our operations and the increased number of toll-free calls we received in 2002. Due to economies of scale, our call center costs showed a proportionally smaller increase despite a larger increase in our revenues over the same period.

Gross profit.    As a result of the above factors we had a gross profit of RMB45.7 million in 2002, compared to RMB18.3 million in 2001.

Operating expenses.    The following table sets forth the breakdown of our operating expenses for the period from April 4, 2001 to December 31, 2001 and the year ended December 31, 2002.

	Period from April 4, 2001 to December 31, 2001			Year ended December 31, 2002
	RMB	% of revenues		RMB	% of revenues
	(in thousands, except percentage data)
Operating expenses
Service development	1,174	4.2	%	1,528	2.7	%
Sales and marketing	21,130	75.9		35,142	63.0
General and administrative	5,898	21.2		10,542	18.9
Stock-based compensation	3,167	11.4		4,471	8.0
Amortization of goodwill and intangibles	583	2.1		—	—
Business tax and surcharges	1,360	4.9		2,816	5.1
Total operating expenses	33,312	119.7	%	54,499	97.7	%

Our operating expenses were RMB54.5 million in 2002, compared to RMB33.3 million in 2001.

Our service development expenses grew in 2002 due to the expanding number of travel supplier relationships, as well as higher maintenance costs due to our expanded websites. We also incurred service development expenses as we upgraded the software used for our service platform in 2002.

Our sales and marketing expenses increased in 2002 compared to 2001 due to the longer operating period in 2002. In this longer operating period we incurred higher salary and bonus expenses, distributed more eLong membership cards, and paid more commissions to our resellers as they generated more booking volumes in 2002.

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Our general and administrative expenses increased in 2002 as a result of the longer operating period and additional payroll expenses associated with hiring more staff.

Our stock-based compensation resulted from amortization of vesting ordinary shares granted to directors and executive officers in April 2001.

We incurred no amortization of goodwill in 2002 due to the adoption of Statement of Financial Accounting Standards No. 142, which requires that goodwill not to be amortized.

We paid more business taxes and surcharge expenses in 2002 compared to 2001 due to increases in our revenues.

Other expenses, net.    We recorded other expenses of RMB690,232 in 2002, as compared to RMB42,319 in 2001. The significantly higher other expenses we recorded in 2002 were due to an impairment charge of RMB591,000 relating to an investment security we held and higher interest expenses, as well as a lower interest income earned on lower average cash balances in 2002.

Income tax expense.    We incurred an income tax expense of RMB580,109 in 2002, compared to RMB70,910 in 2001. Our effective tax rate differs from the statutory tax rate of 33% primarily due to foreign tax differentials and non-deductible expenses.

Net loss.    We had a net loss of RMB10.1 million in 2002, compared to a net loss of RMB15.1 million in 2001. Our net loss decreased significantly as a result of a significant increase in revenues and a decrease in amortization, offset by proportionately smaller increases in cost of services, service development expenses, general and administrative expenses, sales and marketing expenses and business taxes and surcharges.

Liquidity and Capital Resources

The following table sets forth a summary of our cash flows for the periods indicated.

	April 4, 2001 to December 31, 2001		Year ended December 31,						Six months ended June 30,
			2002		2003				2003		2004
	RMB		RMB		RMB		US$		RMB		RMB		US$
	(in thousands, except for percentage data)
Net cash provided by (used in) operating activities	(7,910	)	1,621		(7,429	)	(898	)	1,803		(12,285	)	(1,484	)
Net cash used in investing activities	(23,305	)	(494	)	(1,628	)	(97	)	(616	)	(7,293	)	(881	)
Net cash provided by (used in) financing activities	36,649		(1,218	)	76,856		9,285		(138	)	(1,084	)	(131	)
Effect of foreign exchange rate changes on cash	—		—		(11	)	(1	)	—		(22	)	(3	)
Net increase (decrease) in cash and cash equivalents	5,434		(91	)	67,789		8,190		1,049		(20,685	)	(2,499	)
Cash and cash equivalents at beginning of period/year	—		5,434		5,344		646		5,344		73,132		8,836
Cash and cash equivalents at end of period/year	5,434		5,344		73,132		8,836		6,392		52,448		6,337

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Operating activities.    Our net cash used in operating activities was RMB12.3 million (US$1.5 million) for the six months ended June 30, 2004, compared to net cash provided by operating activities of RMB1.8 million for the six months ended June 30, 2003. Net cash used in operating activities increased primarily as a result of a RMB15.1 million increase in accounts receivable associated with our corporate travel business, partially offset by a net increase in accrued expenses and other payables mainly associated with payroll and commissions.

Net cash used in operating activities was RMB7.4 million (US$0.9 million) in 2003, compared to net cash provided by operating activities of RMB1.6 million in 2002 and net cash used in operating activities of RMB7.9 million in 2001. The level of cash used in operating activities was higher in 2003 as a result of increases in our accounts receivable and prepaid expenses and other current assets, partially offset by increases in our accounts payable. Our accounts receivable increased primarily as a result of an expansion of our corporate travel service in which hotel rooms and air tickets are prepaid by us. As we continue to expand our corporate travel service business, we expect that our accounts receivable will increase substantially. We intend to finance the additional working capital needs resulting from the growth in our corporate travel services with our cash balances and a portion of the net proceeds we will receive from this offering. Our prepaid expenses and other current assets increased primarily as a result of the rental deposits for new office space and other prepaid marketing expenses. We used additional net cash in 2001 due to the start up and commencement of operations of our business.

Our operations are dependent on the cash flow we receive from our affiliated Chinese entities through our contractual arrangements with each affiliated Chinese entity. Our affiliated Chinese entities pay pre-agreed fees to us for the technical or other services that we provide to them. Our affiliated Chinese entities pay pre-agreed fees based on prevailing “market rates.” The term “market rates” in our agreements with our affiliated Chinese entities is not clearly defined and we determine “market rates” based on input from ourselves and our affiliated Chinese entities, taking into account any external “market rate” that may have developed for the services that we provide. Because the same individuals control both our company and our affiliated Chinese entities, we are able to adjust “market rates” and any payment schedule from the affiliated Chinese entity to us. While we are not aware of any restrictions that prevent the transfer of funds from our affiliated Chinese entities to us, any such restriction would limit our cash flow and have an adverse effect on our financial condition. See “Risk Factors—Risks Related to Our Business—Our affiliated Chinese entities are controlled by Justin Tang, which may pose potential conflicts of interests, and if they violate their contractual agreements with us, our business could be harmed, our reputation could be damaged and we might have to resort to litigation to enforce our rights, which could be time-consuming and expensive.”

Investing activities.    Our net cash used in investing activities was RMB7.3 million (US$0.9 million) for the six months ended June 30, 2004, compared to net cash used in investing activities of RMB0.6 million for the six months ended June 30, 2003. Net cash used in investing activities increased as a result of our GCH acquisition and our capital expenditures spent during the first quarter of 2004. In addition, for the six months ended June 30, 2003, we did not invest significantly in any activities as a result of the negative impact of the SARS outbreak in 2003.

Net cash used in investing activities was RMB1.6 million (US$0.2 million) in 2003, compared to net cash used in investing activities of RMB0.5 million in 2002 and RMB23.3 million in 2001. In 2001 we acquired eLong Beijing for US$1.5 million (RMB equivalent 12.4 million) in order to commence operations. In addition, from 2001 to 2002, we also placed a total of RMB12.0 million with Shenzhen Youyuan Investment Company, an affiliate of Billable Development, which is a significant shareholder of our company. Shenzhen Youyuan Investment Company managed the

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money for us and we received a guaranteed annual interest of 2.25% on the placement. As of December 31, 2003, all the principal and interest were repaid in full. In 2003, we used RMB5.2 million (US$0.6 million) to purchase certain fixed assets including server equipment and computers as part of our relocation to our new headquarters.

Financing activities.    Our net cash used in financing activities was RMB1.1 million (US$0.1 million) for the six months ended June 30, 2004, compared to net cash used in financing activities of RMB0.1 million for the six months ended June 30, 2003. Our net cash provided by financing activities was due to a repayment of receivables from certain shareholders in connection with the issuance of our ordinary shares.

Our net cash provided by financing activities was RMB76.9 million (US$9.3 million) in 2003, compared to net cash used in financing activities of RMB1.2 million in 2002 and net cash provided by financing activities of RMB36.6 million in 2001.

In April 2001, we issued 16.0 million of our ordinary shares to our initial shareholders for RMB37.3 million. In August 2003, we repurchased and cancelled approximately 3.3 million shares from our shareholders for RMB41.4 million and we received US$15.0 million from four investors, in exchange for 9,787,494 Series A preferred shares. The Series A preferred shares will be automatically converted into ordinary shares upon consummation of this offering. We do not currently have any borrowing facility in place and have no current plans to establish one.

Our capital expenditures totalled RMB0.8 million, RMB3.0 million and RMB5.2 million (US$0.6 million) in 2001, 2002 and 2003, respectively. We expect our capital expenditures in 2004 to amount to approximately RMB12.0 million (US$1.5 million) of which RMB3.2 million (US$0.4 million) was spent in the first six months of 2004. Our capital expenditures relate primarily to purchases of computer equipment, servers and computer software to support the expansion of our business. We anticipate that our capital expenditures in the remainder of 2004 will also consist of similar equipment and software purchases.

During the near term, we intend to continue to focus our marketing campaign on retaining existing customers and acquiring new customers. In addition, we plan to continue to invest in expanding our service offerings, improving our websites and improving the infrastructure supporting customer service and customer care. We believe that the proceeds to us from this offering, our available cash and anticipated future operating cash flows will be sufficient to fund currently anticipated liquidity needs in the near term. However, any projections of future cash inflows and outflows and any projections of the future state of the economy and travel industry conditions, which may have direct effect on our cash inflows, are subject to substantial uncertainty.

If we determine that we need to raise additional capital in the future, we may seek to sell additional equity or borrow funds. The sale of additional equity would result in dilution to our existing equity holders. We cannot assure you that any of these financing alternatives will be available in amounts or on terms acceptable to us, if at all. If we are unable to raise or borrow any needed additional capital, we could be required to significantly alter our operating plan, which could have a material adverse effect on our business, operating results or financial condition.

Subsequent Event

In August 2004, we received US$58.7 million from IAC in exchange for the issuance of 11,188,570 Series B preferred shares, and we repurchased and cancelled 1,581,874 Series A preferred shares and 4,012,411 ordinary shares from existing shareholders for an aggregate

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purchase price of US$29.3 million. We retained the remainder, or approximately US$29.4 million, of the amount received from IAC. Of the retained amount, approximately US$4.4 million is currently being held in escrow, of which, subject to: (1) possible claims by IAC for indemnification under our agreement with IAC for representations, warranties, and covenants provided by us, and (2) payment by us for certain post-closing matters, approximately US$1.1 million will be released to us on August 4, 2005 and the balance will be released to us on March 31, 2006. The Series B preferred shares will be automatically converted into either ordinary shares or high-vote ordinary shares on the 31st business day after the completion of this offering. We believe that no material contingencies exist in respect of IAC’s indemnification rights and that the payments to IAC will not have a material effect on our financial condition.

Contractual Cash Obligations

In November 2003, we entered into a three-year leasing agreement for 3,744 square meters of office space in Beijing for our headquarters, with an option to renew for an additional two-year term. The annual payment under the lease is RMB2.6 million (US$0.3 million).

Future minimum lease payments under non-cancelable operating leases with initial or remaining lease terms in excess of one year as of December 31, 2003 are:

	Minimum lease amount
	(RMB)	US$
2004(1)	4,021,355	485,847
2005	2,619,240	316,448
2006	2,619,240	316,448
Total	9,259,835	1,118,743

(1) Also includes approximately RMB1.4 million (US$0.2 million) for lease payments on our other branch offices.

We are also contractually obligated to pay RMB3.0 million (US$0.4 million) and RMB0.5 million (US$0.1 million) in 2004 and 2005, respectively, related to the acquisition of GCH. See “— Recent Acquisition.”

Off-balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees or arrangements, interest rate swap transactions or foreign currency forward contracts. We do not engage in trading activities involving non-exchange traded contracts.

Inflation and Monetary Risk

Inflation in China has not had a material impact on our results of operations in recent years. According to the National Bureau of Statistics of China, the change in Consumer Price Index in China was 0.7%, -0.8% and 1.2% in 2001, 2002 and 2003, respectively.

Quantitative and Qualitative Disclosures about Market Risk

Interest rate risk.    Our exposure to interest rate risk for changes in interest rates relates primarily to the interest income generated by excess cash and cash equivalents deposited in banks. Cash and cash equivalents consist of cash on hand and in bank and certificates of deposit with an initial term of less than three months.

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The carrying amounts of cash and cash equivalents, accounts receivable and other receivables represent our principal exposure to credit risk in relation to our financial assets. As of December 31, 2003, substantially all of our cash and cash equivalents were held with major international banks which we believe are of acceptable credit quality. We have not used any derivative financial instruments to hedge interest rate risk. We have not been exposed nor do we anticipate being exposed to material risks due to changes in interest rates, although our future interest income may fluctuate in line with changes in interest rates. The risk associated with fluctuating interest rates is principally confined to our cash deposits in banks, and, therefore, our exposure to interest rate risk is minimal.

Foreign exchange risk.    Substantially all of our revenue-generating operations are transacted in Renminbi, which is not fully convertible into foreign currencies. Excluding amounts held in escrow, we currently have approximately US$30 million held in United States dollar denominated deposits. We have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency risk, but we believe that our current exposure to foreign exchange risks is manageable. See “Risk Factors — Risks Related to Doing Business in the People’s Republic of China — The fluctuation of Renminbi may materially and adversely affect the value of your investment.”

Recent Accounting Pronouncements

In November 2002, the EITF reached a consensus on Issue No.00-21, “Revenue Arrangements with Multiple Deliverables”, or “EITF No.00-21”. EITF No. 00-21 addresses how revenue arrangements with multiple deliverables should be divided into separate units of accounting and how the arrangement consideration should be allocated to the identified separate accounting units. For our purposes, EITF No.00-21 is effective for fiscal periods beginning after June 15, 2003. The adoption of this consensus did not have a significant impact on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” SFAS No.150 establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. It also includes required disclosures for financial instruments within its scope. For our purposes, SFAS No.150 was effective for instruments entered into or modified after May 31, 2003 and otherwise will be effective at the beginning of the first financial year beginning after June 15, 2003. FASB Staff Provision No. FAS150-3 deferred certain provisions of SFAS No.150 for certain mandatorily redeemable non-controlling interests. We currently do not have any financial instruments that are within the scope of SFAS No.150.

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THE TRAVEL AND TOURISM INDUSTRY IN CHINA

The facts and statistics used in this prospectus relating to the travel industry and economy in China are derived from various government and institute research publications. While we have taken reasonable care to ensure that these facts and statistics presented are accurately reproduced from such sources, we have not independently verified them. These facts and statistics may not be comparable to similar facts and statistics collected for the industry or economy in the United States and other countries.

In terms of domestic tourism spending in 2002, the approximately RMB388 billion (US$46.9 billion) travel industry in China is large and growing rapidly. We expect the industry to continue to experience rapid growth as China’s economy continues to develop. Travel and tourism in China is characterized by a highly fragmented and inefficient travel service sector due to many factors, including the lack of consolidated hotel ownership, the lack of a centralized hotel reservation system, the localized nature of travel agencies and a dual regulatory regime. We believe that the fragmented nature of the travel market in China will create increasing demand for central reservation platforms such as our own capable of consolidating a wide range of travel information and negotiating favorable terms with travel suppliers on the basis of scale from our aggregated demand.

According to the China National Tourism Administration, as of the end of 2002, China had more than 11,500 travel agencies, with the top 100 domestic travel agencies having an aggregate market share of less than 2%. As the requirements of travelers become more complex, we believe that these local agencies, which had been accustomed to providing services using state-owned travel suppliers, have been increasingly unable to respond to the changing needs of business and leisure travelers in China. In addition, the development of China’s tourism infrastructure has resulted in an increasing number of travelers who choose to engage in leisure travel without the constraints inherent in packaged group tours. These frequent independent travelers, or FITs, represent a key segment of the growing travel industry in China that we seek to serve.

The increasing accessibility of the Internet in China creates a foundation for new markets and opportunities, providing the ability to bring together a large number of segmented suppliers and customers in a highly fragmented travel industry. We believe that we are well positioned to benefit from these trends in China’s travel industry.

Historical Background

Following the founding of the People’s Republic of China, government agencies and state-owned enterprises dominated commercial activity in China up until the late 1970s when the Chinese government began to introduce market-based economic reforms. In the past, large state-owned travel agencies provided travel services to the consumers. The three largest travel agencies, the China Travel Service, or CTS, the China International Travel Service, or CITS, and the China Youth Travel Service, or CYTS, operated as loosely organized groups of individual local agencies that often had strong ties to local governments. The local offices of these organizations functioned individually with their own networks of customers and service suppliers. The choices available to travelers through these organizations were limited and the quality of services was inconsistent. For example, accommodation and transportation arrangements would be limited to hotels and airlines with which the local branch of the travel agencies had established relationships. While these state-owned agencies have made some

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efforts to integrate their widespread operations across the country, high levels of decentralization have persisted in the travel industry in China.

The Growth of the Economy and Tourism Industry in China

China’s economy has grown rapidly in recent years with compound annual GDP growth of 8.2% in the period from 2000 through 2002. As China’s economy has developed, the per capita annual incomes of urban and rural households have also increased. The following table sets forth certain statistical information regarding China’s recent economic performance and per-capita annual income for the periods indicated.

	Year			CAGR
	2000	2001	2002
GDP (RMB in billions)	8,947	9,731	10,479	8.2	%
Real GDP growth rate (%)	9.0	8.8	7.7	N/A
Per capita GDP (RMB)	7,086	7,651	8,184	7.5
Per capita annual income of rural households (RMB)	3,146	3,307	3,449	4.7
Per capita annual income of urban households (RMB)	6,296	6,869	8,177	14.0

Sources: China Statistical Yearbooks 2001, 2002 and 2003.

Expenditures on tourism have grown at an even faster pace than GDP. In conjunction with rising per capita income in China, government policies have also fostered the development of the leisure travel and market. In the past decade, the central government and various levels of local governments in China have actively sought to promote investment in tourism infrastructure in order to further develop tourism. According to the China Statistical Yearbook, investment in capital construction for the tourism sector rose from RMB2.5 billion in 1998 to RMB5.1 billion in 2002. Since 1998, a total of RMB16.4 billion has been invested in capital construction for travel and tourism. Various levels of government have also introduced a number of policy initiatives to encourage tourism, including the introduction in 1999 of weeklong holidays for Labor Day in May and National Day in October, paid vacation days and the relaxation of many outbound travel restrictions. By 2003, the number of official off-days, including weekends and holidays, had reached 114 days per year, helping to stimulate travel demand.

Domestic travel volume has risen from approximately 280 million trips in 1990 to approximately 878 million trips in 2002, most of which was leisure oriented. In 2002 China posted 12.0% and 10.1% increases from 2001 in the number of domestic trips and in domestic tourism spending, respectively. International tourism grew as well, rising 11.0% in terms of international tourist arrivals and 14.6% in terms of international tourism revenues in 2002. China’s growth in tourism was adversely affected in the first half of 2003 due to the effects of SARS, but growth in tourism has since recovered and is expected to be robust in 2004. The following table shows a summary of certain tourism statistics in China for the periods indicated.

	Year			CAGR
	2000	2001	2002
Domestic tourism spending (RMB in billions)	317.6	352.2	387.8	10.5	%
Tourists (Overnight Visitors) (in millions)	31.2	33.2	36.8	8.6
International tourism receipts (US$ in billions)	16	17.8	20.4	12.1

Sources: The Yearbooks of China Tourism Statistics 2001, 2002 and 2003

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The expansion in economic activity and tourism in China has led to a rapid expansion in the hotel sector. According to the Yearbook of China Tourism Statistics, the number of star-rated hotels, as rated by China National Tourism Bureau, grew from 853 in 1992 to 8,880 in 2002, with the number of rooms growing from 167,195 in 1992 to 897,206 in 2002. The following table shows the growth in the number of hotels in China with star rating and associated occupancy rates as of the dates and for the periods indicated.

	As of December 31,			CAGR
	2000	2001	2002
Number of hotels with star rating	6,029	7,358	8,880	21.4	%
Three- to five-star hotels	2,368	2,857	3,656	24.3
One- and two-star hotels	3,661	4,501	5,224	19.5
Total number of rooms	594,678	816,260	897,206	22.8
Total number of occupied room-nights (in millions)	125.0	174.2	197.1	25.6
Average occupancy rate (%)	57.6	58.5	60.2	N/A

Sources: The Yearbooks of China Tourism Statistics 2001, 2002 and 2003

Domestic air traffic in China has also been increasing rapidly. According to the China Statistical Yearbook, the number of civil flight routes connecting parts of China increased from 385 routes in 2000 to 1,015 routes in 2002. The following table shows recent traffic volume for China’s airline industry and at selected airports in China as well as some statistics for selected airports in the United States for the periods indicated for comparison purposes.

	Year			CAGR
	2000	2001	2002
	(in millions of passengers, except for flight routes)
Total annual number of domestic air passengers	60.3	68.3	77.6	13.4	%
Total number of domestic civil aviation flight routes	385	563	1,015	62.4
Annual airport traffic in Beijing (PEK)	21.7	24.2	27.2	13.8
Annual airport traffic in Shanghai
Shanghai Pudong (PVG) (1)	5.5	6.9	11.0	41.2
Shanghai Hongqiao (SHA)	12.1	13.8	13.7	6.1
Annual airport traffic in New York (JFK)	32.8	29.4	29.9	-4.5
Annual airport traffic in Chicago (ORD) (2)	72.1	67.4	66.6	-3.9

⁽¹⁾ The Shanghai Pudong International Airport opened on October 1, 1999. As a result, growth rates for passenger traffic at this airport may not represent an accurate basis of comparison.

⁽²⁾ The decline in airport traffic in the United States in 2001 and 2002 may reflect to a significant extent the effects of the terrorist attacks on September 11, 2001.

Sources: National Bureau of Statistics of China website (www.stats.gov.cn/english/); China Statistical Yearbooks 2000 – 2003; the John F. Kennedy International Airport website (www.panynj.gov/aviation/jfkframe.htm); the Chicago O’Hare International Airport website (www.ohare.com/ohare/home.asp).

Changing Travel Patterns in China

Leisure travel in China has in the past consisted principally of packaged group tours. Traditional travel agencies in China focus on packaged group tours. According to CYTS, one of the largest traditional travel agencies, approximately 90% of their customers traveled in tour

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groups in 2002. The typical tour group follows a set itinerary and is organized by a travel agency. The agency receives a fixed fee and negotiates discounted prices for hotel rooms and other travel related services either directly or through other intermediaries. Guided tour groups are generally useful to travelers who travel infrequently and who are unfamiliar with their destinations and who are looking for an economical way of travel. However, tour groups offer minimal flexibility in the choice of destinations, length of stay and timing of one’s travel.

According to market data from CEIC Data Company Ltd., the frequent independent traveler, or FIT, segment of travelers grew at an approximately 18% compound annual growth rate from 1999 to 2002 and is the largest growing group of travelers in China. FITs are defined as travelers who do not travel with tour groups and who require flexibility in the selection of accommodations and transportation. FITs are typically more sophisticated urban dwellers who value customized experiences. We expect that as Chinese travelers become wealthier and more experienced with leisure travel, the appeal of traditional tours will become less important than the ability to arrange one’s own schedule.

In the past, business travelers, who usually traveled on government business, had little choice but to accept the arrangements made by their organizations or by local travel agencies hired by their organizations. Accommodation and transportation arrangements were generally in the form of state-owned guesthouses or airlines that were part of the travel agent’s network. We believe that the increase in commercial activity has contributed to a growing number of people in China conducting business travel outside of government related business travel.

Traditionally, most companies in China have relied on either local travel agencies or their internal resources for business travel planning. Companies in China have begun to recognize the importance of focusing on their core competency by outsourcing non-critical functions. A growing number of medium and large-sized companies are beginning to centralize their corporate travel management by outsourcing to professional travel service providers.

Inefficiencies and Fragmentations in the Travel Market in China

The travel market in China is highly fragmented with an underdeveloped booking, reservation and fulfillment infrastructure, and with no dominant nationwide travel agencies. As a result of market reforms, a gradual shift from state-owned to privately-owned travel agencies and changing travel patterns, the travel market in China is undergoing a period of change. While competition among the older state-owned travel agencies and the privately owned travel agencies has significantly promoted the development of China’s travel service, the industry remains inefficient and is likely to remain so in the foreseeable future.

Inefficiencies in the hotel reservation system.    According to the Year Book of China Tourism Statistics 2003, as of December 31, 2002, China had 3,656 three-, four- or five-star hotels. Hotels in China are generally run independently and are not part of large chains. The largest hotel chains in China are small relative to the larger hotel chains in the United States. There is no industry wide electronic reservation infrastructure similar to that available in the United States and parts of Europe.

There is no national distribution system for hotel rooms in China. Travel agents generally have to negotiate room availability and rates with the hotel each time they make a booking. Hotel suppliers in China are not able to benefit from an efficient distribution system that is managed by a centralized process. Until recently, travelers in China did not have access to comprehensive hotel information or a central location for bookings. Instead, consumers in

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China and hotels interact through walk-in room reservations, direct call-in reservations, business conventions and traditional travel agency bookings.

Inefficiencies in the air-ticketing system.    Currently, TravelSky Technology Limited, or TravelSky, operates the only nationwide system for air-ticket reservations in China. Consumers in China do not have access to direct bookings on TravelSky unless it is done through individual travel agencies. Moreover, the delivery of air tickets remains inefficient. The majority of consumers in China receive their air tickets through physical delivery and payment to the travel agency is made upon delivery. The process of physical delivery means that consumers in China do not have a reliable or timely delivery process that can respond to last minute travel needs. For example, business travelers who change their flight destinations at the last minute often have to wait for the delivery of a physical ticket before they can initiate their travel. While some airlines in China have recently begun to offer electronic ticketing, there is currently no universal electronic ticketing system available.

Inefficiencies in traditional travel agencies.    Travel agencies in China tend to be unaffiliated, small office operations. Even the four travel agencies that operate on a nationwide basis are mostly structured such that each office operates independently from the others. Consumers in China have generally not been able to enjoy the benefits that can be offered by a nationwide, integrated travel agency.

Inefficiencies created by separate regulatory regimes.    Under current regulations, two distinct regulatory bodies regulate the travel industry in China. In order to sell air tickets, travel agencies must obtain a permit from the Civil Aviation Administration of China. If a travel agency intends to conduct the air-ticketing business in more than one city, an air-ticketing permit is required for every city, as there is currently no national air ticketing license. In addition, in order to conduct other travel-related business such as hotel reservations, the travel agency must obtain a separate license from the China National Tourism Administration. Consumers who wish to purchase both air tickets and make hotel reservations through a single agency must use a travel agency that performs both functions. Many traditional travel agencies are unable to perform both functions given the limited number of licenses that can be issued and the costs associated with obtaining each license. As a result, consumers are often forced to arrange travel plans with multiple travel agencies.

Internet Growth in China

According to the China Statistical Yearbook 2003, China had a total population of 1.3 billion, with approximately 470 million people concentrated in urban areas such as Beijing, Shanghai, Guangzhou and Wuhan. According to China Internet Network Information Center, China had approximately 87 million Internet users as of June 30, 2004, 28% higher than as of June 30, 2003. The majority of these Internet users are from urban centers. The increasing accessibility of the Internet in China creates a foundation for new markets and opportunities, providing the ability to bring together a large number of segmented suppliers and customers in a fragmented travel industry. In an online environment, consumers have access to a broad array of information that enables them to conveniently and efficiently evaluate and compare travel options, while suppliers can extend their marketing reach to a large base of widely dispersed potential customers. As Internet usage grows, consumer adoption of e-commerce and online travel booking is expected to increase accordingly.

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OUR BUSINESS

Overview

We are a leading online travel service provider in China. We utilize a centralized modern call center and web-based distribution technologies to provide our services. We seek to serve China’s emerging class of FITs, who engage in business and leisure travel. According to the China Statistical Yearbook 2003, China’s domestic tourism spending totaled approximately RMB388 billion in 2002, and we believe FITs to be a fast-growing, yet relatively underserved segment of this market. Through our nationwide 24-hour toll-free call center, our user-friendly Chinese and English language websites and our extensive reseller network, we provide our customers with consolidated travel information and the ability to book rooms at discounted rates at over 2,600 hotels in more than 220 cities across China. The majority of our hotel suppliers are three-, four- or five-star hotels, as rated by the China National Tourism Bureau, catering to higher-end travelers. We also offer convenient air ticketing and other travel related services, such as rental cars, vacation packages and corporate travel services, at competitive prices.

Since our inception in April 2001, we believe we have built one of the largest travel service distribution networks in China. We offer our customers a wide selection of hotel rooms in all major cities in China, usually at significant discounts to published rates, and guaranteed year-round room availability at many hotels. Our hotel booking volume has increased from approximately 389,000 room-nights in 2001 to approximately 1,032,000 room-nights in 2003. In the six months ended June 30, 2004, we booked approximately 847,300 room-nights, compared to the approximately 343,600 room-nights we booked in the six months ended June 30 2003. For the three months ended September 30, 2004, we booked approximately 538,000 room-nights. We offer our travel suppliers access to aggregated consumer demand, giving them the ability to promote their hotels and other travel related services to a large and growing base of customers at low incremental cost.

We also book air tickets for all major airlines in China and many international airlines that operate flights originating from China. We issue and deliver air tickets using a network of local agents throughout major cities in China. In the six months ended June 30 2004, we sold approximately 93,600 air tickets, compared to approximately 20,700 air tickets we sold in the six months ended June 30, 2003. For the three months ended September 30, 2004, we sold approximately 81,000 air tickets.

We have experienced significant growth since we began operations in 2001. For the six months ended June 30, 2004, we generated revenues of RMB60.1 million (US$7.3 million), an increase of 146.0% over RMB24.4 million generated in the six months ended June 30 2003. We generated revenues of RMB74.4 million (US$9.0 million) for the year ended December 31, 2003, an increase of 33.3% from 2002. We recorded a net income of RMB1.6 million (US$0.2 million) for the year ended December 31, 2003 and a net loss of RMB5.4 million (US$0.7 million) for the six months ended June 30, 2004. We recorded a net loss for the first six months ended June 30, 2004 as a result of our one-time payment of individual income tax obligations on behalf of five senior members of our management team, our payments into government-mandated multi-employer defined contribution plans, our provisions for doubtful accounts and our performance bonus paid to non-senior members of management. Approximately 81.0% of our total revenues in 2003 and 79.9% of our total revenues for the six months ended June 30, 2004 were derived from our hotel booking business, with the remainder of our revenues being largely derived from sales of air tickets, short messaging services, Internet advertising the sale of co-branded and VIP membership cards and Internet service to hotels.

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Recent Developments

On August 4, 2004 we issued and sold 11,188,570 Series B preferred shares to IAC, which, among other things, owns and operates, through its IAC Travel division, various online travel businesses, including Expedia, Hotels.com, Hotwire and the WWTE private label business. We used approximately one-half of the proceeds of the sale to repurchase securities from our existing shareholders. After the share repurchase we retained US$29,345,033 of the aggregate purchase price. Of that amount, US$4,401,754 is being held in escrow, of which, subject to: (1) possible claims by IAC for indemnification under our agreement with IAC for breaches of representations, warranties, and covenants provided by us, and (2) payment by us for certain post-closing matters, US$1,100,438 will be released to us on August 4, 2005 and the balance will be released on March 31, 2006. In addition, we granted IAC options to purchase additional ordinary shares, and a warrant to purchase a number of our high-vote ordinary shares that will, if exercised, result in IAC’s holding approximately 52% of our outstanding shares and approximately 96% of our voting power on a fully-diluted basis. See “Investment by IAC/InterActiveCorp” for a more detailed description of the IAC investment.

We are organized under the law of the Cayman Islands and have a wholly owned subsidiary in China that conducts operations in China under a series of contractual arrangements with our affiliated Chinese entities. See “Corporate Structure and Related Party Transactions” for information on our operating structure.

Our Opportunity

We expect the travel and tourism industry in China to continue to grow rapidly as China’s economy continues to expand. China’s travel service industry is fragmented and inefficient. This fragmentation creates a market opportunity for our centralized reservation platform offering comprehensive travel information and favorable terms negotiated with travel service suppliers across China on the basis of scale from our aggregated demand. See “The Travel and Tourism Industry in China.”

Our Strengths

We have quickly become one of the leading travel service providers in China by capitalizing on our following competitive strengths:

Brand leadership.    As one of the early movers in the industry to adopt modern communications and Internet technologies, we believe that we have established one of the best-known brands for travel services in China. We believe our customers associate the eLong brand with value, convenience and innovation. According to a survey conducted in January 2004 by iResearch, an online market research company in China, our Chinese-language website ranked number one in terms of consumer awareness for online travel services in China.

Nationwide reach for nationwide travel destinations.    Our customers can make reservations for accommodation at over 2,600 hotels in more than 220 cities across China, and book domestic and international air tickets, vacation packages and rental cars by calling our centralized 24-hour call center from anywhere in China or by logging onto our websites. Our customers may also access our services through our extensive nationwide reseller network consisting of more than 4,000 travel service providers. We issue and deliver air tickets using a network of local agents in major cities in China.

Total customer focus.    We provide our customers with comprehensive travel information, allowing them to conveniently compare prices, browse availability and amenity options, and

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select the price and supplier that best meet their individual travel needs. We enhance customer experience through services such as personalized phone greetings, mobile text messaging that provides destination information, and a loyalty program that rewards repeat customers. Our user friendly websites, well trained call center representatives and continuous service development efforts reflect our focus on providing superior customer service.

Strong supplier value.    We offer our travel suppliers access to aggregated consumer demand and the ability to promote their services to a large and growing base of frequent independent travelers seeking higher-end travel services. In addition, our call center and web-based transaction and service platform, with its easy-to-use supplier interface, allows our suppliers to promote their services at low incremental cost and with minimal changes to their existing systems.

Streamlined business operations through tailored information management systems.    We have drawn on our in-depth knowledge of the business practices unique to China’s travel service industry to develop proprietary processes and technology-based systems for use in our business. These processes and systems incorporate business intelligence, customer relationship management, order processing, financial reporting and performance management and enable us to coordinate effectively the activities of our staff, agents, suppliers and resellers. This results in streamlined operations, a higher degree of operating flexibility and stronger customer relationships through enhanced customer service.

Scalable and cost-efficient platform.    Our transaction and service platform, enabled by our centralized call-center and web-based distribution technologies, provides superior scalability and significant cost advantages over traditional methods of travel service distribution. Our platform allows us to expand our range of services and extend our geographical reach without making major changes to our existing infrastructure or incurring significant capital costs.

Experienced management.    We believe that our management team, which includes Justin Tang, our Chairman, President and Chief Executive Officer, and a seasoned team of senior managers with significant experience in the areas of travel service operations, marketing, technology and finance, is one of the strongest management teams in the travel service industry in China.

Relationship with IAC/InterActiveCorp.    IAC’s investment in our company has provided us with additional financial resources, consisting of up to approximately US$58.7 million from the proceeds of the sales of our Series B preferred shares, of which US$29.3 million was used to repurchase securities from our existing shareholders. In addition, we believe that our business will benefit from being aligned with IAC, which we believe is one of the leading global companies in online travel with what we believe to be a broad product offering, strong technology platform, well-known brand, experienced management team and track record of success.

Our Strategy

Our mission is to become the leading provider of travel services in China. We seek to achieve revenue and earnings growth by pursuing the following key business strategies:

Strengthen brand awareness and marketing.    We seek to strengthen consumer awareness of our brand by pursuing an aggressive marketing strategy based on online and traditional media advertising, affiliations with top Internet portals in China including Yahoo!China, Sohu.com and Tom.com, and co-marketing programs with prominent consumer brands such as Motorola in China.

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We seek to encourage consumer conversion and the use of our services through segment-based marketing, targeted promotions and focused telemarketing efforts.

We also seek to promote the awareness of our brand and increase our penetration among our target customers by leveraging the customer bases of other leading businesses and customer service companies. Our initiatives in this area include:

Ÿ increasing advertising and eLong card distribution using publications such as BusinessWeek, China Entrepreneur and bizTravel magazine;

Ÿ cooperating with commercial banks for them to offer co-branded credit cards; and

Ÿ entering into arrangements with major telecommunication companies in China, such as China Mobile, China Unicom and China Telecom, and with major airlines in China, such as China Southern Airlines, under which travel booking inquiries are directed from their service hotlines to us.

Expand our range of travel services.    We intend to capitalize on our leadership in hotel reservations utilizing a centralized modern call center and web-based distribution technologies and leverage the reach and efficiency of our distribution platform by growing our air ticketing and other travel related service, such as vacation packages, car rentals and corporate travel services. We seek to expand the selection of our destination services, such as restaurant and entertainment bookings, and offer our customers greater flexibility in choosing the desired combination of travel services.

Enhance customer experience.    We seek to enhance our customer’s experience by providing more personalized care, and by strengthening and expanding travel supplier relationships to offer our customers a wider range of travel services. We seek to deliver consistently high-quality customer service through continuous improvements in the information technology systems utilized in our call center, and in the content, features and functions of our websites.

We seek to retain our most loyal customers and generate repeat bookings by offering loyalty point rewards and additional specialized services, including dedicated VIP lounges at airports and a VIP call service with reduced waiting time. Our VIP call service, staffed by a dedicated team of specially trained representatives, provides VIP customers personalized travel advice and services.

Enhance efficiency and profitability.    We have built our operating infrastructure to take advantage of the inherent cost advantages of our centralized call center and web-based distribution technologies. We also seek to increase the efficiency of our marketing programs by tracking the effectiveness of our expenditures on various marketing activities.

We continue to enhance our online distribution platform by making our websites more intuitive and easier to use and by capitalizing on improvements in electronic commerce infrastructure, such as the introduction of electronic ticketing. By using exclusive online promotional offers, we believe we will be able to benefit from the increasing adoption of online commerce among consumers by attracting additional customers and migrating existing customers to our websites, thereby lowering our operating costs.

Develop a complementary merchant business.    We also seek to further enhance our profitability by developing a complementary merchant business. As we have achieved increasing scale in our hotel reservation business, we are building increasing volumes of repeat

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business with our key hotel suppliers, gaining better understanding of aggregated consumer booking patterns and the ability to better predict room demand. We intend to begin selling pre-purchased hotel rooms and other services from selected suppliers, which we believe will result in higher profit margins per transaction.

Enhance our technology infrastructure.    We design and maintain our systems with a view to enhancing consumer-friendliness and providing adaptive solutions for our hotel and other travel service suppliers. We seek to streamline our transaction processes through ongoing technology upgrades to our transaction and service platform. We are promoting a proprietary electronic booking system to encourage more hotels to directly update their inventory information in our system. At the same time we are introducing our Enterprise Travel Automation System, or ETA, to our corporate customers. The ETA system is an advanced booking engine with additional functionalities tailored to our corporate customers, such as the ability to track employee travel applications and approvals, provide travel advice, and generate custom reports for planning and cost control purposes.

Selectively pursue complementary acquisitions.    We seek to supplement the organic growth of our business by pursuing acquisitions which would enable us to expand our service offerings, our customer base and our distribution network. We seek to capitalize on the opportunities for consolidation in China’s fragmented and inefficient travel service industry by selectively exploring opportunities to acquire other travel service businesses such as air-ticketing agencies, hotel-room consolidators, tour-package agencies and corporate travel providers.

Increase benefits from our relationship with IAC/InterActiveCorp.    Over time, we seek to derive additional strategic benefits from our relationship with IAC as a significant shareholder, including the potential to cross-market and cross-sell our bases of consumers and suppliers, share enabling technologies, work closely with IAC management and personnel and pursue additional travel opportunities.

Our Services

We offer our customers a wide selection of travel services. The following table sets forth the percentage of our total revenues represented by our services for the periods indicated.

	Year ended December 31,						Six-months ended June 30,
	2001		2002		2003		2004
Travel services
Hotel reservations	50.4	%	71.8	%	81.0	%	79.9	%
Air ticketing	3.8		3.6		5.0		6.3
Other travel related services(1)	13.1		11.4		3.0		1.2
Other services(2)	32.7		13.2		11.0		12.6
Total	100.0	%	100.0	%	100.0	%	100	%

⁽¹⁾ Other travel related services include primarily sales of co-branded and VIP membership cards.

⁽²⁾ Other services include Internet advertising, Internet services and short messaging services.

Hotel reservations.    We currently have room supplier relationships with more than 2,600 hotels in over 220 cities throughout China. We seek to offer a range of hotel options at a variety

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of prices, with the majority of our hotel suppliers being three-, four- or five-star hotels, catering to higher-end customers. For the year ended December 31, 2003, we derived 81.0% of our total revenues from our hotel bookings. For the six months ended June 30, 2004, we derived 79.9% of our total revenues from our hotel bookings.

We act primarily as an agent in our hotel-related transactions. When a customer makes an initial inquiry through either our call center or our websites, we match the customer’s request with our allotment of rooms and make a reservation for the customer with the appropriate hotel supplier. The hotel supplier returns a confirmation that is passed along to the customer by phone, fax or email. When the customer checks into the hotel on the designated date, the hotel informs us of the customer’s check in. The customer settles his hotel bill directly with the hotel, and we are entitled to a fraction of the room rate as a commission. Upon the completion of a customer’s stay, we verify with the hotel the length of the stay and calculate our commissions, ranging from 10% to 20% of the hotel room rate, which the hotels pay us on a monthly basis. We pay no penalty to the hotel for “no shows” on confirmed bookings, although we are not paid any commission in respect of “no show” bookings. We do not currently pre-purchase hotel rooms until the customer has paid us, and consequently do not carry significant inventory risk. However, as we supplement our current agent business model with a merchant business model, we may suffer losses if we are unable to accurately predict the inventory we need.

Our hotel booking volume has increased from approximately 389,000 room-nights in 2001 to approximately 1,032,000 room-nights in 2003. For the six months ended June 30, 2004, we booked approximately 847,300 room-nights. In July 2004, we booked approximately 177,300 room-nights and in August 2004 we booked approximately 191,200 room-nights. We have negotiated escalating commission rates with hotels with which we have higher booking volumes. As our reservation volume increases, we are often able to pass along higher hotel discount rates to our customers, while at the same time securing more guaranteed room inventory.

We use a proprietary Travel Information Automation system, or TIA, to manage our hotel supplier relationships. The TIA system provides end-to-end technology support for our hotel suppliers, allowing hotel personnel to enter and update hotel information including room availability, pricing and description on a real-time basis. Hotels without access to the Internet may call us to set up or update their information.

We also employ a proprietary hotel rating system that rates individual hotels using specific criteria related to pricing, room availability, amenities and customer satisfaction. We recommend highly rated hotels to our customers to generate more booking volume at these hotels. We believe that our hotel rating system allows us to improve customer satisfaction and strengthen our valued hotel supplier relationships.

Depending on our agreement with the individual hotel supplier, we either receive a guaranteed allotment of hotel room-nights per month or operate on an “as-requested” basis. Our agreements with hotels typically contain some or all of the following provisions:

Ÿ Room pricing.    The hotel guarantees negotiated room rates that are lower than published rates. In addition, the customer is also able to enjoy promotional rates if such rates are in effect.

Ÿ Room supply.    The hotel must notify us of any shortages of hotel rooms so that we can make alternative accommodations for our customers.

Ÿ Customer accommodation.    The hotel must upgrade the customer to a higher level of accommodation if, due to the fault of the hotel, a customer’s reserved room is not available upon check in.

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Ÿ Confirmation of the customer’s stay.    The hotel must inform us of the length of the customer’s stay. We confirm a customer’s length of stay by contacting the hotel to verify the customer’s check-in and check-out dates and contact customers to crosscheck the information reported by the hotel. We continuously rate our hotel on the basis of the accuracy and timeliness of the reported information.

Ÿ Extended stay.    The hotel must immediately inform us if the customer extends their stay beyond the original booking. We then book the extended stay and calculate the additional commission.

Ÿ Commission payments.    The hotel pays us either a flat, pre-negotiated or an escalating commission based on the number of hotel room-nights we book.

Our agreements with our hotel room suppliers are all in writing. We enter into agreements with companies that own hotels. Due to the fragmented nature of the hotel industry in China where hotels are generally owned separately, we generally enter into agreements with hotel companies on an individual hotel basis.

For hotels with which we have guaranteed room allotments, the hotel supplier gives us a specified minimum number of guaranteed available rooms each day. The hotel must notify us in advance if it is unable to make the guaranteed rooms available to our customers. Our guaranteed allotment allows us to provide more efficient customer service through instant confirmations, and we incur no obligation if the guaranteed allocation is not used. We intend to increase our guaranteed room allotments at frequently visited hotels so that we can best meet our customers’ needs.

On an “as-requested” basis, we first confirm with the hotel the availability of rooms before we book a room and return the confirmation to the customer. Under this basis, our operational efficiency is generally reduced since we cannot deliver an instant confirmation to the customer.

Some of our hotel suppliers require that a customer use a credit card to guarantee a confirmed booking. In China, it is currently uncommon for businesses to be allowed to charge a customer’s credit card without an accompanying purchase transaction. However, major financial institutions have allowed us to use credit card information without an actual purchase being made. As a result, currently we are one of the few reservation agents that are able to offer room reservations at hotels that require a guaranteed booking by credit card.

Air ticketing.    We provide a 24-hour air-ticketing service through our toll-free call center and websites. We act as agents for all major airlines in China and international airlines that operate flights that originate from selected cities in China. We make flight reservations through TravelSky, which is the operator of the only nationwide system for air-ticket reservations in China, and currently issue and deliver air tickets using a network of local agents throughout major cities in China. Under current regulations, travel agents, including us, have no discretion to offer discounts on airline tickets. However, we have successfully negotiated escalating commissions with many airlines based on the number of air tickets we sell.

Our air-ticketing process begins when a customer initiates an inquiry through our toll-free call center or our websites. The customer is informed of the available flights based on their schedule and desired air carrier and we then confirm a booking for a seat on the selected flight through our call center. Booking information is sent to one of our local agents in the city where the customer wants the ticket to be issued and delivered. We have relationships with a network of local ticketing agents throughout major cities in China. We use these local agents and other third party delivery companies to deliver the tickets to our customers and collect payments for

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the tickets. We then collect the airfare from the delivery company, pay the agent’s commission and the cost of the tickets, and retain the balance ourselves. We currently do not pre-purchase air tickets for resale.

We believe that air-ticketing sales will represent a growing source of revenues in the future. In the six months ended June 30, 2004, we sold approximately 93,600 air tickets, compared to approximately 20,700 air tickets sold in the six months ended June 30, 2003. In July 2004, we sold approximately 21,800 air tickets and in August 2004 we sold approximately 23,700 air tickets. We anticipate that the expected adoption of e-tickets in China will allow consumers to better use our call center and websites to book air tickets and will benefit our air-ticketing business by allowing us to reach a broader customer base without materially increasing our operating costs.

Vacation packages.    We offer third-party vacation packages that include air transportation, hotel accommodation and other travel related services to many popular destinations in China. A vacation package transaction begins in the same way as the majority of our other transactions, with the customer initiating an inquiry either through our toll-free call center or our websites. The customer selects the desired vacation package and places an order with us. After confirming both the hotel reservation and transportation arrangements with the appropriate travel supplier, we send our customer a confirmation and arrange for ticket delivery, if needed, through a local travel agency. The customer pays for the vacation upon delivery of the appropriate confirmation or air ticket, and we deduct our commission. In general, our customers only pay a penalty if they cancel their reservations at a late stage.

We select vacation packages to serve the unique needs of FITs. Many of our vacation packages are designed as self-guided tours which permit FITs to travel to desired locations without adhering to the rigid schedules that are typical of tour group packages.

Rental cars.    We believe that rental cars for leisure or business travel will be increasingly important to FITs in the future. Currently we offer rental car services in Beijing and Shanghai. We act as agents for rental car companies with whom we have established relationships and earn a commission for the rental cars that we book. We do not incur a penalty for no-shows nor pre-pay for rental cars and consequently do not incur inventory risk.

We act as agents in our rental car business and a typical rental car transaction begins the same way as our other transactions. The customer uses our toll-free call center or websites to inquire as to the availability of rental cars and we confirm the booking with the appropriate car rental agencies. The customer pays the rental car company at the end of the rental period, and we are then paid our commission.

Corporate travel service.    We have recently begun to provide companies in China a corporate travel service providing travel planning, hotel reservations, air-ticketing and rental car bookings. By centralizing their travel management functions, our corporate clients can reduce their travel costs and the associated administrative burden. We also assist companies in planning, executing and streamlining their travel budgets. We are introducing our ETA System to our corporate travel customers. The ETA system is an advanced booking engine with additional functionalities tailored to our corporate customers. It includes the ability to track employee travel applications and approvals, provide travel services, and generates customized reports for planning and cost control purposes. We provide our clients with detailed reports that monitor business trips made by individual employees, including relevant information on hotel and air-fare expenses, and the duration and frequency of trips. Upon request, we can provide confidential reports to client companies on travel outlays over any given period, with a breakdown by city, by employee or by branch.

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Other services.    We derive revenues from other services including advertising on our websites, our VIP and co-branded membership cards and short messaging services with private label content to our customers’ mobile telephones. Our other services are designed to complement our core travel related services and to enhance the overall customer experience with us. We derive revenue from Internet advertising based on the length of time that an Internet advertisement is displayed on our website. Our revenues from the sale of co-branded and VIP membership cards are based on the number of membership cards sold. In addition, we derive revenue from short messaging services based on the number of messages sent by the user. Going forward, we expect that our revenues from these other services will continue to decrease relative to our revenues from hotel reservations and air ticketing.

Marketing and Brand Promotion

We market our services through a combination of online marketing, direct marketing, traditional media advertising and co-marketing with established brands. We seek to build a brand identity that consumers associate with choice, convenience and value.

Direct marketing.    We conduct direct marketing activities principally at major airports and transportation hubs in China. Our promotional efforts at these locations include the distribution of complimentary eLong Membership cards. eLong membership cards are part of our efforts to promote our services through a loyalty program. eLong membership cardholders are entitled to reward benefits such as complimentary hotel rooms and gifts for accumulated transactions.

In addition, as part of our direct marketing efforts we maintain a showroom at the Beijing International Airport. Our showroom at the Beijing International Airport includes eLong customer service representatives and a business center, allowing our customers full access to the Internet, fax, telecommunications and other amenities such as food and beverages. We also use our showroom at the Beijing International Airport to expose travelers and potential customers to our eLong brand.

Online marketing.    We have established marketing agreements with top Internet portals in China including Yahoo!China, Sohu.com and Tom.com in order to expand our online presence. These portals feature hyperlinks to our websites for their hotel service recommendations to their web visitors. In some cases we operate on a co-branded basis, where we provide our services and our brand is featured on these portals. In other cases, we operate on a private label basis, where we deliver our services using the brand name of the originating website. In both cases, we pay commissions based on the bookings generated through our co-marketers. We feel that our online marketing effort is an important part of our marketing strategy and serves as a cost-effective marketing tool. In addition, our online presence serves as an additional channel to capture targeted customers through association with established Internet brands in China. We believe that the Internet will continue to experience growth in China, and our relationships with top Internet portals in China will position us well to exploit its potential.

Traditional marketing.    Our traditional media advertising efforts include in-flight airline magazine advertising, flyer distribution and outdoor billboards. The focus of our media advertising efforts is to promote awareness of the eLong brand among our potential customers.

Co-marketing relationships.    We seek to expand our market reach by entering into co-marketing agreements with companies that have a large customer base and strong brand recognition. We believe that we are able to reach more customers and capitalize on their brand recognition in promoting our services and in enhancing our credibility. We have developed

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co-marketing agreements with some of the largest companies in China, including major telecommunications service providers, major airlines in China, major consumer product companies and major financial institutions, with a view to establishing our brand.

The following sets forth a brief description of our co-marketing arrangements with these companies. Currently, we earn less than 4% of our travel related revenues through these arrangements.

Ÿ Under the terms of our agreements with major telecommunications companies (China Mobile, China Unicom and China Telecom), we will be one of the service providers for travel related services to customers of the telecommunications company. The telecommunications companies will receive a commission for the reservations they generate for us. Our co-marketing agreements with these major telecommunications companies are valid for periods ranging from one to five years.

Ÿ Under the terms of our agreements with major airlines (China Eastern, China Southern and Hainan Airlines), the frequent flyer members of these major airlines are entitled to use our services under similar terms currently enjoyed by eLong card members and earn mileage for booking hotel rooms with us. The mileage earned by frequent flyer members would be purchased by us based on a pre-determined price. Our co-marketing agreements with these major airlines are valid for periods ranging from one to three years.

Ÿ Under the terms of our agreements with major consumer product companies such as Motorola, Inc., we will provide travel services, including hotel and air-ticket reservations and dining and entertainment discount services, to members of the user club of the particular consumer product company. Our co-marketing agreements with consumer product companies vary in duration.

Ÿ In October 2002, CITIC Industrial Bank, or CITIC, issued a co-branded banking card called the “CITIC eLong Card.” Under the terms of our agreement with CITIC, CITIC will provide financial services to holders of the card and we will provide travel services relating to hotel and air-ticket reservations and dining and entertainment discounts to the card holders.

eLong membership program.    We promote our brand through our loyalty program that rewards repeat customers. Membership in our eLong membership program entitles our customers to receive awards such as free travel services, non-cash gifts and amenities. Our membership program is designed to encourage repeat transactions in higher-end travel services that offer higher margins for us and forms the cornerstone of our customer retention program.

Distribution

We are one of the leading online travel service providers in China. We distribute our travel services through the following principal channels:

Ÿ our twenty-four hours per day, seven days per week, toll-free call center;

Ÿ our popular Internet websites; and

Ÿ our extensive nationwide network of over 4,000 resellers.

Call center.    We operate a 24-hour call center staffed by more than 300 customer service representatives. The call center is accessible nationwide on a toll free basis for fixed line telephone calls in China and by calling 1-888-eLongok in the U.S. and Canada. Mobile users currently cannot access toll-free service in general, but can access our services by calling our

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Beijing call center number. Our call center typically handles more than 15,000 calls per day, and accounts for approximately 75% of our total hotel and 100% of our air-ticketing reservations in terms of revenues. We believe that our call center constitutes a cost-efficient distribution channel because of the available pool of low-cost labor in China. We expect our call center to remain our principal distribution channel going forward, due to China’s large and growing mobile and fixed-line phone subscribers and consumer preference for the personalized service we are able to provide through our call center.

Websites.    We offer our travel services through our user-friendly websites www.eLong.com and www.eLong.net. Our Chinese and English language websites allow us to expand our customer base and improve customer service with minimum transaction costs. Customers can browse travel service options, compare prices, book and confirm orders through our websites. Our websites are designed to provide customers with a quick, efficient and flexible service that facilitates comparison among our large number of travel suppliers. Presently, our websites account for approximately 25% of the hotel reservations revenues.

Reseller network.    We have developed an extensive nationwide network of over 4,000 non-exclusive resellers, consisting of smaller travel and air-ticketing agencies, that utilize our call center and websites to distribute travel services. We pay our resellers a portion of our commission, subject to an escalating scale, based on the number of hotel reservations and air-ticket bookings they generate for us.

Technology

We believe that we have a leading technology team in the travel service industry in China. Our goal is to develop a high-performance, reliable, scalable and secure system in-house to support our business demands for new features and functionalities.

We have built a sophisticated, proprietary back office system encompassing order processing, customer relationship management, inventory control, business intelligence and staff performance management functions that coordinates the activities of our internal departments, clients, agents and partners within a single cohesive platform. We have also invested in an advanced, in-bound call center for phone based bookings and a scalable network infrastructure platform utilizing hardware and software from top-tier vendors.

Our Travel Industry Automation, or TIA, system provides end-to-end technology support for our entire travel business. Developed completely in-house, this modular software suite combines order-processing and fulfillment functions with tools in business intelligence, customer relationship management, inventory control, and staff performance management. Web-based and connected to the our websites, the TIA system is accessible from many of our remote office locations. We can feed data into our financial system, interface with our toll-free call center system and reach China’s mobile phone subscriber base.

Our system connects us with our suppliers, clients, partners and agents. Our web-based e-Booking software links hotels directly into our system, enabling them to manage their own inventories and more efficiently process our bookings. Our Enterprise Travel Management system helps our corporate clients streamline business travel and better manage their travel costs. Our agent management module provides our agents with a virtual reservation center complete with booking, client management and reporting capabilities.

Our co-located server farm has two 100Mb/sec connections to China’s Internet backbone. We deploy multiple redundancy features to ensure operational continuity. We back up our data

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daily onsite and monthly on tapes. The back up data are stored at a secured separate location to allow timely and complete recovery in the event of data loss.

Our infrastructure security system is designed to ensure that our users can only access and use our system according to their assigned authorization levels. Our system also includes VPN and encryption technologies to allow for secure Intranet access, as well as an intrusion detection system, which is designed to detect security breaches. Our infrastructure security system, however, may not be adequate at all times and we may experience occasional security breaches. See “Risk Factors—Risks Related to Our Business—We could be liable for breaches of security on our websites and fraudulent transactions by users of our websites.”

As of June 30, 2004, we employed 45 staff members to maintain and enhance our transaction and service infrastructure.

Competition

The travel service industry in China is extremely large, highly fragmented and intensely competitive. We compete with Ctrip.com International, Ltd, traditional travel agencies such as CTS, CITS and CYTS, and hotel suppliers that sell their room inventory directly to consumers. The major markets in which we currently compete include the relatively affluent coastal areas of China. As China’s market continues to grow, we may face further competition from other new domestic hotel room consolidators or international players such as expedia.com or priceline.com that may seek to expand into China. We may also face increasing competition from hotels and airlines should they further expand into the direct selling market or engage in alliances with other travel service providers besides us. We compete on the basis of brand recognition, selection, price, ease of use, accessibility of information, breadth of services offered, convenience, and customer service and satisfaction.

We cannot assure you that we will compete successfully with any of our current or future competitors. See “Risk Factors — Risks Related to Our Business — We may not be able to compete successfully against our current or future competitors.”

Intellectual Property

To protect our proprietary rights, we rely upon a combination of copyright and trademark laws, trade secrets, and confidentiality agreements with both employees and third party protective contractual provisions. All of our employees have executed confidentiality and non-use agreements that transfer any rights they may have to copyrights and patents to us. In addition, prior to discussing business and technologies with outside parties, we typically require that the parties enter into a non-disclosure agreement with us. If these discussions result in a license or other business relationship, we also require that the agreement setting forth the parties’ respective rights and obligations include provisions protecting our intellectual property rights.

Through one of our wholly-owned subsidiaries in China, elongNet Information Technology (Beijing) Co., Ltd., we have registered our domain names www.eLong.com and www.eLong.net with Register.com, Inc. and Tucows, Inc, respectively, two widely recognized Internet domains registries. We have also registered www.eLong.com.cn with the China Internet Network Information Center, a Chinese domain name registration service. The “eLong” character in Chinese is our registered trademark.

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Employees

The following table sets forth the number of our employee categorized by function as of the dates indicated.

	As of December 31,			As of June 30,
	2001	2002	2003	2004
Management and administration	47	56	67	91
Customer service	103	202	361	577
Sales and marketing	151	289	381	453
Supplier management	61	62	52	68
Technical services	21	24	32	45
Total	383	633	893	1,234

We participate in government-mandated multi-employer defined contribution plans under which certain pensions, medical and other welfare benefits are provided to employees. We make monthly payments to these plans based on the employee’s compensation.

We have not entered into any collective bargaining agreements. We consider our relations with our employees to be good.

Facilities

Our headquarters in Beijing, consisting of our administrative center, sales and marketing division, technical services department and call center, is located in a leased space of approximately 3,700 square meters. We lease the premises for our headquarters under a three-year term lease, expiring in November 2006, with an option to renew for an additional two-year term. We also maintain branch and sales offices in major cities in China including Shanghai, Guangzhou, Shenzhen, Wuhan, Nanjing, Hangzhou and Chengdu. We believe that adequate facilities are available to accommodate our future expansion plans.

Legal Proceedings

We are currently not involved in any material litigation, arbitration or administrative proceedings that could have a material adverse effect on our financial condition or results of operations. From time to time, we may be involved in disputes with individual employees. So far as we are aware, no material litigation, arbitration or administrative proceedings are pending.

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INVESTMENT BY IAC/INTERACTIVECORP

Overview

On July 23, 2004, we and our two wholly-owned subsidiaries entered into a transaction agreement with IAC and IACT Asia Pacific Limited, an indirectly wholly-owned subsidiary of IAC, under which, among other things, IACT Asia Pacific agreed to purchase our Series B preferred shares from us. We also entered into a transfer and escrow contribution agreement with our existing shareholders and IACT Asia Pacific on July 23, 2004, under which, among other things, we agreed to repurchase some of our ordinary shares and Series A preferred shares from our existing shareholders. On August 4, 2004, the transactions contemplated by the transaction agreement and transfer agreement were completed.

Issuance and Sale to IAC of Series B Preferred Shares

On August 4, 2004, we issued and sold to IACT Asia Pacific Limited 11,188,570 Series B preferred shares, which represented approximately 30% of our outstanding ordinary shares on a fully-diluted basis as of that date (based on the current one-to-one conversion rate of Series B preferred shares into ordinary shares). For more information on the terms of the Series B preferred shares, see “Description of Share Capital—Preferred Shares—Series B Preferred Shares.” The aggregate purchase price for the Series B preferred shares sold to IAC was US$58,690,062, or approximately US$5.25 per share, a portion of which was deposited into escrow as described below. The purchase price is subject to a post-closing adjustment based on the amount of our cash and cash equivalents as of the August 4 closing. If our cash level as of closing was more than US$6,288,508, IAC would be obligated to pay us 30% of the excess, and if our cash level was less than US$6,288,508 as of closing, we would be obligated to pay IAC 30% of the deficit. If there is a dispute between the parties regarding the cash level as of closing, a nationally recognized accounting firm mutually acceptable to us and IAC will be engaged to settle the dispute. Currently, we have not determined or discussed the post-closing adjustment with IAC.

Repurchase from Shareholders of Our Securities

On August 4, 2004 we used US$29,345,029, approximately one-half of the proceeds of the sale of Series B preferred shares to IAC, to repurchase from some of our existing shareholders an aggregate of 4,012,411 of our ordinary shares and 1,581,874 of our Series A preferred shares for a purchase price of approximately US$5.25 per share. In connection with the issuance and sale of Series B preferred shares to IAC, we agreed with IAC that immediately after that issuance and sale, IAC would own approximately 30% of the shares of our company on a fully-diluted basis. We agreed with IAC that IAC would obtain such 30% through (1) a direct purchase of Series B preferred shares from our company and (2) a repurchase by us from our existing shareholders of a certain number of their shares, with the number of Series B preferred shares sold being roughly equal to half of the number of shares we purchased from existing shareholders. In connection with the IAC transaction, we offered to all of our existing shareholders the opportunity to sell to us a portion of their shares in our company. In addition, we offered to the holders of vested warrants or options who elected to exercise their vested warrants or options the opportunity to sell to us shares issued in connection with such exercises. The number of shares that each shareholder, warrant holder and option holder ultimately agreed to sell to us and that we agreed to buy was based upon discussions between us and each shareholder, warrant holder and option holder and the level of interest in selling expressed by each such holder. As further described below under “—Indemnification and Escrow,” ten percent of the consideration to the existing shareholders was deposited into escrow. We agreed with these existing shareholders that they would reimburse us for 50% of

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any post-closing purchase price adjustment payments, as described above under “—Issuance and Sale to IAC of Series B Preferred Shares, “ that we might become obligated to pay to IAC, and that we would pay to them 50% of such post-closing adjustment payments that IAC might become obligated to pay to us.

In addition, under a transfer and escrow contribution agreement by and among our company, IAC and some of our shareholders, we agreed that, if IAC exercises its warrant, we will repurchase from some of our existing shareholders, at the same purchase price per share as IAC pays in connection with its exercise of the warrant, that number of ordinary shares equal to 50% of the number of high-vote ordinary shares which IAC purchases under the warrant. All of our existing shareholders and holders of vested warrants or options (other than IAC) were offered the opportunity to participate in such repurchase. The number of shares that each shareholder, warrant holder and option holder agreed to sell to us if IAC exercises the warrant was based upon discussions between us and each shareholder, warrant holder and option holder. As with the initial purchase, ten percent of the consideration to be paid to these existing shareholders upon the repurchase will be deposited into escrow and will be held in accordance with the terms described below under “—Indemnification and Escrow.”

Under the transfer and escrow contribution agreement, the shareholders who agreed to participate in the repurchase described in the preceding paragraphs have agreed to indemnify IAC, its affiliates, and their respective officers, directors, agents and employees, successors and assigns as described below under “—Indemnification and Escrow.”

Indemnification and Escrow

We and our existing shareholders have agreed to indemnify IAC, its affiliates, and their respective officers, directors, agents and employees from and against any costs, expenses, liabilities, damages or other losses incurred by any of them and arising out of the breach by us of any of our representations or covenants in the transaction agreement and related agreements. Our representations in the transaction agreement include customary warranties relating to our business and to our issuance of the Series B preferred shares. Such representations survive until March 31, 2006, except for certain “major” representations, such as with respect to taxes, capitalization and corporate authority, which survive through the expiration of their respective statutes of limitations. Our covenants in the transaction agreement generally relate to the post-closing operations of our business.

In addition, we and our existing shareholders have agreed to pay IAC 30% of any payments made by, penalties levied on, or judgments entered against us, our subsidiaries or our affiliated Chinese entities in connection with certain actions that we have agreed to take after the closing of the IAC investment. Payments due to IAC in connection with this obligation will be made by releasing the appropriate amount from the escrow deposit described below.

In order to secure the indemnification and payment obligations of us and the existing shareholders, US$7,336,258 was deposited into escrow on August 4, 2004, of which US$2,934,502, or 40%, represented the amount held back at closing from the net proceeds of the existing shareholders and the remaining US$4,401,756, or 60%, represented the amount of our net proceeds withheld at closing. In addition, if IAC exercises its warrant as described below, 12.5% of the aggregate exercise price paid by IAC under the warrant will be deposited into escrow as additional security, 40% of which will represent the amount held back from our existing shareholders in connection with the repurchase of their ordinary shares relating to the warrant exercise and the remaining 60% of which will represent the amount of our net proceeds from the IAC warrant exercise withheld at the closing of such exercise.

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Our indemnification and payment obligations are limited in certain respects. IAC’s sole recourse for indemnification with respect to breaches of our representations (other than for “major” representations, such as with respect to taxes, capitalization and corporate authority) is to the amounts deposited in escrow. Subject to any pending indemnification claims by IAC, on August 4, 2005, 25% of the amount then in escrow will be released to us and the existing shareholders, and any remaining amounts in escrow will be released on March 31, 2006. Our maximum liability for indemnification with respect to breaches of our “major” representations is US$58,690,062.

In addition to bearing a portion of the indemnification obligations with respect to our representations and covenants and our payments in connection with certain post-closing matters, our existing shareholders have also agreed to indemnify IAC for breaches of their respective representations and covenants in the transfer agreement.

Stock Options

August Grant to IAC. In connection with the IAC investment, on August 4, 2004, we granted to IAC an option to purchase up to 711,429 of our ordinary shares at a purchase price of US$5.25 per ordinary share. The stock option is only exercisable to the extent of a number of ordinary shares that is equal to 30% of: (1) the number of ordinary shares which are purchased from time to time by our officers and employees under options to purchase an aggregate of 1.66 million ordinary shares we granted on July 23, 2004, plus (2) the number of ordinary shares which are purchased through IAC’s exercise of its option to purchase up to 711,429 ordinary shares we granted on August 4, 2004. To the extent that any such officer’s or employee’s options terminate or expire without being exercised, an amount of IAC’s option equal to 30% of such officer’s or employee’s terminated or expired options will likewise terminate or expire.

October Grant to IAC. On October 1, 2004, we issued to certain of our officers options to purchase an aggregate of 250,000 ordinary shares. Under the investors agreement we entered into with IAC and our other shareholders on July 23, 2004, our Series A preferred shareholders and IAC each have a right of first offer with respect to any sales or issuances by us of any of our securities after August 4, 2004 and prior to the completion of this offering (including with respect to the issuance on October 1, 2004 of the 250,000 options), which gives each of our Series A preferred shareholders and IAC the right to buy, on the same terms and subject to the same conditions, up to a portion of such issuance equal to the proportion that the number of shares held by such shareholder bears to the total number of our outstanding ordinary shares, on an as-converted and fully-diluted basis. In addition, under the investors agreement, we are not permitted to issue any of our securities (including the October 1, 2004 issuance of the 250,000 options to certain of our officers) without the prior written consent of IAC. See “—Governance and Other Rights of IAC—Current Rights Attributable to the Warrant and Series B Preferred Shares.”

Prior to October 1, 2004, each of our Series A shareholders waived their respective rights of first offer with respect to the issuance by us on October 1, 2004 of the 250,000 options to certain of our officers and the issuance by us on October 1, 2004 to IAC of an option to purchase up to 260,204 of our ordinary shares, as further described below.

On October 1, 2004, we entered into a stock option agreement with IAC pursuant to which, in exchange for IAC giving its consent to the issuance of the 250,000 options to certain of our

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officers, we granted to IAC an option to purchase up to 260,204 of our ordinary shares at a purchase price of US$5.25 per ordinary share with the same vesting terms as the options granted to the two officers in October 2004. The option mirrors the terms and conditions of the options granted to our officers on October 1, 2004. The stock option we granted to IAC on October 1, 2004 is only exercisable to the extent of a number of ordinary shares that is equal to 51% of: (1) the number of ordinary shares which are purchased from time to time by certain of our officers under options to purchase an aggregate of 250,000 ordinary shares we granted on October 1, 2004, plus (2) the number of ordinary shares which are purchased through IAC’s exercise of its option to purchase up to 260,204 ordinary shares we granted on October 1, 2004. To the extent that any such officer’s options terminate or expire without being exercised, an amount of IAC’s option equal to 51% of such officer’s terminated or expired options will likewise terminate or expire.

Warrant

On August 4, 2004, we granted IAC a warrant which is exercisable by IAC during the first 30 business days following the completion of this offering. If IAC does not exercise the warrant within 30 business days of this offering, the warrant will expire. IAC’s warrant entitles it to purchase that number of our high-vote ordinary shares equal to:

Ÿ 51% of our fully-diluted ordinary shares outstanding (but excluding the stock option granted to IAC in August 2004 and in October 2004) minus the number of ordinary shares (including securities exercisable for or convertible into ordinary shares, but excluding IAC’s stock options and warrant) held by IAC at the time of exercise;

Ÿ divided by 0.745.

The purchase by IAC of that number of high-vote ordinary shares will result in IAC’s holding approximately 52% of our outstanding ordinary shares on a fully-diluted basis and, in conjunction with the conversion of its Series B preferred shares into high-vote ordinary shares after its exercise of the warrant, approximately 96% of the total voting power of our shares (assuming in each case that the underwriters exercise their over-allotment option in full). Assuming the completion of this offering, the exercise price for the warrant will be equal to the lower of:

Ÿ the initial public offering price for this offering; or

Ÿ the price determined using: (1) US$205 million, minus our indebtedness, plus our cash and cash equivalents, plus the pro forma consideration that would be received in connection with the exercise of all vested or unvested in-the-money options, warrants or other convertible securities of the company, in each case at the time of exercise, divided by (2) the total number of our outstanding ordinary shares on a fully-diluted basis at the time of exercise (but excluding out-of-the-money options, warrants or securities).

If IAC exercises the warrant, it will deposit 12.5% of the aggregate purchase price into escrow as security for its indemnification rights, as more fully described above under “—Indemnification and Escrow.”

In connection with any exercise of the warrant by IAC, we will simultaneously repurchase from the existing shareholders that number of ordinary shares equal to 50% of the high-vote ordinary shares being purchased by IAC under the warrant. The purchase price for such repurchase would be the same as IAC’s purchase price under the warrant.

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Restrictions on IAC

Transfers and Acquisitions. In connection with its investment in us, IAC has agreed to a number of restrictions, including:

Ÿ IAC has agreed not to sell any of its shares in this offering;

Ÿ If IAC exercises its warrant, it will not transfer any of its shares prior to the one-year anniversary of the completion of this offering;

Ÿ IAC has agreed that, for the twenty-four month period following the consummation of this offering, it will not (and it will cause its affiliates, officers, directors, employees and representatives not to) solicit, initiate, entertain, consider, encourage or accept the submission of an inquiry, proposal or offer relating to the acquisition (whether by merger, purchase of stock or assets, or otherwise) of us (a) by IAC or any other party or (b) as part of a going-private transaction; and

Ÿ If IAC’s warrant expires unexercised and it holds less than 50% of the then-outstanding ordinary shares on an as-converted basis, then for a period of two years following the expiration of the warrant, IAC will not (and will not permit its affiliates to) acquire or agree to acquire, whether directly or indirectly, any equity securities of our company, with certain customary exceptions, such as for stock dividends, reorganization or other transaction, such as a rights offering, affecting any class of our securities generally; provided, that the restriction will cease upon the earlier to occur of (a) the date that IAC holds more than 50% of our outstanding shares on an as-converted basis, (b) the date on which an existing shareholder or its affiliate makes an offer to acquire or acquires an amount of our securities which, when added together with all of our securities that they have purchased since July 23, 2004, would equal 5% or more of our fully-diluted ordinary shares outstanding and (c) the date on which a third party makes a bona fide offer to acquire or acquires an amount of our securities which would result in such party holding 5% or more of our fully-diluted ordinary shares outstanding.

Non-Compete. As long as IAC holds more than a 15% economic interest in us (unless it transfers the voting rights with respect to that interest to us), it will be prohibited from owning, managing, operating or otherwise controlling any entity or business which operates a travel service in China or which markets travel services specifically to Chinese residents. The non-compete restriction is subject to exceptions for certain pre-existing IAC businesses, such as IAC’s Interval International timeshare business, and IAC’s private label arrangements with third-party websites that are operated within China that promote IAC’s travel services to Chinese residents (including travel services provided in China) on their websites. In addition, IAC is not restricted from acquiring entities or participating in joint ventures or strategic relationships with entities that engage in a competitive business, so long as the assets and revenues attributable to the competitive business do not exceed 10% of the assets or revenues of the acquired entity, the joint venture or our company.

Governance and Other Rights of IAC

Current Rights Attributable to the Warrant and Series B Preferred Shares. Our corporate governance documents and agreements with our shareholders provide IAC with a greater degree of control and influence in the operation of our business and the management of our affairs than is typically available to non-majority shareholders of a publicly-traded company. As the sole holder of our Series B preferred shares, IAC has considerable approval rights with respect to the operations and management of our business, including with respect to the acquisition of any assets or businesses in excess of US$1 million or the incurrence of any

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indebtedness in excess of US$1 million. For a further description of such rights, please see “Description of Share Capital—Preferred Shares—Series B Preferred Shares—Protective Provisions.”

In connection with IAC’s investment in us, we entered into an investors agreement with IAC and our other shareholders on July 23, 2004, under which IAC has been granted similar approval rights. In addition, under the investors agreement, without IAC’s prior written approval, we are prohibited from issuing any of our securities or allowing any of our subsidiaries or Chinese affiliates from issuing any of their securities, including in each case any stock options or convertible securities, except with respect to this offering.

These extraordinary approval rights will terminate within 31 business days of the completion of this offering. IAC’s special approval rights under the investors agreement cease upon the earlier of (a) its exercise of the warrant and (b) the date on which its warrant expires unexercised, which would occur 30 business days from the completion of this offering if it chose not to exercise the warrant. The Series B preferred shares will automatically convert into ordinary shares or high-vote ordinary shares 31 business days after the completion of this offering.

IAC’s Control Upon the Exercise of Its Warrant. If IAC exercises its warrant and purchases our high-vote ordinary shares, it will result in IAC’s holding approximately 52% of our outstanding ordinary shares on a fully-diluted basis and, in conjunction with the conversion of its Series B preferred shares into high-vote ordinary shares after its exercise of the warrant, approximately 96% of the total voting power of all of our shares of voting stock (assuming in each case that the underwriters exercise their over-allotment option in full). Each ordinary share has one vote on all matters submitted to our shareholders whereas each high-vote ordinary share, which IAC would hold exclusively, has 15 votes.

Upon the exercise of the warrant, the parties to the investors agreement are required to do all things necessary to cause our board of directors to increase in size from seven members to eleven and to cause the four vacancies to be filled by IAC’s designees, which would result in IAC designees comprising a majority of our board of directors.

Therefore, as a result of IAC’s exercise of its warrant, IAC will be able to exercise control over all matters requiring approval by the board of directors or our shareholders, and this power may continue even if IAC owns a minority economic interest in us.

IAC’s Rights If It Does Not Exercise Its Warrant. If IAC chooses not to exercise its warrant, it will within 31 business days of the completion of this offering lose the special approval rights described above under “—Current Rights Attributable to the Warrant and Series B Preferred Shares.” However, even if IAC no longer has those approval rights, it will continue to have a number of control rights over the operation and management of our business as a result of the size of its equity interest in us and its rights under the transaction agreement and investors agreement.

If IAC does not exercise its warrant, it will hold approximately 28% of our outstanding shares and approximately 28% of the voting power of our shares (assuming the conversion of its Series B preferred shares into ordinary shares and assuming the underwriters exercise their over-allotment option in full). Although IAC will not have the power on its own to control the management of our company or prevent us from taking most actions, it will be considerably more difficult for our shareholders to approve matters submitted to them without the support of IAC, including some matters which the majority of our non-IAC shareholders support.

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Similarly, under the investors agreement, after the expiration of IAC’s warrant, we and our shareholders who are parties to that agreement will continue to be required to do all things necessary to cause two of IAC’s board nominees to be elected to our board and to cause the size of our board to remain at seven members. Although the IAC directors will not have the power on their own to control our board or prevent our board from taking most actions, it will be considerably more difficult for our board to approve actions without the support of the IAC directors, including some actions which the majority of our non-IAC directors support. After the completion of this offering, shareholders who hold     % of the voting power of our ordinary shares will be parties to the investors agreement. Therefore, for so long as shareholders holding a majority of our voting power are parties to the investors agreement, IAC will have the power to designate two of our seven directors. For more information regarding the director election rights under our investors agreement, see “Management—Board Practices.”

IAC will also continue to have certain rights under the transaction agreement with respect to the operations and management of our company. For example, without the consent of IAC, neither we nor our subsidiaries or affiliates will be allowed to amend any of the contracts between our wholly-owned subsidiaries and our affiliated Chinese entities which govern our management rights over the affiliated Chinese entities and the operation of our business. For more information regarding such agreements, see “Corporate Structure and Related Party Transactions.” In addition, IAC has the right to replace the current shareholders of the affiliated Chinese entities with designees of its choice.

IAC will continue to have these rights until the earlier of: (1) 90 days after the earlier of (a) the date on which IAC’s beneficial ownership of our capital stock is equal to or less than 15% on a fully-diluted basis or (b) the date on which IAC holds more than 50% of our outstanding shares on an as-converted basis or (2) the date on which IAC takes any action that would have been a violation of the terms of its non-compete restriction were such restriction to have been in place.

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REGULATION

The travel industry in China is subject to substantial regulation by the Chinese government. This section sets forth a summary of certain significant Chinese regulations that affect our business and our industry.

Scope of Regulation

Current PRC laws and regulations impose substantial restrictions on foreign ownership in air-ticketing, advertising and Internet businesses in China. As a result, we have a wholly owned subsidiary in China that conducts its operations through a series of contractual arrangements with our affiliated Chinese entities.

In the opinion of our PRC counsel, Commerce & Finance Law Offices, the ownership structure, businesses and operations of our wholly owned subsidiary and affiliated Chinese entities in China comply with all existing PRC laws, regulations and rules. In addition, no consent, approval or license, other than those already obtained, is required under existing PRC laws, regulations and rules for such ownership structure, businesses and operations as of this offering.

Restrictions on Foreign Ownership

Air ticketing.    The principal regulation governing foreign ownership in air-ticketing business in China is The Foreign Investment Industrial Guidance Catalogue (2002). Under this regulation, a foreign investor currently cannot own 100% of an air-ticketing agency in China. It is our understanding that while there is no regulation stipulating an upper limit of foreign ownership, the Chinese government will not permit substantial foreign ownership in an air-ticket agency. However, it is our understanding that beginning on December 11, 2004, foreign investors will be permitted to own 100% of an air ticketing agency.

Travel agency.    The principal regulation governing foreign ownership in travel agencies in China is the Establishment of Foreign Controlled and Wholly Foreign Owned Travel Agencies Tentative Provisions (2003). Recently, foreign investors that

Ÿ primarily engage in travel agency business;

Ÿ have annual revenue from travel services exceeding US$40 million (in the case of foreign-controlled travel agencies) or US$500 million (in the case of wholly foreign-owned travel agencies); and

Ÿ are members of travel industrial associations in their home countries or regions

have been permitted to establish or own travel agencies in Beijing, Shanghai, Guangzhou, Shenzhen, Xian or other approved national tourism areas, upon the approval of the PRC government, subject to substantial restrictions on the scope of their business. For example, foreign-invested travel agencies are prohibited from engaging in the business of overseas travel by PRC citizens or travel by persons from the other regions of the PRC to Hong Kong, Macau or Taiwan. In addition, other than its head office, foreign-invested travel agencies are not allowed to open branch offices.

Advertising.    The principal regulations governing foreign ownership in advertising agencies in China include:

Ÿ The Foreign Investment Industrial Guidance Catalogue (2002); and

Ÿ The Administrative Regulations Concerning Foreign Invested Advertising Enterprises (2004).

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Under these regulations, foreign investors can currently own up to 70% of the equity interest in an advertising agency in China. Beginning on December 10, 2005, foreign investors will be permitted to own 100% of an advertising agency.

Internet content provision.    The principal regulations governing foreign ownership in the Internet content provision business in China include:

Ÿ The Administrative Rules for Foreign Investments in Telecommunications Enterprises (2001); and

Ÿ The Foreign Investment Industrial Guidance Catalogue (2002).

Under these regulations, a foreign entity is prohibited from owning more than 50% of a Chinese entity that provides value-added telecommunications services, including Internet content provision.

General Regulation of Businesses

Air ticketing.    The air-ticketing business is subject to the supervision of the Civil Aviation Administration of China, or CAAC, and its regional branches. The principal regulation governing air-ticketing business in China is the Administration on Civil Aviation Transporting Marketing Agency Business Regulations (1993).

Under this regulation, an air-ticketing agency must obtain a permit from CAAC or its regional branch in every city in which the agency proposes to conduct business. The two types of air-ticketing permits in China are permits for selling tickets for international flights and flights to Hong Kong, Macau and Taiwan and permits for selling tickets for domestic flights in China except flights to Hong Kong, Macau and Taiwan.

Travel agency.    The travel agency industry is subject to the supervision of the China National Tourism Administration and local tourism administrations. The principal regulations governing travel agencies in China include:

Ÿ The Administration of Travel Agencies Regulations (1996), as amended; and

Ÿ The Rules of Implementation of the Administration of Travel Agencies Regulations (2001).

Under these regulations, a travel agency must obtain a license from the China National Tourism Administration in order to conduct cross-border travel business, and a license from the provincial-level tourism administration in order to conduct a domestic travel agency business.

Advertising.    The State Administration of Industry and Commerce is responsible for regulating advertising activities in China. The principal regulations governing advertising, including online advertising in China include:

Ÿ The Advertising Law (1994); and

Ÿ The Administration of Advertising Regulations (1987).

Under these regulations, any entity conducting advertising activities must obtain an advertising permit from the local Administration of Industry and Commerce.

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Internet content provision service and online commerce.    The provision of travel-related content on the websites is subject to Chinese laws and regulations relating to the telecommunications industry and the Internet, and regulated by various government authorities, including the Ministry of Information Industry and the State Administration of Industry and Commerce. The principal regulations governing the telecommunications industry and the Internet include:

Ÿ The Telecommunications Regulations (2000);

Ÿ The Administrative Measures for Telecommunications Business Operating Licenses (2001); and

Ÿ The Internet Information Services Administrative Measures (2000).

Under these regulations, Internet content provision services are classified as value-added telecommunications businesses, and a commercial operator of such services must obtain an Internet content provision license from the appropriate telecommunications authority in order to carry out any commercial Internet content provision operations in China.

With respect to online commerce, there are no specific Chinese laws at the national level governing or defining online commerce activities, and no government authority has been designated to regulate these activities. There are existing regulations governing retail business that require companies to obtain licenses in order to engage in the business. However, it is unclear whether these existing regulations will be applied to online commerce.

Regulation of Foreign Currency Exchange and Dividend Distribution

Foreign currency exchange.    The principal regulation governing foreign currency exchange in China is the Foreign Currency Administration Rules (1996), as amended. Under these rules, the Renminbi is freely convertible for trade and service-related foreign exchange transactions, but not for direct investment, loans or investments in securities outside China without the prior approval of the State Administration of Foreign Exchange of the People’s Republic of China, or SAFE.

Pursuant to the Foreign Currency Administration Rules, foreign-invested enterprises in China may purchase foreign exchange without the approval of SAFE for trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They may also retain foreign exchange, subject to a cap approved by SAFE, to satisfy foreign exchange liabilities or to pay dividends. However, the relevant Chinese government authorities may limit or eliminate the ability of foreign-invested enterprises to purchase and retain foreign currencies in the future. In addition, foreign exchange transactions for direct investment, loan and investment in securities outside China are still subject to limitations and require approvals from SAFE.

Dividend distribution.    The principal regulations governing distribution of dividends by foreign-invested companies include:

Ÿ The Sino-foreign Equity Joint Venture Law (1979), as amended;

Ÿ The Regulations of Implementation of the Sino-foreign Equity Joint Venture Law (1983), as amended;

Ÿ The Foreign Investment Enterprise Law (1986), as amended; and

Ÿ The Regulations of Implementation of the Foreign Investment Enterprise Law (1990), as amended.

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Under these regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, wholly foreign owned enterprises in China are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds unless such reserve funds have reached 50% of their respective registered capital. These reserves are not distributable as cash dividends.

In addition, our wholly-owned subsidiaries are required to allocate portions of their respective after-tax profits to their enterprise expansion funds and staff welfare and bonus funds at the discretion of their boards of directors. Our affiliated Chinese entities are required to allocate at least 5% of their respective after-tax profits to their respective statutory welfare funds. Allocations to these statutory reserves and funds can only be used for specific purposes and are not transferable to us in the forms of loans, advances, or cash dividends.

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MANAGEMENT

Executive Officers and Directors

Members of our board of directors are elected by our shareholders. Effective upon completion of this offering, our board of directors will consist of seven directors. If IAC exercises its warrant, our board of directors will increase to eleven directors, and IAC will have the right to designate four additional directors to fill the vacancies in the board as a result of such increase.

Our executive officers are appointed by, and serve at the discretion of, our board of directors. The following table sets forth information regarding our directors and executive officers as of October 6, 2004.

Name	Age, as of October 6, 2004	Position
Justin Yue Tang	33	Chairman of the Board, President and Chief Executive Officer
Richard Zheng Xue	33	Director and Vice President of Business Development and Strategy
Richard Chen	34	Vice President and Chief Technology Officer
Frank Zheng	38	Vice President of Travel Services
Derek Palaschuk	40	Chief Financial Officer
Liming Sun	41	Director
Xiaojian Zhong	37	Director
Barney Harford	32	Director

Executive Officers and Directors

Justin Tang, Chairman, President and Chief Executive Officer

Justin Tang is responsible for our overall strategy and management. In 2001, Mr. Tang led the buyout of eLong’s business from its parent company, Asia.com. Prior to the buyout, Mr. Tang was the founder and President of Asia.com. Mr. Tang was originally one of the co-founders of eLong.com, and he was responsible for eLong’s US$68 million merger with Mail.com and the formation of Asia.com. Prior to founding eLong.com, Mr. Tang was a Vice President at Oscar Gruss & Son Incorporated, a New York-based investment banking firm. He has also worked for Brookehill Equities, Inc., and Merrill Lynch & Co., and has seven years’ experience in venture investment and the financial service industry. Mr. Tang studied at Nanjing University in China and received his BS degree from Concordia College in the United States. Mr. Tang has been on our board of directors since our inception.

Richard Xue, Director and Vice President of Business Development and Strategy

Richard Xue is responsible for our business development and strategy. Prior to joining eLong in December 2003, Mr. Xue worked for eight years in investment banking in the United States and China. Most recently, he was a Vice President with ICEA Finance Holdings, a Hong Kong based investment banking firm specialized in serving companies in China. Before that, he held various positions at Dain Rauscher Wessels in San Francisco, First Chicago Capital Markets Inc. in Chicago, and Tokai Asia in Hong Kong. Mr. Xue studied at Tsinghua University in China and received a BS degree in Physics from University of Illinois and an MBA degree from University of Chicago in the United States. Mr. Xue has been on our board of directors since March 2004.

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Richard Chen, Vice President and Chief Technology Officer

Richard Chen is responsible for our technology infrastructure development and Internet operations. Mr. Chen was one of the co-founders of eLong.com and also served as the Chief Technology Officer of Asia.com. Prior to founding eLong, he worked as a business applications developer at Allaire Corporation, a Massachusetts-based software company specializing in Internet design tools, and as an IT consultant at Boston-based Greystone Solutions. He has seven years’ of experience in the information technology industry. Mr. Chen received a BS degree in Electrical Engineering from Lafayette College and a MS degree in Electrical Engineering from Stanford University in the United States.

Frank Zheng, Vice President of Travel Services

Frank Zheng is responsible for the overall operation of travel services. Mr. Zheng was a Senior Director of Travel Services with Asia.com. From 1994 through 2000, Mr. Zheng held various financial and operations positions with Bank of New York, The Reserve Management Corp, and Dean Witter Intercapital Company. Mr. Zheng received a BA degree from City University of New York.

Derek Palaschuk, Vice President and Chief Financial Officer

Derek Palaschuk has served as our Chief Financial Officer since April 2004. Prior to joining us, he was with Sohu.com, Inc., or Sohu. While at Sohu, he served as the Chief Financial Officer and Senior Vice President from July 2001 to March 2004 and as Vice President, Controller from August 2000 until October 2000 and its Vice President, Finance from October 2000 to July 2001. Prior to joining Sohu, Mr. Palaschuk served as Vice President, Finance and Chief Financial Officer for CR China Holdings Group, a privately held international trading and investment group. In addition, Mr. Palaschuk has served as the Chief Financial Officer of China Automotive Components Corporation, the management company of a fund investing in the Chinese automotive industry. Mr. Palaschuk also has experience as an audit manager with PricewaterhouseCoopers in Hong Kong and Beijing. Mr. Palaschuk holds a BA in Commerce from the University of Saskatchewan and an LLB from the University of British Columbia. He is also a Canadian Chartered Accountant.

Liming Sun, Director

Liming Sun has served as our director since 2001. Mr. Sun is the president of Kunlun Securities Co. Ltd., previously Qinghai Securities Co. Ltd. Prior to joining Kunlun Securities Co. Ltd. in 1999, Mr. Sun worked as the Deputy General Manager of Shenzhen Shengrun Network Co. Ltd., a company specializing in online securities trading. He has also worked for Zhengzhou Commodity Exchange and Chris Economic Affair Agency. He has 18 years’ experience in investment and online securities trading. Mr. Sun received a BS degree in Automation from Harbin Institute of Technology and a MS degree in Automation from Jilin University of Technology in China.

Xiaojian Zhong, Director

Xiaojian Zhong has served as our director since 2001. Mr. Zhong is the chairman of Billable Development Ltd., one of our significant shareholders. He is also the president of Shenzhen Youyuan Investment Co. Ltd and Qinghai Digital Holding Investment Co. Ltd, which has diversified investments in financial services, information technology and real estate businesses. He has 15 years’ experience in investment and management. Mr. Zhong received a BS degree in Economics from Beijing University.

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Barney Harford, Director

Barney Harford has served as our director since August 2004. Mr. Harford is President of IAC Travel — Asia Pacific, a subsidiary of IAC. Mr. Harford has worked for IAC or businesses acquired by IAC in other capacities since 1999. In 2002, Mr. Harford became the Vice President of New Channel Development for Expedia, Inc., which was subsequently acquired by IAC, and in 2003, Mr. Harford became Senior Vice President for Air, Car and Private label. Prior to joining Expedia, Mr. Harford worked in the United Kingdom as a strategy consultant with The Kalchas Group. He holds an MBA from INSEAD and an MA in Natural Sciences from Clare College, Cambridge University. Mr. Harford’s business address is 13810 SE Eastgate Way Suite 400, Bellevue, WA 98005, USA.

Other Key Employees

Feng Qian, Senior Director of Air Ticketing

Feng Qian has served as our Senior Director of Air Ticketing since 2003. Before joining us, Mr. Qian worked as a General Manager in the Passenger Sales and Marketing Department of Foreign Enterprise Air Service Corp. from 1991 to 2003. Mr. Qian received an MBA from the University of International Business and Economics in Beijing and a BA degree from Beijing City University.

Richard Liu, Senior Director of Business Development

Richard Liu has served as our Senior Director of Business Development since 2003. From 1999 to 2003, Mr. Liu was the founder and General Manager of General Chinese Hotels Reservation Network Co., Ltd. From 1993 to 1999, Mr. Liu was the founder and General Manager of Hefeng Advertising Co. Ltd. Mr. Liu also had five years experience as a journalist for the Huaiyin Daily. Mr. Liu received a BA degree in China.

Span Pan, Senior Director of Internet Service

Span Pan has served as our Senior Director of Internet Service since 1999. From 1995 to 1997, Mr. Pan was the director of Hong Kong Dong Tiecheng Ad Producing Co. Ltd. He received a BA degree from Guangdong Xinghai Institute of Music in China.

Veronica Chen, Director of Finance

Veronica Chen is responsible for the financial management and reporting for the company. Before joining eLong, Ms. Chen was Finance Manager for Eli Lilly Asia Co. Prior to that, Ms. Chen held various senior financial management positions with Donovan Systems Co, Swisstol Dalian, Shangri-la Hotel Beihai, and Sheraton Hotel Tianjin. Ms. Chen received an MBA degree from the City University of the United States. She is a member of Australia Society of CPAs.

Yan Lu, Director of Customer Service Operations

Yan Lu has served as our Director of Customer Service since 2004. From 2002 to 2003, Mr. Lu worked as E-Contact Sales Professional in Bell Canada. From 1998 to 2001, Mr. Lu worked as Business Development Manager in Reuter’s Group. From 1993 to 1997, Mr. Lu worked as sales manager in MQM, S.A, a Spanish trading and consulting company in China. Mr. Lu also worked as a project administrator in Ministry of Education of the PRC. Mr. Lu received an MBA from Leeds University and a BBA from the Capital University of Economics in China.

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Leo Yu, Director of Call Center Operations

Leo Yu has served as our Director of Call Center since 2000. In 1999, Mr. Yu co-founded Lohoo Co. Ltd. From 1998 to 1999, Mr. Yu was the head of the pricing department of BizExpress International Limited. From 1997 to 1998, Mr. Yu was the supervisor for call center of Beijing Modern Express Co. Ltd. He received a BS from the Beijing Technology and Business University in China.

Enman Ma, Financial Controller

Enman Ma joined our company in August 2004 as our financial controller. Prior to joining our company, Ms. Ma worked as an audit manager in the Beijing office of PricewaterhouseCoopers. Ms. Ma is a qualified CPA in China and received a BA in Economics from Beijing University.

Board Practices

Our board of directors will consist of seven members upon the completion of this offering. We anticipate appointing two additional directors at the earliest practical date. If IAC exercises its warrant, our board of directors will increase to eleven members, subject to further increase or decrease by IAC and with IAC holding the right to nominate the additional four directors as set forth below.

Of our current directors, prior to this offering, Messrs. Tang, Xue and Sun were appointed through shareholder voting and not nominated by specific shareholders. Mr. Zhong was nominated by Billable Development Ltd. and appointed through shareholder voting. Mr. Harford was nominated by IAC and appointed through shareholder voting. Our investors agreement with IAC and our other shareholders and our articles of association specify that in any election of our board of directors, the existing shareholders will each vote at any meeting of shareholders such number of shares then owned by the existing shareholders as may be necessary to elect the following:

Ÿ for as long as Tiger Technology Private Investment Partners, L.P. owns at least 50% of our Series A preferred shares originally acquired by Tiger Technology Private Investment Partners, L.P., one director elected by a majority vote of the Series A preferred shares and nominated by Tiger Technology Private Investment Partners, L.P.;

Ÿ for as long as Billable Development, Ltd. owns at least 50% of the ordinary shares purchased by Billable Development, Ltd. under the share purchase agreement dated April 18, 2001, two directors nominated by Billable Development Ltd.;

Ÿ for as long as Messrs. Lawrence Auriana, Peter Lerner and Ira S. Nordlicht own at least 50% of the ordinary shares purchased by them under the share purchase agreement dated April 18, 2001, one director collectively nominated collectively by them;

Ÿ one director nominated by the holders of a majority of the voting power of the shareholders, who is our then current chief executive officer, initially to be Mr. Justin Tang; and

Ÿ two directors nominated by IAC, but in the event of IAC’s exercise of its warrant, four additional directors (for a total of six directors) nominated by IAC.

Upon the completion of this offering, the rights of Tiger Technology Private Placement Partners, L.P., Billable Development Ltd., and, collectively, Messrs. Lawrence Auriana, Peter Lerner and Ira S. Nordlicht to nominate directors and the obligation of shareholders to vote with

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respect to the rights of the above shareholders will terminate. However, the directors elected prior to this offering, if any, by Tiger Technology Private Placement Partners, L.P., Billable Development Ltd., and, collectively, Messrs. Lawrence Auriana, Peter Lerner and Ira S. Nordlicht will, subject to removal for cause provided for under applicable law or our amended articles of association, have the right to continue serving on our board of directors until the one-year anniversary of the completion of this offering. The rights of IAC to appoint either two or six directors, depending on whether it has exercised its warrant, will continue after the completion of this offering. See “Investment by IAC/InterActiveCorp—Governance and Other Rights of IAC”.

There are no family relationships between any of our directors and senior management. We plan to establish the audit committee and the compensation committee under our board of directors.

Audit committee.    We anticipate that the members of our audit committee will be Liming Sun and two other independent directors we plan to appoint. We have not determined the chairman of our audit committee. Our audit committee reports to the board regarding the appointment of our independent public accountants, the scope and results of our annual audits, compliance with our accounting and financial policies and management’s procedures and policies related to the adequacy of our internal accounting controls.

Compensation committee.    We anticipate that the members of our compensation committee will be Barney Harford and one other independent director whom we plan to appoint. We have not determined the chairman of our compensation committee. Our compensation committee reviews and makes recommendations to the board regarding compensation policies and all forms of compensation to be provided to our executive officers and directors. In addition, the compensation committee reviews bonus and stock compensation arrangements for all of our other employees. Under our investors agreement with IAC and our other shareholders, IAC has the right to appoint one director to our compensation committee, and if IAC exercises its warrant, it will have the right to appoint two directors to our compensation committee. In addition, if IAC exercises its warrant, our compensation committee will not have the authority to issue stock options unless two directors nominated by IAC are on our compensation committee.

Duties of Directors

Under Cayman Islands law, our directors have a duty to act honestly, in good faith and with a view to the best interests of our company. Our directors also have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to our company, our directors must ensure compliance with our memorandum and articles of association.

Terms of Directors and Officers

All of our current directors will hold office until the one-year anniversary of this offering or until their successors have been duly elected and qualified. Officers are appointed by and serve at the discretion of our board of directors.

Limitation on Liability and Other Indemnification Matters

Cayman Islands law and our articles of association allow us to indemnify our directors, officers and trustee acting in relation to any of our affairs against actions, costs, charges, losses, damages and expenses incurred by reason of any act done or omitted in the execution of their duties as our directors, officers and trustee. Under our memorandum and articles of association, indemnification is not available if those events were incurred or sustained by or through their own willful neglect or intentional malfeasance.

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Compensation of Directors and Executive Officers

For the year ended December 31, 2003, the aggregate cash and stock-based compensation paid to our executive officers and directors was as follows.

	Annual  compensation			Ordinary shares underlying options(1)
Name	Salary US$		Bonus US$	Number
Justin Tang	160,000		—	250,000
Liming Sun	—		—	—
Xiaojian Zhong	—		—	—
Richard Xue	7,500	(2)	—	240,000
Richard Chen	90,000		—	—
Faith Huang(3)	90,000		—	—
Frank Zheng	74,000		—	—

⁽¹⁾ These options have an exercise price of US$1.53 per share.

⁽²⁾ Represents a pro rata amount of Mr. Xue’s salary in 2003.

⁽³⁾ Ms. Huang was an executive officer of our company in 2003.

During the second quarter of 2004, our board of directors approved a one-time payment of the individual income tax of our chief executive officer and four other senior members of our management team, which totaled RMB4.5 million (US$0.5 million).

Service Contracts

We currently do not have service contracts with our directors.

Employment Agreements with Executive Officers

General.    We are party to employment agreements, dated and effective as of July 23, 2004, with each of our executive officers Justin Tang, Richard Xue, Richard Chen, Frank Zheng and Derek Palaschuk.

Under our employment agreements, Mr. Tang will report to our board of Directors, and each of the other executives will report to our chief executive officer, Justin Tang. These employment agreements supersede prior agreements to which the executives were party, including the employment agreements between each of Messrs. Tang, Zheng, and Chen and us, dated as of September 1, 2003; the employment agreement between Mr. Xue and us, dated as of December 8, 2003; and the employment agreement between Mr. Palaschuk and us, dated as of April 23, 2004.

Compensation and Benefits.    The agreements generally provide a three-year term during which Mr. Tang will receive an initial base salary of US$200,000 per year and each of the other executives will receive an initial base salary of US$105,000 per year. The annual base salaries will be reviewed not less frequently than annually by our compensation committee, in the case of Mr. Tang, and by our chief executive officer and our compensation committee, in the case of each of the other executives, in each case, after the first anniversary of the commencement of the term or upon completion of any major financing or strategic event. Commencing in 2005, we will award our executive officers an annual bonus based on their individual performance, our performance, and other factors deemed relevant by our compensation committee, based upon a target bonus range of 15-50% of annual base salary.

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The agreements acknowledge that each of the executives has been granted options to purchase our shares in the past and provide that each of the executives may in the future be granted additional options to purchase our shares. The options are subject to the terms and conditions of the applicable share option plan and any related stock option agreement in effect at the time we grant or granted the options. However, in the event that, following a “change in control,” an executive resigns for “good reason,” or is terminated by us without “cause” (in each case, as defined in the agreements), the agreements provide that with respect to options granted on or after July 1, 2004, the executives are entitled to immediate vesting for an additional 12 months for the remaining options that are unvested as of the date of the termination. In the case of Messrs. Palaschuk and Xue, the provision described in the immediately preceding sentence also applies to those options granted prior to July 1, 2004, except for the provision regarding a “change of control”, which excludes a change of control of our company due to an acquisition by IAC Liberty Media, Mr. Barry Diller or their affiliates. Under the employment agreement of Mr. Xue, in addition to the general stock option arrangements, one-third of his grant of options to purchase 240,000 ordinary shares on December 1, 2003 will vest on the first anniversary of the date of grant and one-twelfth will vest on each three month anniversary thereafter, subject to the Mr. Xue’s continued employment with us through each applicable vesting date. In addition, none of the executive may transfer their options without the approval of IAC, so long as IAC beneficially own at least 15% of the voting power of our shares, unless such option were granted prior to July 1, 2004 and such transfers were previously approved.

During the term, the executives are eligible to participate in employee benefit plans of general application including health, life insurance and disability insurance. In addition, we will reimburse the executives for reasonable expenses incurred in the course of their employment in accordance with our policies. With respect to Messrs. Zheng, Chen, and Palaschuk, we will reimburse each of them for: “home leave” round trip transportation up to two times per year, including reasonable meal and laundry expenses; language training and educational expenses, reasonably incurred by these executives and their spouses and children, in China; and housing expenses, up to US$3500 per month, if the executive is renting a house. In all cases, the reimbursements and payments:

Ÿ will only be payable so long as such payments by us are non-taxable to the executive for individual income tax purposes;

Ÿ do not exceed 40% of the executive annual base salary; and

Ÿ shall be subject to the executive’s provision of official documentation required by the applicable taxing authority and the executive’s compliance with our policies relating to expense reimbursement.

If the reimbursements are not allowed or are taxable to the executives, we will pay the equivalent cash amounts as annual base salary.

Restrictions on Sale of Executives’ Shares.    Under the agreements, each of the executives has agreed:

Ÿ that he will not sell more than 7% of his total shareholding of our stock; and

Ÿ that he will further be restricted to sell in the aggregate no more than 15% of his total shareholding during the three years following the completion of this offering or three years following the exercise of the warrant in the event this offering is not consummated.

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In the event of a termination of the executive’s employment for any reason, then the three-year period referred to in the immediately preceding sentence will end upon the earlier of:

Ÿ the date which is three years following the completion of this offering or the three years following the exercise of the warrant in the event this offering is not consummated; or

Ÿ the date which is one year following the date of such termination.

The provisions described above apply to Mr. Tang, but he will be restricted to sell in the aggregate no more than 12% of his total shareholdings. Furthermore, if Mr. Tang resigns for good reason or if we terminate his employment without cause, then the sale limit period referred to above will end if:

Ÿ there are no outstanding claims by us or IAC against Mr. Tang or Purple Mountain Holdings, Ltd. for violations or failures to materially comply with arrangements described in the employment agreements;

Ÿ we and Mr. Tang have entered into a mutually acceptable general release of claims; and

Ÿ Mr. Tang has requested in writing to be on or continue to remain on our board of directors but we do not nominate him to be on our board.

Severance.    Under the agreements, in the event that, during the term, an executive resigns for good reason or we terminate an executive’s employment without cause, subject to the executive’s execution of a release and compliance with the restrictive covenants, the executive will be entitled to salary continuation for the remainder of the term. In addition, the executives will be entitled to continuation of health insurance benefits, comparable to those in place immediately prior to the termination at our expense during the severance period. Following the executive’s termination of employment, we will continue to provide the executive with directors and officers insurance coverage for six years following the termination, to cover insurable events that occurred during the executive’s term as our director or officer.

Restrictive Covenants.    Each of our company and eLongNet Information Technology (Beijing) Co. Ltd. are party to a restrictive covenant agreement with each of Messrs. Tang, Xue, Chen, Zheng and Palaschuk. The restrictive covenant agreements provide that during each executive’s employment and continuing until the later of: (1) 12 months after the termination of such executive’s employment and (2) three years after the effective date of such executive’s restrictive covenant agreement the executive will not compete with us or our subsidiaries related companies or affiliates. In addition, for a period of two years after his employment, the executive will not solicit our employees or customers or the employees or customers of our subsidiaries related companies or affiliates, and while employed and indefinitely thereafter will not disclose or otherwise use our confidential information or the confidential information of our subsidiaries related companies or affiliates. The agreements also state that the executives’ work product will be assigned to us or eLongNet Information Technology (Beijing) Co. Ltd.

“Clawback” Provisions. If an executive, after the termination of his employment, violates or fails to materially comply with the restrictive covenant agreement or other arrangements described in the agreements, any insurance or other benefits will terminate immediately and we will have the right to cease making certain payments or reduce certain payments that otherwise may be due to the executives and to receive reimbursement for other payments that have already been made to the executive as described in the agreements. In addition, we will have the right to cancel the executive’s equity awards and shares purchased pursuant to the exercise of such equity awards or receive a refund of any amounts realized upon the sale or other transfer of such awards in the event that the executive engages in prohibited actions specified in the agreements.

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Stock-Based Compensation Plans and Option Grants

2001 stock option plan.    In April 2001, we adopted a stock option plan that allows our board of directors to grant stock options to our executive officers and key employees. We may grant stock options to purchase up to 4,000,000 authorized but unissued ordinary shares.

On April 18, 2001, we granted to our executive officers options to purchase 4,000,000 ordinary shares at an exercise price of US$0.50 per share. The stock options have a ten year term and were fully vested and exercisable at the date of grant. We used the Black-Scholes option pricing model to determine the fair value of the options at nil excluding a volatility assumption. At December 31, 2003, no options have been exercised. The following table shows the assumptions used in determining the fair value of the options granted under the 2001 stock option plan.

Weighted-average assumptions
Expected dividend yield	0.00%
Risk-free interest rate	3.11%
Expected life of option	5 years

In accordance with our board of directors’ resolution dated August 26, 2003, we increased the number of ordinary shares authorized under the 2001 stock option plan to 5,500,000. In September and December 2003, options to purchase 490,000 ordinary shares were granted to our executive officers at an exercise price of US$1.53 per share. The stock options granted in 2003 have a ten-year term and vest over a four-year period from the date of grant. On the date of grant, the fair value of the stock options was RMB0.8 million using the Black-Scholes option pricing model excluding a volatility assumption. The following table shows the assumptions used in determining the fair value of the options granted in 2003.

Weighted-average assumptions
Expected dividend yield	0.00%
Risk-free interest rate	2.63%
Expected life of option	5 years

In January 2004, we issued options to purchase 689,400 ordinary shares at an exercise price of US$1.53 per share. These options have a term of ten years. Out of the total options to purchase 689,400 ordinary shares, options to purchase 299,000 ordinary shares were granted to employees who joined the company after January 1, 2002 and will vest over four years from the grant date, or 12.5% after every six months from the date of the grant. The other options to purchase 390,400 ordinary shares, granted to employees who joined the company before January 1, 2002, will vest over three years from the grant date, or 16.67% after every six months from the date of the grant. On the date of grant, the fair value of the stock options was RMB753,456 using the Black-Scholes option-pricing model (excluding a volatility assumption). The following table shows the assumptions used in determining the fair value of the options granted:

Weighted-average assumptions
Expected dividend yield	0%
Risk-free interest rate	2.63%
Expected life of option	4 years

In April 2004, we issued an option to purchase 300,000 ordinary shares to Derek Palaschuk at an exercise price of US$1.53 per share. The option has a term of ten years and will vest three

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years from the date of grant. On the date of grant, the fair value of the stock options was RMB8,381,360 using the Black-Scholes option-pricing model. The following table shows the assumptions used in determining the fair value of the options granted:

Weighted-average assumptions
Expected dividend yield	0%
Risk-free interest rate…	2.63%
Expected life of option	4 years
Expected Volatility	43%

The following table summarizes the outstanding options granted under our 2001 stock option plan.

	Ordinary shares underlying options granted	Exercise price	Date of grant	Date of expiration
		US$
Granted in 2001
Justin Tang	2,750,000	0.50	April 18, 2001	April 17, 2011
Richard Chen	300,000	0.50	April 18, 2001	April 17, 2011
Faith Huang	300,000	0.50	April 18, 2001	April 17, 2011
Lee Zhang	350,000	0.50	April 18, 2001	April 17, 2011
Frank Zheng	300,000	0.50	April 18, 2001	April 17, 2011
Granted in 2003
Justin Tang	250,000	1.53	September 1, 2003	August 31, 2013
Richard Xue	240,000	1.53	December 1, 2003	November 30, 2013
Granted in 2004
Derek Palaschuk	300,000	1.53	April 20, 2004	April 19, 2014
Other employees(1)	689,400	1.53	January 1, 2004	January 1, 2014

(1) Includes 74 employees who were granted options to purchase a total of 390,400 ordinary shares and 78 employees who were granted options to purchase a total of 299,000 ordinary shares.

2004 stock and annual incentive plan.    In July 2004, we adopted a stock and annual incentive plan that allows our board of directors to grant stock options to our officers, employees, directors or consultants and those of our subsidiaries and our affiliated Chinese entities. We may grant stock appreciation rights, stock options, restricted stock or a performance unit to purchase up to an aggregate of 4,000,000 shares of authorized but unissued ordinary shares.

On July 23, 2004, under our 2004 stock and annual incentive plan, we granted options to purchase 1,660,000 ordinary shares at an exercise price of US$5.25 per share to our executive officers and certain employees. The stock options have a ten-year term vesting over four years with 25% of the options vesting on the first anniversary of the date of grant and the remaining options vesting at the rate of 8.3% per quarter over the remaining three years. On August 4, 2004, we granted to IAC an option to purchase 711,429 ordinary shares at an exercise price of US$5.25 per share. Portions of the shares granted under IAC’s option become exercisable if and when various executive officers and employees exercise the stock options granted to them

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on July 23, 2004 under our 2004 stock and annual incentive plan. On the date of grant, the fair value of the stock options was RMB26,579,057 using the Black-Scholes option pricing model. The following table shows the assumptions used in determining the fair value of the options granted in 2004.

Weighted-average assumptions
Expected dividend yield	0.00%
Risk-free interest rate	2.63%
Expected life of option	4 years
Expected Volatility	43%

The following table summarizes the outstanding options granted in July 2004 to our executive officers and certain employees under our 2004 stock option and annual incentive plan, and to IAC.

Granted in July and August 2004	Ordinary shares underlying options granted	Exercise Price US$	Date of grant	Date of expiration
IAC	711,429	5.25	August 4, 2004	August 3, 2014(2)
Justin Tang	700,000	5.25	July 23, 2004	July 22, 2014
Richard Chen	200,000	5.25	July 23, 2004	July 22, 2014
Frank Zheng	180,000	5.25	July 23, 2004	July 22, 2014
Richard Xue	100,000	5.25	July 23, 2004	July 22, 2014
Derek Palaschuk	50,000	5.25	July 23, 2004	July 22, 2014
Other Employees(1)	430,000	5.25	July 23, 2004	July 22, 2014

⁽¹⁾ Includes 28 employees who were granted options to purchase a total of 430,000 ordinary shares.

⁽²⁾ The IAC options will expire on the date the related employee options expire or otherwise terminate.

In October 2004, under our 2004 stock and annual incentive plan we granted an option to purchase 150,000 ordinary shares at an exercise price of US$5.25 per ordinary share to Mr. Richard Chen and an option to purchase 100,000 ordinary shares at an exercise price of US$5.25 to Mr. Frank Zheng. The stock options have a ten-year term vesting over four years with 25% of the options vesting on the first anniversary of the date of grant and the remaining options vesting at the rate of 8.3% per quarter over the remaining three years. On the date of grant, the fair value of the stock options was RMB5,542,811 using the Black-Scholes option pricing model.

The following table shows the assumptions used in determining the fair value of the options granted in October 2004.

Weighted Average Assumptions
Expect dividend yield . .	0.00%
Risk-free interest rate . .	2.63%
Expect life of options . .	4 years
Expected Volatility . . . . . . . . . . . . .	43%

In addition, in October 2004, under the terms of a stock option agreement we entered into with IAC, we granted IAC an option to purchase up to 260,204 ordinary shares at an exercise price of US$5.25 per ordinary share with the same vesting terms as the options granted to Mr. Chen and Mr. Zheng in October 2004. For more information regarding the issuance of options to IAC, see “Investment by IAC/InterActiveCorp—Stock Options.” On the date of grant, the fair value of the option granted to IAC is RMB5,769,047.

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The following table summarizes the outstanding options granted in October 2004 to our two executive officers under our 2004 stock option and annual incentive plan and to IAC.

Granted in September 2004	Ordinary shares underlying options granted	Exercise Price $US	Date of grant	Date of expiration
IAC	260,204	5.25	October 1, 2004	September 30, 2014(1)
Richard Chen	150,000	5.25	October 1, 2004	September 30, 2014
Frank Zheng	100,000	5.25	October 1, 2004	September 30, 2014

⁽¹⁾ The IAC options will expire on the date the related employee option expires or otherwise terminates.

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CORPORATE STRUCTURE AND RELATED PARTY TRANSACTIONS

Corporate History

eLong.com, Inc., was incorporated in the State of Delaware in May 1999 with an initial investment of approximately US$1.0 million. In March 2000, Mail.com (now “Easylink Services”), a Nasdaq listed company, acquired eLong.com, Inc. for a total consideration of US$68 million consisting of cash payment and Mail.com Corporation’s stock and changed its name from Mail.com to Asia.com, Inc. Mail.com and several other individuals subsequently invested an additional US$22 million in Asia.com, Inc. to fund further expansion. On April 4, 2001, a group of investors, led by Justin Tang, our current CEO, formed eLong, Inc. in the British Virgin Islands and purchased Asia.com’s travel and Internet business in China for US$1.5 million. On May 19, 2004, we were re-incorporated in the Cayman Islands. In August 2004, IAC made an investment in our company as described in “Investment by IAC/InterActiveCorp.”

Corporate Structure and Arrangements with Affiliated Chinese Entities

Foreign ownership in the Internet content provision, advertising, and air-ticketing businesses is subject to significant restrictions under current PRC laws and regulations. As a result, we have a wholly-owned subsidiary, eLongNet Information Technology (Beijing) Co., Ltd., or eLong Information, that conducts operations in China through a series of contractual arrangements with our affiliated Chinese entities, which hold the licenses and permits required to conduct our business. These affiliated Chinese entities include:

Ÿ Beijing eLong Information Technology Co., Ltd., or Beijing Information, which holds a license for Internet content provision services, a license for call center services, a license for short messaging services and a license for online advertising.

Ÿ Beijing Asia Media Interactive Advertising Co., Ltd., or Beijing Media, which holds a license for advertising.

Ÿ Beijing eLong Airlines Service Co., Ltd., or Beijing Airline, which holds the relevant air-ticketing licenses.

Ÿ Jiangsu General Chinese Hotel Reservation Network Ltd., or GCH, which we acquired recently.

We do not have any direct ownership interest or voting rights in our affiliated Chinese entities. Under these contractual arrangements, we have management control over our affiliated Chinese entities. We also bear economic risks with respect to, and derive economic benefits from, their operations.

In July, 2004, Justin Tang, on behalf of our company, incorporated in the PRC Beijing eLong Travel Agency Co., Ltd., or Beijing Travel. Beijing Travel has a travel agent license with which we may facilitate the future execution of our travel business. However, we have not included Beijing Travel into our corporate structure as we have not determined the specific travel services that will be conducted by Beijing Travel. As a result, we have not entered into any contractual relationship with Beijing Travel. Beijing Travel has no business contracts, revenues, significant expenses and employees. We expect to incorporate Beijing Travel into our corporate structure if and when we determine the scale and nature of its business operations. See “Our Business—Our Services—Corporate Travel Services” for a more detailed description of our corporate travel service.

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The following chart shows the ownership structure of our company.

⁽¹⁾ Include exclusive technical services agreement, trademark license agreement, domain name license agreement, cooperation agreement and operating agreement.

⁽²⁾ Include exclusive advertising technical services agreement, operating agreement, and trademark license agreement.

⁽³⁾ Include exclusive consultancy and technical services agreement, operating agreement, and trademark license agreement.

⁽⁴⁾ Include exclusive technical services agreement, operating agreement, and trademark license agreement.

Prior to December 2003, our entities in China included our wholly owned subsidiary, eLongNet Information Technology (Beijing) Co., Ltd. and our affiliated Chinese entities. Justin Tang, our Chief Executive Officer, and Qu Zhi, a representative of our Series A preferred shareholders, own 75% and 25%, respectively, of Beijing Information and Beijing Media. Beijing Information and Beijing Media own 80% and 20%, respectively, of Beijing Airline.

In December 2003, Beijing Airline and Beijing Information acquired 80% and 20% interest, respectively, of GCH which primarily engages in hotel-booking business. The total consideration for the acquisition was RMB6.0 million in cash.

In June 2004, we formed a second wholly-owned subsidiary, eLongNet Hi-Tech (Beijing) Co., Ltd., or eLong Hi-Tech. However, eLong Hi-Tech is not currently engaged in any business activity and we will dissolve eLong Hi-Tech if we do not require it to engage in any business activity in the future.

We do not believe that we could have obtained from unrelated third parties similar contractual terms that we currently have with our affiliated Chinese entities. Qu Zhi receives from eLong Information RMB10,000 per month as compensation for acting as a shareholder of the Chinese entities. Justin Tang has not, and we expect that he will not, receive any personal benefit from these agreements except as a shareholder of eLong, Inc. We have been advised by our PRC counsel, Commerce & Finance Law Offices, that these agreements have been duly

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authorized, executed and delivered, and are enforceable under current PRC law. The principal terms of these agreements with our affiliated Chinese entities are described below.

Beijing Information

Technical services agreement.    Beijing Information and eLong Information have entered into a technical services agreement, which has been amended and restated. Under the agreement, eLong Information has the exclusive right to provide Beijing Information with technical services relating to its website operations. eLong Information has also granted Beijing Information a non-exclusive license to use certain software owned by eLong Information. The term of the agreement is identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information at any time. Beijing Information has agreed to make quarterly payments to eLong Information for the technical services and the software license, and such payments are based on market prices as mutually agreed by the parties. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Equity interests pledge agreements.    Justin Tang and Qu Zhi have entered into separate agreements with eLong Information, which have been amended and restated. Under the agreements, Justin Tang and Qu Zhi have pledged their entire respective ownership interests in Beijing Information to eLong Information to secure the payment obligations of Beijing Information under the technical services agreement described above and the obligations of Beijing Information under the trade mark license agreement, the domain name license agreement, the cooperative agreement and the business operation agreement. Upon the occurrence of certain events of default specified in the agreements, including the failure of Beijing Information to make required payments of the technical service fees and the software license fees to eLong Information under the technical services agreement described above or to perform any of its obligations under the cooperative agreement, the business operation agreement, the trade mark license agreement and the domain name license agreement, eLong Information may enforce the equity interests pledge by complying with certain procedures required by law. The term of each agreement is identical to the term of the technical services agreement described above. These agreements are governed by the laws of the PRC and disputes arising under the agreements will be resolved by binding arbitration in China.

Trademark license agreement.    Beijing Information and eLong Information have entered into a trademark license agreement, which has been amended and restated. Under this agreement, eLong Information has granted Beijing Information a non-exclusive license to use certain trademarks, provided that such license cannot be sublicensed. The agreement has a term identical to the term of incorporation of eLong Information including any extensions thereto and may be terminated by eLong Information with 30-day notice. Beijing Information agrees to pay eLong Information license fees based on market rates. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Domain name license agreement.    Beijing Information and eLong Information have entered into a domain name license agreement, which has been amended and restated. Under this agreement, eLong Information has granted Beijing Information the right to use certain domain names including www.eLong.com and www.eLong.net. The agreement has a term identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information with a 30-day notice. Beijing Information has agreed to pay eLong Information a license fee based on market rates. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

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Cooperative agreement.    Beijing Information and eLong Information have entered into a cooperative agreement, which has been amended and restated. Under the agreement, eLong Information has agreed to:

Ÿ develop the hotel-booking market by negotiating with hotels on behalf of Beijing Information;

Ÿ provide relevant market and hotel information to Beijing Information;

Ÿ send booking orders to hotels and accept confirmation responses from hotels for Beijing Information; and

Ÿ accept commissions and services fees from hotels on behalf of Beijing Information.

Under this agreement, Beijing Information has also agreed to publish prices, market information and other relevant information on its website and process customer orders and other relevant matters through the Internet and our call center. eLong Information is obligated to pay Beijing Information an information and service fee quarterly based on market prices. The term of this agreement is identical to the term of incorporation of eLong Information including any extension thereto. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Business operation agreement.    Beijing Information, Justin Tang, Qu Zhi, and eLong Information have entered into a business operation agreement, which has been amended and restated. Under this agreement, eLong Information has agreed to provide guarantees for performance by Beijing Information of contracts, agreements or transactions with third parties in connection with its business operations. In return, Beijing Information has agreed to pledge its accounts receivable mortgage or pledge and all its assets to eLong Information. eLong Information may, at its sole discretion, provide Beijing Information any performance guarantee and working capital loan guarantee in connection with Beijing Information’s business operations. In addition, Beijing Information, Justin Tang and Qu Zhi have each agreed not to enter into any transaction that would substantially affect the assets, rights, obligations or operations of Beijing Information without prior written consent from eLong Information. Furthermore, Justin Tang and Qu Zhi have agreed that upon instruction from eLong Information, they will appoint or remove Beijing Information’s directors, and executive officers and to accept eLong Information’s guidance regarding the day-to-day operations and financial and personnel management of Beijing Information. The term of this agreement is identical to the term of incorporation of eLong Information including any extensions thereto and may be terminated by eLong Information with a 30-day notice. Under this business operation agreement, if any of the agreements between eLong Information and Beijing Information terminates or expires, eLong Information has the right but without obligation to terminate any other agreements between eLong Information and Beijing Information, including without limitation this business operation agreement. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Loan agreement.    eLong Information lent RMB750,000 and RMB250,000 to Justin Tang and Qu Zhi, respectively, for making contributions to the registered capital of Beijing Information. We subsequently lent RMB12.0 million and RMB4.0 million to Justin Tang and Qu Zhi, respectively, for the purposes of repaying their loans outstanding to eLong Information and increasing the registered capital of Beijing Information. The loans are interest free and have a repayment term of ten years and may be extended by the parties upon mutual agreement. In addition, in the event that we exercise our option to purchase the 100% equity interest in Beijing Information pursuant to an option agreement described below, the loan will accelerate and be repaid by the proceeds from the exercise of our option. Under this circumstance, the loans will be discharged.

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In addition, under certain conditions such as the incapacity of Qu Zhi or Justin Tang, or the termination of employment with us of Justin Tang, the repayments under the loan agreement will accelerate. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Agreement relating to exclusive purchase right of equity interest.    Justin Tang and Qu Zhi have entered into separate agreements relating to exclusive purchase right of equity interest with us, which have been amended and restated. Under these agreements, we and any third party designated by us have the right, at any time, when applicable Chinese laws and regulations change to permit foreign invested companies to operate an Internet content provision business, to purchase from Justin Tang and Qu Zhi their respective equity interests in Beijing Information. The exercise price of the option is at an aggregate price equal to the actual paid-in registered capital of Beijing Information (or pro rata portion thereof, as appropriate) unless otherwise specified under PRC laws. The proceeds from the exercise will be applied to repay the loans extended to Justin Tang and Qu Zhi, unless otherwise agreed by the parties in accordance with the requirement of prevailing applicable laws. The term of each of these agreements is twenty years. The agreements are governed by the laws of the PRC and disputes arising under the agreements will be resolved by binding arbitration in China.

Beijing Media

Advertising technical consulting and services agreement.    Beijing media and eLong Information have entered into an advertising technical consulting and services agreement, which has been amended and restated. Under this agreement, eLong Information has the exclusive right to provide Beijing Media with technical services relating to the latter’s advertising operations conducted through www.elong.com. eLong Information has also granted Beijing Media a non-exclusive license to use certain software owned by eLong Information. The term of this agreement is identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information at any time. Beijing Media is required to pay eLong technical consulting and service fees and software license fees based on market prices as agreed by the parties. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Equity interests pledge agreements.    Justin Tang and Qu Zhi have entered into separate equity pledge agreements with eLong Information, which have been amended and restated. Under the agreements, Justin Tang and Qu Zhi have pledged their entire respective ownership interests in Beijing Media to eLong Information to secure the payment obligations of Beijing Media under the advertising technical consulting and services agreement described above and the obligations of Beijing Media under the business operation agreement and the trademark license agreement. Upon the occurrence if certain events of default specified in the agreements, including the failure of Beijing Media to pay service fees and the software license fees to eLong Information under the advertising technical consulting and services agreement or to perform any of its obligations under the business operation agreement and the trademark license agreement, eLong Information may enforce the equity interest pledge by complying with certain provisions required by law. The term of each agreement is identical to the term of the advertising consulting and services agreement described above. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Cooperative agreement.    Beijing Media and Beijing Information have entered into a cooperative agreement. Under this agreement, eLong Information has agreed to provide web space and information services to Beijing Media. Beijing Media is obligated to pay Beijing

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Information for such web space and information services based on market prices. The term of this agreement is identical to the term of incorporation of Beijing Media including any extension thereto. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Business operation agreement.    Beijing Media, Justin Tang, Qu Zhi, and eLong Information have entered into a business operation agreement, which has been amended and restated. Under this agreement, eLong Information has agreed to provide guarantees for performance by Beijing Media of contracts, agreements or transactions with third parties in connection with its business operations. In return, Beijing Media has agreed to pledge its accounts receivable and mortgage or pledge all its assets to eLong Information. eLong Information may, at its sole discretion, provide Beijing Media any working capital loan guarantee in connection with its business operations. In addition, Beijing Media, Justin Tang and Qu Zhi have each agreed not to enter into any transaction that would substantially affect the assets, rights, obligations, or operations of Beijing Media without prior written consent from eLong Information. Furthermore, Justin Tang and Qu Zhi have agreed that upon instruction from eLong Information, they will appoint or remove Beijing Media’s directors and executive officers and to accept eLong Information’s guidance regarding the day-to-day operations and financial and personnel management of Beijing Media. The term of this agreement is identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information with a 30-day notice. Under this business operation agreement, if any of the agreements between eLong Information and Beijing Media terminates or expires, eLong Information has the right but without obligation to terminate any other agreements between eLong Information and Beijing Media, including without limitation this business operation agreement. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Loan agreement.    eLong Information lent RMB375,000 and RMB125,000 to Justin Tang and Qu Zhi, respectively, for making contributions to the registered capital of Beijing Media. We subsequently loaned RMB375,000 and RMB125,000 to Justin Tang and Qu Zhi, respectively, for the purpose of repaying their loans outstanding to eLong Information. The loans are interest free and have a repayment term of ten years and may be extended by the parties upon mutual agreement. In addition, in the event that we exercise our option to purchase the 100% equity interest in Beijing Media pursuant to an option agreement, described below, the loan will be repaid by the proceeds from the exercise of our option. Under this circumstance, the loans will accelerate and be discharged. In addition, under certain conditions such as the incapacity of Qu Zhi or Justin Tang, or the termination of employment with us of Justin Tang, the repayments under the loan agreement will accelerate. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Agreements relating to exclusive purchase right of equity interest.    Justin Tang and Qu Zhi have entered into separate agreements relating to the exclusive purchase right of equity interest with us, which have been amended and restated. Under these agreements, we and any third party designated by us have the right, at any time, when applicable Chinese laws and regulations change to permit foreign invested companies to operate an advertising business, to purchase from Justin Tang and Qu Zhi their respective equity interests in Beijing Media. The exercise price of the options is at an aggregate price equal to the actual paid-in registered capital of Beijing Media, (or pro rata portion thereof, as appropriate) unless otherwise specified under the PRC laws. Upon the exercise of the options, the proceeds from the exercise will be applied to repay the loans extended to Justin Tang and Qu Zhi, unless otherwise agreed by the parties in accordance with the requirement of prevailing applicable laws. The term of each of

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these agreements is twenty years. The agreements are governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Trademark license agreement.    Beijing Media and eLong Information have entered into a trademark license agreement. Under this agreement, eLong Information has granted Beijing Media a non-exclusive license to use certain trademarks, provided that such license cannot be sublicensed. The agreement has a term identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information with 30-day notice. Beijing Media agrees to pay eLong Information license fees based on market rates. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Beijing Airline

Technical consulting and services agreement.    Beijing Airline and eLong Information have entered into a technical consulting and services agreement, which has been amended and restated. Under this agreement, eLong Information has the exclusive right to provide Beijing Airline technical services relating to its air-ticketing business conducted by Beijing Air through www.elong.com. eLong Information has also granted Beijing Airline a non-exclusive license to use certain software owned by eLong Information. The term of the agreement is identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information at any time. Beijing Airline has agreed to pay eLong Information service fees and software license fees based on market prices as agreed by the parties. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Equity interest pledge agreement.    Beijing Information and Beijing Media have entered into an equity interest pledge agreement with eLong Information, which has been amended and restated. Under the agreements Beijing Information and Beijing Media have pledged their entire respective ownership interests in Beijing Airline to eLong Information to secure the payment obligation of Beijing Airline under the technical consulting and services agreement described above and the performance of the obligations under the business operation agreement and the trademark license agreement. Upon the occurrence of certain events of default specified in the agreement, including the failure of Beijing Airline to make required payments of the technical services fees and the software license fees to eLong Information under the technical consulting and services agreements described above or to perform any of its obligations under the business operation agreement and the trademark license agreement, eLong Information may enforce the equity interest pledge by complying with certain procedures required by law. The agreement has a term identical to the term of the technical consulting and services agreement described above. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Business operation agreement.    Beijing Airline, Beijing Information, Beijing Media and eLong Information have entered into a business operation agreement, which has been amended and restated. Under this agreement, eLong Information has agreed to provide guarantees for the performance by Beijing Airline of contracts, agreements or transactions with third parties in connection with its business operations. In return, Beijing Airline has agreed to pledge its accounts receivable and mortgage or pledge all its assets to eLong Information. eLong Information may, at its sole discretion, provide Beijing Airline any working capital guarantee in connection with its business operations. In addition, Beijing Airline, Beijing Information and

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Beijing Media have each agreed that they will not enter into any transaction that would substantially affect the assets, rights, obligations or business operations of Beijing Airline without prior written consent from eLong Information. Furthermore, Beijing Information and Beijing Media have each agreed that upon instruction from eLong Information, they will appoint or terminate Beijing Airline’s directors and executive officers and to accept eLong Information’s guidance regarding the day-to-day operations and financial and personnel management of Beijing Airline. The term of this agreement is identical to the term of incorporation of eLong Information including any extensions thereto and may be terminated by eLong Information with a 30-day notice. Under this business operation agreement, if any of the agreements between eLong Information and Beijing Airlines terminates or expires, eLong Information has the right but without obligation to terminate any other agreements between eLong Information and Beijing Airlines, including without limitation this business operation agreement. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Cooperative agreement.    Beijing Airline and Beijing Information have entered into a cooperative agreement, which has been amended and restated. Under this agreement, Beijing Information has agreed to provide website hosting services and call center services to Beijing Airline. Beijing Airline has agreed to pay information service fees to Beijing Information quarterly based on market prices. The term of this agreement is identical to the term of incorporation of Beijing Airline including any extensions thereto. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Trademark license agreement.    Beijing Airline and eLong Information have entered into a trademark license agreement. Under this agreement, eLong Information has granted Beijing Airline a non-exclusive license to use certain trademarks, provided that such license cannot be sublicensed. The agreement has a term identical to the term of incorporation of eLong Information including any extensions thereto and may be terminated by eLong Information with 30-day notice. Beijing Airline agrees to pay eLong Information license fees based on market rates. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

GCH

Technical consulting and services agreement.    GCH and eLong Information have entered into a technical consulting and services agreement, which has been amended and restated. Under this agreement, eLong Information has the exclusive right to provide GCH technical services relating to its hotel reservation business conducted by GCH through www.elong.com. eLong Information has also granted GCH a non-exclusive license to use certain software owned by eLong Information. The term of the agreement is identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information at any time. GCH has agreed to pay eLong Information service fees and software license fees based on market prices as agreed by the parties. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Equity interest pledge agreement.    Beijing Airline and Beijing Information have entered into an equity interest pledge agreement, which has been amended and restated. Under the terms of the agreements, Beijing Airline and Beijing Information have pledged their entire respective ownership interests in GCH to eLong Information to secure the payment obligation of GCH under the technical consulting and services agreement described above and the

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performance of its obligations under the business operation agreement and the trademark license agreement. Upon the occurrence of certain events of default specified in the agreement, including the failure of GCH to make required payments of the technical service fees and the software license fees to eLong Information under the technical consulting and services agreement described above or to perform any of its obligations under the business operation agreement and the trademark license agreement, ELong Information may exercise its rights to enforce the equity interest pledge by complying with certain procedures required by law. The agreement has a term identical to the term of the technical consulting and services agreement described above. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Business operation agreement.    GCH, Beijing Information, Beijing Airline, and eLong Information have entered into a business operation agreement, which has been amended and restated. Under this agreement, eLong Information has agreed to provide guarantees for the performance by GCH of contracts, agreements or transactions with third parties in connection with it operations. In return, GCH has agreed to pledge its accounts receivable and mortgage or pledge all its assets to eLong Information. ELong Information may, at its sole discretion, provide GCH a working capital guarantee in connection with its business operations. In addition, GCH, Beijing Information and Beijing Airline have each agreed that they will not enter into any transaction that would substantially affect the assets, rights, obligations or business operations of GCH without prior written consent from eLong Information. Furthermore, Beijing Information and Beijing Airline have agreed that upon instruction from eLong Information, they will appoint or remove GCH’s directors and executive officers and they will accept eLong Information’s guidance regarding the day-to-day operations and financial and personnel management of GCH. The term of this agreement is identical to the term of information of eLong Information including any extensions thereto, and may be terminated by eLong Information with a 30-day notice. Under this business operation agreement, if any of the agreements between eLong Information and GCH terminates or expires, eLong Information has the right but without obligation to terminate any other agreements between eLong Information and GCH, including without limitation this business operation agreement. The agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Cooperative agreement.    GCH and Beijing Information have entered into a cooperative agreement, which has been amended and restated. Under this agreement, Beijing Information has agreed to provide website hosting services and call center services to GCH. GCH has agreed to pay information service fees to Beijing Information quarterly based on market prices. The term of this agreement is identical to the term of incorporation of the GCH including any extensions thereto. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

Trademark license agreement.    GCH and eLong Information have entered into a trademark license agreement. Under this agreement, eLong Information has granted GCH a non-exclusive license to use certain trademarks, provided that such license cannot be sublicensed. The agreement has a term identical to the term of incorporation of eLong Information including any extensions thereto, and may be terminated by eLong Information with 30-day notice. GCH agrees to pay eLong Information license fees based on market rates. This agreement is governed by the laws of the PRC and disputes arising under the agreement will be resolved by binding arbitration in China.

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Related Party Transactions

In May 2001, we entered into a money management agreement with Shenzhen Youyuan Investment Company, an affiliate of Billable Development, Ltd., one of our principal shareholders. Under the agreement, Youyuan Investment agreed to manage RMB12.0 million for us, and we were entitled to receive a guaranteed annual interest of 2.25% on the principle amount. As of December 31, 2003, all the principal and accrued interest have been returned to us in full.

In May 2002, we entered into a money management agreement with Shenzhen Youyuan Investment Company. Under the agreement, Youyuan Investment agreed to manage RMB4.0 million for us, and we were entitled to receive a guaranteed annual interest of 2.25%. As of December 31, 2003, all principal and accrued interest have been repaid.

In October, 2002, we entered into agreement with Shenzhen Sincere Technology Development Co. Ltd., or Sincere, to sell co-branded membership cards to Sincere for RMB2.3 million. Mr. Xiaojian Zhong, the principal shareholder of Billable Development Ltd., indirectly has a minority shareholding interest in Sincere. As of December 31, 2003, accounts receivable from Sincere amounted to RMB1.3 million.

In July 2003, we entered into a lease agreement with Kunlun Securities. Mr. Xiaojian Zhong, the principal shareholder of Billable Development Ltd., indirectly has a minority shareholding interest in Kunlun Securities. Under the agreement, Kunlun Securities would provide free rent on 196 square meters of office space in Shenzhen, China to us for twelve months.

In May 2004, Tiger Technology Private Investment Partners, L.P., Tiger Technology II, L.P., Blue Ridge Limited Partnership, Blue Ridge Offshore Master Limited Partnership and RMG Holdings, LLC collectively sold an aggregate of 150,000 Series A preferred shares to Mr. Derek Palaschuk at a price of US$1.53 per share.

During the second quarter of 2004, we advanced approximately RMB1.7 million on an interest free basis to our chief executive officer. The advance was repaid in August 2004.

During the second quarter of 2004, our board of directors approved for us to make a one-time payment of the individual income tax obligations of our chief executive officer and four other senior managers, totaling RMB4.5 million.

In July 2004, we and our two wholly-owned subsidiaries entered into a transaction agreement with IAC and IACT Asia Pacific Limited, an indirectly wholly-owned subsidiary of IAC, under which, among other things, IACT Asia Pacific agreed to purchase our Series B preferred shares from us for approximately US$58.7 million. See “Investment by IAC/InterActiveCorp” for more details of the IAC investment in our company.

Approximately US$7.3 million of the purchase price is currently being held in a separate escrow account with the Bank of New York. The escrow account is under the joint control of IAC and us. A portion of the amount in the escrow account is intended to provide for: (1) indemnification to IAC for breaches of our representations, warranties and covenants in the transaction agreement we entered into with IAC, and (2) payments to IAC in connection with the performance of certain post closing actions as specified in the transaction agreement. IAC is entitled to receive 30% of any payments made by, penalties levied on, or judgments entered against us, our subsidiaries or our affiliated Chinese entities in connection with certain actions that we have agreed to take after the closing of the IAC investment. The aforementioned

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payments will be made by releasing to IAC the appropriate amount from the escrow deposit. We believe that no material contingencies exist in respect of IAC’s indemnification rights and that the payments to IAC will not have a material effect on our financial condition. Of the approximately US$4.4 million of our proceeds being held in escrow, subject to claims by IAC for indemnification and our payments to IAC, US$1.1 million is to be released on August 4, 2005 and the balance is to be released on March 31, 2006.

We have also agreed to pay to IAC 15% of the investment banking fees we incurred with respect to IAC’s investment in our company. In addition, we have agreed to pay up to US$50,000 for the legal fees incurred in connection with the IAC transaction by each of Tiger Technology Private Investment Partners L.P. and Blue Ridge Limited Partnership.

On October 1, 2004, we granted to IAC an option to purchase up to 260,204 of our ordinary shares at a purchase price of US$5.25. For more information regarding the issuance of options to IAC, see “Investment by IAC/InterActiveCorp—Stock Options.”

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PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 of the General Rule and Regulations under the Securities Exchange Act of 1934, of our ordinary shares, on a fully diluted basis and taking into account the conversion of preferred shares into ordinary shares and the aggregate number of ordinary shares underlying our outstanding options and stock warrants as of             , 2004, by:

Ÿ each of our directors and senior executive officers;

Ÿ each person known to us to own beneficially more than 5% of our ordinary shares; and

Ÿ other selling shareholders.

	Ordinary shares beneficially owned prior to this offering		Shares being sold in this offering(†)		Shares beneficially owned after this offering		Shares beneficially owned after this offering in the event of IAC’s warrant exercise
	Number (1)	% (2)	Number	%	Number (1)	%	Number(1)	%
Executive Officers and Directors
Xiaojian Zhong (3)(30)	5,522,959	13.4	1,223,462		4,299,497
Justin Tang (4)(30)	4,251,248	10.4	—		4,251,248
Richard Chen (5)(30)	470,000	1.1	—		470,000
Frank Zheng (6)(30)	360,000	0.9	—		360,000
Derek Palaschuk (7)(30)	150,000	0.4	—		150,000
Richard Xue (8)(30)	60,000	0.1	—		60,000
Liming Sun (9)(30)	231,000	0.6	38,000		193,000
Principal Shareholders
IAC/InterActiveCorp (10)(30)	11,188,570	27.2	—		11,188,570
Billable Development Ltd. (11)(30)	5,522,959	13.5	1,223,462		4,299,497
Tiger Technology Private Investment Partners, L.P. (12)(30)	5,325,000	13.0	1,000,000		4,325,000
Purple Mountain Holding, Ltd.(13)(30)	4,251,248	10.3
Lawrence Auriana (14)(30)	3,911,111	9.5	—		3,716,111
Blue Ridge Limited Partnership (15)(30)	2,184,495	5.3	—		2,184,495
Other Selling Shareholders
RMG Holdings, LLC (16)(30)	546,125	1.3	85,750		460,375
Michael Rapp (17)(30)	256,500	0.6	198,564		57,936
Wang Gui Ying (18)(30)	231,000	0.6	123,313		107,687
Wang Yi Jie (19)(30)	231,000	0.6	38,000		193,000
Ira Nordlicht and Helen S. Scott (20)(30)	137,778	0.3	40,000		97,778
Pan Dai (21)(30)	77,000	0.2	16,000		61,000
Phillip Wagenheim (22)(30)	42,500	0.1	19,302		23,198
Bo Liu (23)(30)	38,500	0.1	10,000		28,500
Karl Brenza (24)(30)	30,000	0.1	15,000		15,000
Elliot Smith (25)(30)	10,000	*	10,000		—
Jeffrey Meshel (26)(30)	10,000	*	10,000		—
Broadband Capital Management LLC (27)(30)	10,000	*	10,000		—
David Prince (28)(30)	1,500	*	1,500		—
Amy Galanti (29)(30)	500	*	500		—

^(†) Assumes exercise of the underwriter’s over-allotment option.

⁽¹⁾ Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission, or the SEC, and includes voting or investment power with respect to securities.

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⁽²⁾ The number of ordinary shares outstanding used in calculating the percentage for each listed person includes the ordinary shares of underlying options held by such persons. Percentage of beneficial ownership prior to the offering is based on 41,063,335 ordinary shares outstanding as of October 4, 2004 on a fully diluted basis, including 12,925,595 ordinary shares issued, 8,205,620 Series A preferred shares convertible into ordinary shares using a one to one conversion ratio, 11,188,570 Series B preferred shares convertible into ordinary shares using a one to one conversion ratio, 971,633 options outstanding held by IAC, 7,372,417 options outstanding under the 2001 Stock Option Plan and the 2004 Stock Option Plan and the 399,500 warrants issued and outstanding.

⁽³⁾ Represents 5,522,959 ordinary shares held by Billable Development Ltd. Mr. Zhong holds ultimate investment power over the securities held by Billable Development Ltd. The address for Mr. Zhong is 3^rd Fl, Qinghai Dasha, 7043 Beihuan Dadao, Futian, Shenzhen, China 518034.

⁽⁴⁾ Includes 1,438,748 ordinary shares and 2,812,500 ordinary shares issuable upon the exercise of options held by Purple Mountain Holding, Ltd. Mr. Tang holds ultimate investment power over the securities held by Purple Mountain Holding, Ltd. Mr. Tang also holds 700,000 ordinary shares issuable upon the exercise of options that will not vest with 60-days of the date of this prospectus, and, through Purple Mountain Holding, Ltd., holds an additional 187,500 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus. The address for Mr. Tang is Block B, Xingke Plaza Building, 10 Jiuxianqiao Zhonglu, Chaoyang District, Beijing 100021, People’s Republic of China.

⁽⁵⁾ Includes 170,000 ordinary shares and 300,000 ordinary shares issuable upon the exercise of options held by Mind Trade Assets Limited. Mr. Chen holds ultimate investment power over the securities held by Mind Trade Assets Limited. Mr. Chen also holds 350,000 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus. The address for Mr. Chen is Block B, Xingke Plaza Building, 10 Jiuxianqiao Zhonglu, Chaoyang District, Beijing 100021, People’s Republic of China.

⁽⁶⁾ Includes 60,000 ordinary shares and 300,000 ordinary shares issuable upon the exercise of options held by Top River Assets Limited. Mr. Zheng holds ultimate investment power over the securities held by Top River Assets Limited. Mr. Zheng also holds 280,000 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus. The address for Mr. Zheng is Block B, Xingke Plaza Building, 10 Jiuxianqiao Zhonglu, Chaoyang District, Beijing 100021, People’s Republic of China.

⁽⁷⁾ Includes 150,000 Series A preferred shares issuable upon the exercise of options held by Mr. Palaschuk. Mr. Palaschuk also holds 50,000 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus, and, through Capital Dragon Agents Limited, holds an additional 300,000 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus. Mr. Palaschuk holds ultimate investment power over the securities held by Capital Dragon Agents Limited. The address for Mr. Palaschuk is Block B, Xingke Plaza Building, 10 Jiuxianqiao Zhonglu, Chaoyang District, Beijing 100021, People’s Republic of China.

⁽⁸⁾ Includes 60,000 shares issuable upon the exercise of options held by Sino Faith Assets Limited. Mr. Xue holds ultimate investment power over the securities held by Sino Faith Assets Limited. Mr. Xue also holds 100,000 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus, and, through Sino Faith Assets Limited, holds an additional 180,000 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus. The address for Mr. Xue is Block B, Xingke Plaza Building, 10 Jiuxianqiao Zonglu, Chaoyang District, Beijing 100021, People’s Republic of China.

⁽⁹⁾ Represents 231,000 ordinary shares held by Mr. Sun. The address for Mr. Sun is 11^th Fl. Qinghai Dasha 7043 Beihuan Dadao, Futian, Shenzhen, People’s Republic of China 518034.

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⁽¹⁰⁾ Includes 11,188,570 Series B preferred shares held by IACT Asia Pacific Limited, a subsidiary of IAC, which will convert automatically on a one-to-one conversion ratio (subject to certain anti-dilution adjustments, if applicable) into either ordinary shares (if IAC does not exercise its warrant) or high-vote ordinary shares (if IAC exercises its warrant) 31 business days after the completion of this offering, and              high-vote ordinary shares issuable to IACT Asia Pacific Limited upon the potential exercise of IACT Asia Pacific Limited’s warrant, (assuming that the underwriters do not exercise their over-allotment option and that we do not issue any of our securities prior to the exercise of the warrant other than in connection with this offering). The shares beneficially owned by IAC after the potential exercise of its warrant represents 96% of the total voting power of our shares and gives effect to our repurchase, in connection with the exercise of IAC’s warrant, from existing shareholders of              ordinary shares. IAC also holds 971,633 ordinary shares issuable upon the exercise of options that will not vest within 60-days of the date of this prospectus. The address for IAC is 152 West 57th Street, 42^nd Floor, New York, NY 10019 USA.

⁽¹¹⁾ Represents 5,522,959 ordinary shares held by Billable Development Ltd. Investment power over the ordinary shares held by Billable Development Ltd. rests with Mr. Zhong.

⁽¹²⁾ Includes 5,306,362 Series A preferred shares which are convertible into ordinary shares on a one to one basis, held by Tiger Technology Private Investment Partners, L.P. and 18,638 Series A preferred shares, which are convertible into ordinary shares on a one to one basis, held by Tiger Technology II, L.P. Tiger Technology PIP Performance, L.L.C., or Tiger PIP, is the sole general partner of Tiger Technology Private Investment Partners, L.P. Charles P. Coleman III, a citizen of the United States of America, is the sole managing member of Tiger PIP. Tiger Technology Performance, L.L.C., or Tiger Performance, is the sole general partner of Tiger Technology II, L.P. Charles P. Coleman III is the sole managing member of Tiger Performance. The address of Tiger Technology Private Investment Partners, L.P. and Tiger Technology II, L.P. is 101 Park Avenue, 48th Floor, New York, NY 10178.

⁽¹³⁾ Represents 1,438,747 ordinary shares and 2,812,500 ordinary shares issuable upon the exercise of options held by Purple Mountain Holding Ltd. Purple Mountain Holdings, Ltd., holds an additional 187,500 ordinary shares issuable upon the exercise of options that will not rest within 60-days of the date of this prospectus. Investment power over the securities held by Purple Mountain Holding Ltd. rest with Mr. Tang. The address for Purple Mountain Holding Ltd. is 3rd Floor, Qwomer Complex, P.O. Box 765, Road Town, Tortola, British Virgin Islands.

⁽¹⁴⁾ Represents 3,911,111 ordinary shares held by Mr. Auriana. The address for Mr. Auriana is 140 E. 45th Street, 43Fl, New York, NY 10017.

⁽¹⁵⁾ Includes 1,725,751 Series A preferred shares which are convertible into ordinary shares on a one to one basis held by Blue Ridge Limited Partnership and 458,744 Series A preferred shares which are convertible into ordinary shares on a one to one basis held by Blue Ridge Offshore Master Limited Partnership. JAG Holdings LLC holds voting and dispositive power for the shares held by Blue Ridge Limited Partnership and JAG Offshore Holdings LLC holds voting and dispositive power for the shares held by Blue Ridge Offshore Master Limited Partnership. John A. Griffin is the sole managing member of each of JAG Holdings LLC and JAG Offshore Holdings LLC. Mr. Griffin disclaims beneficial ownership of these shares except to the extent of his pecuniary interest in these shares, Blue Ridge Offshore Master Limited Partnership disclaims beneficial ownership of the shares held by Blue Ridge Limited Partnership, and Blue Ridge Limited Partnership disclaims beneficial ownership of the shares held by Blue Ridge Offshore Master Limited Partnership. The address of Blue Ridge Limited Partnership is 660 Madison Avenue, New York, NY 10021. The address of Blue Ridge Offshore Master Limited Partnership is c/o JAG Offshore Holdings LLC, 660 Madison Avenue, New York, NY 10021.

⁽¹⁶⁾ Includes 546,125 Series A preferred shares held by RMG Holdings, LLC. The address of RMG Holdings, LLC is 1633 Broadway, New York, NY 10019, USA.

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⁽¹⁷⁾ Represents 256,500 ordinary shares issuable upon the exercise of a warrant held by Michael Rapp. The address of Mr. Rapp is 805 Third Avenue, New York, NY 10022, USA.

⁽¹⁸⁾ Represents 231,000 ordinary shares owned by Wang Gui Ying. The address of Wang Gui Ying is Suite 602, 603 & 604, Union Plaza, Chaoyangmenwai Avenue, Beijing 10020, PRC.

⁽¹⁹⁾ Represents 231,000 ordinary shares owned by Wang Yi Jie. The address of Wang Yi Jie is Suite 602, 603 & 604, Union Plaza, Chaoyangmenwai Avenue, Beijing 10020, PRC.

⁽²⁰⁾ Represents 137,778 ordinary shares jointly owned by Ira Nordlicht and Helen S. Scott. The address of Mr. Nordlicht is 645 Fifth Avenue, New York, NY 10022, USA.

⁽²¹⁾ Represents 77,000 ordinary shares owned by Pan Dai. The address of Pan Dai is Suite 602, 603 & 604, Union Plaza, Chaoyangmenwai Avenue, Beijing 10020, PRC.

⁽²²⁾ Represents 42,500 ordinary shares issuable upon the exercise of a warrant held by Phillip Wagenheim. The address of Mr. Wagenheim is 805 Third Avenue, New York, NY 10022, USA.

⁽²³⁾ Represents 38,500 ordinary shares issuable upon the exercise of a warrant held by Bo Liu. The address of Mr. Liu is Suite 301, Building 35, 23 South Zizhuyuan Road, Haidan District 100044, Beijing, PRC.

⁽²⁴⁾ Represents 30,000 ordinary shares issuable upon the exercise of a warrant held by Karl Brenza. The address of Mr. Brenza is 805 Third Avenue, New York, NY 10022, USA.

⁽²⁵⁾ Represents 10,000 ordinary shares issuable upon the exercise of a warrant held by Elliot Smith. The address of Mr. Smith is 805 Third Avenue, New York, NY 10022, USA.

⁽²⁶⁾ Represents 10,000 ordinary shares issuable upon the exercise of a warrant held by Jeff Meshel. The address of Mr. Meshel is 805 Third Avenue, New York, NY 10022, USA.

⁽²⁷⁾ Represents 10,000 ordinary shares issuable upon the exercise of a warrant held by Broadband Capital Management LLC. The address of Broadband Capital is 805 Third Avenue, New York, NY 10022, USA.

⁽²⁸⁾ Represents 1,500 ordinary shares issuable upon the exercise of a warrant held by David Prince. The address of Mr. Prince is 805 Third Avenue, New York, NY 10022, USA.

⁽²⁹⁾ Represents 500 ordinary shares issuable upon the exercise of a warrant held by Amy Galanti. The address of Ms. Galanti is 805 Third Avenue, New York, NY 10022, USA.

⁽³⁰⁾ Our existing shareholders are parties to an investors agreement, dated July 23, 2004, under which they have agreed to vote their ordinary shares and preferred shares in the election of directors and other matters in the manner provided in the investors agreement, including for the election of directors designated by IAC, by certain former holders of our Series A preferred shares, and other holders of our ordinary shares. See “Management—Board Practices” for a more detailed description of our election of directors under the investors agreement.

* Represents less than 0.1%.

Prior to the issuance of our Series A preferred shares in August 2003, Billable Development, Lawrence Auriana and Justin Tang owned 51.0%, 24.6% and 11.3% respectively, of the outstanding shares of our company. Their ownership was reduced to 31.7%, 14.7% and 6.9%, respectively, after the issuance of Series A preferred shares, which are convertible into ordinary shares, as Tiger Technology Private Investment Partners, L.P., Tiger Technology II, L.P., Blue Ridge Limited Partnership and RMG Holdings, LLC collectively acquired an ownership interest of 36.9%. All of the percentages in this paragraph exclude shares underlying outstanding options and warrants.

As of the date of this prospectus, Mr. Lawrence Auriana, a record holder in the United States, owns approximately 9.5% of our ordinary shares on a fully diluted basis. Tiger Technology Private Investment Partners, L.P. and Tiger Technology II, L.P, each a record holder in the United States, own 64.7% and 0.2%, respectively, of our Series A preferred shares issued. Blue Ridge Limited Partnership, a record holder in the United States, and Blue Ridge Offshore Master Limited Partnership, a record holder in the Cayman Islands, own 21.0% and 5.6%,

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respectively, of our Series A preferred shares issued. RMG Holdings, LLC, a record holder in the United States, owns 6.7% of our Series A preferred shares issued.

On April 23, 2004, Purple Mountain Holding Ltd. received a transfer of 3,000,000 ordinary shares issuable upon the exercise of options from Justin Tang. The ordinary shares issuable upon the exercise of options that were transferred included 2,750,000 fully-vested options and 250,000 un-vested options. Investment power over the ordinary shares issuable upon the exercise of options held by Purple Mountain Holding Ltd. rests with Mr. Tang. The address of Purple Mountain Holding, Ltd. is 3rd Floor, Qwomar Complex, PO Boax 765, Road Town, Tortola, British Virgin Islands.

On May 10, 2004, Tiger Technology Private Investment Partners, L.P., Tiger Technology II, L.P., Blue Ridge Limited Partnership, Blue Ridge Offshore Master Limited Partnership and RMG Holdings, LLC sold 99,650, 350, 31,600, 8,400 and 10,000 Series A preferred shares, respectively, or a total of 150,000 Series A preferred shares, to Mr. Derek Palaschuk at US$1.53 per share.

On August 4, 2004 we issued and sold 11,188,570 of our Series B preferred shares to IAC. We repurchased from existing shareholders an aggregate of 4,012,411 of our ordinary shares and 1,581,874 of our Series A preferred shares. We also granted to IAC an option to purchase up to 711,429 ordinary shares.

In addition, in connection with the sale of the Series B preferred shares, we granted to IAC a warrant to purchase that number of our high-vote ordinary shares which will result in IAC’s holding approximately 52% of our outstanding ordinary shares and 96% of our voting power on a fully-diluted basis. See “Investment by IAC/InterActiveCorp” for additional details regarding the IAC investment.

On October 1, 2004, we granted to IAC an option to purchase up to 260,204 ordinary shares. For more information regarding the issuance of options to IAC, see “Investment by IAC/InterActiveCorp—Stock Options.”

Our shareholders are entitled to vote together as a single class on all matters submitted to shareholder’s vote. Holders of our high-vote ordinary shares are entitled to 15 votes each share on all matters upon which ordinary shares are entitled to vote, compared to holders or our ordinary shares who are entitled to only one vote each share. In addition, our existing shareholders are parties to an investors agreement under which they have agreed to vote their ordinary shares in the election of directors and other matters in the manner provided in the investors agreement, including for the election of directors designated by IAC, by certain former holders of our Series A preferred shares and other holders of our ordinary shares. See “Management—Board Practices” for a more detailed description of our election of directors under the investors agreement and “Risk Factors—Risks Related to Our Business—We are controlled by a small group of our existing shareholders, whose interest may not be aligned with the interests of the other shareholders,” “Risk Factors—Potential conflicts of interest may exist because our directors and officers may have interests in IAC or its subsidiaries,” “Risk Factors—Conflicts of interest may arise between IAC and us, which may not be resolved in a manner favorable to us,” “Risk Factors—IAC may exert significant control over our operations and management even if it does not exercise its warrant,” and “Risk Factors—We may potentially be controlled by IAC or its affiliates, who may have strategic interests that differ from those of our other shareholders” for a description of the risks associated with our significant shareholder.

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IAC’s warrant, which entitles IAC, within the first 30 business days after the completion of this offering, to purchase that number of our high-vote ordinary shares that will result in IAC’s holding 51% of our outstanding ordinary shares on a fully-diluted basis after giving effect to our repurchase, in connection with IAC’s exercise of the warrant, from existing shareholders a number of ordinary shares equal to one-half of the shares purchased by IAC pursuant to the warrant, would result in a change of control of our company.

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DESCRIPTION OF SHARE CAPITAL

We are a Cayman Islands company and our affairs are governed by our Memorandum and Articles of Association and the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands and the common law applicable in the Cayman Islands. The following are summaries of material provisions of our current Memorandum and Articles of Association and the Companies Law insofar as they relate to the material terms of our share capital. These summaries do not purport to be complete and are subject to the Memorandum and Articles of Association. We have filed a copy of our complete Memorandum and Articles of Association as an exhibit to our Registration Statement on Form F-1.

Under our Memorandum of Association, the objects for which we are established are unrestricted, including (a) acting as a holding company; and (b) investing in securities.

After the completion of this offering, our authorized share capital will consist of: (1) 200,000,000 ordinary shares with a par value of US$0.01 per share, of which 150,000,000 are designated ordinary shares and 50,000,000 are designated high-vote ordinary shares; and (2) 50,000,000 Series B preferred shares with a par value of US$0.01 per share.

Ordinary Shares and High-Vote Ordinary Shares

General.    As of October 6, 2004 there were 12,925,595 ordinary shares outstanding held of record by 21 shareholders and there were no high-vote ordinary shares outstanding. Additionally, options to purchase an aggregate of 8,344,050 ordinary shares were outstanding under our stock option plans and under our options grant to IAC. Furthermore, warrants to purchase 399,500 ordinary shares were outstanding and a warrant was outstanding to purchase that number of high-vote ordinary shares which would result in IAC’s holding 51% of our outstanding ordinary shares on a fully-diluted basis, giving effect to our repurchase, in connection with IAC’s exercise of the warrant, from existing shareholders a number of ordinary shares equal to one-half of the shares purchased by IAC. All the outstanding ordinary shares are fully paid and non-assessable. The ordinary shares, including the high-vote ordinary shares, are not entitled to any sinking fund or preemptive or redemption rights. Ordinary shares are issued in registered form.

Voting rights.    Each ordinary share, other than high-vote ordinary shares, is entitled to one vote on all matters upon which the ordinary shares are entitled to vote, including the election of directors. Each high-vote ordinary share is entitled to 15 votes on all matters upon which ordinary shares are entitled to vote, including the election of directors.

Preferred Shares

Series A Preferred Shares

Upon closing of the offering, all of our Series A preferred shares issued and outstanding will convert on an one-to-one basis into an aggregate of 8,205,620 ordinary shares.

Series B Preferred Shares

General.    As of August 4, 2004 there were 11,188,570 Series B preferred shares outstanding held of record by one shareholder. All the outstanding Series B preferred shares are fully paid and non-assessable. Certificates representing the Series B preferred shares are issued in

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registered form. If any shares of Series B preferred shares had not been converted to ordinary shares prior to July 23, 2024, we will be required to redeem them on such date at a price of $5.25 per share, plus any declared but unpaid dividends.

Voting rights.    Each Series B preferred share is entitled to one vote for each ordinary share into which each Series B preferred share could then be converted or 15 votes for each high-vote ordinary share into which it could then be converted, as applicable. The holder of such Series B preferred shares has full voting rights and powers equal to the voting rights and powers of the holders of ordinary shares or high-vote ordinary shares, as applicable, and is entitled to vote upon all matter which the holders of ordinary shares are entitled to vote, including the election of directors.

Conversion Rights.    If IAC exercises its warrant within 30 U.S. business days after the completion of this offering, then the Series B preferred shares will convert automatically into high-vote ordinary shares upon the earlier of the 31^st U.S. business day after the completion of this offering or such date as specified by written consent of or agreement by the holders of a majority of the then outstanding Series B preferred shares. If IAC does not exercise its warrant within 30 U.S. business days after the completion of this offering, then the Series B preferred shares will convert automatically into ordinary shares immediately upon the earlier of the 31^st U.S. business day after the completion of this offering or such date as specified by written consent of or agreement by the holders of a majority of the then outstanding Series B preferred shares. In addition, each Series B preferred share is convertible into ordinary shares (if IAC has not exercised its warrant prior to conversion) or high-vote ordinary shares (if IAC has exercised its warrant prior to conversion) at any time prior to the automatic conversion described above, at the option of the holder of the Series B preferred shares.

Currently, the conversion ratio for Series B preferred shares is one-to-one: (a) each Series B preferred share is convertible into one ordinary share, and (b) assuming IAC had already exercised its warrant, each Series B preferred share would be convertible into one high-vote ordinary share. The conversion ratio is subject to adjustment, as determined by dividing the Series B original issue Price, or US$5.25, by the Series B conversion price which is initially set at US$5.25. The Series B conversion price will be adjusted if and when the following events occur:

Ÿ if we issue additional ordinary shares (or options, warrants or other securities convertible or exercisable for ordinary shares) for a consideration per share that is less than the Series B conversion price that is in effect immediately before such issuance, then the Series B conversion price will be adjusted by multiplying the Series B conversion price by a fraction, the numerator of which will be the total number of ordinary shares outstanding, on a fully-diluted basis, before the additional securities are issued, plus the number of ordinary shares represented by the additional securities issued, on a fully-diluted basis, and the denominator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued;

Ÿ if we split or subdivide our ordinary shares, or pay a stock dividend or other distribution of ordinary shares (or options, warrants or other securities convertible or exercisable for ordinary shares), then the Series B conversion price will be appropriately decreased to take into account the increased number of ordinary shares outstanding; and

Ÿ if we effect a reverse stock split or otherwise decrease the number of ordinary shares by combining our outstanding ordinary shares, then the Series B conversion price will be appropriately increased to take into account the decreased number of ordinary shares outstanding.

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Liquidation Preference.    If we are liquidated prior to the 31^st U.S. business day after the completion of this offering, the holders of our Series B preferred shares will be entitled to receive, prior and in preference to any distribution of the proceeds on such liquidation to the holders of ordinary shares, an amount per share equal to the higher of: (1) US$5.25, plus any declared but unpaid dividends on such share, or (2) the amount such holders would receive if their Series B preferred shares were converted into ordinary shares immediately prior to such liquidation.

Protective Provisions.    Until the Series B preferred shares are converted into either ordinary shares or high-vote ordinary shares, the approval of holders of a majority of our Series B preferred shares is required in order for us to take any of the following actions:

Ÿ alter any rights, preferences or privileges of the Series B preferred shares so as to affect adversely the shares;

Ÿ except in connection with this offering, amend, revise or repeal our, our subsidiaries, or our affiliated Chinese entities’ memorandums and articles of association or comparable charter documents;

Ÿ change the authorized number of directors of our subsidiaries or our affiliated Chinese entities, or increase (or decrease) the size of our board of directors other than in accordance with the Investors Agreement;

Ÿ create, authorize, or issue, directly or indirectly, any of our, our subsidiaries’, or our affiliated Chinese entities’ securities (other than our ordinary shares, high-vote ordinary shares or preferred shares);

Ÿ redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any of our preferred shares, our ordinary shares or the applicable capital stock of any of our subsidiaries or affiliated Chinese entities;

Ÿ directly or indirectly, enter into any merger, amalgamation, reorganization, consolidation or combination, or convey, sell, lease, sublease, transfer or otherwise dispose of all or substantially all of our business, property or assets;

Ÿ declare or make any payment of cash or distribution of assets to any class of securities of us or any of our subsidiaries or affiliated Chinese entities;

Ÿ incur indebtedness or guarantee any obligation outside our ordinary course of business including the incurrence of debt in excess of US$1 million;

Ÿ sell, transfer, assign or otherwise dispose of any material asset, including assets with an estimated fair market value in excess of US$1 million;

Ÿ purchase or otherwise acquire any material assets or businesses or make any capital expenditures, in a transaction or series of related transactions, in excess of US$1 million; or

Ÿ change, directly or indirectly, in any material respect the nature of the conduct or operations of our business and the business of our subsidiaries and our affiliated Chinese entities (taken as a whole) as of May 27, 2004.

Rights of Ordinary Shares and Series B Preferred Shares

Subject to the restrictions described above under “—Preferred Shares,” voting at any meeting of shareholders is by a majority of the votes cast by those who are present in person and by those persons representing a shareholder by proxy.

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A quorum required for a meeting of shareholders consists of one or more persons present in person and representing in person or by proxy in excess of fifty percent of the total issued voting power of our company throughout the meeting. Shareholders’ meetings are held annually and may also be convened by any two directors, any director and the secretary, or the board of directors. Advanced notice of at least five days is required for the convening of annual general meetings of shareholders, and all other shareholder meetings.

Subject to the restrictions described above under “—Preferred Shares,” any resolution to be made by the shareholders requires the affirmative vote of a majority of the votes attaching to the shares cast at a general meeting of our company, while a special resolution requires the affirmative vote of two-thirds of the votes cast at our general meeting. A special resolution is required for matters such as changing our name or amending our memorandum and articles of association. Upon the closing of this offering, holders of ordinary shares and of our Series B preferred shares, which will be the only shares carrying the right to vote at our general meetings, have the power, among other things, to elect directors, appoint auditors, and make changes in the amount of our authorized share capital.

Dividends.    Upon the closing of this offering, the holders of our ordinary shares and our Series B preferred shares are entitled to receive such dividends as may be declared by our board of directors. Any dividends shall be distributed among all holders of our ordinary shares and Series B preferred shares in proportion to the number of ordinary shares that would be held by each such holder if all Series B preferred shares were converted to ordinary shares; provided, however, that no dividend shall be paid to the holders of ordinary shares unless a dividend of equal amount per share is paid in full to the holders of our Series B preferred shares. Dividends may be paid only out of profits, which include net earnings and retained earnings undistributed in prior years, and out of share premium, a concept analogous to paid-in surplus in the United States, subject to a statutory solvency test. See “Dividend Policy” for more information.

Liquidation.    If we were to be liquidated, the liquidator may, with the sanction of a special resolution, divide among the shareholders in cash or in kind the whole or any part of our assets, and may for such purpose, set such value as he or she deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders and the different classes of shareholders, subject to the restrictions described above under “—Preferred Shares.” The liquidator may vest the whole or any part of such assets in trustees upon such trusts for the benefit of the shareholders as the liquidator, with the sanction of a special resolution, thinks fit, provided that a shareholder shall not be compelled to accept any shares or other assets that subject such shareholder to liability.

Miscellaneous.    Share certificates registered in the names of two or more persons are deliverable to any one of them named in the share register, and if two or more such persons tender a vote, the vote of the person whose name first appears in the share register will be accepted to the exclusion of any other.

History of Share Issuances

The following is a summary of the issuance of ordinary shares, preferred shares and warrants:

Ÿ On April 17, 2001, we issued 16,000,000 ordinary shares to the initial shareholders, Billable Investment Ltd. and management shareholders in exchange for cash contributions of US$4,500,000.

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Ÿ On April 17, 2001, we granted 4,000,000 ordinary shares to a group of nine management employees and non-employee directors. The ordinary shares vest over a two-year period beginning from the date of the grant, and in May 2003, the 4,000,000 shares became fully vested and were issued.

Ÿ On April 18, 2001, options for 4,000,000 ordinary shares were granted to certain of our executives pursuant to our stock option plan. The options have an exercise price of US$0.50 per share and have a ten year term and were fully vested and exercisable at the date of grant.

Ÿ On August 26, 2003, we increased the number of ordinary shares authorized to be issued under the stock option plan to 5,500,000. In 2003, we granted options for 490,000 ordinary shares to certain of our executives at an exercise price of US$1.53 per share. The options have a ten year term and vest over a four year period from the date of the grant.

Ÿ On August 26, 2003, we issued warrants to purchase 600,000 shares of ordinary stock at an exercise price of US$0.75 per share to Broadband Capital Management LLC, an investment banking and financial advisory firm, and two outside consultants in consideration for investment banking services provided to us in connection with a private placement of Series A preferred shares. We also paid Broadband Capital Management LLC US$250,000 for these services.

Ÿ On August 29, 2003, we entered into an agreement to sell 9,787,494 Series A preferred shares to outside investors at a per share purchase price of US$1.5325, which purchase price was paid in cash.

Ÿ On August 29, 2003, we repurchased 3,262,949 ordinary shares from certain existing shareholders at US$1.53257 per share. Such ordinary shares were subsequently cancelled.

Ÿ On December 15, 2003, we issued 50,000 ordinary shares to Mr. Peter Lerner upon the exercise of his warrants.

Ÿ On January 1, 2004, we granted options for 689,400 ordinary shares to certain of our employees at an exercise price of US$1.53 per share. The options have a ten year term and vest over a three-or-four year period from the date of the grant.

Ÿ On April 20, 2004, we granted options to purchase 300,000 ordinary shares to a senior management employee at an exercise price of US$1.53 per share. The options have a ten year term and vest over a four year period from the date of the grant.

Ÿ On July 23, 2004, we granted options to purchase 1,660,000 ordinary shares to certain of our employees at an exercise price of US$5.25 per share. The options have a ten year term and vest over a four year period from the date of the grant.

Ÿ On July 23, 2004 we entered into an agreement to sell 11,188,570 Series B preferred shares to IAC for an aggregate purchase price of US$58,690,062, which purchase price was paid in cash on August 4, 2004.

Ÿ On July 23, 2004 we entered into an agreement to purchase from certain existing shareholders 1,581,874 Series A preferred shares and 4,012,411 ordinary shares, for an aggregate purchase price of US$29,345,029, which purchase price was paid in cash on August 4, 2004. The repurchased Series A preferred shares and ordinary shares were subsequently cancelled. In addition, under this agreement, if IAC exercises its warrant, we are obligated to repurchase from various existing shareholders an amount of ordinary shares equal to one-half of the number of shares IAC purchases pursuant to the warrant.

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Ÿ On August 4, 2004, we issued 80,000, 44,000, 15,000, and 11,500 ordinary shares to Messrs. Michael Rapp, Philip Wagenheim, Wayne Sturman, Liu Bo, respectively, upon their exercise of warrants. Messrs. Rapp, Wagenheim and Sturman obtained their warrants when Broadband Capital Management Consulting LLC transferred its warrants to buy 500,000 ordinary shares to various individuals. Mr. Liu Bo obtained his warrant when his brother, Mr. Liu Hao, transferred his warrants to him.

Ÿ On August 4, 2004, we granted to IAC an option to purchase up to 711,429 ordinary shares at a purchase price of US$5.25 per share, which is exercisable by IAC to the extent of that number of ordinary shares that is equal to 30% of: (1) the number of ordinary shares which are purchased from time to time by our officers and employees under options to purchase an aggregate of 1,660,000 million ordinary shares that we granted to these officers and employees on July 23, 2004, plus (2) the number of ordinary shares which are purchased through IAC’s exercise of its option to purchase up to 711,429 ordinary shares we granted on August 4, 2004.

Ÿ On August 4, 2004, we granted a warrant to IAC to purchase the number of our high-vote ordinary shares that will result in IAC’s holding approximately 51% of our outstanding ordinary shares on a fully-diluted basis, after giving effect to the repurchase of shares from existing shareholders as described above. Assuming the completion of this offering, the exercise price for the warrant will be equal to the lower of (a) the initial public offering price for this offering or (b)(1) US$205 million, minus our indebtedness, plus our cash and cash equivalents, plus the pro forma consideration that would be received in connection with the exercise of all vested or unvested in-the-money options, warrants or other convertible securities of the company, in each case at the time of exercise, divided by (2) the total number of our outstanding ordinary shares on a fully-diluted basis at the time of exercise (but excluding out-of-the-money options or securities). If it exercises the warrant, IAC would deposit 12.5% of the aggregate purchase price into escrow as security for its indemnification rights under its agreement with us in connection with its purchase of Series B preferred shares.

Ÿ On October 1, 2004, we granted options to purchase an aggregate of 250,000 ordinary shares to two members of senior management at an exercise price of US$5.25 per share. The options have a ten year term and vest over a four year period from the date of the grant. We also granted to IAC an option to purchase 260,204 shares at an exercise price of US$5.25 per share. For more information regarding the issuance of options to IAC, see “Investment by IAC/InterActiveCorp—Stock Options.” The stock option we granted to IAC on October 1, 2004 is only exercisable to the extent of a number of ordinary shares that is equal to 51% of: (1) the number of ordinary shares which are purchased from time to time by certain of our officers under options to purchase an aggregate of 250,000 ordinary shares we granted on October 1, 2004, plus (2) the number of ordinary shares which are purchased through IAC’s exercise of its option to purchase up to 260,204 ordinary shares we granted on October 1, 2004. To the extent that any such officer’s options terminate or expire without being exercised, an amount of IAC’s option equal to 51% of such officer’s terminated or expired options will likewise terminate or expire.

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Stock Option Activity

Stock option activities since April 4, 2001 were as follows:

	Number of shares	Weighted average exercise price
		US$
Balance at April 4, 2001	—	—
Granted	4,000,000	0.50
Exercised	—	—
Forfeited	—	—
Expired	—	—
Balance at December 31, 2001	4,000,000	0.50
Granted	—	—
Exercised	—	—
Forfeited	—	—
Expired	—	—
Balance at December 31, 2002	4,000,000	0.50
Granted	490,000	1.53
Exercised	—	—
Forfeited	—	—
Expired	—	—
Balance at December 31, 2003	4,490,000	0.61
Granted	689,400	1.53
Exercised	—	—
Forfeited	—	—
Expired	—	—
Balance at March 31, 2004	5,179,400	0.73
Granted	300,000	1.53
Exercised	—	—
Forfeited	—	—
Expired	—	—
Balance at June 30, 2004	5,479,400	0.78
Granted	2,881,633	5.25
Exercised	—	—
Forfeited	—	—
Expired	—	—
Balance at October 1, 2004	8,361,033	2.32

Broadband Warrants

We issued warrants on August 22, 2003 in conjunction with our private placement of Series A preferred shares. We issued warrants to buy 500,000 of our ordinary shares at an warrant price of US$0.75 to Broadband Capital Management LLC and warrants to buy 50,000 of our ordinary shares at an exercise price of US$0.75 to each of our two outside consultants, Peter Lerner and Liu Hao, in consideration for investment banking services provided to us. Vesting of the warrant was conditioned on the closing of the private placement. The warrants have a termination date of August 22, 2013.

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Broadband Capital Management Consulting LLC subsequently transferred a majority of its warrants to various individuals and three of these individuals exercised their warrants on August 4, 2004 and acquired ordinary shares in our company. These individuals subsequently sold the ordinary shares acquired through the exercise of their warrants to us in connection with IAC’s investment in our company. Mr. Liu Hao subsequently transferred the ownership of his warrants to his brother, Liu Bo. Mr, Liu Bo subsequently exercised a portion of his warrants to acquire ordinary shares in our company and sold the ordinary shares to us in connection with IAC’s investment in our company.

In December 2003, Mr. Lerner exercised his warrants and acquired 50,000 ordinary shares of our company.

IAC Warrant

On August 4, 2004, we granted IAC a warrant which is exercisable by IAC during the first 30 business days following the completion of this offering. If IAC does not exercise the warrant within 30 business days of this offering, the warrant will expire. IAC’s warrant entitles it to purchase that number of our high-vote ordinary shares equal to:

Ÿ 51% of our fully-diluted ordinary shares outstanding (but excluding the stock options granted to IAC in August 2004 and October 2004) minus the number of ordinary shares (including securities exercisable for or convertible into ordinary shares, but excluding IAC’s stock options and warrant) held by IAC at the time of exercise;

Ÿ divided by 0.745.

The purchase by IAC of that number of high-vote ordinary shares which will result in IAC’s holding 51% of our outstanding ordinary shares on a fully-diluted basis and, in conjunction with the conversion of its Series B preferred shares into high-vote ordinary shares after its exercise of the warrant, approximately % of the total voting power of our shares (assuming in each case that the underwriters exercise their over-allotment option in full). Assuming the completion of this offering, the exercise price for the warrant will be equal to the lower of:

Ÿ the initial public offering price for this offering; or

Ÿ the price determined using: (1) US$205 million, minus our indebtedness, plus our cash and cash equivalents, plus the pro forma consideration that would be received in connection with the exercise of all vested or unvested in-the-money options, warrants or other convertible securities of the company, in each case at the time of exercise, divided by (2) the total number of our outstanding ordinary shares on a fully-diluted basis at the time of exercise (but excluding out-of-the-money options, warrants or securities).

If it exercises its warrant, IAC will deposit 12.5% of the aggregate purchase price into escrow as security for IAC’s indemnification rights. See “Investment by IAC/InterActiveCorp - Indemnification and Escrow.”

In connection with any exercise of the warrant by IAC, we will simultaneously repurchase from some of our existing shareholders a number of ordinary shares equal to 50% of the high-vote ordinary shares being purchased by IAC under the warrant. The purchase price for such repurchase would be the same as IAC’s purchase price under the warrant.

Directors

Interested transactions.    A director may vote in respect of any contract or transaction in which he is interested provided that the nature of the interest in such contract or transaction is

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disclosed by him at or prior to its consideration and vote on such matter. Disclosure of the director’s interest may be made by means of a general notice to the board of directors at a directors’ meeting. It is sufficient for the disclosure by means of a general notice to state that the director is a shareholder or officer of a specified company and is to be regarded as interested in any transaction between us and such company. After such general notice, it will not be necessary to give special notice relating to any particular transaction.

Any transaction that would likely to affect a director’s status as an “Independent Director,” (as defined in Rule 4200(a)(15) of the Nasdaq National Stock Market Inc.’s Market Place Rules) or that would constitute a related party transaction as defined in the Nasdaq National Stock Market Inc.’s Market Place Rules, shall require the approval of our audit committee.

Remuneration and borrowing.    Remuneration if any to be paid to the directors subject to any direction that may be given at the general meeting, is determined by the directors. The directors may exercise all the powers of the company to borrow money, mortgage any or all of our properties and assets and to issue debentures, bonds and other securities, whether outright or as collateral for any debt or obligation of the company or any third party.

Qualifications.    There are no membership qualifications for directors. No director shall be required to hold any of our shares as a qualification to be a director.

Variation of Rights of Shares

Pursuant to our Memorandum and Articles of Association, subject to the law, we may vary all or any of the special rights attached to any class of shares, unless otherwise provided by the terms of a class of shares, with the consent in writing of the holders of all the shares of that class or with the approval of holders of a majority of the shares of such class at a separate meeting of that class.

Rights of Non-resident or Foreign Shareholders

There are no limitations imposed by foreign law or by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our Memorandum and Articles of Association governing the ownership threshold above which shareholder ownership must be disclosed.

Differences in Corporate Law

The Companies Law of the Cayman Islands is modeled after that of England but does not follow recent United Kingdom statutory enactments and differs from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to our company and the Delaware General Corporation Law, or Delaware Law, applicable to most companies incorporated in the United States and their shareholders.

Duties of Directors.    Under the common law of the Cayman Islands, directors owe a fiduciary duty to the company to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty has four essential elements:

Ÿ a duty to act in good faith in the best interests of the company;

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Ÿ a duty not to personally profit from opportunities that arise from the office of director;

Ÿ a duty to avoid conflicts of interest; and

Ÿ a duty to exercise powers for the purpose for which such powers were intended.

In general, the Companies Law of the Cayman Islands, or the Companies Law, imposes various duties on officers of a company with respect to certain matters of management and administration of the company. The Companies Law contains provisions which impose default fines on persons who fail to satisfy those requirements. However, in many circumstances, an individual shall only be liable if he knowingly is guilty of the default or knowingly and wilfully authorises or permits the default.

The Companies Law does not have any provision that restricts a Cayman company from indemnifying its directors and officers.

Under Delaware law, the business and affairs of a corporation are managed by or under the direction of its board of directors. In exercising their powers, directors are charged with a fiduciary duty of care to protect the interests of the corporation and a fiduciary duty of loyalty to act in the best interests of its stockholders. The duty of care requires that directors act in an informed and deliberative manner and inform themselves, prior to making a business decision, of all material information reasonably available to them. The duty of care also requires that directors exercise care in overseeing and investigating the conduct of corporate employees. The duty of loyalty may be summarized as the duty to act in good faith, not out of self-interest, and in a manner which the director reasonably believes to be in the best interests of the stockholders.

Under Delaware law, a party challenging the propriety of a decision of a board of directors bears the burden of rebutting the applicability of the presumptions afforded to directors by the “business judgment rule”. If the presumption is not rebutted, the business judgment rule attaches to protect the directors and their decisions, and their business judgments will not be second guessed. Where, however, the presumption is rebutted, the directors bear the burden of demonstrating the entire fairness of the relevant transaction. Notwithstanding the foregoing, Delaware courts subject directors’ conduct to enhanced scrutiny in respect of defensive actions taken in response to a threat to corporate control and approval of a transaction resulting in a sale of control of the corporation.

Interested Directors.    There are no provisions under Cayman Islands law that require a director who is interested in a transaction entered into by a Cayman company to disclose his interest or that will render such director liable to such company for any profit realized pursuant to such transaction.

Under Delaware law, such a transaction would not be voidable if (a) the material facts as to such interested director’s relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes and as to the translation the transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors are less than a quorum (b) such material facts are disclosed or are known to the stockholders entitled to vote on such transaction and the transaction is specifically approved in good faith by vote of the stockholders or (c) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified. Under Delaware law, a director could be held liable for any transaction in which such director derived an improper personal benefit.

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Voting Rights and Quorum Requirements.    Under Cayman Islands law, the voting rights of shareholders are regulated by the company’s articles of association and, in certain circumstances, the Companies Law. The articles of association will govern matters such as quorum for the transaction of business, rights of shares, and majority votes required to approve any action or resolution at a meeting of the shareholders or board of directors. Under Cayman Islands law, certain matters must be approved by a special resolution which is defined as two-thirds of the votes cast by shareholders present at a meeting and entitled to vote; otherwise, unless the articles of association otherwise provide, the majority is usually a simple majority of votes cast.

Under Delaware law, unless otherwise provided in the company’s certificate of incorporation, each stockholder is entitled to one vote for each share of stock held by the stockholder. Unless otherwise provided in the company’s certificate of incorporation or bylaws, a majority of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum at a meeting of stockholders. In matters other than the election of directors, with the exception of special voting requirements related to extraordinary transactions, the affirmative vote of a majority of shares present in person or represented by proxy at the meeting and entitled to vote is required for stockholder action, and the affirmative vote of a plurality of shares is required for the election of directors.

Dividends.    Cayman Islands law allows dividend to be paid out of share premium account if authorized by the company’s articles of association; otherwise, generally dividend is paid out of profit under common law.

Under Delaware law, subject to any restrictions contained in the company’s certificate of incorporation, a company may pay dividends out of surplus or, if there is no surplus, out of net profits for the fiscal year in which the dividend is declared or for the preceding fiscal year. Delaware law also provides that dividends may not be paid out of net profits if, after the payment of the dividend, the capital of the company is less than the capital represented by the outstanding stock of all classes having a preference upon the distribution of assets.

Mergers and Similar Arrangements.    Cayman Islands law does not provide for mergers as that expression is understood under United States corporate law. However, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement in question is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:

Ÿ the company is not proposing to act illegally or ultra vires and the statutory provisions as to majority vote have been complied with;

Ÿ the shareholders have been fairly represented at the meeting in question;

Ÿ the arrangement is such as a businessman would reasonably approve; and

Ÿ the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law or that would amount to a “fraud on the minority.”

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When a takeover offer is made and accepted by holders of 90% of the shares within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer.

Cayman Islands law does not require that shareholders approve sales of all or substantially all of a company’s assets as is commonly adopted by U.S. companies.

Under the investors agreement with IAC and our other shareholders, upon the approval by our board of directors of a merger, consolidation, scheme of arrangement, amalgamation or reconstruction or other such business combination, we will cause a meeting of shareholders to be called promptly (but in any event not less than 30 days after the initial approval by our board of directors) in order to determine whether a majority of the voting power of our shares approves of the transaction. If a majority of the voting power of our shares vote in favor of the transaction, a second vote will be held where each shareholder who is a party to the investors agreement will be obligated to vote his or her shares in favor of the transaction. If a majority of the voting power of our shares vote against the transaction, a second vote will be held where each shareholder who is a party to the investors agreement will be obligated to vote his or her shares against the transaction.

Under Delaware law, with certain exceptions, a merger, consolidation, exchange or sale of all or substantially all the assets of a corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. Under Delaware law, a stockholder of a corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which such stockholder may receive cash in the amount of the fair value of the shares held by such stockholder (as determined by a court) in lieu of the consideration such stockholder would otherwise receive in the transaction.

Delaware law also provides that a parent corporation, by resolution of its board of directors, may merge with any subsidiary, of which it owns at least 90% of each class of capital stock without a vote by stockholders of such subsidiary. Upon any such merger, dissenting stockholders of the subsidiary would have appraisal rights.

Shareholders’ Suits.    The rights of shareholders under Cayman Islands law are not as extensive as the rights of shareholders under legislation or judicial precedent in many United States jurisdictions. Class actions and derivative actions are generally not available to shareholders under Cayman Islands laws. However, the Cayman courts ordinarily would be expected to follow English case law precedent, which would permit a shareholder to commence an action in the company’s name to remedy a wrong done to it where the act complained of is alleged to be beyond the company’s corporate power or is illegal or would result in the violation of its memorandum of association or articles of association. Furthermore, consideration would be given by the court to acts that are alleged to constitute a fraud against the minority shareholders or where an act requires the approval of a greater percentage of shareholders than actually approved it. The winning party in such an action generally would be able to recover a portion of attorneys’ fees incurred in connection with such action.

The articles of association of a Cayman company may provide for the shareholders to waive all claims or rights of action that they might have, individually or in right of the company, against any of its directors or officers for any act or failure to act in the performance of such director’s or officer’s duties, except with respect to any fraud or dishonesty of such director or officer.

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Class actions and derivative actions generally are available to stockholders under Delaware law for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court generally has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action.

Shareholder Proposals.    The Companies Law does not provide shareholders any right to bring business before a meeting or requisition a general meeting; however these rights may be provided for in the articles of association of a company.

Unless provided in the company’s certificate of incorporation or bylaws, Delaware law does not include a provision restricting the manner in which stockholders may bring business before a meeting.

Approval of Corporate Matters by Written Consent.    The Companies Law allows a special resolution to be passed in writing if signed by all the shareholders and authorized by the articles of association of a company.

Delaware law permits stockholders to take action by written consent signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting of stockholders.

Calling of Special Shareholders Meetings.    The Companies Law does not have provisions governing the proceedings of shareholders meetings which are usually provided for in the articles of association of a company.

Delaware law permits the board of directors or any person who is authorized under a corporation’s certificate of incorporation or by-laws to call a special meeting of stockholders.

Staggered Board of Directors.    The Companies Law does not contain statutory provisions specifically mandating staggered board arrangements for a Cayman company. Such provisions, however, may validly be provided for in the articles of association of a company.

Delaware law permits corporations to have a staggered board of directors.

Cumulative Voting.    While there is nothing under the laws of the Cayman Islands which specifically prohibits or restricts the creation of cumulative voting rights for the election of directors of a company, unlike the requirement under Delaware law that cumulative voting for the election of directors is permitted only if expressly authorized in the certificate of incorporation, it is not a concept that is accepted as a common practice in the Cayman Islands, and we have made no provisions in our articles of association to allow cumulative voting for such election or any other matter.

Indemnification of Directors and Executive Officers and Limitation of Liability    Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against the consequences of committing a crime. Our Articles of Association provide for indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such, but the indemnity does not extend to any matter in respect of any fraud or dishonesty which may be attached to such person.

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Insofar as indemnification for liabilities arising under the Securities Act that may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of United States law.

Delaware law provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of directors to the corporation or its stockholders for monetary damages for breach of a fiduciary duty as a director, except no provision in the certificate of incorporation may eliminate or limit the liability of a director:

Ÿ for any breach of a director’s duty of loyalty to the corporation or its stockholders;

Ÿ for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

Ÿ statutory liability for unlawful payment of dividends or unlawful stock purchase or redemption; or

Ÿ for any transaction from which the director derived an improper personal benefit.

Under Delaware law, a corporation may indemnify any person who was or is a party or is threatened to be made a party to any proceeding, other than an action by or on behalf of the corporation, because the person is or was a director or officer, against liability incurred in connection with the proceeding if (1) the director or officer acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the corporation and (2) the director or officer, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Further, Delaware law provides that unless ordered by a court, any foregoing indemnification is subject to a determination that the director or officer has met the applicable standard of conduct:

Ÿ by a majority vote of the directors who are not parties to the proceeding, even though less than a quorum;

Ÿ by a committee of directors designated by a majority vote of the eligible directors, even though less than a quorum;

Ÿ by independent legal counsel in a written opinion if there are no eligible directors, or if the eligible directors so direct; or

Ÿ by the stockholders.

Under Delaware law, a corporation may not indemnify a director or officer in connection with any proceeding in which the director or officer has been adjudged to be liable to the corporation unless and only to the extent that the court determines that, despite the adjudication of liability but in view of all the circumstances of the case, the director or officer is fairly and reasonably entitled to indemnify for those expenses which the court deems proper.

Anti-Takeover Provisions in Our Articles of Association    Some provisions of our Articles of Association may discourage, delay or prevent a change in control of the company or management that shareholders may consider favorable.

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our Memorandum and Articles of Association for what they believe in good faith to be in the best interests of the company.

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The anti-takeover provisions in Delaware law prohibit business combinations between a Delaware corporation and an interested stockholder within three years of the time when the interested stockholder became an interested stockholder unless the corporation or transaction meets certain requirements or falls within certain exceptions or the corporation has elected not to be governed by such anti-takeover provisions in its certificate of incorporation.

Inspection of Books and Records    Holders of our shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, our Memorandum and Articles of Association permit inspections of the share register and we will provide our shareholders with annual audited financial statements.

Under Delaware law, stockholders of a Delaware corporation have the right during the usual hours for business to inspect for any proper purpose, and to obtain copies of list(s) of stockholders and other books and records of the corporation and its subsidiaries, if any, to the extent the books and records of such subsidiaries are available to the corporation.

Registration Rights

After the offering certain persons will be entitled to registration rights. See “Shares Eligible for Future Sale—Registration Rights.”

Transfer Agent and Registrar

We have appointed Codan Trust Company (Cayman) Limited as the transfer agent and registrar for our ordinary shares. The transfer agent’s address is Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681GT, George Town, Grand Cayman, British West Indies.

Listing

We have applied to have the ADSs quoted on The Nasdaq National Market under the symbol “LONG.”

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

American Depositary Receipts

JPMorgan Chase Bank, as the depositary, will issue the ADSs, which you will be entitled to receive in the offering. Each ADS will represent an ownership interest in two ordinary shares, which we will deposit with the custodian, as agent of the depositary, under the deposit agreement among ourselves, the depositary and you as an ADR holder. In the future, each ADS will also represent any securities, cash or other property deposited with the depositary but which they have not distributed directly to you. Unless specifically requested by you, all ADSs will be issued on the books of our depositary in book-entry form and a statement will be mailed to you that reflects your ownership interest in such ADSs. In our description, references to American depositary receipts or ADRs shall include the statements you will receive which reflects your ownership of ADSs.

The depositary’s office is located at 4 New York Plaza, New York 10004.

You may hold ADSs either directly or indirectly through your broker or other financial institution. If you hold ADSs directly, by having an ADS registered in your name on the books of the depositary, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs through your broker or financial institution nominee, you must rely on the procedures of such broker or financial institution to assert the rights of an ADR holder described in this section. You should consult with your broker or financial institution to find out what those procedures are.

Because the depositary’s nominee will actually be the registered owner of the shares, you must rely on it to exercise the rights of a shareholder on your behalf. The obligations of the depositary and its agents are set out in the deposit agreement. New York law governs the deposit agreement and the ADSs.

The following is a summary of the material terms of the deposit agreement. Because it is a summary, it does not contain all the information that may be important to you. For more complete information, you should read the entire deposit agreement and the form of ADR that contains the terms of your ADSs. You can read a copy of the deposit agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part. You may also obtain a copy of the deposit agreement at the SEC’s Public Reference Room located at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-732-0330.

Share Dividends and Other Distributions

We may make various types of distributions with respect to our securities. The depositary has agreed to pay to you the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after deducting its expenses. You will receive these distributions in proportion to the number of underlying shares that your ADSs represent.

Except as stated below, to the extent the depositary is legally permitted it will deliver such distributions to ADR holders in proportion to their interests in the following manner:

Ÿ Cash.     The depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof (to the extent applicable), on an averaged or other practicable basis, subject to:

Ÿ appropriate adjustments for taxes withheld;

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Ÿ such distribution being impermissible or impracticable with respect to certain registered holders; and

Ÿ deduction of the depositary’s expenses in:

Ÿ converting any foreign currency to U.S. dollars to the extent that it determines that such conversion may be made on a reasonable basis;

Ÿ transferring foreign currency or U.S. dollars to the United States by such means as the depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis;

Ÿ obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time; and

Ÿ making any sale by public or private means in any commercially reasonable manner.

If exchange rates fluctuate during a time when the depositary cannot convert a foreign currency, you may lose some or all of the value of the distribution.

Ÿ Shares.    In the case of a distribution in shares, the depositary will issue additional ADRs to evidence the number of ADSs representing such shares. Only whole ADSs will be issued. Any shares which would result in fractional ADSs will be sold and the net proceeds will be distributed to the ADR holders entitled thereto.

Ÿ Rights to receive additional shares.    In the case of a distribution of rights to subscribe for additional shares or other rights, if we provide satisfactory evidence that the depositary may lawfully distribute such rights, the depositary may arrange for ADR holders to instruct the depositary as to the exercise of such rights. However, if we do not furnish such evidence or if the depositary determines it is not practical to distribute such rights, the depositary may:

Ÿ sell such rights if practicable and distribute the net proceeds as cash; or

Ÿ allow such rights to lapse, in which case ADR holders will receive nothing.

We have no obligation to file a registration statement under the Securities Act in order to make any rights available to ADR holders.

Ÿ Other Distributions.    In the case of a distribution of securities or property other than those described above, the depositary may either:

Ÿ distribute such securities or property in any manner it deems equitable and practicable;

Ÿ to the extent the depositary deems distribution of such securities or property not to be equitable and practicable, sell such securities or property and distribute any net proceeds in the same way it distributes cash; or

Ÿ hold the distributed property in which case the ADSs will also represent the distributed property.

Any U.S. dollars will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the depositary in accordance with its then current practices.

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The depositary may choose any practical method of distribution for any specific ADR holder, including the distribution of foreign currency, securities or property, or it may retain such items, without paying interest on or investing them, on behalf of the ADR holder as deposited securities.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADR holders.

There can be no assurances that the depositary will be able to convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a specified price, nor that any of such transactions can be completed within a specified time period.

Deposit, Withdrawal and Cancellation

The depositary will issue ADSs if you or your broker deposits shares or evidence of rights to receive shares with the custodian. In the case of the ADSs to be issued under this prospectus, we will arrange with the underwriters named herein to deposit such shares.

Shares deposited in the future with the custodian must be accompanied by certain documents, including instruments showing that such shares have been properly transferred or endorsed to the person on whose behalf the deposit is being made.

The custodian will hold all deposited shares (including those being deposited by or on our behalf in connection with the offering to which this prospectus relates) for the account of the depositary. ADR holders thus have no direct ownership interest in the shares and only have such rights as are contained in the deposit agreement. The custodian will also hold any additional securities, property and cash received on or in substitution for the deposited shares. The deposited shares and any such additional items are referred to as “deposited securities”.

Upon each deposit of shares, receipt of related delivery documentation and compliance with the other provisions of the deposit agreement, including the payment of the fees and charges of the depositary and any taxes or other fees or charges owing, the depositary will issue an ADR or ADRs in the name of the person entitled thereto evidencing the number of ADSs to which such person is entitled. All of the ADSs issued will, unless specifically requested to the contrary, be part of the depositary’s direct registration system, and a registered holder will receive periodic statements from the depositary which will show the number of ADSs registered in such holder’s name. An ADR holder can request that the ADSs not be held through the depositary’s direct registration system and that certificated ADRs be issued.

When you turn in your ADSs at the depositary’s office, the depositary will, upon payment of certain applicable fees, charges and taxes, and upon receipt of proper instructions, deliver the underlying shares to an account designated by you maintained by us, in the case of shares in registered form, or transfer to an account of an accredited financial institution on your behalf in the case of shares in bearer form. At your risk, expense and request, the depositary may deliver deposited securities at such other place as you may request.

The depositary may only restrict the withdrawal of deposited securities in connection with:

Ÿ temporary delays caused by closing our transfer books or those of the depositary or the deposit of shares in connection with voting at a shareholders’ meeting, or the payment of dividends;

Ÿ the payment of fees, taxes and similar charges; or

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Ÿ compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or to the withdrawal of deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

Voting Rights

How do I vote?

If you are an ADR holder and the depositary asks you to provide it with voting instructions, you may instruct the depositary how to exercise the voting rights for the shares which underlie your ADSs. After receiving voting materials from us, the depositary will notify the ADR holders of any shareholder meeting or solicitation of consents or proxies. This notice will describe how you may instruct the depositary to exercise the voting rights for the shares which underlie your ADSs. For instructions to be valid, the depositary must receive them on or before the date specified. The depositary will try, as far as is practical, subject to the provisions of and governing the underlying shares or other deposited securities, to vote or to have its agents vote the shares or other deposited securities as you instruct. The depositary will only vote or attempt to vote as you instruct. The depositary will not itself exercise any voting discretion. Furthermore, neither the depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast or for the effect of any vote.

There is no guarantee that you will receive voting materials in time to instruct the depositary to vote and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

Record Dates

The depositary may, after consultation with us, fix record dates for the determination of the ADR holders who will be entitled

Ÿ to receive a dividend, distribution or rights, or

Ÿ to give instructions for the exercise of voting rights at a meeting of holders of ordinary shares or other deposited securities, or

Ÿ for the determination of the registered holders who shall be responsible for the fee assessed by the depositary for administration of the ADR program and for any expenses as provided for in the ADR,

all subject to the provisions of the deposit agreement.

Reports and Other Communications

Will I be able to view our reports?

The depositary will make available for inspection by ADR holders any written communications from us which are both received by the custodian or its nominee as a holder of deposited securities and made generally available to the holders of deposited securities. We will furnish these communications in English when so required by any rules or regulations of the U.S. Securities and Exchange Commission.

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Additionally, if we make any written communications generally available to holders of our shares, including the depositary or the custodian, and we request the depositary to provide them to ADR holders, the depositary will mail copies of them, or, at its option, summaries of them to ADR holders.

Fees and Expenses

What fees and expenses will I be responsible for paying?

ADR holders will be charged a fee for each issuance of ADSs, including issuances resulting from distributions of shares, rights and other property, and for each surrender of ADSs in exchange for deposited securities. The fee in each case is $5.00 for each 100 ADSs (or any portion thereof) issued or surrendered.

The following additional charges shall be incurred by the ADR holders, by any party depositing or withdrawing shares or by any party surrendering ADRs or to whom ADRs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the ADRs or the deposited securities or a distribution of ADRs), whichever is applicable:

Ÿ to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of US$1.50 per ADR or ADRs for transfers of certificated ADRs made;

Ÿ to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of US$0.02 or less per ADS (or portion thereof) for any cash distribution made pursuant to the Deposit Agreement;

Ÿ a fee of US$0.02 per ADS (or portion thereof) per year to cover such expenses as are incurred by the depositary in administering our ADR program (which fee shall be assessed against registered holders of ADRs as of the record date set by the depositary not more often than once each calendar year and shall be payable in the manner described in the next succeeding provision);

Ÿ any other charge payable by any of the depositary, any of the depositary’s agents, including, without limitation, the custodian, or the agents of the depositary’s agents in connection with the servicing of our shares or other deposited securities (which charge shall be assessed against registered holders of our ADRs as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such registered holders or by deducting such charge from one or more cash dividends or other cash distributions);

Ÿ a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those holders entitled thereto;

Ÿ stock transfer or other taxes and other governmental charges;

Ÿ cable, telex and facsimile transmission and delivery charges incurred at your request;

Ÿ transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities;

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Ÿ expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars;

Ÿ such fees and expenses as are incurred by the depositary (including without limitation expenses incurred in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable law, rule or regulation; and

Ÿ any other charge payable by the depositary and its agents (including the custodian) in connection with any servicing of securities underlying the ADSs.

We will pay all other charges and expenses of the depositary and any agent of the depositary (except the custodian) pursuant to agreements from time to time between us and the depositary. The fees described above may be amended from time to time.

Payment of Taxes

ADR holders must pay any tax or other governmental charge payable by the custodian or the depositary on any ADS or ADR, deposited security or distribution. If an ADR holder owes any tax or other governmental charge, the depositary may deduct the amount thereof from any cash distributions, or sell deposited securities and deduct the amount owing from the net proceeds of such sale. In either case the ADR holder remains liable for any shortfall. Additionally, if any tax or governmental charge is unpaid, the depositary may also refuse to effect any registration, registration of transfer, split up or combination of deposited securities or withdrawal of deposited securities (except under limited circumstances mandated by securities regulations). If any tax or governmental charge is required to be withheld on any non-cash distribution, the depositary may sell the distributed property or securities to pay such taxes and distribute any remaining net proceeds to the ADR holders entitled thereto.

Reclassifications, Recapitalizations and Mergers

If we take certain actions that affect the deposited securities, including (a) any change in par value, split up, consolidation, cancellation or other reclassification of deposited securities, or (b) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all of our assets, then the depositary may choose to:

Ÿ amend the form of ADR;

Ÿ distribute additional or amended ADRs;

Ÿ distribute cash, securities or other property it has received in connection with such actions;

Ÿ sell any securities or property received and distribute the proceeds as cash; or

Ÿ none of the above.

If the depositary does not choose any of the above options, any of the cash, securities or other property it receives will constitute part of the deposited securities and each ADS will then represent a proportionate interest in such property.

Amendment and Termination

We may agree with the depositary to amend the deposit agreement and the ADSs without your consent for any reason. ADR holders must be given at least 30 days notice of any amendment that imposes or increases any fees or charges (other than stock transfer or other

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taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or affects any substantial existing right of ADR holders. If an ADR holder continues to hold an ADR or ADRs after being so notified, such ADR holder is deemed to agree to such amendment. Notwithstanding the foregoing, an amendment can become effective before notice is given if this is necessary to ensure compliance with a new law, rule or regulation.

No amendment will impair your right to surrender your ADSs and receive the underlying securities. If a governmental body adopts new laws or rules which require the deposit agreement or the ADS to be amended, we and the depositary may make the necessary amendments, which could take effect before you receive notice thereof.

The depositary may terminate the deposit agreement by giving the ADR holders at least 30 days prior notice, and it must do so at our request. The deposit agreement will be terminated on the removal of the depositary for any reason. After termination, the depositary’s only responsibility will be to deliver deposited securities to ADR holders who surrender their ADRs, and to hold or sell distributions received on deposited securities. As soon as practicable after the expiration of six months from the termination date, the depositary will sell the deposited securities which remain and hold the net proceeds of such sales, without liability for interest, in trust for the ADR holders who have not yet surrendered their ADRs. After making such sale, the depositary shall have no obligations except to account for such proceeds and other cash. The depositary will not be required to invest such proceeds or pay interest on them.

Limitations on Obligations and Liability to ADR holders

Prior to the issue, registration, registration of transfer, split-up, combination, or cancellation of any ADRs, the delivery of any distribution in respect thereof, the depositary and its custodian may require you to pay, provide or deliver:

Ÿ payment with respect thereto of: (a) any stock transfer or other tax or other governmental charge; (b) any stock transfer or registration fees in effect for the registration of transfers of shares or other deposited securities upon any applicable register and (c) any applicable fees and expenses described in the ADR;

Ÿ the production of proof satisfactory to it of (a) the identity and genuineness of any signature and (b) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, payment of applicable taxes or governmental charges, or legal or beneficial ownership and the nature of such interest, information relating to the registration of the shares on the books maintained by or on our behalf for the transfer and registration of shares, compliance with applicable law, regulations, provisions of or governing deposited securities and terms of the deposit agreement and the ADR, as it may deem necessary or proper; and

Ÿ compliance with such regulations as the depositary may establish consistent with the deposit agreement.

The deposit agreement expressly limits the obligations and liability of the depositary, ourselves and our respective agents. Neither we nor the depositary nor any such agent will be liable if:

Ÿ any present or future law, regulation of the United States, the People’s Republic of China, the Cayman Islands or any other country, or of any governmental or regulatory

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authority or stock exchange, the provisions of or governing any deposited securities, act of God, war or other circumstance beyond its control shall prevent, delay any act which the deposit agreement or any ADR provides shall be done or performed by it;

Ÿ it exercises or fails to exercise any discretion given it in the deposit agreement or the ADRs;

Ÿ it exercises or fails to exercise discretion under the deposit agreement or the ADR;

Ÿ it performs its obligations without gross negligence or bad faith;

Ÿ it takes any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting shares for deposit, any registered holder of ADRs, or any other person believed by it to be competent to give such advice or information; or

Ÿ it relies upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

Neither the depositary nor its agents have any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs. We and our agents shall only be obligated to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs, which in our opinion may involve us in expense or liability, if indemnity satisfactory to us against all expense (including fees and disbursements of counsel) and liability is furnished as often as we require. The depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the deposit agreement, any registered holder or holders of ADRs, any ADSs or otherwise to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators.

The depositary will not be responsible for failing to carry out instructions to vote the deposited securities or for the manner in which the deposited securities are voted or the effect of the vote. In no event shall the depositary or any of its agents be liable for any indirect, special, punitive or consequential damages.

The depositary may own and deal in deposited securities and in ADSs.

Disclosure of Interest in ADSs

To the extent that the provisions governing any deposited securities may require disclosure of or impose limits on beneficial or other ownership of deposited securities, other shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, you agree to comply with all such disclosure requirements and ownership limitations and to cooperate with the depositary in its compliance with our instructions in respect of such disclosure requirements and ownership limitations.

Requirements for Depositary Actions

We, the depositary or the custodian may refuse to:

Ÿ issue, register or transfer an ADR or ADRs;

Ÿ effect a split-up or combination of ADRs;

Ÿ deliver distributions on any such ADRs; or

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Ÿ permit the withdrawal of deposited securities (unless the deposit agreement provides otherwise), until the following conditions have been met:

Ÿ the holder has paid all taxes, governmental charges, and fees and expenses as required in the deposit agreement;

Ÿ the holder has provided the depositary with any information it may deem necessary or proper, including, without limitation, proof of identity and the genuineness of any signature; and

Ÿ the holder has complied with such regulations as the depositary may establish under the deposit agreement.

The depositary may also suspend the issuance of ADSs, the deposit of shares, the registration, transfer, split up or combination of ADRs, or the withdrawal of deposited securities (unless the deposit agreement provides otherwise), if the register for ADRs or any deposited securities is closed or if we or the depositary decide it is advisable to do so.

Books of Depositary

The depositary or its agent will maintain a register for the registration, registration of transfer, combination and split-up of ADRs. You may inspect such records at such office during regular business hours, but solely for the purpose of communicating with other holders in the interest of business matters relating to the deposit agreement.

The depositary will maintain facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADRs. These facilities may be closed from time to time, to the extent not prohibited by law.

Pre-release of ADSs

The depositary may issue ADSs prior to the deposit with the custodian of shares (or rights to receive shares). This is called a pre-release of the ADS. A pre-release is closed out as soon as the underlying shares (or other ADSs) are delivered to the depositary. The depositary may pre-release ADSs only if:

Ÿ the depositary has received collateral for the full market value of the pre released ADSs; and

Ÿ each recipient of pre released ADSs agrees in writing that he or she:

Ÿ owns the underlying shares,

Ÿ assigns all rights in such shares to the depositary,

Ÿ holds such shares for the account of the depositary and

Ÿ will deliver such shares to the custodian as soon as practicable, and promptly if the depositary so demands.

In general, the number of pre released ADSs will not evidence more than 30% of all ADSs outstanding at any given time (excluding those evidenced by pre released ADSs). However, the depositary may change or disregard such limit from time to time as it deems appropriate. The depositary may retain for its own account any earnings on collateral for pre released ADSs and its charges for issuance thereof.

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SHARES ELIGIBLE FOR FUTURE SALE

Before the offering, there has not been a public market for our ordinary shares. Future sales of substantial amounts of our ordinary shares in the public markets after this offering could adversely affect market prices prevailing from time to time. As described below, only a limited number of the shares currently outstanding will be available for sale immediately after the offering due to contractual and legal restrictions on resale. Nevertheless, after these restrictions lapse, future sales of substantial amounts of our ordinary shares, including shares issued upon exercise of outstanding options and warrants or conversion of the convertible note, in the public market in the United States, or the possibility of such sales, could negatively impact the market price in the United States of our ADSs and our ability to raise equity capital in the future.

Upon completion of the offering, we will have 28,525,200 ordinary shares outstanding, including ordinary shares represented by ADSs, assuming no exercise of the underwriters’ overallotment option, and 11,188,570 Series B preferred shares outstanding. Of that amount, 8,770,312 ordinary shares, including ordinary shares represented by ADSs, will be publicly held by investors participating in the offering, and 19,754,888 ordinary shares will be held by our existing shareholders, who may be our affiliates within the meaning of the Securities Act. In addition, based on options and warrants outstanding as of October 6, 2004,                  shares will be subject to outstanding options after the offering, of which approximately                  shares will be vested and exercisable 180 days after the offering.                 ,                  and                  of the shares eligible for future sale on 90 days after and at various times beginning more than 180 days after the date of this prospectus will be unvested and subject to our right of repurchase.

All of the ADSs offered in the offering will be freely tradable in the United States without restriction or further registration under the Securities Act, unless the shares are held by “affiliates,” as that term is defined in Rule 144 under the Securities Act. For purposes of Rule 144, an “affiliate” of an issuer is a person that, directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with, the issuer. Shares or ADSs purchased by an affiliate may not be resold, except pursuant to an effective registration statement or an exemption from registration, including an exemption under Rule 144 of the Securities Act described below.

The 19,754,888 ordinary shares held by existing shareholders upon the completion of the offering are, and those ordinary shares issuable upon exercise of options and warrants outstanding upon completion of the offering and those ordinary shares issuable upon conversion of the convertible note will be, “restricted securities,” as the term is defined in Rule 144 under the Securities Act. These restricted securities may be sold in the United States only if they are registered or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act. These rules are described below.

Lock-up Agreements

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act, relating to, any of our ADSs or our ordinary shares or securities convertibles into or exchangeable or exercisable for any of our ADSs or our ordinary shares or publicly disclose the intention to make any offer, sale, pledge, dispositions or filing,

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without the prior written consent of the representative for the underwriters for a period of 180 days after the date of this prospectus.

The foregoing restrictions do not apply to (1) issuance of our ordinary shares upon the exercise of employee stock options outstanding on the date of this prospectus under our employee stock option plan, or (2) grants of stock options under the terms of a plan in effect on the date of this prospectus.

Our executive officers and directors and each of IAC, Billable Development Ltd., Tiger Technology Private Investment Partners, L.P., Tiger Technology II, L.P., Blue Ridge Limited Partnership, Blue Ridge Offshore Master Limited Partnership, RMG Holdings, LLC, the other selling shareholders and certain other shareholders have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of our ADSs or our ordinary shares or securities convertible into or exchangeable or exercisable for any of our ADSs or our ordinary shares, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any of our ADSs or ordinary shares, whether any of these transactions are to be settled by delivery of our ADSs or ordinary shares or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of the representative for the underwriters for a period of 180 days after the date of this prospectus.

The foregoing restrictions do not apply to (1) transfers of our ordinary shares or ADSs to the underwriters in this offering, (2) transfers of our ADSs or other securities acquired in open market transactions after the completion of this offering, or (3) transfers of any of our ordinary shares, ADSs or other securities by (a) gift, will or intestacy, (b) distributions to an immediate family member or a trust of which the applicable officer, director or shareholder, or such family member is the beneficiary or (c) distribution to partners, members or shareholders, in each case under (a), (b) or (c) above, so long as the transferee executes a similar lock-up agreement.

The 180-day lock-up period applicable to us, our executive officers, directors and certain of our shareholders, as described above, is subject to adjustment under certain circumstances. If (1) during the last 17 days of the 180-day lock-up period, (a) we release earnings results or (b) material news or a material event relating to us occurs, or (2) prior to the expiration of the 180-day lock-up period, we announce that we will release earnings results during the 16-day period following the last day of the 180-day lock-up period, then, in each case, the 180-day lock-up period will be extended until the expiration of the 18-day period beginning on the date of our release of the earnings results or the occurrence of material news or a material event relating to us, unless Deutsch Bank Securities Inc., acting as representative, waives this extension in writing.

Rule 144

In general, under Rule 144 as currently in effect, beginning 90 days after the date of this prospectus, a person who has beneficially owned “restricted securities” for at least one year would be entitled to sell in the United States, within any three-month period, a number of shares that is not more than the greater of:

Ÿ 1% of the number of our ordinary shares then outstanding; or

Ÿ the average weekly trading volume of the ordinary shares on all exchanges during the four calendar weeks before a notice of the sale on Form 144 is filed with the Securities and Exchange Commission.

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Sales under Rule 144 are also subject to manner of sale provisions, notice requirements and the availability of current public information about us. However, these shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

Under Rule 144(a), a person who is not deemed to have been our affiliate at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years from the later of the date these shares were acquired from us or from our affiliate, including the holding period of any prior owner other than an affiliate, is entitled to sell those shares in the United States without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. However, these shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

Rule 701

Beginning 90 days after the date of this prospectus and subject to any lock up arrangements, any of our employees, officers, directors or consultants who purchased shares under a written compensatory plan or contract may be entitled to sell such shares in the United States in reliance on Rule 701. Rule 701 permits affiliates to sell such shares under Rule 144 without complying with the holding period requirements of Rule 144. Rule 701 further provides that non-affiliates may sell these shares in reliance on Rule 144 subject only to its manner of sale requirements. However, the Rule 701 shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

Stock Options

As of October 6, 2004, options to purchase an aggregate of 8,344,050 ordinary shares were outstanding under our stock option plans and under our grants of options to IAC to purchase ordinary shares. Shortly after this offering, we intend to file a registration statement under the Securities Act to register up to          ordinary shares reserved for issuance under our stock option plans. Any vested shares registered under the registration statement will be available for sale in the public market immediately upon effectiveness of the registration statement, subject to the lock-up period and the Rule 144 volume limitations applicable to our affiliates.

Registration Rights

After the completion of this offering, the holders of 7,119,870 ordinary shares converted from Series A preferred shares, the holder of 11,188,570 ordinary shares or high-vote ordinary shares to be converted from Series B preferred shares on the 31^st business day after the completion of this offering, and the holders of 971,633 ordinary shares issuable upon the exercise of options granted to IAC in August 2004 and October 2004 will be entitled to registration rights under an investors agreement between us and such holders dated as of July 23, 2004.

The investors agreement gives any person owning or having rights to acquire (1) ordinary shares or high-vote ordinary shares issuable or issued upon conversion or exercise of the Series A preferred shares, Series B preferred shares, the option granted on August 4, 2004 to IAC or the warrant granted to IAC, as the case may be, or (2) the                  ordinary shares issued to certain holders of our ordinary shares as specified under the investor agreement, the right to have us, upon the request of the holders, from time to time file registration statements to facilitate the registered public offering and sale in the United States of such shares or to include such shares in registration statements filed by us for registered public offerings and sales in the United States.

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In addition, the holders of warrants to purchase up to 78,500 ordinary shares will be entitled to registration rights pursuant to warrant agreements between us and each of such holders dated as of August 26, 2003. The warrant agreements give any person owning or having rights to acquire ordinary shares issuable or issued upon of exercise of the warrant granted to such person the right to have us, upon the request of the holders, from time to time file registration statements to facilitate the registered public offering and sale in the United States of such shares or to include such shares in registration statements filed by us for registered public offerings and sales in the United States. In general, these holders have the right to:

Ÿ request registration of the applicable securities within six months of this offering;

Ÿ request registration in case of our registering of new stock or other securities;

Ÿ request under certain conditions that a Form F-3 registration statement be filed; and

Ÿ have the expenses of registration paid by us.

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TAXATION

United States Federal Income Taxation

The following is a discussion of U.S. federal income tax consequences to a U.S. Holder, as defined below, who purchases ADSs and ordinary shares pursuant to this offering. This discussion assumes that investors will hold their ADSs or ordinary shares as capital assets (generally, property held for investment). This discussion does not discuss all aspects of U.S. federal income taxation which may be important to particular investors in light of their individual circumstances, including investors subject to special taxation, such as:

Ÿ banks;

Ÿ dealers in securities or currencies;

Ÿ financial institutions;

Ÿ insurance companies;

Ÿ tax-exempt organizations;

Ÿ persons holding ADSs or ordinary shares as part of hedging, conversion, constructive sale, straddle or other integrated transactions;

Ÿ traders in securities that have elected the mark to market method of accounting;

Ÿ persons who own 5% or more of our shares;

Ÿ U.S. persons whose “functional currency” is not the U.S. dollar; or

Ÿ Non-U.S. Holders (as defined below).

This discussion is based in part on representations by the depositary and assumes that each obligation under the deposit agreement and any related agreement will be performed in accordance with its terms. Furthermore, the discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended, or the Code, and U.S. Treasury regulations, rulings and judicial decisions thereunder as of the date hereof. Such authorities are subject to change, possibly on a retroactive basis, which may result in U.S. federal income tax consequences different from those discussed below.

A U.S. Holder considering an investment in our ADSs or ordinary shares is urged to consult its tax advisor concerning the U.S. federal, state, local and non-U.S. income and other tax consequences.

A U.S. Holder is a beneficial owner of ADSs or ordinary shares that is a U.S. person. A U.S. person is:

Ÿ a citizen or resident of the United States;

Ÿ a corporation or other entity taxable as a corporation created or organized in or under the laws of the United States, any state thereof, or the District of Columbia;

Ÿ an estate the income of which is subject to U.S. federal income taxation, regardless of its source; or

Ÿ a trust if it is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

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A beneficial owner of ADSs or ordinary shares that is not a U.S. Holder is referred to herein as a “Non-U.S. Holder.”

If a partnership holds ADSs or ordinary shares, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. A partner of a partnership holding ADSs or ordinary shares is urged to consult its tax advisors regarding an investment in our ADSs or ordinary shares.

ADSs.    In general, for U.S. federal income tax purposes, a U.S. Holder of ADSs will be treated as the owner of the underlying ordinary shares that are represented by such ADSs. Deposits and withdrawals of ordinary shares in exchange for ADSs will not be subject to U.S. federal income taxation.

Distributions on ADSs or ordinary shares.    Subject to the application of the passive foreign investment company, foreign personal holding company, and foreign investment company rules, each as discussed below, the gross amount of the distributions in respect of the ADSs or ordinary shares will be subject to tax as dividend income to the extent of our current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Subject to certain limitations, dividends paid to non-corporate U.S. Holders, including individuals, may be eligible for a reduced rate of taxation if we are deemed to be a “qualified foreign corporation” for U.S. federal income tax purposes and provided that such holder satisfies certain holding period requirements with respect to the ownership of our ADS, or ordinary shares. Subject to the exceptions discussed below, a qualified foreign corporation includes:

Ÿ a foreign corporation that is eligible for the benefits of a comprehensive income tax treaty with the United States that includes an exchange of information program; and

Ÿ a foreign corporation if its stock with respect to which a dividend is paid or its ADSs backed by such stock are readily tradable on an established securities market within the United States.

A foreign corporation (even if it is described above) does not constitute a qualified foreign corporation if the foreign corporation is a passive foreign investment company, foreign personal holding company, or foreign investment company. Although we believe that we will be a qualified foreign corporation, no assurance can be given in this regard. In addition, our status, however, as a qualified foreign corporation may change. A U.S. Holder that exchanges its ADSs for ordinary shares may not be eligible for the reduced rate of taxation on dividends if the ordinary shares are not deemed to be readily tradable on an established securities market within the United States.

Dividends will be includable in a U.S. Holder’s gross income on the date actually or constructively received by the depositary, in the case of ADSs or, in the case of ordinary shares by such U.S. Holder. These dividends will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations.

To the extent that the amount of any distribution exceeds our current and accumulated earnings and profits, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of the ADSs or ordinary shares, and the balance in excess of adjusted basis will be taxed as capital gain.

Sale, exchange or other disposition of ADSs or ordinary shares.    Subject to the application of the passive foreign investment company and foreign investment company rules, each as

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discussed below, upon the sale, exchange or other disposition of ADSs or ordinary shares, a U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount realized upon the sale, exchange or other disposition and the adjusted tax basis of the U.S. Holder in the ADSs or ordinary shares. The capital gain or loss generally will be long-term capital gain or loss if, at the time of sale, exchange or other disposition, the U.S. Holder has held the ADS or ordinary share for more than one year. Net long-term capital gains of non-corporate U.S. Holders, including individuals, are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. Any gain or loss that a U.S. Holder recognizes generally will be treated as gain or loss from sources within the United States for U.S. foreign tax credit limitation purposes.

Passive foreign investment company rules.    In general, we will be classified as a passive foreign investment company for any taxable year in which either (a) at least 75% of our gross income is passive income or (b) at least 50% of the value (determined on the basis of a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income. For this purpose, passive income generally includes dividends, interest, royalties, rents (other than rents and royalties derived in the active conduct of a trade or business and not derived from a related person), annuities and gains from assets that produce passive income. If we own at least 25% by value of the equity shares of another corporation, we will be treated for purposes of the passive foreign investment company tests as owning a proportionate share of the assets of the other corporation, and as receiving directly a proportionate share of the other corporation’s income.

We believe, based on the projected composition of our income and valuation of our assets, that we should not be classified as a passive foreign investment company for U.S. federal income tax purposes, although no assurance can be given in this regard. Whether we are a passive foreign investment company for any particular taxable year is determined on an annual basis and will depend on the composition of our income and assets, including goodwill. The calculation of goodwill will be based, in part, on the then market value of our capital stock, which is subject to fluctuation. In addition, the composition of our income and assets will be affected by how we spend the cash we raise in this offering. Accordingly, there can be no assurance that we will not be classified as a passive foreign investment company in the current or any future taxable year.

If we are a passive foreign investment company for any taxable year during which a U.S. Holder has an equity interest in our company, unless the U.S. Holder makes a mark-to-market election as discussed below, such U.S. Holder will be subject to special tax rules in any future taxable year regardless of whether we are classified as a passive foreign investment company in such future years with respect to (a) “excess distributions” and (b) gain from the disposition of stock. Excess distributions are defined generally as the excess of the amount received with respect to the equity interests in the taxable year over 125% of the average annual distributions received in the shorter of either the three previous years or a U.S. Holder’s holding period before the taxable year and must be allocated ratably to each day of the U.S. Holder’s holding period. The amount allocated to the current taxable year or any year before we became a passive foreign investment company will be included as ordinary income in a U.S. Holder’s gross income for that year. The amount allocated to other prior taxable years will be taxed as ordinary income at the highest rate in effect for a U.S. Holder in that prior year and the tax is subject to an interest charge at the rate applicable to deficiencies in income taxes. The entire amount of any gain realized upon the sale or other disposition of the equity interests will be treated as an excess distribution made in the year of sale or other disposition and as a consequence will be treated as ordinary income and, to the extent allocated to years prior to the year of sale or disposition with respect to which we were a passive foreign investment company, will be subject to the interest charge described above.

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In certain circumstances, instead of being subject to the excess distribution rules discussed above, a U.S. Holder may make an election to include gain on the ADSs or ordinary shares of a passive foreign investment company as ordinary income under a mark-to-market method, provided that the ADSs or ordinary shares are regularly traded on a qualified exchange. Under current law, the mark-to-market election is only available for ADSs or ordinary shares that are regularly traded within the meaning of U.S. Treasury regulations on certain designated U.S. exchanges and foreign exchanges that meet trading, listing, financial disclosure and other requirements to be treated as a qualified exchange under applicable U.S. Treasury regulations. The Nasdaq National Market is a qualified exchange. The ordinary shares may not be eligible for mark-to-market treatment under the foregoing rule even if the ADSs otherwise satisfy the applicable requirement.

If a U.S. Holder makes a mark-to-market election, the U.S. Holder will include each year as ordinary income, rather than capital gain, the excess, if any, of the fair market value of the U.S. Holder’s ADSs or ordinary shares at the end of the taxable year over such U.S. Holder’s adjusted basis in the ADSs (or ordinary shares, if applicable) and will be permitted an ordinary loss in respect of the excess, if any, of the adjusted basis of these ADSs or ordinary shares over their fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder’s basis in the ADSs or ordinary shares will be adjusted to reflect any such income or loss amounts. Any gain or loss on the sale of the ADSs or ordinary shares will be ordinary income or loss, except that this loss will be ordinary loss only to the extent of the previously included net mark-to-market gain.

If a U.S. Holder owns ADSs or ordinary shares during any year that we are a passive foreign investment company, the U.S. Holder must file Internal Revenue Service Form 8621.

A U.S. Holder is urged to consult its tax advisor concerning the U.S. federal income tax consequences of an investment in our ADSs or ordinary shares if we are deemed or become a passive foreign investment company, including the possibility of making a market-to-market election.

Foreign Personal Holding Company Rules.    In general, we will be classified as a foreign personal holding company for U.S. federal income tax purposes for any taxable year if (a) at any time during the taxable year, five or fewer individuals who are U.S. citizens or residents own or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of all classes of our stock measured by voting power or value and (b) at least 60% (or 50% in taxable years subsequent to our classification as a foreign personal holding company) of our gross income for the year is “foreign personal holding company income.” We believe that there is a risk that five or fewer U.S. individuals will be treated as owning (or being deemed to own) more than 50% of the voting power or value of our ADSs or ordinary shares. Consequently, depending on whether we satisfy the foreign personal holding company gross income test, we may be or become a foreign personal holding company. We believe, however, based on the projected composition of our income, that we should not satisfy the foreign personal holding company gross income test and, therefore, we should not be classified as a foreign personal holding company for U.S. federal income tax purposes, although no assurance can be given in this regard. The determination of whether we are a foreign personal holding company will be made on an annual basis and will depend on the composition of our income and the makeup of our shareholder base. Accordingly, there can be no assurance that we will not be classified as a foreign personal holding company in the current or any future taxable year.

If we were to become a foreign personal holding company, a portion of our “undistributed foreign personal holding company income,” as defined for U.S. federal income tax purposes,

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would be taxable to U.S. Holders as ordinary dividend income regardless of whether any distributions attributable to such income were made and would not be, as discussed above, eligible for a reduced rate of taxation applicable to certain dividends.

Foreign Investment Company Rules.    In general, we will be classified as a foreign investment company for U.S. federal income tax purposes for any taxable year if (a) 50% or more of the combined voting power or total value of our outstanding shares are held, directly or indirectly, by U.S. Holders, and (b) we are found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein. We believe that there is a significant risk that 50% or more of the combined voting power or total value of our outstanding shares are held, directly or indirectly, by U.S. Holders. We believe, however, based on our operations, that we should not be treated as engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein and, therefore, we should not be classified as a foreign investment company for U.S. federal income tax purposes, although no assurance can be given in this regard. The determination of whether we are a foreign investment company will be made on an annual basis and will depend on nature of our activities and the composition of our shareholder base. Accordingly, there can be no assurance that we will not be classified as a foreign investment company in the current or any future taxable year. If we were to become a foreign investment company, all or part of any gain realized by a U.S. Holder selling or exchanging the ADSs or ordinary shares would be treated as ordinary income rather than capital gain.

Cayman Islands Taxation

The Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to our company levied by the Government of the Cayman Islands except for stamp duties that may be applicable on instruments executed in, or after execution brought within the jurisdiction of, the Cayman Islands. The Cayman Islands are not party to any double taxation treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

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ENFORCEABILITY OF CIVIL LIABILITIES

We are a Cayman Islands holding company. We are continued in the Cayman Islands because of the following benefits associated with being a Cayman Islands corporation:

Ÿ political and economic stability;

Ÿ an effective judicial system;

Ÿ a favorable tax system;

Ÿ the absence of exchange control or currency restrictions; and

Ÿ the availability of professional and support services.

However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides significantly less protection for investors. In addition, Cayman Islands companies do not have standing to sue before the federal courts of the United States.

Substantially all of our assets are located in China. In addition, most of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of our or such persons’ assets are located in China. As a result, it may be difficult for you to effect service of process within the United States upon us or such persons or to enforce against them or against us, judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. We have appointed CT Corporation System as our agent for service of process in the United States with respect to any action brought against us in the United States District Court for the Southern District of New York under the securities laws of the United States or any State of the United States or under the deposit agreement or the ADRs referred to under “Description of American Depositary Shares”, or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

Conyers Dill & Pearman, Cayman, our counsel as to Cayman Islands law, and Commerce & Finance Law Offices, our counsel as to Chinese law, have advised us that there is uncertainty as to whether the courts of the Cayman Islands and China, respectively, would:

Ÿ recognize or enforce judgments of United States courts obtained against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or

Ÿ be competent to hear original actions brought in each respective jurisdiction, against us or such persons predicated upon the securities laws of the United States or any state thereof.

Conyers Dill & Pearman, Cayman, has further advised us that a final and conclusive judgment in personam in federal or state courts of the United States under which a sum of money is payable, other than a sum payable in respect of taxes, fines, penalties or similar charges, may be subject to enforcement proceedings as a debt in the Courts of the Cayman Islands under the common law doctrine of obligation.

In addition, Commerce & Finance Law Offices has advised us further that the recognition and enforcement of foreign judgments are provided for under Chinese Civil Procedural Law. Courts in China may recognize and enforce foreign judgments in accordance with the requirements of Chinese Civil Procedural Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated                             , 2004, we and the selling shareholders have agreed to sell to the underwriters named below, for whom Deutsche Bank Securities Inc. is acting as representative, the following respective numbers of our ADSs:

Underwriters	Number of ADSs
Deutsche Bank Securities Inc.     WR Hambrecht + Co, LLC
Total

The underwriting agreement provides that the underwriters are obligated to purchase all of the ADSs from us and the selling shareholders in this offering if any are purchased, other than those ADSs covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or this offering may be terminated.

All sales of our ADSs in the United States will be made by U.S. registered broker/dealers.

The selling shareholders have granted to the underwriters a 30-day option to purchase on a pro rata basis up to      additional ADSs, at the initial public offering price less the underwriting discounts and commissions. The option may be exercised to cover any over-allotments of ADSs. To the extent the option is exercised by the underwriters, such option, if applied to sales in the United States, will not exceed 15% of the total number of ADSs sold in the United States.

The underwriters propose to offer the ADSs initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of US$     per ADS. The underwriters and selling group members may allow a discount of US$     per ADS on sales to other broker/dealers. After the initial public offering, the underwriters may change the public offering price and concession and discount to broker/dealers.

The following table summarizes the compensation and estimated expenses to be paid by us and the Selling Shareholder:

	Per share		Total
	Without over- allotment	With over- allotment	Without over- allotment	With over- allotment
Underwriting discounts and commissions paid by us	US$	US$	US$	US$
Expenses payable by us	US$	US$	US$	US$
Underwriting discounts and commissions paid by the selling shareholders	US$	US$	US$	US$
Expenses payable by the selling shareholders	US$	US$	US$	US$

The underwriters have informed us that they do not expect sales to accounts over which the underwriters have discretionary authority to exceed 5% of our ADSs being offered.

As far as we are aware, (a) none of our major shareholders, directors and executive officers intends to subscribe in this offering and (b) none of any other person intends to subscribe for more than 5% of our ADSs being offered.

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The selling shareholders who will be selling in this offering may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act of 1933, as amended, or the Securities Act.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act relating to, any of our ADSs or our ordinary shares or securities convertible into or exchangeable or exercisable for any of our ADSs or our ordinary shares or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of the representative for the underwriters for a period of 180 days after the date of this prospectus.

The foregoing restrictions do not apply to (1) issuance of our ordinary shares upon the exercise of employee stock options outstanding on the date of this prospectus under our employee stock option plan, or (2) grants of stock options under the terms of a plan in effect on the date of this prospectus.

Our executive officers and directors and each of IAC, Billable Development Ltd., Tiger Technology Private Investment Partners, L.P., Tiger Technology II, L.P., Blue Ridge Limited Partnership, Blue Ridge Offshore Master Limited Partnership, RMG Holdings, LLC, the other selling shareholders and certain other shareholders have agreed that they will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of our ADSs or our ordinary shares or securities convertible into or exchangeable or exercisable for any of our ADSs or our ordinary shares, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of any of our ADSs or ordinary shares, whether any of these transactions are to be settled by delivery of our ADSs or ordinary shares or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of the representative for the underwriters for a period of 180 days after the date of this prospectus.

The foregoing restrictions do not apply to: (1) transfers of our ordinary shares or ADSs to the underwriters in this offering, (2) transfers of our ADSs or other securities acquired in open market transactions after the completion of this offering, or (3) transfers of any of our ordinary shares, ADSs or other securities by (a) gift, will or intestacy, (b) distributions to an immediate family member or a trust of which the applicable officer, director or shareholder, or such family member is the beneficiary or (c) distribution to partners, members or shareholders, in each case under (a), (b) or (c) above, so long as the transferee executes a similar lock-up agreement.

The 180-day lock-up period applicable to us, our executive officers, directors and certain of our shareholders, as described above, is subject to adjustment under certain circumstances. If (1) during the last 17 days of the 180-day lock-up period, (a) we release earnings results or (b) material news or a material event relating to us occurs, or (2) prior to the expiration of the 180-day lock-up period, we announce that we will release earnings results during the 16-day period following the last day of the 180-day lock-up period, then, in each case, the 180-day lock-up period will be extended until the expiration of the 18-day period beginning on the date of our release of the earnings results or the occurrence of material news or a material event relating to us, unless Deutsch Bank Securities Inc., acting as representative, waives this extension in writing.

We and the selling shareholders have agreed to indemnify the underwriters against some liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

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We have applied to have our ADSs quoted on the Nasdaq National Market. Before this offering, there has been no public market for our ADSs or ordinary shares. The public offering price will be determined through negotiations among us and the representative for the underwriters. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are:

Ÿ the valuation multiples of publicly traded companies that the representative believes to be comparable to us;

Ÿ our financial information;

Ÿ the history of, and the prospects for, our company and the industry in which we compete;

Ÿ an assessment of our management, our past and present operations, and the prospects for, and timing of, our future revenues;

Ÿ the present state of our development; and

Ÿ the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

In connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions, penalty bids and passive market making in accordance with Regulation M under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Ÿ Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

Ÿ Over-allotment involves sales by the underwriters of our ADSs in excess of the number of our ADSs the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of our ADSs over-allotted by the underwriters is not greater than the number of our ADSs that they may purchase in the over-allotment option. In a naked short position, the number of our ADSs over-allotted is greater than the number of our ADSs in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing in the open market.

Ÿ Syndicate covering transactions involve purchases of our ADSs in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of our ADSs to close out the covered short position, the underwriters will consider, among other things, the price of our ADSs available for purchase in the open market as compared to the price at which they may purchase our ADSs through the over-allotment option. If the underwriters sell more of our ADSs than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying the additional ADSs over-allotted not covered by the over-allotment option in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of our ADSs in the open market after pricing that could adversely affect investors who purchase in this offering.

Ÿ Penalty bids permit the representative to reclaim a selling concession from a syndicate member when our ADSs originally sold by the syndicate member are purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

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Ÿ In passive market making, market makers in our ADSs who are underwriters or prospective underwriters may, subject to limitations, make bids for or purchases of our ADSs until the time, if any, at which a stabilizing bid is made.

These stabilizing transactions, syndicate covering transactions, penalty bids and passive market making may have the effect of raising or maintaining the market price of our ADSs or preventing or retarding a decline in the market price of our ADSs. As a result, the price of our ADSs may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time.

A prospectus in electronic format may be made available on the Web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering and one or more of the underwriters participating in this offering may distribute prospectus electronically. The representative may agree to allocate a number of our ADSs to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make Internet distributions on the same basis as other allocations.

United Kingdom.    Each underwriter has represented, warranted, and agreed that (a) it has not offered or sold and, prior to the expiry of a period of six months from the completion of the global offering, will not offer or sell any ADSs or ordinary shares to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses, or otherwise in circumstances which do not constitute an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (b) it has complied and will comply with all applicable provisions of the Financial Services and Markets Act 2000 (the “FSMA”) with respect to anything done by it in relation to any ADSs or ordinary shares in, from or otherwise involving the United Kingdom; and (c) it only has communicated or caused to be communicated and only will communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any ADSs or ordinary shares in circumstances in which section 21(1) of the FSMA does not apply to us.

France.    This prospectus is not being distributed in the context of a public offer in France within the meaning of Article L. 411-1 of the French Monetary and Financial Code (Code monétaire et financier), and thus this prospectus has not been and will not be submitted to the Commission des Opérations de Bourse for approval in France. We and each of the underwriters have represented and agreed that it has not offered or sold, and will not offer or sell, directly or indirectly, any ADSs or ordinary shares to the public in France and has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in France this prospectus or any other offering material relating to the offer of the GDSs and that such offers, sales and distributions have been and will be made in France (a) to qualified investors (investisseurs qualifiés) and/or (b) to a restricted group of investors (cercle restreint d’investisseurs), in each case, acting for their own account, all as defined in, and in accordance with, Articles L. 411-1 and L. 411-2 of the French Monetary and Financial Code and Decree no. 98-880 dated 1^st October, 1998. This prospectus is not to be further distributed or reproduced (in whole or in part) in France by the recipients of this prospectus and this prospectus has been distributed on the understanding that such recipients will only participate in the issue or sale of the ADSs for their own account and undertake not to transfer, directly or indirectly, the ADSs to the public in France, other than in compliance with all applicable laws and regulations and in particular with Articles L. 411-1 and L. 411-2 of the French Monetary and Financial Code.

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Germany.    Each underwriter has represented and agreed that (a) this prospectus is not a Securities Selling Prospectus (Verkaufsprospekt) within the meaning of the German Securities Prospectus Act (Verkaufsprospektgesetz) of September 9, 1998, as amended, and has not been filed with and approved by the German Federal Supervisory Authority (Bundesanstalt f¨ur Finanzdienstleistungsaufsicht) or any other German governmental authority; and (b) it has not offered or sold and will not offer or sell any ADSs or ordinary shares or distribute copies of this prospectus or any document relating to the ADSs, directly or indirectly, in Germany except to persons falling within the scope of paragraph 2 numbers 1, 2 and 3 of the German Securities Prospectus Act and by doing so has not taken, and will not take, any steps which would constitute a public offering of the ADSs or ordinary shares in Germany.

Italy.    The offering of the ADSs or ordinary shares has not been registered with the Commissione Nazionale per le Societ`a e la Borsa or “CONSOB,” in accordance with Italian securities legislation. Accordingly, each underwriter has represented and agreed that the ADSs or ordinary shares may not be offered, sold or delivered, and copies of this prospectus or any other document relating to the ADSs or ordinary shares may not be distributed in Italy except to Professional Investors, as defined in Art. 31.2 of CONSOB Regulation no. 11522 of 1st July, 1998, as amended, pursuant to Art. 30.2 and Art. 100 of Legislative Decree no. 58 of 24th February, 1998 (or the Finance Law) or in any other circumstance where an express exemption to comply with the solicitation restrictions provided by the Finance Law or CONSOB Regulation no. 11971 of 14th May, 1999, as amended (or the Issuers Regulation) applies, including those provided for under Art. 100 of the Finance Law and Art. 33 of the Issuers Regulation, and provided, however, that any such offer, sale, or delivery of the ADSs or ordinary shares or distribution of copies of this prospectus or any other document relating to the ADSs or ordinary shares in Italy must (a) be made in accordance with all applicable Italian laws and regulations, (b) be made in compliance with Article 129 of Legislative Decree no. 385 of 1st September 1993, as amended (the “Banking Law Consolidated Act”) and the implementing guidelines of the Bank of Italy (Istruzioni di Vigilanza per le banche) pursuant to which the issue, trading or placement of securities in the Republic of Italy is subject to prior notification to the Bank of Italy, unless an exemption applies depending, inter alia, on the amount of the issue and the characteristics of the securities, (c) be conducted in accordance with any relevant limitations or procedural requirements the Bank of Italy or CONSOB may impose upon the offer or sale of the securities, and (d) be made only by (1) banks, investment firms or financial companies enrolled in the special register provided for in Article 107 of the Banking Law Consolidated Act, to the extent duly authorized to engage in the placement and/or underwriting of financial instruments in Italy in accordance with the Financial Laws Consolidated Act and the relevant implementing regulations; or by (2) foreign banks or financial institutions (the controlling shareholding of which is owned by one or more banks located in the same EU Member State) authorized to place and distribute securities in the Republic of Italy pursuant to Articles 15, 16 and 18 of the Banking Law Consolidated Act, in each case acting in compliance with every applicable law and regulation.

The Netherlands.    Each underwriter has represented and agreed that it has not offered, distributed, sold, transferred or delivered, and will not offer, distribute, sell, transfer or deliver, any ADSs or ordinary shares, directly or indirectly, in the Netherlands, as part of their initial distribution or at any time thereafter, to any person other than our employees or employees of our subsidiaries, individuals who or legal entities which trade or invest in securities in the conduct of their profession or business within the meaning of article 2 of the Exemption Regulation issued under the Securities Transactions Supervision Act 1995 (“Vrijstellingsregeling Wet toezicht effectenverkeer 1995”), which includes banks, brokers, pension funds, insurance companies, securities institutions, investment institutions and other institutional investors,

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including, among others, treasuries of large enterprises, who or which regularly trade or invest in securities in a professional capacity.

Norway.    This prospectus has not been approved by or registered with the Oslo Stock Exchange under Chapter 5 of the Norwegian Securities Trading Act 1997. Accordingly, each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, any ADSs or ordinary shares to any persons in Norway in any way that would constitute an offer to the public other than to persons who invest in securities as part of their professional activity and who are registered with the Oslo Stock Exchange in this capacity, or otherwise only in circumstances where an exemption from the duty to publish a prospectus under the Norwegian Securities Trading Act 1997 shall be applicable.

Sweden.    This prospectus has not been approved by or registered with the Swedish Financial Supervisory Authority (Finansinspekitonen). Accordingly, each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, any ADSs or ordinary shares to persons in Sweden, except to a “closed circle” of not more than 200 pre-selected, non-substitutable investors, under the Swedish Financial Instruments Trading Act (“Lag (1991:980) om handel med finansiella instrument”).

Ireland.    Each underwriter has represented and agreed that (a) otherwise than in circumstances which are not deemed to be an offer to the public by virtue of the provisions of the Irish Companies Acts, 1963 to 2003, it has not offered or sold, and will not offer or sell, in Ireland, by means of any document, any ADSs or ordinary shares, unless such offer or sale has been or is made to persons whose ordinary business it is to buy or sell shares or debentures, whether as principal or agent, and it has not issued, and will not issue, in Ireland any form of application for ADSs or ordinary shares; and (b) it has not made and will not make any offer of ADSs or ordinary shares to the public in Ireland to which the European Communities (Transferable Securities and Stock Exchange) Regulations, 1992 of Ireland would apply, except in accordance with the provisions of those regulations; and (c) it has complied, and will comply, with all applicable provisions of the Investment Intermediaries Act 1995 of Ireland, as amended, with respect to anything done by it in relation to the offer, sale or delivery of the ADSs or ordinary shares in or involving Ireland.

Switzerland.    Each underwriter has acknowledged that (a) it has not offered or sold, and will not offer or sell, the ADSs and ordinary shares to any investors in Switzerland other than on a non-public basis; (b) this prospectus does not constitute a prospectus within the meaning of Article 652a and Art. 1156 of the Swiss Code of Obligations (Schweizerisches Obligationenrecht); and (c) none of this offering, the ADSs and ordinary shares has been or will be approved by any Swiss regulatory authority.

Luxembourg.    Each underwriter represents, warrants and agrees that the ADS or ordinary shares are not being offered to the public in the Grand Duchy of Luxembourg and each of the underwriters represents, warrants and agrees that it will not offer the ADSs or ordinary shares or cause the offering of the ADSs or ordinary shares or contribute to the offering of the ADSs or ordinary shares to the public in Luxembourg, unless all the relevant legal and regulatory requirements have been complied with. In particular, this offer has not been and may not be announced to the public and offering material may not be made available to the public.

Hong Kong.    Each underwriter has represented and agreed that (a) it has not offered or sold, and will not offer or sell, in Hong Kong, by means of any document, any ADSs or ordinary shares other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to the public

167

within the meaning of the Companies Ordinance (Chapter 32 of the laws of Hong Kong); and (b) except as permitted under the securities laws of Hong Kong, it has not issued, and will not issue, in Hong Kong any document, invitation or advertisement relating to the ADSs or ordinary shares other than with respect to ADSs or ordinary shares which are intended to be disposed of to persons outside Hong Kong or only to persons whose business involves the acquisition, disposal or holding of securities, whether as principal or agent.

Japan.    Each underwriter has acknowledged and agreed that the ordinary shares and ADSs have not been and will not be registered under the Securities and Exchange Law of Japan and are not being offered or sold and any may not be offered or sold, directly and indirectly, in Japan or to or for the account of any resident of Japan, except that the initial purchasers may offer and sell such shares (a) under an exception from the registration requirements of the Securities and Exchange Law of Japan and (b) in compliance with any other applicable requirements of Japanese law. As used in this paragraph, “resident of Japan” means any person residing in Japan including any corporation or other entity organized under the laws of Japan.

Singapore.    This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, each underwriter has represented and agreed that it will not offer or sell ADSs or ordinary shares, nor will it make ADSs or ordinary shares the subject of an invitation for subscription or purchase, nor will it circulate or distribute this prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of ADSs or ordinary shares, whether directly or indirectly, to the public or any member of the public in Singapore other than:

Ÿ to an institutional investor or other person specified in Section 274 of the Securities and Futures Act 2001, Chapter 289, of Singapore (the Securities and Futures Act);

Ÿ to a sophisticated investor, and in accordance with the conditions, specified in Section 275 of the Securities and Futures Act; or

Ÿ otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act.

People’s Republic of China.    This prospectus does not constitute a public offer of the ADSs or ordinary shares, whether by way of sale or subscription, in the People’s Republic of China. Each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, directly or indirectly, any ADSs or ordinary shares in the People’s Republic of China. For the purposes of this paragraph, the People’s Republic of China excludes Hong Kong, Macau and Taiwan.

Cayman Islands.    This prospectus does not constitute a public offer of the ADSs or ordinary shares, whether by way of sale or subscription, in the Cayman Islands. Each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, directly or indirectly, any ADSs or ordinary shares in the Cayman Islands.

168

LEGAL MATTERS

The validity of the ADSs and certain legal matters as to United States and New York law will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP. Certain legal matters as to United States federal and New York law will be passed upon for the underwriters by Shearman & Sterling LLP. The validity of the ordinary shares and certain other legal matters as to Cayman Islands law will be passed upon for us by Conyers Dill & Pearman, Cayman. Certain legal matters as to PRC law will be passed upon for us by Commerce & Finance Law Offices and for the underwriters by Haiwen & Partners.

EXPERTS

The consolidated financial statements of eLong, Inc. as of December 31, 2002 and 2003 and for the period from April 4, 2001, the date of our inception, to December 31, 2001 and for the years ended December 31, 2002 and 2003, have been included herein and in the registration statement in reliance upon the report of KPMG, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of such firm as experts in accounting and auditing. The offices of KPMG are located at 8/F Prince’s Building, 10 Chater Road, Central, Hong Kong.

EXPENSES RELATED TO THIS OFFERING

The following table sets forth the estimated costs and expenses, other than the underwriting discounts and commissions, payable by us in connection with the offering described in the Registration Statement (all amounts are estimated except the U.S. Securities and Exchange Commission registration fee and National Association of Securities Dealers filing fee).

U.S. Securities and Exchange Commission registration fee	US$	9,249.10
National Association of Securities Dealers filing fee	US$	2,840.00
Nasdaq listing fee	US$	100,000.00
Blue Sky fees and expenses
Legal fees and expenses
Accounting fees and expenses
Printing costs
Transfer agent fees
Miscellaneous
Total	US$

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the U.S. Securities and Exchange Commission, or the SEC, a registration statement on Form F-1 under the Securities Act in connection with this offering of our ADSs. A related registration statement on Form F-6 has also been filed with the SEC to register the ADSs as represented by the ADRs. This prospectus, which forms a part of the registration

169

statement on Form F-1, does not contain all of the information set forth in these registration statements, and the exhibits and schedules thereto. We have omitted certain portions of these registration statements from the prospectus in accordance with the rules and regulations of the SEC. You should refer to these registration statements for further information. Statements contained in this prospectus as to the contents of any contract or other document that is filed as an exhibit to the registration statements are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or document.

Upon declaration by the SEC of the effectiveness of the registration statements, we will become subject to the periodic reporting and other informational requirements of the Exchange Act, applicable to a foreign private issuer. Under the Exchange Act, we will file annual reports on Form 20-F within six months of our fiscal year end and we will furnish other reports and information under cover of Form 6-K with the SEC. Copies of the registration statements, their accompanying exhibits, as well as such reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the SEC’s Public Reference Room located at 450 Fifth Street, N.W., Room 1200, Washington, D.C. 20549. The public may obtain information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330 or by contacting the SEC at its website at www.sec.gov.

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we intend to furnish the depositary with our annual reports, which will include a review of operations and annual audited financial statements prepared in conformity with U.S. GAAP, and all notices of shareholders’ meetings and other reports and communications that are made generally available to our shareholders. The depositary will make such notices, reports and communications available to holders of ADSs and, upon our request, will mail to all record holders of ADSs the information contained in any notice of a shareholders’ meeting received by the depositary from us. Please see “Description of American Depositary Shares” for more information regarding responsibilities of the depositary. We also intend to furnish under Form 6-K the SEC with quarterly reports containing certain unaudited financial information.

170

CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2002 and 2003	F-3
Consolidated Statements of Operations for the period from April 4, 2001 (inception) to December 31, 2001 and for the years ended December 31, 2002 and 2003	F-4
Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the period from April 4, 2001 (inception) to December 31, 2001 and for the years ended December 31, 2002 and 2003	F-5
Consolidated Statements of Cash Flows for the period from April 4, 2001 (inception) to December 31, 2001 and for the years ended December 31, 2002 and 2003	F-6
Notes to Consolidated Financial Statements for the years ended December 31, 2002 and 2003	F-7
Interim Financial Statements (unaudited)
Consolidated Balance Sheets as of December 31, 2003 and June 30, 2004	F-41
Consolidated Statements of Operations for the six months ended June 30, 2003 and 2004	F-42
Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the year ended December 31, 2003 and the six months ended June 30, 2004	F-43
Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2004	F-44
Notes to Consolidated Financial Statements	F-45

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of

eLong, Inc.:

We have audited the accompanying consolidated balance sheets of eLong, Inc. and its subsidiaries as of December 31, 2002 and 2003, and the related consolidated statements of operations, shareholders’ equity and comprehensive income, and cash flows for the period from April 4, 2001 (date of inception) to December 31, 2001 and for the years ended December 31, 2002 and 2003, all expressed in Renminbi. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of eLong, Inc. and its subsidiaries as of December 31, 2002 and 2003, and the results of their operations and their cash flows for the period from April 4, 2001 (date of inception) to December 31, 2001 and for the years ended December 31, 2002 and 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in note 2(r) to the consolidated financial statements, on January 1, 2002, the Company adopted the provisions of Statement of Financial Accounting Standards No.142, “Goodwill and Other Intangible Assets”.

The accompanying consolidated financial statements as of and for the year ended December 31, 2003 have been translated into United States dollars solely for the convenience of the reader. We have audited the translation and, in our opinion, such financial statements expressed in Renminbi have been translated into United States dollars on the basis set forth in Note 2(d) to the consolidated financial statements.

Hong Kong, China

February 28, 2004, except as

to note 21, which is as

of August 26, 2004, and except

as to note 22, which is

as of October 1, 2004

F-2

eLong, Inc.

CONSOLIDATED BALANCE SHEETS

December 31, 2002 and 2003

		December 31,
	Note	2002		2003		2003
		RMB		RMB		US$
ASSETS
Current assets
Cash and cash equivalents		5,343,634		73,132,396		8,835,937
Accounts receivable, net	(4)	11,988,907		28,497,455		3,443,094
Due from related party	(20)	4,000,000		—		—
Investment securities	(5)	192,000		447,001		54,007
Prepaid expenses and other current assets	(6)	2,357,120		8,539,415		1,031,741
Deferred tax assets	(12)	9,583		14,042		1,697
Total current assets		23,891,244		110,630,309		13,366,476
Deferred tax assets	(12)	518,489		644,334		77,849
Equipment and software, net	(7)	6,288,425		8,108,475		979,675
Goodwill	(8)	5,871,400		8,998,133		1,087,164
Intangibles	(8)	—		2,180,000		263,390
Total assets		36,569,558		130,561,251		15,774,554
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		3,555,096		11,041,418		1,334,036
Accrued expenses and other payables	(9)	11,620,085		18,210,380		2,200,198
Advances from customers		144,375		35,000		4,229
Business and other taxes payable		722,464		666,848		80,569
Current portion of capital lease obligations		842,700		—		—
Total current liabilities		16,884,720		29,953,646		3,619,032
Total liabilities		16,884,720		29,953,646		3,619,032
Commitments and contingencies	(13)
Shareholders’ equity
Preferred shares: US$ 0.01 par value; Nil shares and 9,787,494 shares authorized, issued and outstanding as of December 31, 2002 and 2003	(15)	—		113,957,084		13,768,421
Ordinary shares: US$ 0.01 par value; 20,000,000 and 47,000,000 shares authorized; 16,000,000 issued and outstanding as of December 31, 2002; 16,787,506 issued and outstanding as of December 31, 2003	(16)	1,324,800		1,390,087		167,951
Additional paid-in capital	(16)	44,877,600		9,656,248		1,166,679
Statutory reserves		—		625,469		75,570
Deferred compensation		(1,304,100	)	(722,033	)	(87,237	)
Receivable from shareholders		—		(331,200	)	(40,016	)
Accumulated other comprehensive income		—		255,001		30,810
Accumulated deficit		(25,213,462	)	(24,223,051	)	(2,926,656	)
Total shareholders’ equity		19,684,838		100,607,605		12,155,522
Total liabilities and shareholders’ equity		36,569,558		130,561,251		15,774,554

The accompanying notes are an integral part of these financial statements.

F-3

eLong, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Period From April 4, 2001 (Inception) to December 31, 2001

and for the Years Ended December 31, 2002 and 2003

	Note	2001		2002		2003		2003
		RMB		RMB		RMB		US$
Revenues
Travel		18,734,078		48,401,225		66,230,538		8,002,047
Others		9,103,909		7,349,116		8,159,596		985,851
Total revenues	(10)	27,837,987		55,750,341		74,390,134		8,987,898
Cost of services		9,527,698		10,079,176		9,370,302		1,132,130
Gross profit		18,310,289		45,671,165		65,019,832		7,855,768
Operating expenses
Service development		1,173,889		1,528,139		2,022,039		244,305
Sales and marketing	(11)	21,129,998		35,141,705		44,903,054		5,425,237
General and administrative		5,898,355		10,541,905		10,513,683		1,270,275
Stock-based compensation*		3,167,100		4,471,200		1,352,935		163,463
Amortization of goodwill and intangibles	(8)	583,494		—		20,000		2,416
Business tax and surcharges		1,359,697		2,815,864		4,108,676		496,415
Total operating expenses		33,312,533		54,498,813		62,920,387		7,602,111
Profit/(Loss) from operations		(15,002,244	)	(8,827,648	)	2,099,445		253,657
Other income (expenses)
Interest income		43,951		30,173		118,663		14,337
Interest expense		(86,270	)	(129,405	)	(128,931	)	(15,578	)
Foreign exchange loss		—		—		(10,775	)	(1,302	)
Impairment loss on investment securities	(5)	—		(591,000	)	—		—
Income/(Loss) before income tax expense		(15,044,563	)	(9,517,880	)	2,078,402		251,114
Income tax expense	(12)	70,910		580,109		462,522		55,882
Net income/(loss)		(15,115,473	)	(10,097,989	)	1,615,880		195,232
Basic income/(loss) per share	(17)	(0.94	)	(0.63	)	0.09		0.01
Diluted income/(loss) per share	(17)	(0.94	)	(0.63	)	0.07		0.01
Proforma basic income per share (unaudited)	(18)					0.05		0.01
Proforma diluted income per share (unaudited)	(18)					0.04		0.01

* Stock-based compensation is all related to general and administrative expenses.

The accompanying notes are an integral part of these financial statements.

F-4

eLong, Inc.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

For the Period From April 4, 2001 (Inception) to December 31, 2001

and for the Years Ended December 31, 2002 and 2003

	Ordinary shares				Preferred shares	Receivable from shareholders		Additional paid in capital		Statutory reserves	Deferred compensation		Accumulated other comprehensive income	Accumulated deficit		Total shareholders’ equity
	Number of Shares		Amount
April 4, 2001 (inception)	—		—		—	—		—		—	—		—	—		—
Issuance of ordinary shares	16,000,000		1,324,800		—	—		35,935,200		—	—		—	—		37,260,000
Grant of ordinary shares to employees and directors	—		—		—	—		8,942,400		—	(8,942,400	)	—	—		—
Amortization of deferred compensation	—		—		—	—		—		—	3,167,100		—	—		3,167,100
Net loss	—		—		—	—		—		—	—		—	(15,115,473	)	(15,115,473	)
December 31, 2001	16,000,000		1,324,800		—	—		44,877,600		—	(5,775,300	)	—	(15,115,473	)	25,311,627
Amortization of deferred compensation	—		—		—	—		—		—	4,471,200		—	—		4,471,200
Net loss	—		—		—	—		—		—	—		—	(10,097,989	)	(10,097,989	)
December 31, 2002	16,000,000		1,324,800		—	—		44,877,600		—	(1,304,100	)	—	(25,213,462	)	19,684,838
Amortization of deferred compensation	—		—		—	—		—		—	1,304,100		—	—		1,304,100
Issuance of ordinary shares to employees and directors	4,000,000		331,200		—	—		—		—	—		—	—		331,200
Receivable from shareholders	—		—		—	(331,200	)	—		—	—		—	—		(331,200	)
Grant of stock options	—		—		—	—		770,868		—	(770,868	)	—	—		—
Issuance of preferred shares, net of offering expenses	—		—		113,957,084	—		—		—	—		—	—		113,957,084
Repurchase and cancellation of ordinary shares	(3,262,494	)	(270,053	)	—	—		(41,117,447	)	—	—		—	—		(41,387,500	)
Exercise of stock warrants	50,000		4,140		—	—		306,267		—	—		—	—		310,407
Stock warrants issued	—		—		—	—		4,818,960		—	—		—	—		4,818,960
Statutory reserves	—		—		—	—		—		625,469	—		—	(625,469	)	—
Amortization of deferred compensation	—		—		—	—		—		—	48,835		—	—		48,835
Unrealised gain on investment securities, net of nil tax	—		—		—	—		—		—	—		255,001	—		255,001
Net income	—		—		—	—		—		—	—		—	1,615,880		1,615,880
December 31, 2003	16,787,506		1,390,087		113,957,084	(331,200	)	9,656,248		625,469	(722,033	)	255,001	(24,223,051	)	100,607,605

Note: For the period from April 4, 2001 (inception) to December 31, 2001 and for the years ended December 31, 2002 and 2003, comprehensive (loss)/income was RMB (15,115,473), RMB(10,097,989) and RMB 1,870,881, respectively.

The accompanying notes are an integral part of these financial statements.

F-5

eLong, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Period From April 4, 2001 (Inception) to December 31, 2001

and for the Years Ended December 31, 2002 and 2003

	2001		2002		2003		2003
	RMB		RMB		RMB		US$
Cash flows from operating activities:
Net income /(loss)	(15,115,473	)	(10,097,989	)	1,615,880		195,232
Adjustments to reconcile net income/(loss) to net cash provided by /(used in) operating activities:
Unrealised exchange losses	—		—		10,775		1,302
Loss on disposal of fixed assets	313,590		108,432		211,171		25,514
Impairment loss on investment securities	—		591,000		—		—
Depreciation of fixed assets and amortization of intangible assets	3,761,146		5,920,171		3,005,792		363,163
Amortization of goodwill	583,494		—		—		—
Utilisation of pre-acquisition net operating loss carryforwards	301,238		877,853		584,241		70,589
Stock based compensation	3,167,100		4,471,200		1,352,935		163,463
Deferred income tax	(230,328	)	(297,744	)	(130,304	)	(15,743	)
Changes in working capital:
Accounts receivable	(2,596,938	)	(5,417,214	)	(16,508,548	)	(1,994,581	)
Prepaid expenses and other current assets	1,997,483		(1,015,688	)	(6,182,295	)	(746,951	)
Accounts payable	801,032		2,627,844		7,486,322		904,505
Business and other taxes payable	54,418		214,176		(55,616	)	(6,720	)
Accrued expenses and other payables	(946,393	)	3,639,382		1,180,920		142,680
Net cash provided by/(used in) operating activities	(7,909,631	)	1,621,423		(7,428,727	)	(897,547	)
Cash flows from investing activities:
Capital expenditures	(809,847	)	(2,994,183	)	(5,179,807	)	(625,830	)
Acquisition of eLong Information, net of cash acquired	(14,995,234	)	(1,000,000	)	—		—
Acquisition of GCH	—		—		(700,000	)	(84,575	)
Advance to related party	(12,000,000	)	(4,000,000	)	—		—
Repayment from related party	4,500,000		7,500,000		4,000,000		483,285
Proceeds from disposal of fixed assets	—		—		251,820		30,425
Net cash used in investing activities	(23,305,081	)	(494,183	)	(1,627,987	)	(196,695	)
Cash flows from financing activities:
Proceeds from issuance of common and preferred share	37,260,000		—		124,472,907		15,038,953
Purchase of shares	—		—		(41,387,500	)	(5,000,483	)
Cash paid for equity offering costs	—		—		(5,386,456	)	(650,797	)
Principal payments under capital lease obligations	(610,995	)	(1,217,899	)	(842,700	)	(101,816	)
Net cash provided by/(used in) financing activities	36,649,005		(1,217,899	)	76,856,251		9,285,857
Effect of foreign exchange rate changes on cash	—		—		(10,775	)	(1,302	)
Net (decrease)/increase in cash and cash equivalents	5,434,293		(90,659	)	67,788,762		8,190,313
Cash and cash equivalents at beginning of period/year	—		5,434,293		5,343,634		645,624
Cash and cash equivalents at end of period/year	5,434,293		5,343,634		73,132,396		8,835,937
Supplemental disclosures of cash flow information:
Cash paid for income taxes	—		—		—		—
Cash paid for interest	86,270		129,405		32,207		3,891

The accompanying notes are an integral part of these financial statements.

F-6

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2003

(1)    ORGANIZATION AND DESCRIPTION OF BUSINESS

The accompanying consolidated financial statements include the financial statements of eLong, Inc., (the “Company”), its wholly-owned subsidiary, eLongNet Information Technology (Beijing) Co., Ltd. (“eLong Information”), and variable interest entities (“VIEs”), consisting of Beijing eLong Information Technology Co., Ltd. (“Beijing Information”), Beijing Asia Media Interactive Co., Ltd. (“Beijing Media”), Beijing eLong Airline Services Co., Ltd. (“Beijing Air”) and General Chinese Hotels Reservation Network Ltd (“GCH”). The Company and its subsidiary and VIEs are collectively referred to as the “Group”. The Group is principally engaged in the provision of travel services including hotel information and reservation services, airline reservations and ticketing, packaged-tour services, and to a lesser extent, Internet-related advertising and other related services in the People’s Republic of China (the “PRC”).

The Company was incorporated in the British Virgin Islands on April 4, 2001.

On April 23, 2001, the Company purchased the entire equity interest in eLong Information from Easylink Service Corporation (formerly Mail.com) in a purchase business combination, for US$ 1,500,000. eLong Information was established in the PRC in August 1999 as a wholly owned foreign enterprise. (See Note 3)

eLong Information conducts its operations in the PRC through a series of agreements with Beijing Media, Beijing Information, Beijing Air and GCH. These VIEs are designed and used solely to facilitate the Company’s participation in Internet content provision, advertising business, travel agency and air-ticketing services in the PRC where foreign ownership is restricted. The Company or eLong Information does not have any equity interests in these VIEs. However, as discussed below, pursuant to certain agreements and arrangements between eLong Information and the VIEs, the Company has economic controlling interest over and is the primary beneficiary of these entities.

Beijing Media is a domestic company incorporated in Beijing, the PRC in August 2000. Beijing Media holds an advertising license and is primarily engaged in the provision of advertising business. Two senior executive officers of the Company hold 100% of the equity interest in Beijing Media. The registered capital of Beijing Media is RMB 500,000.

Beijing Information is a domestic company incorporated in Beijing, the PRC in November 2000. Beijing Information is primarily engaged in website listing and provision of travel related services. Two senior executive officers of the Company hold 100% of the equity interest in Beijing Information. The registered capital of Beijing Information is RMB 16,000,000.

Beijing Air is a domestic company incorporated in Beijing, the PRC in October 2002. Beijing Air is primarily engaged in air ticket booking and other travel related services. Beijing Media and Beijing Information hold 20% and 80% of the equity interest in Beijing Air, respectively. The registered capital of Beijing Air is RMB 8,000,000.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2002 and 2003

GCH is a domestic company incorporated in Nanjing, the PRC with registered capital of RMB 4,000,000. In December 2003, Beijing Media and Beijing Air acquired a 100% interest in GCH (See Note 3).

The equity interests in the VIEs were all funded by the Company or eLong Information in the form of long-term loans to the officers and directors.

The Company has economic controlling interest over the VIEs through a series of related agreements, including exclusive technical services agreements, equity pledge agreements, unassignable option agreements, operating agreements and loan agreements, between eLong Information and the equity shareholders of the VIEs. Through these agreements, the Company is the primary beneficiary of these entities as it absorbs a majority of the VIEs’ expected losses and receives a majority of the VIEs’ expected residual returns.

A summary of certain key agreements with the VIEs is as follows:

Exclusive Technical Services Agreements.    eLong Information provides the VIEs with technical consulting and related services and information services. eLong Information is the exclusive provider of these services. The initial term of these agreements is ten years with an automatic renewal period of five years. In consideration for the services provided by eLong Information, the VIEs agree to pay service fees to eLong Information.

Equity Pledge Agreements.    The equity shareholders have pledged their respective equity interests in the VIEs to eLong Information as a guarantee for the payment by the VIEs of technical and consulting services fees under the exclusive technical services agreements described above. Additionally, the equity shareholders have agreed not to sell, transfer or assign their rights and interests in the VIEs without prior written consent from eLong Information.

Operating Agreements.    The VIEs and the equity shareholders have each agreed that they will not enter into any transaction, or fail to take any action, that would substantially affect their assets, rights and obligations, or operations of VIEs without eLong Information’s prior written consent. In addition, the VIEs will also appoint persons designated by eLong Information as their directors, officers and other senior management, as well as accept eLong Information’s guidance regarding the day-to-day operations, financial management and the personnel management of the VIEs.

Loan Agreements.    Loans were granted to a senior executive officer of the Company and an individual with the sole and exclusive purpose of providing funds necessary for the capitalization and acquisition of the VIEs. Upon the Chinese government lifting its restrictions on foreign ownership of the air-ticketing, travel agency, advertising, or Internet content provision business in China, as applicable, the Company, eLong Information or any third party designated by the Company will exercise its unassignable option to purchase all outstanding equity interest of the VIEs and the loans will be discharged.

The Company has adopted FASB Interpretation No. 46 Revised, “Consolidation of Variable Interest Entities, an Interpretation of ARB No.51” (“FIN 46R”) as of the earliest date

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2002 and 2003

presented. FIN46R requires certain VIEs to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Accordingly, the financial statements of Beijing Media, Beijing Information, Beijing Air and GCH, all are consolidated in the Company’s financial statements from the date when eLong Information first became involved with the entities, including lending to the entities, retaining a beneficial interest in assets transferred or sold to the entities, and providing services to the entities. As a result, the long term loans to the officers and director as discussed above were eliminated on consolidation.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiary and VIEs, where the Company is considered to be the primary beneficiary. All significant intercompany balances and transactions have been eliminated on consolidation.

(b) Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

This basis of accounting differs in certain material respects from that used in the preparation of the Company’s, subsidiary’s and VIEs’ statutory accounts in the PRC. The statutory accounts of the Company’s subsidiary and VIEs have been prepared in accordance with the accounting principles and the relevant regulations applicable in the PRC.

(c) Use of estimates

The preparation of financial statements in conformity with US GAAP requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates, including those related to allowances for doubtful accounts and deferred tax assets, asset depreciation lives, and carrying values of long-lived assets and goodwill, based on currently available information. Changes in facts and circumstances may result in revised estimates.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

(d) Foreign currencies

The Company’s functional and reporting currency is the Renminbi (“RMB”). Assets and liabilities of subsidiaries and consolidated variable interest entities, whose functional currency is not the RMB, are translated at year end exchange rates. Income and expense items are translated at the average rates of exchange prevailing during the year. The adjustment resulting from translating the financial statements of such subsidiaries and entities is reflected as a separate component of shareholders’ equity. Because the local currency of the Company’s subsidiary and consolidated variable interest entities is also the RMB, there were no adjustments resulting from translating the financial statements of such subsidiaries and entities for the periods presented. Monetary assets and liabilities denominated in foreign currencies are translated into Renminbi using the applicable exchange rates quoted by the People’s Bank of China at the balance sheet dates. All such exchange gains and losses are included in the statements of operations.

Translations of amounts from Renminbi into United States dollars (“U.S. dollars”) are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB8.2767, on December 31, 2003, representing the noon buying rate in the City of New York for cable transfers of Renminbi, as certified for customs purposes by the Federal Reserve Bank of New York. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on December 31, 2003, or at any other rate.

(e) Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

(f) Revenue recognition

The Company’s revenues are principally derived from the provision of travel services, including hotel reservation, air-ticketing and other related travel services. The Company recognizes revenues when all of the following have occurred: persuasive evidence of an agreement with the customer exists, services have been performed, the fees for services performed are fixed or determinable and collectibility of the fees is reasonably assured. These criteria are considered to have been met as follows:

Hotel reservation services

The Company receives commissions from travel suppliers for hotel room reservations booked through the Company’s transaction and service platform. Commissions from hotel reservation services rendered are recognized after hotel customers have completed their stay at the applicable hotel and upon confirmation of customers’ stay by the hotel. The Company presents revenues from such transactions on a net basis in the statements of operations as the Company acts as an agent and does not assume

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

any inventory risks and has no obligations for cancelled hotel reservations. Contracts with certain travel suppliers contain escalating commissions that are subject to achieving specific performance targets. Such escalating commissions are recognized when the performance targets have been achieved. Under certain agreements with hotels, the Company receives commissions in the form of free room-nights and recognizes revenue based on the fair value of the room-nights. For the period from April 4, 2001 (inception) to December 31, 2001 and for the years ended December 31, 2002 and 2003, the Company recognized revenues of nil, RMB164,000, and RMB288,000, respectively, related to barter room-nights as the fair values of the room-nights were determinable based on historical experience of cash sale of room-nights.

Air-ticketing services

The Company receives commissions from travel suppliers for air-ticketing services booked through the Company’s transaction and service platform. Commissions from air-ticketing services rendered are recognized after air tickets are issued, delivered to and paid by the customer, net of estimated future cancellations. Estimated future cancellations were insignificant for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003. The Company presents revenues from such transactions on a net basis in the statements of operations as the Company acts as an agent and does not assume any inventory risks and has no obligations for cancelled airline ticket reservations.

Other services

Other services primarily comprise Internet-related advertising services, the sale of VIP and co-branded membership cards and short message services.

Revenue from Internet-related advertising contracts is recognized over the period of the advertising contract when the advertisements are displayed. Revenue from the provision of short message services is recognized when the services have been delivered.

Revenue from the sale of VIP and co-branded membership cards is recognized when the cards are sold since the Company has no remaining and unfilled contractual obligation to perform services.

The Company’s service related revenues are subject to a 5% business tax on revenues generated from services in China. In addition, advertising service revenue is subject to a cultural development surcharge at 3% of the advertising service revenue. Business tax and surcharges are reflected as an operating expense in the consolidated statements of operations.

(g) Cost of services

Costs of services consist primarily of payroll compensation, telecommunication expenses, depreciation, rentals and related expenses incurred by the Company’s

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

transaction and service platform which are directly attributable to the rendering of the Company’s travel services and other related services.

(h) Service development

Service development costs include expenses incurred by the Company to develop the Company’s travel supplier transaction and service platforms as well as to maintain, monitor and manage the Company’s websites. The Company recognizes website and software development costs in accordance with Statement of Position (“SOP”) No.98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use, and Emerging Issues Task Force (“EITF”) 00-2, Accounting for Web Site Development Costs. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development and costs that are associated with repair or maintenance of the existing websites or the development of software and websites content. Costs incurred in the development phase are capitalized and amortized over the estimated product life. During the periods presented, the amount of costs qualifying for capitalization was immaterial and as a result, all website and software development costs were expensed as incurred.

(i) Sales and marketing

Sales and marketing costs consist primarily of costs of advertising expenses, commission fees, production costs of marketing materials, expenses associated with the Company’s customer loyalty program and payroll and related compensation for the Company’s sales and marketing personnel. Advertising expenditures are expensed as incurred. Internet advertising expenses are recognized on a straight-line basis over the term of the advertising agreement.

(j) Income taxes

Deferred income taxes are provided using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized.

In accordance with SFAS No. 109 “Accounting for Income Taxes”, the tax benefits associated with the utilization of pre-acquisition net operating losses carry forwards for which a valuation allowance was established at the date of the acquisition, are recognized in the consolidated financial statements after the acquisition date as follows:

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eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

(i) first to reduce to zero any goodwill related to the acquisition; (ii) second to reduce to zero other non-current intangible assets related to the acquisition; and (iii) third to reduce income tax expense.

(k) Stock based compensation

The Company has adopted the preferable fair value recognition provision of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation”. Under the fair value based method, compensation cost related to employee stock option or similar equity instruments is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period.

The Company accounts for equity instruments issued to non-employee vendors in accordance with the provisions of SFAS No. 123 and EITF Issue No. 96-18, Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the date on which the counterparty’s performance is completed.

(l) Provisions for loyalty points

Cardholders of the VIP, regular, and co-branded cards earn loyalty points based on their usage of the cards. The Company provides travel awards and other non-cash gifts to the cardholders upon redemption of loyalty points that are accumulated based on cardholders’ transactions with the Company. The estimated costs to provide free travel and other non-cash gifts are recognized based on the historical redemption data and are included in sales and marketing expense in the statements of operations.

(m) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and in bank and certificates of deposit with an initial term of less than three months. For purposes of the consolidated statements of cash flows, the Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

(n) Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount and are non interest bearing. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience by customer types. The Company reviews its allowance for doubtful accounts periodically.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Specific amount is reviewed individually for collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.

(o) Investment securities

Investment securities classified as available-for-sale securities are recorded at fair value. Unrealized holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of shareholders’ equity until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis.

A decline in the market value of available-for-sale securities below cost that is deemed to be other than temporary results in a reduction in carrying amount to fair value. In determining whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to year-end, and forecasted performance of the investee. The impairment is charged to earnings and a new cost basis for the security is established.

(p) Equipment and software

Equipment and software are stated at cost, net of accumulated depreciation and amortization. Equipment held under capital leases are initially recorded at the present value of minimum lease payments, which approximate the fair value at the inception of the lease. Interest expense on capital leases is recognized using the effective interest rate method.

Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives, taking into account of any estimated residual value:

Computer equipment and system software	3-5 years
Furniture, fixtures and office equipment	5 years

Equipment held under capital leases and leasehold improvements are depreciated and amortized using the straight-line method over the shorter of the remaining lease term or estimated useful lives of the assets.

(q) Impairment of long-lived assets

Long-lived assets, including intangible assets with estimable useful lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the carrying value of such assets exceeds the future

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eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

undiscounted cash flows attributable to such assets. An impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. No impairment of long-lived assets was recognized for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003.

(r) Goodwill and other intangible assets

The Company adopted the provisions of SFAS No.142, Goodwill and Other Intangible Assets, as of January 1, 2002. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No.142. SFAS No.142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment.

In connection with SFAS No.142’s transitional goodwill impairment evaluation, the Company performed an assessment of whether there was an indication that goodwill is impaired as of the date of adoption. To accomplish this, the Company identified its reporting unit and determined the carrying value of such reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to that reporting unit as of January 1, 2002. The Company determined that the carrying value of its reporting unit did not exceed the fair value of the reporting unit as of January 1, 2002. No impairment on goodwill and other intangible assets was recognized for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003.

Prior to the adoption of SFAS No.142, goodwill was amortized on a straight-line basis over the expected periods to be benefited of 10 years, and assessed for recoverability by determining whether the amortization of the goodwill balance over its remaining life could be recovered through undiscounted future operating cash flows of the acquired operation. In accordance with the provisions of SFAS No.142, goodwill acquired in business combinations completed before July 1, 2001 were amortized through December 31, 2001.

Separately identifiable intangible assets consist of customer lists and domain name. Customer lists have determinable lives and are amortized over their estimated useful lives of 5 years. Domain name has indefinite life and is not subject to amortization.

(s) Employee benefit plans

As stipulated by the regulations of the PRC, the Group participates in various defined contribution plans organized by municipal and provincial governments for its employees. The Group is required to make contributions to these plans at rates ranging from 33.0% to 44.5% of the salaries, bonuses and certain allowances of the employees. Under these plans, certain pension, medical and other welfare benefits are provided to

F-15

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

employees. The Group has no other material obligation for the payment of employee benefits associated with these plans beyond the annual contributions described above. During the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003, the Company contributed RMB 2,453,151, RMB 2,105,224 and RMB 3,126,707 to these plans, respectively.

(t) Statutory reserves

eLong Information, as a wholly-owned-foreign-enterprise under PRC law, is required to provide for certain statutory reserves namely a general reserve, an enterprise expansion fund and a staff welfare and bonus fund which are appropriated from net profits as reported in its PRC statutory filings. eLong Information is required to allocate at least 10% of its after tax profits to the general reserve and has the right to discontinue allocations to the general reserve if such reserve has reached 50% of its registered capital. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors of eLong Information. As domestic PRC companies, Beijing Media, Beijing Information, Beijing Air and GCH are subject to similar statutory reserve requirements. These reserves can only be used for specific purposes and are not transferable to the Company in form of loans, advances, or cash dividends. As of December 31, 2003, RMB 625,469 was appropriated as statutory reserves for Beijing Information.

(u) Earning (loss) per share

In accordance with SFAS No.128 “Computation of Earnings Per Share”, basic earning (loss) per share is computed by dividing net earning (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earning (loss) per share is calculated by dividing net earning (loss) attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the preferred shares (using the as-converted method) and ordinary shares issuable upon the exercise of outstanding stock options and stock warrants (using the treasury stock method). Ordinary equivalent shares in the diluted earning (loss) per share computation are excluded in net loss periods as their effect would be anti-dilutive.

(v) Segment reporting

The Company has one reportable operating segment, which is the provision of travel services in the PRC. The Company manages its business as a single operating segment and substantially all of its revenues are derived in China. Accordingly, no segment information is presented.

(w) Recently issued accounting standards

In November 2002, the EITF reached a consensus on Issue No.00-21, “Revenue Arrangements with Multiple Deliverables” (“EITF No.00-21”). This issue addresses how

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eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

revenue arrangements with multiple deliverables should be divided into separate units of accounting and how the arrangement consideration should be allocated to the identified separate accounting units. For our purposes, EITF No.00-21 is effective for fiscal periods beginning after June 15, 2003. The Company does not believe that this announcement will have a significant impact on its consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity”. SFAS No.150 establishes standards for the classification and measurement of certain financial instruments with characteristics of both liabilities and equity. It also includes required disclosures for financial instruments within its scope. For the Company, SFAS No.150 was effective for instruments entered into or modified after May 31, 2003 and otherwise will be effective at the beginning of the first financial year beginning after June 15, 2003. FASB Staff Provision No. FAS150-3 deferred certain provisions of SFAS No.150 for certain mandatorily redeemable non-controlling interests. The Company currently does not have any financial instruments that are within the scope of SFAS No.150.

(3) ACQUISITION

On April 23, 2001 the Company acquired 100% interest in eLong Information from Easylink Service Corporation. The total consideration of the acquisition was US$ 1,500,000 in cash (equivalent to RMB 12,420,000). eLong Information is a national travel agency entity with its presence throughout China. The results of operations of eLong Information are included in the financial statements of the Company from April 23, 2001 onward.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition.

Current assets	26,935,511
Furniture, office and computer equipment	10,524,319
Total assets acquired	37,459,830
Current liabilities	(30,635,572	)
Long-term obligations	(321,243	)
Total liabilities assumed	(30,956,815	)
Net assets acquired	6,503,015

The excess of the purchase price over the net assets acquired was recorded as goodwill. (See Note 8).

In December 2003, two of the Company’s VIEs acquired 100% interest in General Chinese Hotels Reservation Network LTD (“GCH”). The total consideration of the acquisition was RMB 6,000,000 in cash, payable over the terms of the share purchase agreement. As of December 31, 2003, RMB 700,000 was paid to the selling shareholders and in February 2004, an additional amount of RMB 1,800,000 was paid. GCH is a regional hotel reservation company with its main presence in Shanghai and its surrounding areas. Through certain

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

key service and operating agreements between eLong Information, GCH and GCH’s legal shareholders, eLong Information is the primary beneficiary of and has economic controlling interest over GCH. Accordingly, the results of operations of GCH are consolidated and included in the financial statements of the Company from December 2003 onward. The acquisition of GCH was not a material business combination as measured by i) the total purchase price or GCH’s assets to the Company’s total assets and; ii) pre-tax income of GCH to pre-tax income of the Company.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The Company is in the process of obtaining third-party valuations of certain intangible assets; thus, the allocation of the purchase price is subject to refinement.

Furniture and office equipment	89,026
Intangible assets	2,200,000
Total assets acquired	2,289,026
Total liabilities assumed	—
Net assets acquired	2,289,026

The excess of the purchase price over the net assets acquired was recorded as goodwill (See Note 8). The goodwill represents the intangible benefits that the acquired business will bring to the Company in the future by providing the Company the access to potential strategic partners and customers and broadening the Company’s presence in China.

Of the RMB 2,200,000 of acquired intangible assets, RMB 1,000,000 was assigned to a registered domain name that is not subject to amortization, as the domain name has an indefinite life. The remaining RMB 1,200,000 of acquired intangible assets, representing customer lists, have a useful life of 5 years.

(4) ACCOUNTS RECEIVABLE

Accounts receivable, net is analyzed as follows:

	December 31,
	2002		2003
Accounts receivable	12,227,484		28,746,390
Allowance for doubtful accounts	(238,577	)	(248,935	)
	11,988,907		28,497,455

Out of the balances of accounts receivable as of December 31, 2002 and 2003, approximately RMB 500,000 and RMB 14,000,000, respectively, were receivable from corporate customers in which the Company has prepaid the hotels when the reservations were made. As the Company is an agent in these transactions, revenues earned from reservations made for corporate customers are recorded on a net commission basis.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

The activity in the allowance for doubtful accounts for accounts receivable for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 were as follows:

	December 31,
	2001		2002		2003
Beginning allowance for doubtful accounts	—		48,848		238,577
Additions charged to bad debt expense	384,373		981,532		331,796
Write-offs charged against the allowance	(335,525	)	(791,803	)	(321,438	)
Ending allowance for doubtful accounts	48,848		238,577		248,935

(5) INVESTMENT SECURITIES

The gross unrealized holding gains and fair value of available-for-sale securities are as follows:

	Cost basis	Gross unrealized holding gains	Realized impairment losses		Fair value
At December 31, 2002
Available-for-sale	783,000	—	(591,000	)	192,000
	783,000	—	(591,000	)	192,000
At December 31, 2003
Available-for-sale	192,000	255,001	—		447,001
	192,000	255,001	—		447,001

During the year ended December 31, 2002, an impairment loss of RMB 591,000 was recognized to reflect the decline in the market value that was deemed to be other than temporary as of December 31, 2002, as the cost basis of the security was not expected to be recoverable within a reasonable period of time and the severity and duration of the impairment.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

(6) PREPAID EXPENSES AND OTHER CURRENT ASSETS

Components of prepaid expenses and other current assets are as follows:

	December 31,
	2002	2003
Prepaid expenses	205,470	3,567,408
eLong cards and low values articles	574,151	1,081,899
Hotel room-nights	138,000	220,800
Staff advances	12,400	228,473
Deposits	960,315	3,003,409
Prepayments to hotels for corporate customers	—	296,471
Interest receivable	246,517	10,250
Others	220,267	130,705
Total	2,357,120	8,539,415

(7) EQUIPMENT AND SOFTWARE

Equipment and software and related accumulated depreciation and amortization are as follows:

	December 31,
	2002	2003
Computer equipment	11,324,877	14,250,009
Furniture and office equipment	816,011	648,269
Leasehold improvements	2,509,228	3,923,302
System software	911,515	1,149,784
	15,561,631	19,971,364
Less: Accumulated depreciation and amortization	9,273,206	11,862,889
Net book value	6,288,425	8,108,475

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

(8) GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and other intangible assets are attributable to the purchase of eLong Information and GCH (Note 3).

Gross carrying amount, accumulated amortization and net book value of the goodwill and other intangible assets are as follows:

	December 31,
	2002		2003
Goodwill	6,454,894		9,581,627
Less: accumulated amortization	(583,494	)	(583,494	)
Net book value	5,871,400		8,998,133
Other intangible assets:
Customer lists	—		1,200,000
Domain name	—		1,000,000
	—		2,200,000
Less: accumulated amortization:
Customer lists	—		20,000
Net book value	—		2,180,000

	December 31,
	2001		2002		2003
Goodwill at the beginning of the period/year	—		7,532,253		5,871,400
Adjustment to purchase price allocation	2,500,000		(783,000	)	—
Addition due to acquisition of business (Note 3)	5,916,985		—		3,710,974
Reduction due to utilization of pre-acquisition net operating loss carry forwards	(301,238	)	(877,853	)	(584,241	)
Amortization for the period/year	(583,494	)	—		—
Goodwill at the end of the period/year	7,532,253		5,871,400		8,998,133

Pursuant to the share purchase agreement between the Company and Easylink Service Corporation in connection with the purchase of eLong Information (See Note 3), the Company received 36,232 shares of Easylink Service Corporation in February 2002 as compensation for the payment of RMB 2,500,000 by the Company in December 2001 and January 2002 to settle a lawsuit that was ruled against eLong Information in December 2001. The lawsuit was pending as of the consummation date of the acquisition and the amount of the contingent liability was not reflected in the original purchase price allocation. The amount of the settlement paid or payable by the Company in December 2001 was reflected as an adjustment to the purchase price allocation or as an increase to goodwill in the year ended December 31, 2001. The fair market value of the shares received in February 2002 was RMB 783,000 and was reflected as an adjustment to the original purchase price allocation or as a decrease to goodwill in the year ended December 31, 2002.

F-21

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

The following table reconciles previously reported net loss as if the provisions of SFAS No. 142 were in effect in the prior period:

	2001
Reported net loss	15,115,473
Add back goodwill amortization	583,494
Adjusted net loss	14,531,979
Reported basic and diluted loss per share	0.94
Add back: Amortization of goodwill	0.03
Adjusted basic and diluted loss per share	0.91

The annual estimated amortization expense for the acquired intangible assets for the next five years is as follows:

	Amortization
2004	240,000
2005	240,000
2006	240,000
2007	240,000
2008	220,000
	1,180,000

(9) ACCRUED EXPENSES AND OTHER PAYABLES

	December 31,
	2002	2003
Accrual payroll and welfare	8,104,113	6,831,122
Accrued commission	921,361	1,630,353
Accrued customer loyalty rewards	492,898	776,471
Other accrued expenses and payables	1,883,206	3,495,129
Deposits from corporate customers	218,507	170,753
Payable for acquisition of GCH (Note 3)	—	5,306,552
Total	11,620,085	18,210,380

F-22

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

(10) REVENUES

Components of revenues for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 are as follows:

	2001	2002	2003
Travel
Hotel reservation	14,038,056	40,004,242	60,252,942
Air-ticketing	1,048,791	2,025,806	3,743,513
Others	3,647,231	6,371,177	2,234,083
Total	18,734,078	48,401,225	66,230,538
Others
Advertising	5,756,139	2,250,873	2,948,937
Internet service	3,208,048	4,033,355	1,281,766
Short message services	2,842	141,147	3,364,392
Others	136,880	923,741	564,501
Total	9,103,909	7,349,116	8,159,596

(11) SALES AND MARKETING EXPENSES

Components of sales and marketing expenses for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 are as follows:

	2001	2002	2003
Salary and bonus	10,197,781	15,217,896	15,373,240
Rental	1,915,765	2,745,531	3,179,935
Depreciation	2,756,615	3,956,507	2,723,383
Promotion and entertainment	2,096,473	2,560,541	8,367,800
Production costs of regular membership card	592,795	4,393,205	6,644,731
Agent commission	872,211	3,738,615	5,471,141
Others	2,698,358	2,529,410	3,142,824
	21,129,998	35,141,705	44,903,054

(12) INCOME TAXES

The Company, its subsidiary, and each of its VIEs file separate income tax returns.

British Virgin Islands

The Company is exempt from income tax on its on-shore and foreign-derived income in the British Virgin Islands. There are no withholding taxes in the British Virgin Islands.

China

In accordance with “Income Tax Law of China for Enterprises with Foreign Investment and Foreign Enterprises”, eLong Information, as a foreign invested enterprise, is subject to enterprise income tax (“EIT”) at a rate of 33%.

F-23

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

As PRC domestic companies, Beijing Media and Beijing Air are subject to enterprise income tax at the rate of 33%.

Beijing Information has obtained the status of a “High New Technology Development Enterprise” that entitles it to an EIT rate of 15%. In addition, Beijing Information has been granted a “tax holiday” for exemption of EIT for three years from 2001 to the end of 2003.

The Chinese tax system is subject to substantial uncertainties and has been subject to recently enacted changes, the interpretation and enforcement of which are also uncertain. There can be no assurance that changes in Chinese tax laws or their interpretation or their application will not subject the Company’s PRC entities to substantial Chinese taxes in the future.

Total income tax expense allocated to reduce goodwill for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 is as follows:

	2001		2002		2003
Goodwill, for initial recognition of acquired tax benefits that previously were included in the valuation allowance	(301,238	)	(877,853	)	(584,241	)

Income tax expense/(benefit) attributable to income/(loss) from continuing operations consists of:

	Current (Note)	Deferred		Total
For the period from April 4, 2001 to December 31, 2001	301,238	(230,328	)	70,910
Year ended December 31, 2002	877,853	(297,744	)	580,109
Year ended December 31, 2003	592,826	(130,304	)	462,522

Note—During the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003, the current tax expense included charges in lieu of tax in respect of the utilization of pre-acquisition net operating losses of RMB 301,238, RMB 877,853, and RMB 584,241, respectively.

F-24

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Income tax expense attributable to income/(loss) from continuing operations was RMB 70,910, RMB 580,109, and RMB 462,522 for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003, respectively, and differed from the amounts computed by applying the PRC enterprise income tax rate of 33% to pretax income/(loss) from continuing operations as a result of the following:

	2001		2002		2003
Computed expected tax expense/(benefit) (Note 1)	(4,964,706	)	(3,140,901	)	685,872
Increase (reduction) in income taxes resulting from:
Change in the valuation allowance for deferred tax assets allocated to income tax expense	1,902,980		491,765		231,950
Tax holiday (Note 2)	—		—		(911,496	)
Differential tax rate	274,464		144,176		(1,192,515	)
Foreign tax differential	2,573,022		2,808,779		469,606
Nondeductible items (Note 3)	285,150		276,290		1,179,105
	70,910		580,109		462,522

Note:	1)	The PRC statutory rate has been used since substantially all of the Company’s operations and taxable income are generated in the PRC.
	2)	The aggregate amount and basic per share effect of the tax holiday in 2003, the first year that Beijing Information generated taxable income, were RMB 911,496 and RMB 0.06 (diluted RMB 0.04), respectively.
	3)	Amounts represent personnel and other miscellaneous expenses in excess of statutory deductible limits and non-deductible penalties for tax purpose.

The significant components of deferred income tax benefit attributable to income/(loss) from continuing operations for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 are as follows:

	2001		2002		2003
Deferred tax benefit ( exclusive of the effect of the component below)	(2,133,308	)	(789,509	)	(362,254	)
Increase in the valuation allowance for deferred tax assets	1,902,980		491,765		231,950
	(230,328	)	(297,744	)	(130,304	)

F-25

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below.

	December 31,
	2002		2003
Deferred tax assets:
Accounts receivable principally due to allowance for doubtful accounts	388,806		452,231
Operating loss carryforwards	2,394,745		2,626,695
Operating loss carryforwards, pre-acquisition	18,502,109		17,917,869
Property and equipment, principally due to differences in disposals	139,267		206,145
Total gross deferred tax assets	21,424,927		21,202,940
Less: valuation allowance	(20,896,855	)	(20,544,564	)
Net deferred tax assets	528,072		658,376

In accordance with SFAS No. 109 “Accounting for Income Taxes”, the tax benefits associated with the utilization of pre-acquisition net operating losses carry forwards for which a valuation allowance was established at the date of the acquisition, are recognized in the consolidated financial statements after the acquisition date as follows: (i) first to reduce to zero any goodwill related to the acquisition; (ii) second to reduce to zero other non-current intangible assets related to the acquisition; and (iii) third to reduce income tax expense. The amount of valuation allowance associated with pre-acquisition net operating losses was RMB 17,917,869.

The gross amount of operating loss carryforwards expire in 2005 to 2008 as follows: RMB 54,296,573 in 2005, RMB 5,283,758 in 2006, RMB 1,463,973 in 2007, and RMB 1,211,952 in 2008.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon an assessment of the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible or can be utilized, management has provided a valuation allowance of RMB 20,896,855 and RMB 20,544,564 as of December 31, 2002 and 2003, respectively. After reducing the deferred tax assets by the valuation allowance, the remaining net amount of RMB 528,072 and RMB 658,376, respectively, as of December 31, 2002 and 2003 represents the tax benefits of entities that have been profitable and whose deferred tax assets are more likely than not will be realized. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income are reduced.

F-26

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

(13) LEASES

At December 31, 2002 and 2003, the gross amount of equipment and related accumulated amortization recorded under capital leases were as follows:

	December 31, 2003
	2002		2003
Servers	500,174		500,174
Personal computers	3,159,464		3,159,464
Less: accumulated amortization	(1,280,873	)	(2,012,801	)
	2,378,765		1,646,837

Amortization of assets held under capital leases is included in depreciation expense.

In November 2003, the Company entered into a three-year leasing agreement to secure the 3,744 square meters of office space in Beijing, China. The annual leasing payment is RMB 2,619,240.

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2003 are:

	Minimum lease amount
2004	4,021,355
2005	2,619,240
2006	2,619,240
	9,259,835

Rental expenses incurred under operating leases for the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 amount to RMB 2,280,673, RMB 3,633,603 and RMB 4,287,760, respectively.

(14) STOCK BASED COMPENSATION

2001 stock option plan

In April 2001, the Company adopted a stock option plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock options to officers and key employees. The Plan authorizes the Company to grant options to purchase up to 4 million authorized but unissued ordinary shares.

On April 18, 2001, four million stock options were granted to the Company’s executives at an exercise price of US$ 0.50 per share. The stock options have a ten year term and were fully vested and exercisable at the date of grant. The fair value of the options using the Black-Scholes option-pricing model was nil (excluding a volatility assumption). The

F-27

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

assumptions used in determining the fair value of the options were as follows: weighted-average assumptions—expected dividend yield 0%, risk-free interest rate of 3.11%, and an expected life of 5 years. At December 31, 2003, no options have been exercised.

In accordance with the Board of Directors’ Resolution, dated August 26, 2003, the Company increased the number of ordinary shares authorized to be issued under the 2001 Stock Option Plan to 5,500,000. In 2003, 490,000 shares of options were granted to the Company’s executives at an exercise price of US$ 1.53. The stock options granted in 2003 have a ten year term and vest over a four year period from the date of grant. On the date of grant, the fair value of the stock options was RMB 770,868 using the Black-Scholes option-pricing model (excluding a volatility assumption). The assumptions used in determining the fair value of the options were as follows: expected dividend yield 0%, risk-free interest rate of 2.63%, and an expected life of 5 years. The Company recorded non-cash compensation expense of RMB 48,835 for the year ended December 31, 2003 in respect of stock options granted in 2003.

Stock option activity during the periods indicated is as follows:

	Number of shares	Weighted average exercise price
Balance at April 4, 2001	—		—
Granted	4,000,000	US$	0.50
Exercised	—		—
Forfeited	—		—
Expired	—		—
Balance at December 31, 2001	4,000,000	US$	0.50
Granted	—		—
Exercised	—		—
Forfeited	—		—
Expired	—		—
Balance at December 31, 2002	4,000,000	US$	0.50
Granted	490,000	US$	1.53
Exercised	—		—
Forfeited	—		—
Expired	—		—
Balance at December 31, 2003	4,490,000	US$	0.61

In August 2003, the Company issued warrants to purchase 600,000 of the Company’s ordinary shares at an exercise price of US$ 0.75 per share to Broadband Capital Management LLC (“Broadband”), an investment banking and financial advisory firm, and two outside consultants, one of whom is a non-employee shareholder of the Company, in consideration for investment banking services provided to the Company in respect of the private placement of US$ 15 million aggregate principal amount of Series A preferred

F-28

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

shares in August 2003 (See Note 15). The Company also paid US$ 250,000 (RMB 2,070,000) to Broadband for services provided in connection with this private placement. The Company accounted for the warrants issued to Broadband and the two consultants in accordance with SFAS No. 123 and EITF Issue No. 96-18. The fair value of the warrants granted was RMB 4,818,960 on the date of grant using the Black-Scholes option pricing model (excluding a volatility assumption). The assumptions used in determining the fair value of the warrants were as follows: expected dividend yield 0%, risk free interest rate of 2.9%, and a contractual life of 10 years.

The estimated fair value of the warrants of RMB 4,818,960 and the cash payment of US$ 250,000 (RMB 2,070,000) was charged against the gross proceeds of the Series A preferred shares as such costs were incremental and specifically and directly attributable to the actual placement of such securities.

(15) SERIES A PREFERRED SHARE

On August 29, 2003, the Company received US$ 15,000,000 from four investors—Tiger Technology Private Investment Partners, L.P., Tiger Technology II, L.P., Blue Ridge Limited Partnership, and RMG Holdings, LLC, in exchange for 9,787,494 Series A preferred shares. The series A preferred shares contain the following terms:

Liquidation Preference

In the event of any liquidation, winding up, change of control or asset sale situations of the Company, the preferred shareholders are entitled to receive, prior to any distribution to the holders of ordinary shares or any other class or series of shares, an amount equal to the higher of the preferred shareholders’ capital investment, plus all declared but unpaid dividends thereon and the amount payable to such shareholders on an as-converted basis.

Conversion

Series A preferred shares are convertible at any time into ordinary shares at the option of the preferred shareholders at a rate of one-to-one. Such shares are also automatically converted into ordinary shares upon the consummation by the Company of an initial public offering. In addition, a majority vote of the Series A preferred shareholders can also trigger automatic conversion.

Dividend Rights

No dividend, whether in cash, in property or in shares of the capital of the Company, is allowed to be paid on any other class or series of shares of the Company unless and until a dividend in like amount was first paid in full on the Series A preferred shares (on an as-converted basis).

Voting Rights

Each Series A preferred share carries the same number of votes as an ordinary share.

F-29

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Redemption

Series A preferred shares are not redeemable at the option of the holder.

(16) ORDINARY SHARES

On April 17, 2001, 16,000,000 of the Company’s ordinary shares were issued to the initial shareholders, Billable Development Ltd. (“Billable”, 64%), a group of individual investors (34%) and management shareholders (2%) in exchange for cash of US$ 4,500,000 (RMB 37,260,000).

Billable made its contribution to the Company in two installments. The first contribution of US$ 368,750 (RMB 3,053,250) was paid into the Company’s bank account in the United States. The second contribution of RMB 20,700,000 was paid through Shenzhen Youyuan Investment Company, an affiliate of Billable, into eLong Information’s bank account in the PRC.

On April 17, 2001, the Company granted 4,000,000 ordinary shares to a group of nine management employees and non-employee directors. These ordinary shares vested over a two-year period beginning from the date of grant and, in May 2003, these ordinary shares became fully vested and were issued. As of December 31, 2003, RMB 331,200, representing the par value of the ordinary shares have not been paid. The Company has recorded this receivable as a contra equity in the statement of shareholders’ equity and comprehensive income as of December 31, 2003. The Company recorded non-cash compensation expense during the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003 of approximately RMB 3,167,100, RMB 4,471,200, and RMB 1,304,100 respectively, which was reflected as stock-based compensation expense in the Company’s statements of operations.

On August 29, 2003, the Company purchased 3,262,494 ordinary shares from certain existing shareholders at US$ 1.53257 per share (US$ 5,000,000 or RMB 41,387,500). Such ordinary shares were subsequently cancelled.

(17) (LOSS)/INCOME PER ORDINARY SHARE

Basic (loss)/income and diluted (loss)/income per ordinary share have been calculated in accordance with SFAS No. 128 as follows:

	2001		2002		2003
Net (loss)/income	(15,115,473	)	(10,097,989	)	1,615,880
Denominator for basic (loss)/income per share:
Weighted average ordinary shares outstanding	16,000,000		16,000,000		17,587,502
Basic (loss)/income per ordinary share	(0.94	)	(0.63	)	0.09

F-30

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Potentially dilutive securities that could potentially dilute basic income per ordinary share include Series A preferred shares, stock options granted to employees and directors and stock warrants granted to non-employees. In 2001 and 2002, ordinary equivalent shares in the diluted (loss)/income per ordinary share computation are excluded as their effect would be anti-dilutive.

	December 31,
	2001		2002		2003
Net (loss)/income	(15,115,473	)	(10,097,989	)	1,615,880
Denominator for diluted (loss)/income per share:
Weighted average ordinary shares outstanding	16,000,000		16,000,000		17,587,502
Nonvested ordinary shares and stock options	—		—		3,749,601
Series A preferred shares	—		—		3,262,498
Stock warrants	—		—		116,829
	16,000,000		16,000,000		24,716,430
Diluted (loss)/income per ordinary share	(0.94	)	(0.63	)	0.07

(18) PRO FORMA INCOME PER SHARE (UNAUDITED)

The pro forma basic income per share data give full impact to the 9,787,494 Series A preferred shares of outstanding ordinary shares that will be issued for the preferred shares, as if the preferred shares issuance and the conversion of these shares upon the occurrence of the IPO had both taken place on January 1, 2003. In addition, the pro forma basic income per share data as of December 31, 2003 give effect to the issuance of Series B preferred shares and repurchase of ordinary shares and Series A preferred shares from existing shareholders, as described in note 21. The pro forma diluted income per share computation was based on the pro forma net income available to ordinary shareholders of RMB173,618, divided by the weighted average ordinary shares outstanding on a pro forma basis of 32,969,281, adjusted for the dilutive effect of non-vested ordinary shares and stock options and warrants of 3,866,430, but excluding the effect of stock options and warrants granted subsequent to December 31, 2003 which were granted in the ordinary course of business or in connection with the issuance of Series B preferred shares on August 4, 2004. In addition, pro forma basic and diluted income per share data give effect to the 260,204 options granted to IAC on October 1, 2004 (see note 22), as if such options had been granted on January 1, 2003 at the same terms and exercise price. On the date of grant, the fair value of the 260,204 options was RMB5,769,047 and will be recorded as a deduction in arriving at net income available to ordinary shareholders over the vesting term.

F-31

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

The pro forma basic and diluted income per share have been calculated as follows:

Pro forma basic income per share:

	December 31, 2003
Net income as reported	1,615,880
less: Stock options issued to IAC	1,442,262
Pro forma net income available to ordinary shareholder	173,618
Denominator for basic income per share:
Weighted average ordinary share outstanding	17,587,502
Series A preferred share before repurchase	9,787,494
Series B preferred shares	11,188,570
Repurchase of ordinary shares	(4,012,411	)
Repurchase of Series A preferred shares	(1,581,874	)
	32,969,281
Pro forma basic income per share	0.01

Pro forma diluted income per share:

	December 31, 2003
Net income available to ordinary shareholders	173,618
Denominator for pro forma diluted income per share:
Pro Forma weighted average ordinary share outstanding	32,969,281
Non-vested ordinary shares and stock options	3,749,601
Stock warrants	116,829
	36,835,711
Pro forma diluted income per share	0.00

(19) CONCENTRATION OF RISKS

Credit and concentration risks

The carrying amounts of cash and cash equivalents, accounts receivable and other receivables represent the Group’s maximum exposure to credit risk in relation to financial assets. As of December 31, 2002 and 2003, substantially all of the Company’s cash and cash equivalents were held in major financial institutions located in the PRC, which management believes are of high credit quality. Accounts receivable are typically unsecured and denominated in Renminbi, and are derived from revenues earned from operations arising in the PRC. The Group performs ongoing credit evaluations of its customers’ financial condition and generally does not require collateral on accounts receivable. The Group maintains an allowance for doubtful accounts and actual losses have been within management’s expectations.

F-32

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

The Group has a diversified base of customers. No individual customer contributed to more than 10% of total revenues during the period from April 4, 2001 to December 31, 2001 and for the years ended December 31, 2002 and 2003. Except for Shenzhen Sincere Technology Development Co., Ltd, which accounted for 19% of the Group’s accounts receivable for the year ended December 31, 2002 and Bearing Point Consulting Co., Ltd, which accounted for 23% of the Group’s accounts receivable for the year ended December 31, 2003, respectively, no individual customer accounted for more than 10% of accounts receivable as of December 31, 2002 and 2003.

The Group does not have concentrations of available sources of labor, services, franchises, licenses or other rights that could, if suddenly eliminated, severely impact its operations.

Business and economic risks

The Group conducts its principal operations in the PRC and accordingly is subject to special considerations and significant risks not typically associated with investments in equity securities of United States and Western European companies. These include risks associated with, among others, the political, economic, legal environment and social uncertainties in the PRC, influence of the China National Tourism Administration over certain aspects of the Group’s operations and competition in the travel agency industry.

The Company is currently targeting the Chinese market. The Chinese government regulates Internet access, the distribution of online news and other information, the provision of online commerce and provision of travel agency services through strict business licensing requirements and other governmental regulations. These regulations include limiting foreign ownership in Chinese companies providing Internet access, information and other online Internet services and travel agency services. Management, after consultation and advice from PRC legal counsel, is of the opinion that the Company’s business complies with existing Chinese laws and regulations. However, the interpretation and application of current or proposed requirements and regulations may have an adverse effect on the Company’s business, financial condition and result of operations.

In addition, the ability to negotiate and implement specific business development projects in a timely and favorable manner may be impacted by political considerations unrelated to or beyond the control of the Group. Although the PRC government has been pursuing economic reform policies for the past two decades, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective and as a result, changes in the rate or method of taxation, reduction in tariff protection and other import restrictions, and changes in State policies and regulations affecting the travel agency industry may have a negative impact on the Group’s operating results and financial condition.

F-33

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Currency risk

Substantially all of the revenue-generating operations of the Group are transacted in Renminbi, which is not fully convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted by the People’s Bank of China. However, the unification of the exchange rate does not imply convertibility of Renminbi into United States dollars or other foreign currencies. All foreign exchange transactions must take place either through the People’s Bank of China or other institutions authorized to buy and sell foreign exchange or at a swap center. Approval of foreign currency payments by the People’s Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

(20) RELATED PARTY TRANSACTIONS

Companies are considered to be related if one company has the ability, directly or indirectly, to control the other company or exercise significant influence over the other company in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Because of related party relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties. The principal related party transactions during the periods presented are as follows:

On May 29, 2001, the Company entered into a money management agreement with Shenzhen Youyuan Investment Company, an affiliate of Billable, one of the Company’s principal shareholders. Under the agreement, Youyuan Investment managed RMB 12,000,000 for the Company, and in return the Company received a guaranteed annual interest of 2.25% on the principal amount. The Company had the right to withdraw the funds at any time. In 2001 and 2002, all principal and accrued interest were paid to the Company in full.

On May 14, 2002, the Company entered into a money management agreement with Shenzhen Youyuan Investment Company. Under the agreement, Youyuan Investment managed RMB 4,000,000 for the Company, and in return the Company received a guaranteed annual interest rate of 2.25%. The Company had the right to withdraw the funds at any time. In August 2003, all principal and accrued interest were paid to the Company in full. As of December 31, 2002, the amount of RMB4,000,000 has been reflected as due from related party in the consolidated balance sheet.

In October, 2002, the Company entered into agreement with Shenzhen Sincere Technology Development Co. Ltd. (“Sincere”), to sell co-branded membership cards to Sincere for RMB 2,320,000. Mr. Zhong Xiao Jian, the principal shareholder of Billable Development Ltd., indirectly has a minority shareholding interest in Sincere. As of December 31, 2003, accounts receivable from Sincere amounted to RMB1,320,000.

F-34

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

On July 15, 2003, the Company entered into lease agreement with Kun Lun Securities. Mr. Zhong Xiao Jian, the principal shareholder of Billable Development Ltd., indirectly has a minority shareholding interest in Kun Lun Securities. Under the agreement, Kun Lun Securities provided free rent on 195.65 square meters of office space in Shenzhen, China to the Company for twelve months.

(21) SUBSEQUENT EVENTS

Issuance of Series B Preferred Shares

On August 4, 2004 the Company issued and sold 11,188,570 Series B preferred shares to a wholly owned subsidiary of InterActive Corp (“IAC”) for an aggregate purchase price of US$58,690,062, or US$5.25 per Series B preferred share. Pursuant to the IAC purchase agreements, the Company was required to use approximately one-half, or US$29,345,029, of the proceeds from the sale of the Series B preferred shares to repurchase from existing shareholders an aggregate of 4,012,411 of its ordinary shares and 1,581,874 of its Series A preferred shares at a purchase price of US$5.25 per share. After the share repurchase the Company retained US$29,345,033 of the aggregate purchase price, of which, US$4,401,754 is being held in escrow, of which, subject to possible claims by IAC for indemnification under the agreement between the Company and IAC for representation, warranties, and covenants provided by the Company, US$1,100,438 will be released on August 4, 2005 and the balance will be released on March 31, 2006.

The Company also granted to IAC an option to purchase up to 711,429 ordinary shares at a purchase price of US$5.25, which is exercisable by IAC to the extent of a number of ordinary shares that is equal to 30% of the number of ordinary shares which are purchased from time to time by the Company’s officers and employees pursuant to options to purchase an aggregate of 1,660,000 ordinary shares the Company granted on July 23, 2004. To the extent that any such officer or employee’s options terminate or expire without being exercised, an amount of IAC’s options equal to 30% of such employee’s terminated or expired options shall likewise terminate or expire.

Also in connection with the sale of the Series B preferred shares, the Company granted to IAC a warrant which is exercisable by IAC commencing upon the earlier (i) the Company’s completion of an initial public offering, (ii) the date upon which the Company gives IAC notice that it is no longer pursuing an initial public offering or (iii) March 31, 2005. The IAC warrant will expire upon the earlier of (1) 30 business days following an initial public offering or (2) January 31, 2006, if the Company does not give IAC notice that it is no longer pursuing an initial public offering, or, if the Company does give such notice, 395 days after the date upon which the Company gives IAC such notice. IAC’s warrant entitles it to purchase that number of the Company’s high vote ordinary shares which will result in IAC holding 51% of the Company’s outstanding ordinary shares on a fully-diluted basis after giving effect to the repurchase from existing shareholders of a number of ordinary shares equal to one-half of the shares purchased by IAC pursuant to its warrant. In the case of an exercise of the warrant by IAC subsequent to an initial public offering, the exercise price per share purchased by IAC under the warrant, and the price per share for ordinary shares the

F-35

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Company repurchases from existing shareholders in connection with IAC’s exercise of the warrant, will be equal to the lower of: (1) the initial public offering price for this offering, or (2) the price determined using: (a) US$205 million, minus our indebtedness, plus our cash and cash equivalents, plus the pro forma consideration that would be received in connection with the exercise of all vested or unvested in-the-money options, warrants or other convertible securities of the company, in each case at the time of exercise, divided by (b) the total number of our outstanding ordinary shares on a fully-diluted basis at the time of exercise (but excluding out-of-the-money options or securities). If the Company does not complete an initial public offering and the warrant is exercised, the exercise price per share will be based on the fair market value of the Company, except that if the warrant is exercised within 30 days after the Company gives IAC notice that it is no longer pursuing an initial public offering or, in the event the Company does not give such a notice, by April 30, 2005, then the exercise price per share of the warrant will be (1) US$205 million minus the Company’s outstanding indebtedness plus cash and cash equivalents divided by (2) the Company’s outstanding ordinary shares on a fully-diluted basis at the time of IAC’s exercise of the warrant.

If IAC exercises its warrant, the Company will be controlled by IAC, and IAC will have the power to substantially control the Company’s management and business operations. If IAC exercises the warrant within 30 U.S. business days after the completion of an initial public offering, then the Series B preferred shares issued to IAC will be converted automatically into high-vote ordinary shares on the 31st business day after the completion of the initial public offering. If IAC does not exercise the warrant within 30 U.S. business days from the consummation of an initial public offering offering, then the Series B preferred shares issued to IAC will be converted automatically into ordinary shares upon the 31st business day after the completion of the offering. The high-vote ordinary shares are identical in all respects to the Company’s other ordinary shares, except that each share of high-vote ordinary shares entitles its holder to cast 15 votes in all proceedings and actions of the Company’s ordinary shareholders, whereas each share of our other ordinary shares entitles its holder to one vote.

Until the Series B preferred shares are converted into either ordinary shares or high-vote ordinary shares, the Company will be required to obtain IAC’s approval with respect to various aspects of its business or operations outside of the ordinary course, including acquiring any assets or businesses in excess of US$1,000,000 in a transaction or series of related transactions.

F-36

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Conversion of preferred shares

On August 4, 2004, the Company amended and restated the Articles of Association, which states that the preferred shares should be converted into ordinary shares, subject to the following conditions:

Series A Preferred Shares

Each Series A preferred share will be convertible into ordinary shares based on a one-to-one conversion ratio. Depending on certain anti-dilution adjustment, the Series A Conversion Price will be adjusted as follows:

Ÿ if the Company issues additional securities for a consideration per share that is less than the Series A Conversion Price that is in effect immediately before such issuance, then the Series A Conversion Price will be adjusted by multiplying the Series A Conversion Price by a fraction, the numerator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued, plus the number of ordinary shares represented by the additional securities issued, on a fully-diluted basis, and the denominator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued; and

Ÿ if the Company issues additional securities for a consideration per share that is equal to or greater than the Series A Conversion Price that is in effect immediately before such issuance, then the Series A Conversion Price will not be adjusted.

Series B Preferred Shares

The Series B preferred shares will convert into either ordinary or high-vote ordinary shares regardless of IAC’s exercise of its warrant.

Each Series B preferred share is convertible into ordinary shares or high-vote ordinary shares based on a one-to-one conversion ratio. Depending on certain anti-dilution adjustment, the Series B Conversion Price will be adjusted as follows:

Ÿ if the Company issues additional securities for a consideration per share that is less than the Series B Conversion Price that is in effect immediately before such issuance, then the Series B Conversion Price will be adjusted by multiplying the Series B Conversion Price by a fraction, the numerator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued, plus the number of ordinary shares represented by the additional securities issued, on a fully-diluted basis, and the denominator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued; and

Ÿ if the Company issues additional securities for a consideration per share that is equal to or greater than the Series B Conversion Price that is in effect immediately before such issuance, then the Series B Conversion Price will not be adjusted.

F-37

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

Issuance of stock options

In April 2004, the Company issued 300,000 options to a senior management employee to purchase the Company’s ordinary shares at an exercise price of $1.53 per share. The options have a term of 10 years and will vest 3 years from the date of grant. The Company accounted for these options under the fair value provisions of SFAS No. 123. On the date of grant, the fair value of the stock options was RMB8,381,360 using the Black- Scholes option- pricing model. The assumptions used in determining the fair value of the options were as follows: expected dividend yield 0%, riskfree interest rate of 2.63%, an expected life of 4 years and expected volatility of 43%. The annual estimated non-cash compensation expenses in 2004, 2005, 2006 and 2007 are as follow:

	Compensation expense
2004	1,932,369
2005	2,793,787
2006	2,793,787
2007	861,418
	8,381,360

In July 2004, the Company issued 1,660,000 options to employees to purchase the Company’s ordinary shares at an exercise price of $5.25 per share. The options have a term of 10 years and will vest 4 years from the date of grant. The Company will account for these options under the fair value provisions of SFAS No. 123.

On the date of grant, the fair value of the stock options was RMB26,579,057 using the Black- Scholes option-pricing model. The assumptions used in determining the fair value of the options were as follows: expected dividend yield 0%, riskfree interest rate of 2.63%, and an expected life of 4 years, and expected volatility of 43%. The annual estimated non-cash compensation expenses in 2004, 2005, 2006 and 2007 are as follow:

	Compensation expense
2004	2,907,084
2005	6,644,764
2006	6,644,764
2007	6,644,764
2008	3,737,680
	26,579,057

Incorporation

In May 2004, the Company reincorporated in the Cayman Islands.

F-38

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

(22) Stock Options

On October 1, 2004, the Company issued 250,000 options to two executive officers to purchase the Company’s ordinary shares at an exercise price of US$5.25 per share. The options have a term of 10 years and will vest 4 years from the date of grant. The Company will account for these options under the fair value provisions of SFAS No. 123.

On the date of grant, the fair value of the 250,000 stock options granted to the two executive officers was RMB 5,542,811 using the Black-Scholes option-pricing model. The assumptions used in determining the fair value of the options were as follows: estimated fair market value of underlying shares US$6.25 (mid-point of the estimated initial public offering price), expected dividend yield 0%, risk-free interest rate of 2.63%, an expected life of 4 years, and expected volatility of 43%. The annual estimated non-cash compensation expenses in 2004, 2005, 2006 and 2007 are as follow:

	Compensation expense
2004	461,900
2005	1,385,703
2006	1,385,703
2007	1,385,703
2008	923,802
	5,542,811

Under the IAC purchase agreements, Series A preferred shareholders and IAC each have a right of first offer with respect to any sales or issuances by the Company of any of the Company’s securities after August 4, 2004 (including with respect to the issuance on October 1, 2004 of the 250,000 options), which gives each of them the right to buy, on the same terms, up to a portion of such issuance equal to the proportion that the number of shares held by such shareholder bears to the total number of the Company’s outstanding ordinary shares, on an as-converted and fully-diluted basis. This right of first offer expires upon the completion of the Company’s initial public offering. In addition, under the IAC purchase agreements, the Company is not permitted to issue any of its securities (including the October 1, 2004 issuance of the 250,000 options to certain of its officers) without the prior written consent of IAC.

Prior to October 1, 2004, each of the Series A shareholders waived their respective rights of first offer with respect to the issuance by the Company on October 1, 2004, of the 250,000 options to certain of its officers and the issuance by the Company on October 1, 2004, to IAC of an option to purchase up to 260,204 of the Company’s ordinary shares, as further described below.

On October 1, 2004, the Company entered into a stock option agreement with IAC pursuant to which, in exchange for IAC giving its consent to the issuance of the 250,000 options to certain of the Company’s officers, the Company granted to IAC an option to purchase up to 260,204 of the Company’s ordinary shares at a purchase price of US$5.25, which option mirrors the provision of the options granted to Company’s officers on October 1, 2004.

F-39

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

December 31, 2002 and 2003

These options are exercisable to the extent of a number of ordinary shares that is equal to 51% of the number of ordinary shares which are purchased from time to time by the Company’s officers pursuant to the October grant and by IAC under its October grant. To the extent that any of the officers’ options terminate or expire without being exercised, an amount of IAC’s option equal to 51% of such officer’s terminated or expired options will likewise terminate or expire. On the date of grant, the fair value of the 260,204 options granted to IAC was RMB 5,769,047 and will be recorded as a deduction in arriving at net income available to ordinary shareholders over the vesting term. The assumptions used to determine the fair value were the same as those used in determing the fair value of the 250,000 options.

F-40

eLong, Inc. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31, 2003		June 30, 2004		June 30, 2004		Pro Forma June 30, 2004 (note 8)		As adjusted Pro Forma June 30, 2004 (note 8)
	RMB		RMB		US$		RMB		RMB
ASSETS
Current assets
Cash and cash equivalents	73,132,396		52,447,640		6,336,858		258,893,166		258,893,166
Cash held in escrow	—		—		—		36,431,557		36,431,557
Accounts receivable, net	28,497,455		41,447,199		5,007,757		41,447,199		41,447,199
Investment security	447,001		489,002		59,083		489,002		489,002
Prepaid expenses and other current assets	8,539,415		26,567,624		3,209,968		26,567,624		26,567,624
Deferred tax assets	14,042		14,042		1,697		14,042		14,042
Total current assets	110,630,309		120,965,507		14,615,363		363,842,590		363,842,590
Deferred tax assets	644,334		644,334		77,850		644,334		644,334
Equipment and software, net	8,108,475		10,173,738		1,229,217		10,173,738		10,173,738
Goodwill	8,998,133		8,998,133		1,087,177		8,998,133		8,998,133
Intangibles	2,180,000		2,060,000		248,894		2,060,000		2,060,000
Total assets	130,561,251		142,841,712		17,258,501		385,718,795		385,718,795
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	11,041,418		7,738,266		934,957		7,738,266		7,738,266
Accrued expenses and other payables	18,210,380		38,076,149		4,600,458		38,076,149		38,076,149
Advances from customers	35,000		53,130		6,419		53,130		53,130
Business and other taxes payable	666,848		913,258		110,342		913,258		913,258
Total current liabilities	29,953,646		46,780,803		5,652,176		46,780,803		46,780,803
Total liabilities	29,953,646		46,780,803		5,652,176		46,780,803		46,780,803
Commitments and contingencies
Shareholders’ equity
Series A preferred shares: US$ 0.01 par value; 9,787,494 shares authorized, issued and outstanding as of December 31, 2003 and June 30, 2004 (proforma: nil)	113,957,084		113,957,084		13,768,587		—		—
Series B preferred shares (proforma: 11,188,570)	—		—		—		485,754,167		—
Ordinary shares: US$ 0.01 par value; 47,000,000 shares authorized; 16,787,506 shares issued and outstanding as of December 31, 2003 and June 30, 2004 (proforma: 20,980,715)	1,390,087		1,390,087		167,954		1,737,142		2,663,175
Additional paid-in capital	9,656,248		18,613,807		2,248,968		(110,653,248	)	374,174,886
Statutory reserves	625,469		625,469		75,571		625,469		625,469
Deferred compensation	(722,033	)	(8,949,472	)	(1,081,298	)	(8,949,472	)	(8,949,472	)
Receivable from shareholders	(331,200	)	(240,120	)	(29,012	)	(240,120	)	(240,120	)
Accumulated other comprehensive income	255,001		297,002		35,884		297,002		297,002
Accumulated deficit	(24,223,051	)	(29,632,948	)	(3,580,329	)	(29,632,948	)	(29,632,948	)
Total shareholders’ equity	100,607,605		96,060,909		11,606,325		338,937,992		338,937,992
Total liabilities and shareholders’ equity	130,561,251		142,841,712		17,258,501		385,718,795		385,718,795

The accompanying notes are an integral part of these financial statements.

F-41

eLong, Inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Six Months Ended
	June 30, 2003		June 30, 2004		June 30, 2004
	RMB		RMB		US$
Revenues:
Travel	21,495,282		52,544,274		6,348,534
Others	2,944,541		7,565,485		914,081
Total revenues	24,439,823		60,109,759		7,262,615
Cost of services	4,376,465		7,068,458		854,029
Gross profit	20,063,358		53,041,301		6,408,586
Operating expenses
Service development	764,619		4,249,390		513,422
Sales and marketing	16,980,064		39,188,356		4,734,838
General and administrative	3,975,672		10,794,659		1,304,238
Stock-based compensation(1)	1,304,100		730,120		88,215
Amortization of goodwill and intangibles	—		120,000		14,499
Business tax and surcharges	1,349,847		3,062,169		369,979
Total operating expenses	24,374,302		58,144,694		7,025,191
Loss from operations	(4,310,944	)	(5,103,393	)	(616,605	)
Other income (expenses)
Interest income	14,618		67,561		8,163
Interest expense	(60,786	)	(68,246	)	(8,246	)
Foreign exchange loss	—		(21,917	)	(2,648	)
Loss before income tax expense	(4,357,112	)	(5,125,995	)	(619,336	)
Income tax benefit/(expense)	971,052		(283,902	)	(34,302	)
Net loss	(3,386,060	)	(5,409,897	)	(653,638	)
Basic loss per share	(0.21	)	(0.32	)	(0.04	)
Diluted loss per share	(0.21	)	(0.32	)	(0.04	)
Proforma basic loss per share (note 8)			(0.17	)	(0.02	)
Proforma diluted loss per share (note 8)			(0.17	)	(0.02	)

(1) Stock-based compensation is all related to general and administrative expenses.

The accompanying notes are an integral part of these financial statements.

F-42

eLong, Inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

(Unaudited)

	Ordinary share				Preferred share	Receivable from shareholder		Additional paid in capital		Statutory reserves	Deferred compensation		Accumulated other comprehensive income	Accumulated deficit		Total shareholders equity
	Number of Shares		Amount
Balance at January 1, 2003	16,000,000		1,324,800		—	—		44,877,600		—	(1,304,100	)	—	(25,213,462	)	19,684,838
Amortization of deferred compensation	—		—		—	—		—		—	1,304,100		—	—		1,304,100
Issuance of ordinary share to employees and directors	4,000,000		331,200		—	—		—		—	—		—	—		331,200
Receivable from shareholders	—		—		—	(331,200	)	—		—	—		—	—		(331,200	)
Grant of stock options	—		—		—	—		770,868		—	(770,868	)	—	—		—
Issuance of preferred share, net of offering expenses	—		—		113,957,084	—		—		—	—		—	—		113,957,084
Repurchase and cancellation of ordinary shares	(3,262,494	)	(270,053	)	—	—		(41,117,447	)		—		—	—		(41,387,500	)
Exercise of stock warrants	50,000		4,140		—	—		306,267		—	—		—	—		310,407
Stock warrants issued	—		—		—	—		4,818,960		—	—		—	—		4,818,960
Statutory reserves	—		—		—	—		—		625,469	—		—	(625,469	)	—
Amortization of deferred compensation	—		—		—	—		—		—	48,835		—	—		48,835
Unrealized gain on investment securities, net of nil tax	—		—		—	—		—		—	—		255,001	—		255,001
Net income	—		—		—	—		—		—	—		—	1,615,880		1,615,880
December 31, 2003	16,787,506		1,390,087		113,957,084	(331,200	)	9,656,248		625,469	(722,033	)	255,001	(24,223,051	)	100,607,605
Repayment of receivable from shareholders	—		—		—	91,080		—		—	—		—	—		91,080
Grant of stock options	—		—		—	—		8,957,559		—	(8,957,559	)	—	—		—
Amortization of deferred compensation	—		—		—	—		—		—	730,120		—	—		730,120
Unrealized gain on investment securities, net of nil tax	—		—		—	—		—		—	—		42,001	—		42,001
Net loss	—		—		—	—		—		—	—		—	(5,409,897	)	(5,409,897	)
Balance at June 30, 2004	16,787,506		1,390,087		113,957,084	(240,120	)	18,613,807		625,469	(8,949,472	)	297,002	(29,632,948	)	96,060,909

Note: For the six months period ended June 30, 2003 and 2004, comprehensive loss was RMB3,398,061 and RMB5,367,896, respectively.

F-43

eLong, Inc. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	June 30, 2003		June 30, 2004		June 30, 2004
	RMB		RMB		US$
Cash flows from operating activities:
Net loss	(3,386,060	)	(5,409,897	)	(653,638	)
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:
Unrealized exchange losses	—		21,917		2,648
Loss on disposal of fixed assets	38,575		—		—
Depreciation of fixed assets and amortization of intangible assets	2,151,047		1,248,102		150,799
Stock compensation cost	1,304,100		730,120		88,215
Changes in working capital:
Accounts receivable	2,190,904		(12,949,744	)	(1,564,620	)
Prepaid expenses and other current assets	(4,369,512	)	(4,978,123	)	(601,470	)
Accounts payable	3,949,442		(3,303,152	)	(399,095	)
Business and other taxes payable	(189,400	)	246,410		578,297
Accrued expenses and other payables	114,233		12,109,283		914,549
Net cash provided by/(used in) operating activities	1,803,329		(12,285,084	)	(1,484,315	)
Cash flows from investing activities:
Capital expenditures	(616,244	)	(3,193,365	)	(385,831	)
Deposit made for proposed acquisition of Raytime	—		(2,000,000	)	(241,645	)
Acquisition of GCH	—		(2,100,000	)	(253,727	)
Net cash used in investing activities	(616,244	)	(7,293,365	)	(881,203	)
Cash flows from financing activities:
Repayment of receivable from shareholder in connection with issuance of ordinary shares	—		91,080		11,004
Offering costs	—		(1,175,470	)	(142,023	)
Principal payments under capital lease obligations	(138,388	)	—		—
Net cash used in financing activities	(138,388	)	(1,084,390	)	(131,019	)
Effect of foreign exchange rate changes on cash	—		(21,917	)	(2,648	)
Net increase/(decrease) in cash and cash equivalents	1,048,697		(20,684,756	)	(2,499,185	)
Cash and cash equivalents at beginning of period/year	5,343,634		73,132,396		8,836,043
Cash and cash equivalents at end of period	6,392,331		52,447,640		6,336,858
Supplemental disclosures of cash flow information:
Cash paid for income taxes	—		—		—
Cash paid for interest	16,104		—		—

The accompanying notes are an integral part of these financial statements.

F-44

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(1)    DESCRIPTION OF BUSINESS

The accompanying unaudited consolidated interim financial statements include the financial statements of eLong, Inc., (the “Company”), its wholly-owned subsidiary, eLongNet Information Technology (Beijing) Co., Ltd. (“eLong Information”), and variable interest entities (“VIEs”), consisting of Beijing eLong Information Technology Co., Ltd. (“Beijing Information”), Beijing Asia Media Interactive Co., Ltd. (“Beijing Media”), Beijing eLong Airline Services Co., Ltd. (“Beijing Air”) and General Chinese Hotels Reservation Network Ltd (“GCH”). The Company and its subsidiary and VIEs are collectively referred to as the “Group”. The Group is principally engaged in the provision of travel services including hotel information and reservation services, airline reservations and ticketing, packaged-tour services, and to a lesser extent, Internet-related advertising and other related services in the People’s Republic of China (the “PRC”).

(2)    BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements as of June 30, 2004 and for the six months ended June 30, 2003 and 2004 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The December 31, 2003 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto, included in this prospectus for the fiscal year ended December 31, 2003.

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of June 30, 2004, and the results of operations and cash flows for the six months ended June 30, 2003 and 2004, have been made. The results of operations for the six months ended June 30, 2004 are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Translations of amounts from Renminbi into United States dollars (“U.S. dollars”) are solely for the convenience of the reader and were calculated at the rate of US$1.00=RMB8.2766, on June 30, 2004, representing the noon buying rate in the City of New York for cable transfers of Renminbi, as certified for customs purposes by the Federal Reserve Bank of New York. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on June 30, 2004, or at any other rate.

(3)    STOCK BASED COMPENSATION

The Company has adopted the preferable fair value recognition provision of Statement of Financial Accounting Standards (“SFAS”) No.123, “Accounting for Stock-Based

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eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Compensation”. Under the fair value based method, compensation cost related to employee stock option or similar equity instruments is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period.

In January 2004, the Company issued 689,400 options to 152 employees to purchase the Company’s ordinary shares at an exercise price of US$1.53 per share. The options have a term of 10 years, of which 299,000 options will vest over 4 years from the date of grant and the remaining 390,400 options will vest over 3 years from the date of the grant. The Company accounted for these options under the fair value provisions of SFAS No. 123. On the date of grant, the fair value of the stock options was RMB753,456 using the Black-Scholes option-pricing model (excluding a volatility assumption). The assumptions used in determining the fair value of the options were as follows: expected dividend yield 0%, risk-free interest rate of 2.63%, and an expected life of 4 years. The annual estimated non-cash compensation expenses in 2004, 2005, 2006 and 2007 are as follow:

	Compensation expense
2004	219,632
2005	219,632
2006	219,632
2007	94,560
	753,466

In April 2004, the Company issued 300,000 options to a senior management employee to purchase the Company’s ordinary shares at an exercise price of $1.53 per share. The options have a term of 10 years and will vest 3 years from the date of grant. The Company accounted for these options under the fair value provisions of SFAS No. 123. On the date of grant, the fair value of the stock options was RMB8,381,360 using the Black-Scholes option-pricing model. The assumptions used in determining the fair value of the options were as follows: expected dividend yield 0%, riskfree interest rate of 2.63%, an expected life of 4 years, and expected volatility of 43%. The annual estimated non-cash compensation expenses in 2004, 2005, 2006 and 2007 are as follow:

	Compensation expense
2004	1,932,369
2005	2,793,787
2006	2,793,787
2007	861,418
	8,381,360

F-46

eLong, Inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(4)    PREPAID EXPENSES AND OTHER CURRENT ASSETS

Components of prepaid expenses and other current assets are as follows:

	December 31, 2003	June 30, 2004
Prepaid expenses	3,567,408	3,507,606
eLong cards and low value articles	1,081,899	1,442,557
Hotel room nights	220,800	329,106
Staff advances	228,473	2,752,687
Deposits	3,003,409	4,792,427
Prepayments to hotels for corporate customers	296,471	183,288
Deposit made for proposed acquisition of Ray Time	—	2,000,000
Offering costs	—	11,050,086
Others	140,955	509,867
Total	8,539,415	26,567,624

(5)    ACCRUED EXPENSES AND OTHER PAYABLES

Components of accrued expenses and other payables are as follows:

	December 31, 2003	June 30, 2004
Accrued payroll and welfare	6,831,122	11,763,392
Accrued commission	1,630,353	2,681,994
Accrued customer loyalty rewards	776,471	1,103,251
Deposits from corporate customers	170,753	299,648
Payable for acquisition of GCH	5,306,552	3,200,000
Individual income tax payable for senior management (Note 9)	—	4,539,926
Offering costs	130,482	10,005,097
Other accrued expenses and payables	3,364,647	4,482,841
Total	18,210,380	38,076,149

F-47

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(6)    REVENUES

Components of revenues for the six months ended June 30, 2003 and 2004 are as follows:

	Six Months Ended
	June 30, 2003	June 30, 2004
Travel
Hotel reservation	19,405,849	48,024,419
Air ticketing	1,243,758	3,817,227
Other	845,675	702,628
Total	21,495,282	52,544,274
Others
Advertising	1,516,026	1,927,539
Internet service	740,139	618,896
Short messaging services	589,471	4,563,403
Other	98,905	455,647
Total	2,944,541	7,565,485

(7)    BASIC LOSS PER ORDINARY SHARE

In accordance with SFAS No.128 “Computation of Income Per Share”, basic loss per share is computed by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary share outstanding during the period. Diluted loss per share is calculated by dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent share outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the exercise of outstanding stock options and stock warrants (using the treasury stock method). Ordinary equivalent shares in the diluted loss per share computation are excluded in net loss periods as their effect would be anti-dilutive.

Basic loss and diluted loss per ordinary share have been calculated in accordance with SFAS No. 128 as follows:

	Six Months Ended
	June 30, 2003	June 30, 2004
Net loss	3,386,060	5,409,897
Denominator for basic loss per share:
Weighted average ordinary shares outstanding	16,287,293	16,787,506
Basic/diluted loss per ordinary share	0.21	0.32

For the six months ended June 30, 2003 and 2004, ordinary equivalent shares in the diluted loss per ordinary share computation are excluded as their effect would be anti-dilutive.

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eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(8)    PRO FORMA FINANCIAL INFORMATION

Each of the Company’s Series A preferred shares shall be automatically converted into one ordinary share, subject to certain anti-dilution adjustments, if applicable, prior to the closing of an underwritten public offering of its ordinary shares where the shares are subsequently traded primarily on the Nasdaq Stock Market’s National Market, the New York Stock Exchange or another comparable exchange or marketplace. The pro forma balance sheet as of June 30, 2004 presents as adjusted financial position as if the conversion of the preferred shares into ordinary shares occurred on June 30, 2004. In addition, the pro forma balance sheet as of June 30, 2004 gives effect to the issuance of Series B preferred shares and repurchase of ordinary shares and Series A preferred shares from existing shareholders as described in note 10. After the share repurchase the Company retained US$29,345,033 of the aggregate purchase price. Of that amount, US$4,401,754 is being held in escrow, of which, subject to: (1) possible claims by IAC for indemnification under the agreement between the Company and IAC for representations warranties, and covenants provided by the Company, and (2) payment to IAC for certain post-closing matters, US$1,100,438 will be released on August 4, 2005 and the balance will be released on March 31, 2006. The fair values of the stock options and warrants in connection with the Series B preferred shares were not material and therefore all the proceeds have been reflected as Series B preferred shares. The pro forma balance sheet also does not reflect any potential post-closing adjustment that may arise pursuant to the agreement between the Company and IAC.

Further, the as adjusted pro forma balance sheet reflects the automatic conversion of Series B preferred shares into ordinary or high-vote ordinary shares.

The pro forma basic loss per share data give full impact to the 9,787,494 Series A preferred shares of outstanding shares that will be issued for the preferred shares, as if the preferred shares issuance and the conversion of these shares upon the occurrence of the Offering had both taken place on January 1, 2003. In addition, the pro forma loss per share data as of June 30, 2004 give effect to the issuance of Series B preferred shares and repurchase of ordinary shares and Series A preferred shares from existing shareholders, as described in note 10 as if the issuance and repurchases occurred on January 1, 2003. The pro forma basic/diluted loss per share computation was based on the pro forma net loss available to ordinary shareholders of RMB6,131,028, divided by the weighted average ordinary shares outstanding on a pro forma basis of 32,169,285. The pro forma diluted loss per share did not include the effect of non-vested ordinary shares and stock options and warrants as the effect will be anti-dilutive. In addition, the pro forma diluted loss per share did not include the effect of stock options and warrants granted subsequent to December 31, 2003 which were granted in the ordinary course of business or in connection with the issuance of Series B preferred shares on August 4, 2004. Further, the pro forma basic and diluted loss per share data give effect to the 260,204 options granted to IAC on October 1, 2004 (see note 10), as if such options had been granted on January 1, 2003 at the same terms and exercise price. On the date of grant, the fair value of the 260, 204 options is RMB5,769,047 and will be recorded as a deduction in arriving at net income available to ordinary shareholders over the vesting term. The assumptions used to determine the fair value were the same as those used in determing the fair value of the 250,000 options.

F-49

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The pro forma basic/diluted loss per share has been calculated as follows:

	June 30, 2004
Net loss as reported	5,409,897
Less: Stock options issued to IAC	721,131
Pro forma net loss available to ordinary shareholder	6,131,028
Denominator for basic/diluted loss per share:
Weighted average ordinary share outstanding	16,787,506
Series A preferred shares before repurchase	9,787,494
Series B preferred shares	11,188,570
Repurchase of ordinary shares	(4,012,411	)
Repurchase of Series A preferred shares	(1,581,874	)
	32,169,285
Pro forma basic/diluted loss per share	0.19

(9)    RELATED PARTY TRANSACTION

During the second quarter of 2004, the Company advanced approximately RMB1.7 million on an interest free basis to its Chief Executive Officer which was repaid in August 2004.

During the second quarter of 2004, the Board of Directors approved for the Company to pay the individual income tax of its Chief Executive Officer and four other senior managers, totalling RMB4.5 million. The amounts are recorded as compensation expenses, included in the service development expenses and general and administrative expenses, respectively.

(10)    SUBSEQUENT EVENT

Issuance of Series B Preferred Shares

On August 4, 2004 the Company issued and sold 11,188,570 Series B preferred shares to a wholly owned subsidiary of InterActive Corp (“IAC”) for an aggregate purchase price of US$58,690,062, or US$5.25 per Series B preferred share. Pursuant to the IAC purchase agreements, the Company was required to use approximately one-half, or US$29,345,029, of the proceeds from the sale of the Series B preferred shares to repurchase from existing shareholders an aggregate of 4,012,411 of its ordinary shares and 1,581,874 of its Series A preferred shares at a purchase price of US$5.25 per share. After the share repurchase the Company retained US$29,345,033 of the aggregate purchase price. Of that amount, US$4,401,754 is being held in escrow, of which, subject to: (1) possible claims by IAC for indemnification under the agreement between the Company and IAC for representations, warranties and covenants provided by the Company, and (2) payment to IAC for certain post-closing matters, US$1,100,438 will be released on August 4, 2005 and the balance will be released on March 31, 2006. Management believes that no material contingencies exist in respect of IAC’s indemnification rights and that the payments to IAC will not have a material affect on the Company’s financial condition.

The Company also granted to IAC an option to purchase up to 711,429 ordinary shares at a purchase price of US$5.25, which is exercisable by IAC to the extent of a number of

F-50

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

ordinary shares that is equal to 30% of the number of ordinary shares which are purchased from time to time by the Company’s officers and employees pursuant to options to purchase an aggregate of 1,660,000 million ordinary shares the Company granted on July 23, 2004. To the extent that any such officer or employee’s options terminate or expire without being exercised, an amount of IAC’s options equal to 30% of such employee’s terminated or expired options will likewise terminate or expire.

Also in connection with the sale of the Series B preferred shares, the Company granted to IAC a warrant which is exercisable by IAC commencing upon the earlier (i) the Company’s completion of an initial public offering, (ii) the date upon which the Company gives IAC notice that it is no longer pursuing an initial public offering or (iii) March 31, 2005. The IAC warrant will expire upon the earlier of (a) 30 business days following an initial public offering or (b) January 31, 2006, if the Company does not give IAC notice that it is no longer pursuing an initial public offering, or, if the Company does give such notice, 395 days after the date upon which the Company gives IAC such notice. IAC’s warrant entitles it to purchase that number of the Company’s high vote ordinary shares which will result in IAC holding 51% of the Company’s outstanding ordinary shares on a fully-diluted basis after giving effect to the repurchase from existing shareholders of a number of ordinary shares equal to one-half of the shares purchased by IAC pursuant to its warrant. In the case of an exercise of the warrant by IAC subsequent to an initial public offering, the exercise price per share purchased by IAC under the warrant, and the price per share for ordinary shares the Company repurchases from existing shareholders in connection with IAC’s exercise of the warrant, will be equal to the lower of (a) the initial public offering price for this offering or (b)(1) US$205 million, minus our indebtedness, plus our cash and cash equivalents, plus the pro forma consideration that would be received in connection with the exercise of all vested or unvested in-the-money options, warrants or other convertible securities of the company, in each case at the time of exercise, divided by (2) the total number of our outstanding ordinary shares on a fully-diluted basis at the time of exercise (but excluding out-of-the-money options or securities). If it exercises the warrant, IAC would deposit 12.5% of the aggregate purchase price into escrow as security for its indemnification rights. If the Company does not complete an initial public offering and the warrant is exercised, the exercise price per share will be based on the fair market value of the Company, except that if the warrant is exercised within 30 days after the Company gives IAC notice that it is no longer pursuing an initial public offering or, in the event the Company does not give such a notice, by April 30, 2005, then the exercise price per share of the warrant will be equal to the lower of: (1) the initial public offering price for this offering, or (2) the price determined using: (a) US$205 million, minus our indebtedness, plus our cash and cash equivalents, plus the pro forma consideration that would be received in connection with the exercise of all vested or unvested in-the-money options, warrants or other convertible securities of the company, in each case at the time of exercise, divided by (b) the total number of our outstanding ordinary shares on a fully-diluted basis at the time of exercise (but excluding out-of-the-money options or securities).

If IAC exercises its warrant, the Company will be controlled by IAC, and IAC will have the power to control substantially the Company’s management and business operations. If IAC exercises the warrant within 30 U.S. business days after the completion of an initial public offering, then the Series B preferred shares issued to IAC will be converted automatically into high-vote ordinary shares on the 31st business day after the completion of the initial public offering. If IAC does not exercise the warrant within 30 U.S. business days from the

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eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

consummation of an initial public offering offering, then the Series B preferred shares issued to IAC will be converted automatically into ordinary shares upon the 31st business day after the completion of the offering. The high-vote ordinary shares are identical in all respects to the Company’s other ordinary shares, except that each share of high-vote ordinary shares entitles its holder to cast 15 votes in all proceedings and actions of the Company’s ordinary shareholders, whereas each share of our other ordinary shares entitles its holder to one vote.

Until the Series B preferred shares are converted into either ordinary shares or high-vote ordinary shares, the Company will be required to obtain IAC’s approval with respect to various aspects of its business or operations outside of the ordinary course, including acquiring any assets or businesses in excess of US$1,000,000 in a transaction or series of related transactions.

Conversion of preferred shares

On August 4, 2004, the Company amended and restated the Articles of Association, which states that the preferred shares should be converted into ordinary shares, subject to the following conditions:

Series A Preferred Shares

Each Series A preferred share will be convertible into ordinary shares based on a one-to-one conversion ratio. Depending on certain anti-dilution adjustment, the Series A Conversion Price will be adjusted as follows:

Ÿ if the Company issues additional securities for a consideration per share that is less than the Series A Conversion Price that is in effect immediately before such issuance, then the Series A Conversion Price will be adjusted by multiplying the Series A Conversion Price by a fraction, the numerator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued, plus the number of ordinary shares represented by the additional securities issued, on a fully-diluted basis, and the denominator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued; and

Ÿ if the Company issues additional securities for a consideration per share that is equal to or greater than the Series A Conversion Price that is in effect immediately before such issuance, then the Series A Conversion Price will not be adjusted.

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eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Series B Preferred Shares

The Series B preferred shares will convert into either ordinary or high-vote ordinary shares regardless of IAC’s exercise of its warrant.

Each Series B preferred share is convertible into ordinary shares or high-vote ordinary shares based on a one-to-one conversion ratio. Depending on certain anti-dilution adjustment, the Series B Conversion Price will be adjusted as follows:

Ÿ if the Company issues additional securities for a consideration per share that is less than the Series B Conversion Price that is in effect immediately before such issuance, then the Series B Conversion Price will be adjusted by multiplying the Series B Conversion Price by a fraction, the numerator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued, plus the number of ordinary shares represented by the additional securities issued, on a fully-diluted basis, and the denominator of which will be the total number of ordinary shares, on a fully-diluted basis, before the additional securities are issued; and

Ÿ if the Company issues additional securities for a consideration per share that is equal to or greater than the Series B Conversion Price that is in effect immediately before such issuance, then the Series B Conversion Price will not be adjusted.

Issuance of stock options

In July 2004, the Company issued 1,660,000 options to employees to purchase the Company’s ordinary shares at an exercise price of US$5.25 per share. The options have a term of 10 years and will vest 4 years from the date of grant. The Company will account for these options under the fair value provisions of SFAS No. 123.

On the date of grant, the fair value of the stock options was RMB26,579,057 using the Black- Scholes option-pricing model. The assumptions used in determining the fair value of the options were as follows: expected dividend yield 0%, riskfree interest rate of 2.63%, an expected life of 4 years, and expected volatility of 43%. The annual estimated non-cash compensation expenses in 2004, 2005, 2006 and 2007 are as follow:

	Compensation expense
2004	2,907,084
2005	6,644,764
2006	6,644,764
2007	6,644,764
2008	3,737,680
	26,579,057

On October 1, 2004, the Company issued 250,000 options to two executive officers to purchase the Company’s ordinary shares at an exercise price of US$5.25 per share. The options have a term of 10 years and will vest 4 years from the date of grant. The Company will account for these options under the fair value provisions of SFAS No. 123.

F-53

eLong, inc. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On the date of grant, the fair value of the 250,000 stock options granted to two executive officers was RMB 5,542,811 using the Black-Scholes option-pricing model. The assumptions used in determining the fair value of the options were as follows: estimated fair market value of underlying shares US$6.25 (mid-point of the estimate initial public offering price), expected dividend yield 0%, risk-free interest rate of 2.63%, an expected life of 4 years, and expected volatility of 43%. The annual estimated non-cash compensation expenses in 2004, 2005, 2006 and 2007 are as follow:

	Compensation expense
2004	461,900
2005	1,385,703
2006	1,385,703
2007	1,385,703
2008	923,802
	5,542,811

Under the IAC purchase agreements, Series A preferred shareholders and IAC each have a right of first offer with respect to any sales or issuances by the Company of any of the Company’s securities after August 4, 2004 (including with respect to the issuance on October 1, 2004 of the 250,000 options), which gives each of them the right to buy, on the same terms, up to a portion of such issuance equal to the proportion that the number of shares held by such shareholder bears to the total number of the Company’s outstanding ordinary shares, on an as-converted and fully-diluted basis. This right of first offer expires upon the completion of the Company’s initial public offering. In addition, under the IAC purchase agreements, the Company is not permitted to issue any of its securities (including the October 1, 2004 issuance of the 250,000 options to certain of its officers) without the prior written consent of IAC.

Prior to October 1, 2004, each of the Series A shareholders waived their respective rights of first offer with respect to the issuance by the Company on October 1, 2004, of the 250,000 options to certain of its officers and the issuance by the Company on October 1, 2004, to IAC of an option to purchase up to 260,204 of the Company’s ordinary shares, as further described below.

On October 1, 2004, the Company entered into a stock option agreement with IAC pursuant to which, in exchange for IAC giving its consent to the issuance of the 250,000 options to certain of the Company’s officers, the Company granted to IAC an option to purchase up to 260,204 of the Company’s ordinary shares at a purchase price of US$5.25, which option mirrors the provision of the option granted to the Company’s officers on October 1, 2004. These options are exercisable to the extent of a number of ordinary shares that is equal to 51% of the number of ordinary shares which are purchased from time to time by the Company’s officers pursuant to the October grant and by IAC under its October grant. To the extent that any of the officers’ options terminate or expire without being exercised, an amount of IAC’s option equal to 51% of such officer’s terminated or expired options will likewise terminate or expire. On the date of grant, the fair value of the 260,204 options granted to IAC was RMB 5,769,047 and will be recorded as a reduction to net income available to ordinary shareholders over the vesting term. The assumptions used to determine the fair value were the same as those used in determing the fair value of the 250,000 options.

F-54

4,385,156 American Depositary Shares

Representing 8,770,312 Ordinary Shares

Deutsche Bank Securities

WR Hambrecht + Co

Prospectus

                        , 2004

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, ADSs only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our ADSs.

TABLE OF CONTENTS

	Page
Prospectus Summary Risk Factors Special Note Regarding Forward-Looking Statements Use of Proceeds Dividend Policy Exchange Rate Information Capitalization Dilution Selected Consolidated Financial Data	1 14 33 34 34 35 36 38 41
Management’s Discussion and Analysis of Financial Condition and Results of Operations	45
The Travel and Tourism Industry in China Our Business Investment by IAC/InterActiveCorp Regulation	70 75 88 95
Management Corporate Structure and Related Party Transactions Principal and Selling Shareholders Description of Share Capital Description of American Depositary Shares Shares Eligible for Future Sale Taxation Enforceability of Civil Liabilities Underwriting Legal Matters Experts Expenses Related to this Offering Where You Can Find More Information Index to Financial Statements	99 111 122 128 143 152 156 161 162 169 169 169 169 F-1

Until             , 2004 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to unsold allotments or subscriptions.

PART II

Item 6. Indemnification of Directors and Officers

Our Articles of Association provide that our directors and officers shall be indemnified out of our assets for and against all actions, costs, charges, losses, damages and expenses that such persons shall or may incur or sustain by or by reason of any act done or omitted in or about the execution of their duties in their respective offices or trusts, and none of such persons shall be answerable for the acts, receipts, neglects or defaults of the other or others of such persons provided that the indemnity does not extend to any matter in respect of any willful neglect or intentional malfeasance which may attach to such persons.

We plan to obtain a directors and officers liability policy prior to the completion of this offering. The insured sum will be      million for each and every claim and in the aggregate for any one policy year covering all losses for which indemnification are permitted by law which such officer(s) has become legally obligated to pay on account of any claim first made against him individually or otherwise during the policy period subject to such exclusions as may be stated in the said cover. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees for which indemnification from us is sought. In addition, we are not aware of any threatened litigation or proceeding against any of our directors, officers or employees that may result in a claim for indemnification.

The proposed form of the Underwriting Agreement provides for indemnification under certain circumstances by the underwriters of the Registrant and the Registrant’s directors and certain officers for certain liabilities arising under the Securities Act.

Reference is made to Underwriting Agreement, and the Articles of Association filed as exhibits to this Registration Statement regarding relevant indemnification provisions described above and elsewhere herein.

Insofar as indemnification for liabilities arising under Securities Act of 1933, as amended, or the Securities Act, may be permitted to directors, officers or persons controlling the Registrant under the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 7. Recent Sales of Unregistered Securities

During the past three years, the Registrant has issued and sold the securities listed below without registering the securities under the Securities Act. None of these transactions involved any underwriters’ underwriting discounts or commissions, or any public offering. The Registrant believes that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation D, Regulation S or Rule 701 under the Securities Act or pursuant to Section 4(2) of the Securities Act regarding transactions not involving a public offering.

On August 26, 2003, we increased the number of ordinary shares authorized to be issued under our stock option plan to 5,500,000. In 2003, options for 490,000 ordinary shares were granted to certain of our executives at an exercise price of US$1.53 per share. The options have a ten-year term and vest over a four year period from the date of the grant.

On August 26, 2003, we issued warrants to purchase 600,000 ordinary shares at an exercise price of US$0.75 per share to Broadband Capital Management LLC, an investment banking and

II-1

financial advisory firm, and two outside consultants, Peter Lerner and Liu Hao in consideration for investment banking services provided to us in connection with a private placement of Series A preferred shares. We also paid Broadband Capital Management LLC US$250,000 for these services.

On August 29, 2003, we received US$15,000,000 from four investors – Tiger Technology Private Investment Partners, L.P., Tiger Technology II, L.P., Blue Ridge Limited Partnership, and RMG Holdings, LLC, in exchange for 9,787,494 shares of Series A preferred shares, the issuance of such stock was exempt from registration under Regulation D or Regulation S of the Securities Act of 1933.

On December 15, 2003, we issued 50,000 ordinary shares to Peter Lerner upon his exercise of the warrants granted to him.

On January 1, 2004, we granted options for 689,400 ordinary shares to certain of our employees at an exercise price of US$1.53 per share. The options have a ten-year term and vest over a three-or-four year period from the date of the grant.

On April 20, 2004, we granted options for 300,000 ordinary shares to a senior management employee at an exercise price of US$1.53 per share. The options have a ten-year term and vest over a four year period from the date of the grant.

On July 23, 2004, we granted options for 1,660,000 ordinary shares to certain of our employees at an exercise price of US$5.25 per share. The options have a ten-year term and vest over a four-year period from the date of the grant.

On July 23, 2004 we entered into an agreement to issue 11,188,570 Series B preferred shares to IAC in exchange for US$58,690,062.

On August 4, 2004, we granted to IAC an option to purchase up to 711,429 ordinary shares at a purchase price of US$5.25 per share, which is exercisable by IAC to the extent of that number of ordinary shares that is equal to 30% of the number of ordinary shares which are purchased from time to time by our officers and employees under options to purchase an aggregate of 1,660,000 ordinary shares that the company granted to these officers and employees on July 23, 2004.

On August 4, 2004, we issued a warrant to IAC to purchase the number of our high-vote ordinary shares which, if exercised, would cause IAC to hold 51% of our outstanding ordinary shares on a fully-diluted basis after giving effect to our repurchase, in connection with the warrant exercise, from certain existing shareholders of the company a number of ordinary shares equal to one-half of the shares IAC purchases upon exercise of the warrant. Assuming the completion of this offering the exercise price per share purchased by IAC under the warrant will be equal to the lower of (a) the initial public offering price for this offering or (b)(1) US$205 million, minus our indebtedness, plus our cash and cash equivalents, plus the pro forma consideration that would be received in connection with the exercise of all vested or unvested in-the-money options, warrants or other convertible securities of the company, in each case at the time of exercise, divided by (2) the total number of our outstanding ordinary shares on a fully-diluted basis at the time of exercise (but excluding out-of-the-money options or securities). If it exercises the warrant, IAC would deposit 12.5% of the aggregate purchase price into escrow as security for its indemnification rights.

On October 1, 2004, we granted options to purchase an aggregate of 250,000 ordinary shares to two members of senior management at an exercise price of US$5.25 per share. The options have a ten year term and vest over a four year period from the date of the grant. We also granted to IAC an option to purchase 260,204 shares at an exercise price of US$5.25 per share.

II-2

Item 8. Exhibits and Financial Statement Schedules

(a) Exhibits.

Exhibit No.	Description of Exhibit
1.1	—Form of Underwriting Agreement.*
3.1	—The Amended and Restated Memorandum of Association of the Registrant
3.2	—The Amended and Restated Articles of Association of the Registrant.
4.1	—Form of Ordinary Share Certificate.*
4.2	—The Amended and Restated Articles of Association of the Registrant (Filed as Exhibit 3.2 hereto).
4.3	—Form of Deposit Agreement between the Registrant and JPMorgan Chase Bank, as depositary.
4.4	—Form of American depositary receipt evidencing American depositary shares.
4.5	—Investors’ Rights Agreement dated August 29, 2003 among the Registrant and Series A Preferred Share Investors.
4.6	—Investors Agreement dated July 23, 2004 among Registrant, IACT Asia Pacific Limited and the other parties named therein.
4.7	—Warrant Agreement dated August 22, 2003 between Registrant and Broadband Capital Management LLC.
4.8	—Warrant Agreement dated August 26, 2003 between Registrant and Liu Hao.
4.9	—Warrant Agreement dated July 23, 2004 among Registrant and IACT Asia Pacific Limited.
4.10	—Stock Option Agreement dated July 23, 2004 between Registrant and IACT Asia Pacific Limited.
4.11	—Stock Option Agreement dated October 1, 2004 between Registrant and IACT Asia Pacific Limited.
4.12	—Letter Agreement dated October 1, 2004 between Registrant and IACT Asia Pacific Limited.
5.1	—Opinion of Conyers Dill & Pearman, Cayman regarding the validity of the issuance of ordinary shares being registered.
8.1	—Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, U.S. counsel to the Registrant, regarding certain U.S. tax matters.
8.2	—Opinion of Conyers Dill & Pearman, Cayman, Cayman Islands counsel to the Registrant, regarding certain Cayman Islands tax matters.
10.1	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Justin Tang.
10.2	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Derek Palaschuk.
10.3	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Richard Chen.
10.4	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Richard Xue.
10.5	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Frank Zheng.
10.6	—Amended and Restated Technical Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.

II-3

Exhibit No.	Description of Exhibit
10.7	—Amended and Restated Loan Agreement dated July 20, 2004 among the Registrant, Justin Tang and Qu Zhi regarding Beijing eLong Information Technology Co., Ltd.
10.8	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Justin Tang regarding Beijing eLong Information Technology Co., Ltd.
10.9	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Qu Zhi regarding Beijing eLong Information Technology Co., Ltd.
10.10	—Amended and Restated Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.11	—Amended and Restated Domain Name License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.12	—Amended and Restated Cooperative Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.13	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd., Justin Tang and Qu Zhi.
10.14	—Amended and Restated Loan Agreement dated July 20, 2004 among the Registrant, Inc., Justin Tang and Qu Zhi regarding Beijing Asia Media Interactive Advertising Co., Ltd.
10.15	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Justin Tang and Beijing eLong Information Technology Co., Ltd.
10.16	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Qu Zhi and Beijing eLong Information Technology Co., Ltd.
10.17	—Cooperative Agreement dated July 20, 2004 between Beijing Asia Media Interactive Advertising Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.18	—Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and Beijing Asia Media Interactive Advertising Co., Ltd.
10.19	—Amended and Restated Advertising Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing Asia Media Interactive Advertising Co., Ltd.
10.20	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Justin Tang regarding Beijing Asia Media Interactive Advertising Co., Ltd.
10.21	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Qu Zhi regarding Beijing Asia Media Interactive Advertising Co., Ltd.

II-4

Exhibit No.	Description of Exhibit
10.22	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Justin Tang, Qu Zhi and Beijing Asia Media Interactive Advertising Co., Ltd.
10.23	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Justin Tang and Beijing Asia Media Interactive Advertising Co., Ltd.
10.24	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Qu Zhi and Beijing Asia Media Interactive Advertising Co., Ltd.
10.25	—Amended and Restated Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Airline Service Co., Ltd.
10.26	—Amended and Restated Equity Pledge Interest Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd and Beijing Asia Media Interactive Advertising Co., Ltd. regarding Beijing eLong Airline Service Co., Ltd.
10.27	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Airline Service Co., Ltd. Beijing eLong Information Technology Co., Ltd, and Beijing Asia Media Interactive Advertising Co., Ltd.
10.28	—Amended and Restated Cooperative Agreement dated July 20, 2004 between Beijing eLong Information Technology Co., Ltd and Beijing eLong Airline Service Co., Ltd.
10.29	—Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and Beijing eLong Airline Service Co., Ltd.
10.30	—Amended and Restated Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and General Chinese Reservation Network Ltd.
10.31	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd. and Beijing eLong Airline Service Co., Ltd.
10.32	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co. General Chinese Reservation Network Ltd., Beijing eLong Information Technology Co., Ltd., and Beijing eLong Airlines Service Co., Ltd.
10.33	—Amended and Restated Cooperative Agreement dated July 20, 2004 between Beijing eLong Information Technology Co., Ltd. and General Chinese Reservation Network Ltd.
10.34	—Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and General Chinese Reservation Network Ltd.
10.35	—Transaction Agreement dated July 23, 2004 by and among Registrant, eLongNet Information Technology (Beijing) Co., Ltd., eLong Hi-Tech (Beijing) Co., Ltd., InterActive Corp and IACT Asia Pacific Limited.
10.36	—Transfer and Escrow Contribution Agreement dated July 23 by and among Registrant, IACT Asia Pacific Limited and the selling shareholders listed therein.
10.37	—Series A Preferred Shares Purchase Agreement dated August 29, 2003 by and among the Registrant and Series A preferred share investors.

II-5

Exhibit No.	Description of Exhibit
21.1	—Subsidiaries of Registrant
23.1	—Consent of KPMG
23.2	—Consent of Conyers Dill & Pearman, Cayman (see Exhibit 5.1)
23.3	—Consent of Commerce & Finance Law Offices (see Exhibits 99.1, 99.2, 99.3 and 99.4)
23.4	—Consent of Skadden, Arps, Slate, Meagher & Flom, LLP. (see Exhibit 8.1)
24.1	—Powers of Attorney
99.1	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of Beijing eLong Information Technology Co., Ltd.
99.2	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of Beijing Airline Services Co., Ltd.
99.3	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of Beijing Asia Media Interactive Advertising Co., Ltd.
99.4	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of General Chinese Hotel Reservation Network, Ltd.

* To be filed by amendment.

(b) Financial Statement Schedules.

All supplemental schedules are omitted because of the absence of conditions under which they are required or because the information is shown in the financial statements or notes thereto.

Item 9. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in item 14, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-6

The undersigned Registrant hereby undertakes that:

(1)    For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

(2)    For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Beijing, People’s Republic of China, on October 7, 2004.

eLong, Inc.
By:	/s/  Justin Tang
	Name:  Justin Tang
	Title:     Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Justin Tang, Derek Palaschuk and Richard Xue, and each of them, his or her true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this Registration Statement and any and all related registration statements pursuant to Rule 462(b) of the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons on October 7, 2004, in the capacities indicated.

Signature	Title
/s/  Justin Tang	Justin Tang Chairman of the Board, President and Chief Executive Officer (principal executive officer)
/s/  Derek Palaschuk	Derek Palaschuk Chief Financial Officer (principal financial and accounting officer)
/s/  Xiaojian Zhong	Xiaojian Zhong Director
/s/  Liming Sun	Liming Sun Director
/s/  Richard Xue	Richard Xue Director
/s/  Barney Harford	Barney Harford Director

II-8

SIGNATURE OF AUTHORIZED REPRESENTATIVE OF THE REGISTRANT

Pursuant to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of eLong, Inc., has signed this Registration Statement or amendment thereto in Laguna Beach, California, on October 7, 2004.

By:	/s/  Barney Harford
	Name: Barney Harford
	Title: Director

II-9

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
1.1	—Form of Underwriting Agreement.*
3.1	—The Amended and Restated Memorandum of Association of the Registrant
3.2	—The Amended and Restated Articles of Association of the Registrant.
4.1	—Form of Ordinary Share Certificate.*
4.2	—The Amended and Restated Articles of Association of the Registrant (Filed as Exhibit 3.2 hereto).
4.3	—Form of Deposit Agreement between the Registrant and JPMorgan Chase Bank, as depositary.
4.4	—Form of American depositary receipt evidencing American depositary shares.*
4.5	—Investors’ Rights Agreement dated August 29, 2003 among the Registrant and Series A Preferred Share Investors.
4.6	—Investors Agreement dated July 23, 2004 among Registrant, IACT Asia Pacific Limited and the other parties named therein.
4.7	—Warrant Agreement dated August 22, 2003 between Registrant and Broadband Capital Management LLC.
4.8	—Warrant Agreement dated August 26, 2003 between Registrant and Liu Hao.
4.9	—Warrant Agreement dated July 23, 2004 among Registrant and IACT Asia Pacific Limited.
4.10	—Stock Option Agreement dated July 23, 2004 between Registrant and IACT Asia Pacific Limited.
4.11	—Stock Option Agreement dated October 1, 2004 between Registrant and IACT Asia Pacific Limited.
4.12	—Letter Agreement dated October 1, 2004 between Registrant and IACT Asia Pacific Limited.
5.1	—Opinion of Conyers Dill & Pearman, Cayman regarding the validity of the issuance of ordinary shares being registered.
8.1	—Opinion of Skadden, Arps, Slate, Meagher & Flom LLP, U.S. counsel to the Registrant, regarding certain U.S. tax matters.
8.2	—Opinion of Conyers Dill & Pearman, Cayman, Cayman Islands counsel to the Registrant, regarding certain Cayman Islands tax matters.
10.1	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Justin Tang.
10.2	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Derek Palaschuk.
10.3	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Richard Chen.
10.4	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Richard Xue.
10.5	—Employment Agreement dated July 23, 2004 between Registrant, InterActiveCorp and Frank Zheng.
10.6	—Amended and Restated Technical Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.7	—Amended and Restated Loan Agreement dated July 20, 2004 among the Registrant, Justin Tang and Qu Zhi regarding Beijing eLong Information Technology Co., Ltd.
10.8	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Justin Tang regarding Beijing eLong Information Technology Co., Ltd.

Exhibit No.	Description of Exhibit
10.9	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Qu Zhi regarding Beijing eLong Information Technology Co., Ltd.
10.10	—Amended and Restated Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.11	—Amended and Restated Domain Name License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.12	—Amended and Restated Cooperative Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.13	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd., Justin Tang and Qu Zhi.
10.14	—Amended and Restated Loan Agreement dated July 20, 2004 among the Registrant, Inc., Justin Tang and Qu Zhi regarding Beijing Asia Media Interactive Advertising Co., Ltd.
10.15	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Justin Tang and Beijing eLong Information Technology Co., Ltd.
10.16	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Qu Zhi and Beijing eLong Information Technology Co., Ltd.
10.17	—Cooperative Agreement dated July 20, 2004 between Beijing Asia Media Interactive Advertising Co., Ltd. and Beijing eLong Information Technology Co., Ltd.
10.18	—Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and Beijing Asia Media Interactive Advertising Co., Ltd.
10.19	—Amended and Restated Advertising Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing Asia Media Interactive Advertising Co., Ltd.
10.20	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Justin Tang regarding Beijing Asia Media Interactive Advertising Co., Ltd.
10.21	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Qu Zhi regarding Beijing Asia Media Interactive Advertising Co., Ltd.
10.22	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Justin Tang, Qu Zhi and Beijing Asia Media Interactive Advertising Co., Ltd.
10.23	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Justin Tang and Beijing Asia Media Interactive Advertising Co., Ltd.

Exhibit No.	Description of Exhibit
10.24	—Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Registrant, eLongNet Information Technology (Beijing) Co., Ltd., Qu Zhi and Beijing Asia Media Interactive Advertising Co., Ltd.
10.25	—Amended and Restated Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Airline Service Co., Ltd.
10.26	—Amended and Restated Equity Pledge Interest Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd and Beijing Asia Media Interactive Advertising Co., Ltd. regarding Beijing eLong Airline Service Co., Ltd.
10.27	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Airline Service Co., Ltd. Beijing eLong Information Technology Co., Ltd, and Beijing Asia Media Interactive Advertising Co., Ltd.
10.28	—Amended and Restated Cooperative Agreement dated July 20, 2004 between Beijing eLong Information Technology Co., Ltd and Beijing eLong Airline Service Co., Ltd.
10.29	—Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and Beijing eLong Airline Service Co., Ltd.
10.30	—Amended and Restated Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and General Chinese Reservation Network Ltd.
10.31	—Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd. and Beijing eLong Airline Service Co., Ltd.
10.32	—Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co. General Chinese Reservation Network Ltd., Beijing eLong Information Technology Co., Ltd., and Beijing eLong Airlines Service Co., Ltd.
10.33	—Amended and Restated Cooperative Agreement dated July 20, 2004 between Beijing eLong Information Technology Co., Ltd. and General Chinese Reservation Network Ltd.
10.34	—Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and General Chinese Reservation Network Ltd.
10.35	—Transaction Agreement dated July 23, 2004 by and among Registrant, eLongNet Information Technology (Beijing) Co., Ltd., eLong Hi-Tech (Beijing) Co., Ltd., InterActive Corp and IACT Asia Pacific Limited.
10.36	—Transfer and Escrow Contribution Agreement dated July 23 by and among Registrant, IACT Asia Pacific Limited and the selling shareholders listed therein.
10.37	—Series A Preferred Shares Purchase Agreement dated August 29, 2003 by and among the Registrant and Series A preferred share investors.
21.1	—Subsidiaries of Registrant
23.1	—Consent of KPMG
23.2	—Consent of Conyers Dill & Pearman, Cayman (see Exhibit 5.1)
23.3	—Consent of Commerce & Finance Law Offices (see Exhibits 99.1, 99.2, 99.3 and 99.4)

Exhibit No.	Description of Exhibit
23.4	—Consent of Skadden, Arps, Slate, Meagher & Flom, LLP. (see Exhibit 8.1)
24.1	—Powers of Attorney
99.1	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of Beijing eLong Information Technology Co., Ltd.
99.2	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of Beijing Airline Services Co., Ltd.
99.3	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of Beijing Asia Media Interactive Advertising Co., Ltd.
99.4	—Form of opinion of Commerce & Finance Law Offices, the People’s Republic of China Counsel to the Registrant, as to the legality of the corporate structure of General Chinese Hotel Reservation Network, Ltd.

* To be filed by amendment.

EX-3.1

Exhibit 3.1

THE COMPANIES LAW (REVISED)

COMPANY LIMITED BY SHARES

AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

OF

ELONG, INC.

(Adopted pursuant to the unanimous resolutions of the Directors and Shareholders of the Company dated 23, July, 2004, to be effective 23, July, 2004)

1.    The name of the Company is eLong, Inc.

2.    The Registered Office of the Company shall be at the offices of Codan Trust Company (Cayman) Limited, Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681GT, George Town, Grand Cayman, British West Indies.

3.    Subject to the following provisions of this Memorandum, the objects for which the Company is established are unrestricted and shall include, but without limitation:

(a)    to act and to perform all the functions of a holding company in all its branches and to coordinate the policy and administration of any subsidiary company or companies wherever incorporated or carrying on business or of any group of companies of which the Company or any subsidiary company is a member or which are in any manner controlled directly or indirectly by the Company;

(b)    to act as an investment company and for that purpose to acquire and hold upon any terms and, either in the name of the Company or that of any nominee, shares, stock, debentures, debenture stock, annuities, notes, mortgages, bonds, obligations and securities, foreign exchange, foreign currency deposits and commodities, issued or guaranteed by any company wherever incorporated or carrying on business, or by any government, sovereign, ruler, commissioners, public body or authority, supreme, municipal, local or otherwise, by original subscription, tender, purchase, exchange, underwriting, participation in syndicates or in any other manner and whether or not fully paid up, and to make payments thereon as called up or in advance of calls or otherwise and to subscribe for the same, whether conditionally or absolutely, and to hold the same with a view to investment, but with the power to vary any investments, and to exercise and enforce all rights and powers conferred by or incident to the ownership thereof, and to invest and deal with the moneys of the Company not immediately required upon such securities and in such manner as may be from time to time determined.

4.    Subject to the following provisions of this Memorandum, the Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided by Section 27(2) of The Companies Law (Revised).

5.    Nothing in this Memorandum shall permit the Company to carry on a business for which a license is required under the laws of the Cayman Islands unless duly licensed.

6.    If the Company is exempted, it shall not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this clause shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands.

1

7.    The liability of each member is limited to the amount from time to time unpaid on such member’s shares.

8.    The authorized share capital of the Company is US$2,600,000 made up of 260,000,000 shares divided into:

(a)    200,000,000 ordinary shares with a par value of US$0.01 each, of which:

(i)    150,000,000 are designated Ordinary Shares with a par value of US$0.01 each; and

(ii)    50,000,000 are designated High-Vote Ordinary Shares with a par value of US$0.01 each; and

(b)    60,000,000 preferred shares with a par value of US$0.01 each, of which:

(i)    10,000,000 are designated Series A Preferred Shares with a par value of US$0.01 each; and

(ii)    50,000,000 are designated Series B Preferred Shares with a par value of US$0.01 each.

with power for the Company insofar as is permitted by law to redeem or purchase any of its shares and to increase or reduce the said capital subject to the provisions of the Companies Law (Revised) and the Articles of Association and to issue any part of its capital, whether original, redeemed or increased with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions and so that unless the conditions of issue shall otherwise expressly declare every issue of shares whether stated to be preference or otherwise shall be subject to the powers hereinbefore contained.

2

EX-3.2

Exhibit 3.2

THE COMPANIES LAW (REVISED)

COMPANY LIMITED BY SHARES

AMENDED AND RESTATED ARTICLES OF ASSOCIATION

OF

ELONG, INC.

(Adopted pursuant to the unanimous resolutions of the Directors and Shareholders of the Company dated

23, July, 2004, to be effective 23, July, 2004)

INDEX

1.	TABLE A	1
2.	INTERPRETATION	1
3.	BOARD OF DIRECTORS	4
4.	MANAGEMENT OF THE COMPANY	4
5.	POWER TO APPOINT MANAGING DIRECTOR OR CHIEF EXECUTIVE OFFICER	4
6.	POWER TO APPOINT MANAGER	4
7.	POWER TO AUTHORISE SPECIFIC ACTIONS	4
8.	POWER TO APPOINT ATTORNEY	4
9.	POWER TO DELEGATE TO A COMMITTEE	5
10.	POWER TO APPOINT AND DISMISS EMPLOYEES	5
11.	POWER TO BORROW AND CHARGE PROPERTY	5
12.	EXERCISE OF POWER TO PURCHASE SHARES OF THE COMPANY	5
13.	DISCONTINUATION	6
14.	ELECTION/REMOVAL OF DIRECTORS	6
15.	RESERVED	7
16.	ALTERNATE DIRECTORS AND PROXIES	7
17.	VACANCIES ON THE BOARD	7
18.	NOTICE OF SPECIAL MEETINGS OF THE BOARD	8
19.	QUORUM AT MEETINGS OF THE BOARD	8
20.	MEETINGS OF THE BOARD	8
21.	UNANIMOUS WRITTEN RESOLUTIONS	8
22.	CONTRACTS AND DISCLOSURE OF DIRECTORS’ INTERESTS	9
23.	REMUNERATION OF DIRECTORS	9
24.	OFFICERS OF THE COMPANY	9
25.	APPOINTMENT OF OFFICERS	9
26.	REMUNERATION OF OFFICERS	9
27.	DUTIES OF OFFICERS	9
28.	CHAIRMAN OF MEETINGS	10
29.	REGISTER OF DIRECTORS AND OFFICERS	10
30.	REGISTER OF MORTGAGES AND CHARGES	10
31.	OBLIGATIONS OF BOARD TO KEEP MINUTES	10
32.	INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY	10
33.	WAIVER OF CLAIM BY MEMBER	11
34.	NOTICE OF ANNUAL GENERAL MEETING	11
35.	NOTICE OF EXTRAORDINARY GENERAL MEETING	11
36.	ACCIDENTAL OMISSION OF NOTICE OF GENERAL MEETING	12
37.	MEETING CALLED ON REQUISITION OF MEMBERS	12
38.	SHORT NOTICE	12
39.	POSTPONEMENT OF MEETINGS	12
40.	QUORUM FOR GENERAL MEETING	12
41.	ADJOURNMENT OF MEETINGS	12
42.	ATTENDANCE AT MEETINGS	13
43.	WRITTEN RESOLUTIONS	13
44.	ATTENDANCE OF DIRECTORS	13
45.	VOTING AT MEETINGS	13
46.	[RESERVED]	13
47.	[RESERVED]	13
48.	DEMAND FOR A POLL	13
49.	SENIORITY OF JOINT HOLDERS VOTING	14
50.	INSTRUMENT OF PROXY	14

(i)

51.	REPRESENTATION OF CORPORATION AT MEETINGS	14
52.	RIGHTS OF SHARES	14
53.	RIGHTS OF ORDINARY SHARES	15
54.	RIGHTS OF PREFERRED SHARES	15
55.	POWER TO ISSUE SHARES	27
56.	ALTERATION OF CAPITAL	27
57.	ALTERATION OF REGISTERED OFFICE, NAME AND OBJECTS	28
58.	VARIATION OF RIGHTS, ALTERATION OF SHARE CAPITAL AND PURCHASE OF SHARES OF THE COMPANY	28
59.	REGISTERED HOLDER OF SHARES	28
60.	DEATH OF A JOINT HOLDER	29
61.	SHARE CERTIFICATES	29
62.	CALL ON SHARES	29
63.	FORFEITURE OF SHARES	29
64.	CONTENTS OF REGISTER OF MEMBERS	30
65.	DETERMINATION OF RECORD DATES	30
66.	INSTRUMENT OF TRANSFER	30
67.	RESTRICTION ON TRANSFER	31
68.	TRANSFERS BY JOINT HOLDERS	31
69.	REPRESENTATIVE OF DECEASED MEMBER	31
70.	REGISTRATION ON DEATH OR BANKRUPTCY	31
71.	DECLARATION OF DIVIDENDS BY THE BOARD	32
72.	OTHER DISTRIBUTIONS	32
73.	RESERVE FUND	32
74.	DEDUCTION OF AMOUNTS DUE TO THE COMPANY	33
75.	ISSUE OF BONUS SHARES	33
76.	RECORDS OF ACCOUNT	33
77.	APPOINTMENT OF AUDITOR	34
78.	NOTICES TO MEMBERS OF THE COMPANY	35
79.	NOTICES TO JOINT MEMBERS	35
80.	SERVICE AND DELIVERY OF NOTICE	35
81.	THE SEAL	35
82.	WINDING-UP/DISTRIBUTION BY LIQUIDATOR	35
83.	ALTERATION OF ARTICLES	36

(ii)

THE COMPANIES LAW (REVISED)

COMPANY LIMITED BY SHARES

AMENDED AND RESTATED ARTICLES OF ASSOCIATION

OF

ELONG, INC.

(Adopted pursuant to the unanimous resolutions of the Directors and Shareholders of the Company dated 23 July, 2004, to be effective 23 July, 2004)

1.    Table A

(1)    The regulations in Table A in the Schedule to the Companies Law (Revised) do not apply to the Company.

2.    Interpretation

(2)(a)    In these Articles where the context permits:

“Affiliate” shall be construed such that one person shall be deemed to be an affiliate of another person for so long as one of them is controlled (directly or indirectly) by the other or both are controlled (directly or indirectly) by the same person or group of persons, and for this purpose “control” shall be construed such that any combination of a person, its affiliates and persons acting jointly or in concert with either of them (the “Control Group”) shall control another person if the Control Group is the beneficial owner of securities of such person, or otherwise has, through contract, voting trust, proxy or otherwise, power, sufficient to elect a majority of the board of directors (or, if the person is not a corporation, any comparable body) of such person or to direct the management of such person (it being understood and agreed that (a) the Company and its subsidiaries shall not be deemed to be “Affiliates” of IAC and (b) Beijing eLong Information Technology Co., Ltd., Beijing Asia Media Interactive Co., Ltd., Beijing eLong Airline Services Co., Ltd., and Jiangsu General Chinese Hotel Reservation Network Co. Ltd. shall each be deemed to be “Affiliates” of the Company for so long as such entities continue to be controlled by the Company).

“Alternate Director” means an alternate Director appointed in accordance with these Articles;

“Articles” means these Articles of Association as amended from time to time;

“Auditors” means the auditors for the time being of the Company and includes any person or partnership;

“Board” means the Board of Directors appointed or elected pursuant to these Articles and acting by resolution in accordance with the Law and these Articles or the Directors present at a meeting of Directors at which there is a quorum;

“class meeting” means a separate meeting of the members of a class of shares;

“clear days” in relation to notice of a meeting means days falling after the day on which notice is given or deemed to be given and before the day of the meeting;

“Closing Date” has the meaning ascribed thereto in the Transaction Agreement (as defined below);

“Company” means the company for which these Articles are approved and confirmed;

“Director” means a director, including a sole director, for the time being of the Company and shall include an Alternate Director;

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“Fully-Diluted Number” shall have the meaning ascribed thereto in the Investors Agreement.

“High-Vote Ordinary Shares” means the ordinary shares of the Company that are designated High-Vote Ordinary Shares with a par value of US$0.01 each in the capital of the Company;

“IAC” means InterActiveCorp, a Delaware corporation, or any successor thereto;

“IAC Control Date” shall have the meaning ascribed thereto in the Investors Agreement.

“Investors Agreement” means the Investors Agreement, by and among the Company and its shareholders, dated as of July 23, 2004;

“Law” means The Companies Law (Revised) of the Cayman Islands and every modification or reenactment thereof for the time being in force;

“Member” means the person registered in the Register of Members as the holder of shares in the Company and, when two or more persons are so registered as joint holders of shares, means the person whose name stands first in the Register of Members as one of such joint holders or all of such persons as the context so requires;

“month” means calendar month;

“notice” means written notice as further defined in these Articles unless otherwise specifically stated;

“Officer” means any person appointed by the Board to hold an office in the Company;

“ordinary resolution” means a resolution passed at a general meeting (or, if so specified, a class meeting) of the Company by a simple majority of the votes cast, or a written resolution;

“ordinary shares” means the authorized share capital of the Company that consists of (a) the Ordinary Shares and (b) the High-Vote Ordinary Shares;

“Ordinary Shares” means the ordinary shares of the Company that are designated Ordinary Shares with a par value of US$0.01 each in the capital of the Company;

“paid-up” means paid-up or credited as paid-up;

“preferred shares” means a share in the capital of the Company designated as a preferred share which shall be issued as either (a) the Series A Preferred Shares or (b) the Series B Preferred Shares;

“Qualified Public Offering” means the Company’s first sale of Ordinary Shares in a firm commitment underwritten public offering where the Company’s stock is subsequently primarily traded on the Nasdaq Stock Market’s National Market or the New York Stock Exchange (or another comparable exchange or marketplace approved by both the Board and by each Director selected by IAC or an Affiliate thereof pursuant to Section 2.2(a) of the Investors Agreement (each, an “IAC Director”));

“Register of Directors and Officers” means the Register of Directors and Officers referred to in these Articles;

“Register of Members” means the register of members of the Company;

“Registered Office” means the registered office for the time being of the Company;

“Seal” means the common seal or any official or duplicate seal of the Company;

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“Secretary” means the person appointed to perform any or all duties of secretary and includes any deputy or assistant secretary;

“Series A Preferred Shares” means the preferred shares of the Company that are designated Series A Preferred Shares with a par value of US$0.01 each in the capital of the Company;

“Series B Preferred Shares” means the preferred shares of the Company that are designated Series B Preferred Shares with a par value of US$0.01 each in the capital of the Company;

“share” includes a fraction of a share;

“special resolution” means a resolution passed at a general meeting (or, if so specified, a class meeting) of the Company by a majority of not less than two thirds of the votes cast, as provided in the Law, or a written resolution;

“total voting power” means the combined voting power of the shares of Company stock generally entitled to vote on the election of the Company’s Directors;

“Transaction Agreement” means the Transaction Agreement, by and among the Company, subsidiaries thereof, IAC and an Affiliate of IAC, dated as of July 23, 2004;

“Warrant” means the warrant to purchase securities of the Company to be issued to an Affiliate of IAC by the Company on the Closing Date;

“Warrant Exercise Date” means the date on which IAC or an Affiliate of IAC has exercised (by delivery of notice thereof to the Company) the Warrant;

“year” means calendar year.

(b)    In these Articles where not inconsistent with the context:

(b)    words denoting the plural number include the singular number and vice versa;

(c)    words denoting the masculine gender include the feminine gender and vice versa;

(d)    words importing persons include companies or associations or bodies of persons, corporate or not;

(e)    the word “may” shall be construed as permissive; the word “shall” shall be construed as imperative;

(f)    a reference to a statutory provision shall be deemed to include any amendment or re-enactment thereof.

(c)    Subject as aforesaid, words defined or used in the Law have the same meaning in these Articles.

(d)    Expressions referring to writing or written shall unless the contrary intention appears, include facsimile, printing lithography, photography and other modes of representing words in a visible form.

(e)    The headings in these Articles are for ease of reference only and shall not affect the construction or interpretation of these Articles.

(f)    To the extent there is any conflict between the provisions of these Articles and the provisions of the Investors Agreement, the provisions of the Investors Agreement shall prevail and the Members shall, whenever necessary, exercise all voting rights to procure an amendment to these Articles to the extent necessary to permit the affairs of the Company to be carried out in accordance with the Investors Agreement.

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BOARD OF DIRECTORS

3.    Board of Directors

(1)    The business of the Company shall be managed and conducted by the Board.

(2)    The first director or directors of the Company shall be elected by the subscriber to the Memorandum. Thereafter, the board of directors shall be elected by the holders of preferred shares and ordinary shares, voting together as a single class and not as separate series, and on an as-converted basis (including for purposes of filling of any vacancy created by the resignation or removal of any such director).

4.    Management of the Company

(1)    In managing the business of the Company, the Board may exercise all such powers of the Company as are not, by statute or by these Articles, required to be exercised by the Company in general meeting subject, nevertheless, to these Articles, the provisions of any statute and to such regulations as may be prescribed by the Company in general meeting.

(2)    No regulation or alteration to these Articles pursuant to a special resolution shall invalidate any prior act of the Board which would have been valid if that regulation or alteration had not been made.

(3)    The Board may procure that the Company pays all expenses incurred in promoting and incorporating the Company.

5.    Power to appoint managing director or chief executive officer

The Board may from time to time appoint one or more Directors to the office of managing director or chief executive officer of the Company who shall, subject to the control of the Board, supervise and administer all of the general business and affairs of the Company.

6.    Power to appoint manager

The Board may appoint a person to act as manager of the Company’s day to day business and may entrust to and confer upon such manager such powers and duties as it deems appropriate for the transaction or conduct of such business.

7.    Power to authorize specific actions

The Board may from time to time and at any time authorize any company, firm, person or body of persons to act on behalf of the Company for any specific purpose and in connection therewith to execute any agreement, document or instrument on behalf of the Company.

8.    Power to appoint attorney

The Board may from time to time and at any time by power of attorney appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Board, to be an attorney of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board) and for such period and subject to such conditions as it may think fit and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney

4

as the Board may think fit and may also authorize any such attorney to sub delegate all or any of the powers, authorities and discretions so vested in the attorney. Such attorney may, if so authorised under the seal of the Company, execute any deed or instrument under such attorney’s personal seal with the same effect as the affixation of the seal of the Company.

9.    Power to delegate to a committee

The Board may delegate any of its powers to a committee appointed by the Board and every such committee shall conform to such directions as the Board shall impose on them. Subject to any directions or regulations made by the directors for this purpose, the meetings and proceedings of such committees shall be governed by the provisions of these Articles covering the meetings and proceedings of the Directors, including provisions for written resolutions.

10.    Power to appoint and dismiss employees

The Board may appoint, suspend or remove any manager, secretary, clerk, agent or employee of the Company and may fix their remuneration and determine their duties.

11.    Power to borrow and charge property

The Board may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital, or any part thereof, and may issue debentures, debenture stock and other securities whether outright or as security for any debt, liability or obligation of the Company or any third party.

12.    Exercise of power to purchase shares of the Company

(1)    Subject to the Law, the Company is hereby authorised to issue shares which are to be redeemed or are liable to be redeemed at the option of the Company or a Member; but, save for shares declared to be redeemable by the Memorandum of Association and the Series B Preferred Shares, the Directors shall not issue redeemable shares without the sanction of an ordinary resolution.

(2)    The Board may exercise all the powers of the Company to purchase all or any part of its own shares pursuant to the Law. Shares purchased by the Company shall cease to confer any right or privilege on the Member from whom the shares are purchased.

(3)    Subject to these Articles, the Company is hereby authorised to make payments in respect of the redemption of its shares out of capital or out of any other account or fund which can be authorised for this purpose in accordance with the Law.

(4)    Unless fixed by the ordinary resolution sanctioning its issue the redemption price of a redeemable share, or the method of calculation thereof, shall be fixed by the Directors at or before the time of issue (it being understood that, notwithstanding the foregoing, the redemption price for the Series B Preferred Shares shall not be less than the amount provided for in Article 54.3).

(5)    Unless otherwise provided or directed by the ordinary resolution sanctioning the issue of the shares concerned:

(a)    every share certificate representing a redeemable share shall indicate that the share is redeemable;

5

(b)    in the case of shares redeemable at the option of a Member a redemption notice from a Member may not be revoked without the agreement of the Directors;

(c)    at the time or in the circumstances specified for redemption the redeemed shares shall be cancelled and shall cease to confer on the relevant Member any right or privilege, without prejudice to the right to receive the redemption price, which price shall become payable so soon as it can with due dispatch be calculated, but subject to surrender of the relevant share certificate for cancellation (and reissue in respect of any balance);

(d)    the redemption price may be paid in any manner authorised by these Articles for the payment of dividends;

(e)    a delay in payment of the redemption price shall not affect the redemption but, in the case of a delay of more than thirty days, interest shall be paid for the period from the due date until actual payment at a rate which the Directors, after due enquiry, estimate to be representative of the rates being offered by class A banks in the Cayman Islands for thirty day deposits in the same currency;

(f)    the Directors may exercise as they think fit the powers conferred on the Company by Section 37(5) of the Law (payment out of capital) but only if and to the extent that the redemption could not otherwise be made (or not without making a fresh issue of shares for this purpose);

(g)    subject as aforesaid, the Directors may determine, as they think fit all questions that may arise concerning the manner in which the redemption of the shares shall or may be effected;

(h)    no share may be redeemed unless it is fully paid-up.

13.    Discontinuation

The Board may exercise all the powers of the Company to discontinue the Company to a named country or jurisdiction outside the Cayman Islands pursuant to Section 226 of the Law.

14.    Election/Removal of Directors

(1)    The Board shall consist of not less than one Director and not more than seven Directors or such number in excess thereof as the Board may, subject to and in accordance with the terms of the Investors Agreement, from time to time determine, who shall be elected or appointed in accordance with Article 3(2).

(2)    The Directors may, subject to the terms of the Investors Agreement and these Articles, from time to time appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors, subject to any upper limit on the number of Directors prescribed pursuant to this Article or remove any person as Director by a majority decision of the remaining Directors.

(3)    The Company may, subject to the terms of the Investors Agreement and these Articles, from time to time by ordinary resolution appoint any person to be a Director and may in like manner remove any Director from office, whether or not appointing another in his stead.

(4)    An appointment of a Director may be on terms that the Director shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent annual general meeting or upon any specified event or after any specified period; but no such term shall be implied in the absence of express provision.

(5)    There shall be no shareholding qualification for Directors unless prescribed by special resolution.

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15.    RESERVED

16.    Alternate Directors and Proxies

(1)    A Director may at any time appoint any person (including another Director) to be his Alternate Director and may at any time terminate such appointment. An appointment and a termination of appointment shall be by notice in writing signed by the Director and deposited at the Registered Office or delivered at a meeting of the Directors.

(2)    The appointment of an Alternate Director shall determine on the happening of any event which, if he were a Director, would cause him to vacate such office or if his appointor ceases for any reason to be a Director.

(3)    An Alternate Director shall be entitled to receive notices of meetings of the Directors and shall be entitled to attend and vote as a Director at any such meeting at which his appointor is not personally present and generally at such meeting to perform all the functions of his appointor as a Director; and for the purposes of the proceedings at such meeting these Articles shall apply as if he (instead of his appointor) were a Director, save that he may not himself appoint an Alternate Director or a proxy.

(4)    If an Alternate Director is himself a Director or attends a meeting of the Directors as the Alternate Director of more than one Director, his voting rights shall be cumulative.

(5)    Unless the Directors determine otherwise, an Alternate Director may also represent his appointor at meetings of any committee of the Directors on which his appointor serves; and the provisions of this Article shall apply equally to such committee meetings as to meetings of the Directors.

(6)    An Alternate Director may join in a written resolution of the Directors adopted pursuant to these Articles and his signature of such resolution shall be as effective as the signature of his appointor.

(7)    Save as provided in these Articles an Alternate Director shall not, as such, have any power to act as a Director or to represent his appointor and shall not be deemed to be a Director for the purposes of these Articles.

(8)    A Director who is not present at a meeting of the Directors, and whose Alternate Director (if any) is not present at the meeting, may be represented at the meeting by a proxy duly appointed, in which event the presence and vote of the proxy shall be deemed to be that of the Director. All the provisions of these Articles regulating the appointment of proxies by members shall apply equally to the appointment of proxies by Directors.

17.    Vacancies on the Board

(1)    The Board may act notwithstanding any vacancy in its number but, if and so long as its number is reduced below the number fixed by these Articles as the quorum necessary for the transaction of business at meetings of the Board, the continuing Directors or Director may act for the purpose of (i) increasing the number of Directors to the requisite number, subject to the terms of the Investors Agreement, (ii) summoning a general meeting of the Company or (iii) preserving the assets of the Company.

(2)    The office of Director shall be vacated if the Director:

(a)    is removed from office pursuant to these Articles or the Investors Agreement or is prohibited from being a Director by law;

7

(b)    is or becomes bankrupt or makes any arrangement or composition with his creditors generally;

(c)    is or becomes of unsound mind or an order for his detention is made under the Mental Health Law or any analogous law of a jurisdiction outside the Cayman Islands or dies;

(d)    resigns his or her office by notice in writing to the Company.

18.    Notice of special meetings of the Board

(1)    A Director may, and the Secretary on the requisition of a Director shall, at any time summon a special meeting of the Board.

(2)    Notice of a special meeting of the Board shall be given to a Director by post, cable, email, telex, telecopier, facsimile or other mode of representing words in a legible and non transitory form at such Director’s last known address or any other address given by such Director to the Company for this purpose at least seventy-two (72) hours in advance of the meeting. Notice of a special meeting need not be given to any Director, if a written waiver of notice, executed by him before or after the meeting, is filed with the records of the meeting, or to any Director who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him.

(3)    Any notice of a special meeting given hereunder shall state the place, date and hour of the meeting, and shall state in reasonable detail the business to be conducted at the meeting and any proposed resolution to be adopted. Unless all Directors unanimously agree otherwise, no business may be conducted at a special meeting other than business reasonably related to the business described in such notice.

19.    Quorum at meetings of the Board

The quorum necessary for the transaction of business at a meeting of the Board shall be a majority of the total number of Directors comprising the Board (including any vacancies).

20.    Meetings of the Board

(1)    Subject to the terms of these Articles, the Board may meet for the transaction of business, adjourn and otherwise regulate its meetings as it sees fit.

(2)    Regularly scheduled meetings of the Board shall be held quarterly. The time, date and place of such meetings shall be established annually in advance by a vote of the Board.

(3)    Directors may participate in any meeting of the Board by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

(4)    A resolution put to the vote at a meeting of the Board shall be carried by the affirmative votes of a majority of the votes cast and in the case of an equality of votes the resolution shall fail.

21.    Unanimous written resolutions

A resolution in writing signed by all the Directors which may be in counterparts, shall be as valid as if it had been passed at a meeting of the Board duly called and constituted, such resolution to be effective on the date on which the last Director signs the resolution.

8

22.    Contracts and disclosure of Directors’ interests

(1)    Any Director, or any Director’s firm, partner or any company with whom any Director is associated, may act in a professional capacity for the Company and such Director or such Director’s firm, partner or such company shall be entitled to remuneration for professional services as if such Director were not a Director, provided that nothing herein contained shall authorize a Director or Director’s firm, partner or such company to act as Auditor of the Company.

(2)    A Director who is directly or indirectly interested in a contract or proposed contract or arrangement with the Company shall declare the nature of such interest.

(3)    Following a declaration being made pursuant to this Article, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum at such meeting.

23.    Remuneration of Directors

The remuneration (if any) of the Directors shall, subject to any direction that may be given by the Company in general meeting, be determined by the Directors as they may from time to time determine and shall be deemed to accrue from day to day. The Directors may also be paid all reasonable travel, hotel and other expenses properly incurred by them in attending and returning from meetings of the Board, any committee appointed by the Board, general meetings of the Company, or in connection with the business of the Company or their duties as Directors generally.

OFFICERS

24.    Officers of the Company

The Officers of the Company shall consist of a Chairman and a Secretary and such additional Officers as the Board may from time to time determine all of whom shall be deemed to be Officers for the purposes of these Articles.

25.    Appointment of Officers

(1)    The Board shall appoint a Chairman who shall be a Director.

(2)    The Secretary and additional Officers, if any, shall be appointed by the Board from time to time.

26.    Remuneration of Officers

The Officers shall receive such remuneration as the Board may from time to time determine.

27.    Duties of Officers

The Officers shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Board from time to time.

9

28.    Chairman of meetings

Unless otherwise agreed by a majority of those attending and entitled to attend and vote thereat, the Chairman, if there be one, shall act as chairman at all meetings of the Members and of the Board at which such person is present. In his absence a chairman shall be appointed or elected by those present at the meeting and entitled to vote.

29.    Register of Directors and Officers

(1)    The Board shall cause to be kept in one or more books at its registered office a Register of Directors and Officers in accordance with the Law and shall enter therein the following particulars with respect to each Director and Officer:

(a)    first name and surname; and

(b)    address.

(2)    The Board shall, within the period of thirty days from the occurrence of

(b)    any change among its Directors and Officers; or

(c)    any change in the particulars contained in the Register of Directors and Officers, cause to be entered on the Register of Directors and Officers the particulars of such change and the date on which such change occurred, and shall notify the Registrar of Companies of any such change that takes place.

30.    Register of Mortgages and Charges

(1)    The Directors shall cause to be kept the register of mortgages and charges required by the Law.

(2)    The Register of Mortgages and Charges shall be open to inspection at the office of the Company on every business day, subject to such reasonable restrictions as the Board may impose, so that not less than two hours in each business day be allowed for inspection.

MINUTES

31.    Obligations of Board to keep minutes

(1)    The Board shall cause minutes to be duly entered in books provided for the purpose:

(a)    of all elections and appointments of Officers;

(b)    of the names of the Directors present at each meeting of the Board and of any committee appointed by the Board; and

(c)    of all resolutions and proceedings of general meetings of the Members, meetings of the Board, meetings of managers and meetings of committees appointed by the Board.

INDEMNITY

32.    Indemnification of Directors and Officers of the Company

The Directors and Officers of the Company and any trustee for the time being acting in relation to any of the affairs of the Company and every former director, officer or trustee and

10

their respective heirs, executors, administrators and personal representatives (each of such persons being referred to in this Article as an “indemnified party”) shall be indemnified out of the assets of the Company from and against all actions, proceedings, costs, charges, losses, damages and expenses which they or any of them shall or may incur or sustain by reason of any act done or omitted in or about the execution of their duties in their respective offices or trusts, except any which an indemnified party shall incur or sustain by or through his own wilful neglect or intentional malfeasance; no indemnified party shall be answerable for the acts, omissions, neglects or defaults of any other Director, officer or trustee, or for joining in any receipt for the sake of conformity, or for the solvency or honesty of any banker or other persons with whom any moneys or effects belonging to the Company may be lodged or deposited for safe custody, or for any insufficiency of any security upon which any monies of the Company may be invested, or for any other loss or damage due to any such cause as aforesaid or which may happen in or about the execution of his office or trust unless the same shall happen through the wilful neglect or intentional malfeasance.

33.    Waiver of claim by Member

Each Member agrees to waive (to the fullest extent allowable under law) any claim or right of action such Member might have, whether individually or by or in the right of the Company, against any Director or Officer on account of any action taken by such Director or Officer, or the failure of such Director or Officer to take any action in the performance of his duties with or for the Company.

MEETINGS

34.    Notice of annual general meeting

(1)    The Company shall in each year hold a general meeting as its annual general meeting, provided that, if the Company is an exempted company, it may by ordinary resolution determine that no annual general meeting need be held in a particular year or years or indefinitely.

(2)    Subject to paragraph (1) the annual general meeting of the Company shall be held in each year other than the year of incorporation at such time and place as the Chairman shall appoint. At least five days notice of such meeting shall be given to each Member stating the date, place and time at which the meeting is to be held and if different, the record date for determining members entitled to attend and vote at general meeting, that the election of Directors will take place thereat, and as far as practicable, the other business to be conducted at the meeting.

35.    Notice of extraordinary general meeting

(1)    General meetings other than annual general meetings shall be called extraordinary general meetings.

(2)    The Chairman or any two Directors or any Director and the Secretary or the Board may convene an extraordinary general meeting of the Company whenever in their judgment such a meeting is necessary, upon not less than five days’ notice which shall state the date, time, place and the general nature of the business to be considered at the meeting.

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36.    Accidental omission of notice of general meeting

The accidental omission to give notice of a general meeting to, or the non receipt of notice of a general meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.

37.    Meeting called on requisition of Members

(1)    Notwithstanding anything herein, the Board shall, on the requisition of Members holding at the date of the deposit of the requisition not less than one tenth of such of the total voting power of the Company as of the date of the deposit, forthwith proceed to convene a extraordinary general meeting of the Company; to be effective the requisition shall state the objects of the meeting, shall be in writing, signed by the requisitionists, and shall be deposited at the Registered Office. The requisition may consist of several documents in like form each signed by one or more requisitionists.

(2)    If the Directors do not within twenty-one days from the date of the requisition duly proceed to call an extraordinary general meeting, the requisitionists, or any of them representing more than one half of the total voting power of all of them, may themselves convene an extraordinary general meeting; but any meeting so called shall not be held more than ninety days after the requisition. An extraordinary general meeting called by requisitionists shall be called in the same manner, as nearly as possible, as that in which general meetings are to be called by the Directors.

38.    Short notice

A general meeting of the Company shall, notwithstanding that it is called by shorter notice than that specified in these Articles, be deemed to have been properly called if it is so agreed by all the Members entitled to attend and vote thereat in the case of an annual general meeting, or in the case of an extraordinary general meeting, by seventy-five percent of the total voting power of the Members entitled to attend and vote thereat.

39.    Postponement of meetings

The Board may postpone any general meeting called in accordance with the provisions of these Articles provided that notice of postponement is given to each Member before the time for such meeting. Fresh notice of the date, time and place for the postponed meeting shall be given to each Member in accordance with the provisions of these Articles.

40.    Quorum for general meeting

At any general meeting of the Company one or more persons present in person and representing in person or by proxy in excess of 50% of the total issued voting power of the Company throughout the meeting shall form a quorum for the transaction of business. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned to the same day one week later, at the same time and place or to such other day, time or place as the Board may determine.

41.    Adjournment of meetings

The chairman of a general meeting may, with the consent of the Members at any general meeting at which a quorum is present (and shall if so directed), adjourn the meeting. Unless the meeting is adjourned for more than sixty days fresh notice of the date, time and place for the resumption of the adjourned meeting shall be given to each Member in accordance with the provisions of these Articles.

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42.    Attendance at meetings

Members may participate in any general meeting by means of such telephone, electronic or other communication facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously, and participation in such a meeting shall constitute presence in person at such meeting.

43.    Written resolutions

(1)    Anything which may be done by resolution of the Company in general meeting or by resolution of a meeting of any class of the Members of the Company, may, without a meeting and without any previous notice being required, be done by resolution in writing signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Law, on behalf of, all the Members who at the date of the resolution would be entitled to attend the meeting and vote on the resolution.

(2)    A resolution in writing may be signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Law, on behalf of, the Members, or any class thereof, in as many counterparts as may be necessary.

(3)    For the purposes of this Article, the date of the resolution is the date when the resolution is signed by, or, in the case of a Member that is a corporation whether or not a company within the meaning of the Law, on behalf of, the last required Member to sign and any reference in any Article to the date of passing of a resolution is, in relation to a resolution made in accordance with this Article, a reference to such date.

(4)    A resolution in writing made in accordance with this Article is as valid as if it had been passed by the Company in general meeting or by a meeting of the relevant class of Members, as the case may be, and any reference in any Article to a meeting at which a resolution is passed or to Members voting in favour of a resolution shall be construed accordingly.

(5)    A resolution in writing made in accordance with this Article shall constitute minutes for the purposes of the Law.

44.    Attendance of Directors

The Directors of the Company shall be entitled to receive notice of and to attend and be heard at any general meeting.

45.    Voting at meetings

(1)    Subject to the provisions of the Law, these Articles and the Investors Agreement, any question proposed for the consideration of the Members at any general meeting shall be decided by the affirmative vote of a majority of the votes cast in accordance with the provisions of these Articles and in the case of an equality of votes the resolution shall fail.

(2)    No Member shall be entitled to vote at any general meeting unless such Member has paid all the calls on all shares held by such Member.

46.    [Reserved]

47.    [Reserved]

48.    Demand for a poll

(1)    Subject to any rights or restrictions for the time being lawfully attached to any class of shares, every Member present in person and every person representing a Member by proxy at

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any general meeting of the Company shall have the number of vote(s) for each share of which such person is the holder or for which such person holds a proxy as set forth in Articles 53 and 54.5 and such votes shall be counted in the manner set out in sub paragraph (2) of this Article.

(2)    Each person present and entitled to vote at a general meeting of the Company shall be furnished with a ballot paper on which such person shall record his or her vote in such manner as shall be determined at the meeting having regard to the nature of the question on which the vote is taken, and each ballot paper shall be signed or initialed or otherwise marked so as to identify the voter and the registered member in the case of a proxy. At the conclusion of the poll, the ballot papers shall be examined and counted by a committee of not less than two Members or proxy members appointed by the chairman for the purpose and the result of the poll shall be declared by the chairman.

49.    Seniority of joint holders voting

In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members.

50.    Instrument of proxy

(1)    Except for the proxy granted under the Investors Agreement, all other instruments appointing a proxy shall be in writing in the form, or as near thereto as circumstances admit, of Form “A” in the Schedule hereto, under the hand of the appointor or of the appointor’s attorney duly authorised in writing, or if the appointor is a corporation, either under its seal, or under the hand of a duly authorised officer or attorney. The decision of the chairman of any general meeting as to the validity of any instrument of proxy shall be final (it being understood that the proxy granted under the Investors Agreement shall be deemed to be valid for all purposes under these Articles).

(2)    Any Member may irrevocably appoint a proxy and in such case (i) such proxy shall be irrevocable in accordance with the terms of the instrument of appointment, (ii) the Member may not vote at any meeting at which the holder of such proxy votes and (iii) the Company shall be obliged to recognise the holder of such proxy until such time as the Company is notified in writing that the proxy has been revoked in accordance with its terms.

51.    Representation of corporations at meetings

A corporation which is a Member may, by written instrument, authorize such person as it thinks fit to act as its representative at any meeting of the Members and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which such person represents as that corporation could exercise if it were an individual Member. Notwithstanding the foregoing, the chairman of the meeting may accept such assurances as he or she thinks fit as to the right of any person to attend and vote at general meetings on behalf of a corporation which is a Member.

SHARE CAPITAL AND SHARES

52.    Rights of shares

Subject to any resolution of the Members to the contrary and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the

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share capital of the Company shall be divided into ordinary shares (divided into Ordinary Shares and High-Vote Ordinary Shares) and preferred shares (divided into Series A Preferred Shares and Series B Preferred Shares).

53.    Rights of ordinary shares

(1)    The holders of the Ordinary Shares shall, subject to the provisions of these Articles:

(a)    be entitled to one vote per share and to notice of any Members’ meeting in accordance with these Articles and to vote upon such matters and in such manner as may be provided in the Law;

(b)    subject to the prior rights of holders of all classes of shares at the time outstanding having prior rights as to dividends, be entitled to such dividends as and when the Board may from time to time declare;

(c)    in the event of a winding-up or dissolution of the Company, whether voluntary or involuntary or for the purpose of a reorganization or otherwise or upon any distribution of capital, be entitled to the surplus assets of the Company after distribution to the preferred shareholders as provided in Article 54.2 hereof; and

(d)    generally be entitled to enjoy all of the rights attaching to shares.

(2)    The Ordinary Shares are not redeemable at the option of the holder.

(3)    The High-Vote Ordinary Shares shall be identical in all respects to the Ordinary Shares, except that the holders of the High-Vote Ordinary Shares shall be entitled to fifteen votes for each High-Vote Ordinary Share.

54.    Rights of preferred shares

Except as otherwise set forth in this Article 54, the relative powers, preferences and participating, optional or other special rights, and the qualifications, limitations or restrictions of each class of preferred shares shall be identical in all respects. The holders of the preferred shares shall, subject to the provisions of these Articles, have the following rights and restrictions:

1.    Dividend Provisions:    The holders of preferred shares and ordinary shares shall be entitled to receive dividends, out of any assets legally available therefor, payable when, as, and if declared by the directors. Any dividends or distributions shall be distributed among all holders of ordinary shares and preferred shares in proportion to the number of ordinary shares that would be held by each such holder if all preferred shares were converted to ordinary shares at the then effective Conversion Rate; provided, however, that no dividend shall be paid to the holders of ordinary shares unless a dividend of equal amount per share is paid in full to the holders of preferred shares.

2.    Liquidation Preference:

(a)    In the event of any Liquidation Event (as defined below), either voluntary or involuntary, the holders of preferred shares shall be entitled to receive, prior and in preference to any distribution of the proceeds of such Liquidation Event (the “Proceeds”) to the holders of ordinary shares by reason of their ownership thereof, an amount per share equal to the sum of the applicable Original Issue Price (as defined below) for such preferred shares, plus declared but unpaid dividends on such share. If, upon the occurrence of such event, the Proceeds thus distributed among the holders of the preferred shares shall be insufficient to permit the payment to such holders of the

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full aforesaid preferential amounts, then the entire Proceeds legally available for distribution shall be distributed ratably among the holders of the preferred shares in proportion to the full preferential amount that each such holder is otherwise entitled to receive under this subsection (a). For purposes of this Article, “Original Issue Price” shall mean $1.5325 per share for Series A Preferred Shares and shall mean $5.25 per share for Series B Preferred Shares (as adjusted for any share splits, share dividends, combinations, recapitalizations or the like with respect to such preferred shares).

(b)    Upon completion of the distribution required by subsection (a) of this subsection 2, all of the remaining Proceeds shall be distributed among the holders of ordinary shares pro rata based on the number of ordinary shares held by each.

(c)    (i)    If, in the case of a Liquidation Event, the amount which the holder of a preferred share would, if such holder converted such preferred share into ordinary shares immediately prior to such Liquidation Event (or any applicable record date), be entitled to receive pursuant to subsection 2(b) is greater than the amount which such holder would, if such holder did not so convert such share into ordinary shares, be entitled to receive pursuant to subsection 2(a), then such holder shall receive such greater amount pursuant to such transaction in full satisfaction of all amounts to which such holder is entitled pursuant to this subsection 2 without first having so converted such preferred share into ordinary shares.

(ii)    From and after the IAC Control Date, if the Company engages in a transaction which constitutes a Liquidation Event in which IAC or an Affiliate of IAC is acquiring the Company or substantially all of the assets thereof (whether pursuant to a transaction described in clauses (A), (B) or (C) of the Liquidation Event definition), then the holders of Series B Preferred Shares (to the extent that such holders are either IAC or Affiliates thereof) shall be entitled to receive under this subsection 2 only such amount that it would be entitled to if such shares were converted to ordinary shares immediately prior to such Liquidation Event.

(d)    (i)    For purposes of this subsection 2, a “Liquidation Event” shall include (A) the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets, (B) the consummation of the merger or consolidation of the Company with or into another entity (except any merger or consolidation in which the holders of shares of the Company immediately prior to such merger or consolidation continue to hold, directly or indirectly, at least 50% of the voting power of the shares of the Company or the surviving or acquiring entity (in substantially the same proportions) or otherwise have the power to elect a majority of the board of directors or other governing body of such surviving or acquiring entity), (C) the closing of the transfer or issuance (whether by merger, consolidation or otherwise), in one transaction or series of related transactions, to a person or group of affiliated persons (other than an underwriter of the Company’s securities and other than to IAC or an Affiliate of IAC in connection with the exercise of the Warrant), of the Company’s securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting shares of the Company or (D) a liquidation, dissolution or winding up of the Company; provided, however, that a transaction shall not constitute a Liquidation Event if its sole purpose is to change the jurisdiction of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately prior to such transaction. The treatment of any particular transaction or series of related transactions as a Liquidation Event may be waived as to the Series B Preferred Shares by the vote or written consent of the holders of a majority of the outstanding Series B Preferred Shares.

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(ii)    In any Liquidation Event, if the consideration received by the Company is other than cash, its value will be deemed its fair market value as reasonably determined in good faith by the Board. Any securities shall be valued as follows:

(A)    Securities not subject to investment letter or other similar restrictions on free marketability covered by (B) below:

(1)    If traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange of system over the twenty (20) trading day period ending three (3) trading days prior to the closing;

(2)    If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the twenty (20) trading day period ending three (3) trading days prior to the closing; and

(3)    If there is no active public market, the value shall be the fair market value thereof, as reasonably determined in good faith by the Board.

(B)    The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a member’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (A) (1), (2) or (3) to reflect the approximate fair market value thereof, as reasonably determined in good faith by the Board.

(C)    The foregoing methods for valuing non-cash consideration to be distributed in connection with a Liquidation Event may be superceded by any reasonable determination of such value set forth in the definitive agreements governing such Liquidation Event.

(iii)    In the event the requirements of this subsection 2 are not complied with, the Company shall forthwith either:

(A)    cause such closing to be postponed until such time as the requirements of this subsection 2 have been complied with; or

(B)    cancel such transaction, in which event the rights, preferences and privileges of the holders of the preferred shares shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in subsection 2(d)(iv) hereof.

(iv)    The Company shall give each holder of record of preferred shares written notice of such impending Liquidation Event not later than twenty (20) days prior to the Members’ meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this subsection 2, and the Company shall thereafter give such holders prompt notice of any material changes. The transaction shall not in any event take place sooner than twenty (20) days after the Company has given the first notice provided for herein or sooner than ten (10) days after the Company has given notice of any material changes provided for herein; provided, however, that such periods maybe shortened upon the written consent of the holders of preferred shares that (i) are entitled to such notice rights or similar notice rights and (ii) represent at least a majority of the voting power of all then outstanding preferred

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shares. The holders of the outstanding preferred shares can waive the notice requirements described in this subsection (iv) upon the affirmative vote or written consent of the holders of at least a majority of the preferred shares then outstanding (voting together as a single class and not as separate series, and on an as-converted basis).

3.    Redemption:    Subject to Article 54.4, the preferred shares are not redeemable at the option of the holder. If any shares of Series B Preferred Shares have not been converted to ordinary shares prior to July [    ], 2024, then on such date, the Company shall redeem all such Series B Preferred Shares at a price per share equal to the Original Issue Price for the Series B Preferred Shares, plus any declared but unpaid dividends thereon.

4.    Conversion:    The holders of the preferred shares shall have conversion rights as follows (the “Conversion Rights”):

(a)    Right to Convert:

(i)    Each Series A Preferred Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such shares, into such number of fully paid and nonassessable Ordinary Shares as is determined by dividing the applicable Original Issue Price for the Series A Preferred Shares by the applicable Conversion Price for the Series A Preferred Shares (the conversion rate for a series of preferred shares into ordinary shares is referred to herein as the “Conversion Rate” for such series), determined as hereafter provided, in effect on the date the certificate is surrendered for conversion. The initial “Conversion Price” of the Series A Preferred Shares shall be $1.5325 and shall be subject to adjustment as set forth in subsection 4(d). The date that a holder of preferred stock surrenders a certificate for conversion into Ordinary Shares shall be referred to herein as the “Conversion Notice Date”.

(ii)    Each Series B Preferred Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share at the office of the Company or any transfer agent for such shares,

(A)    if the Conversion Notice Date is prior to the Warrant Exercise Date, into such number of fully paid and nonassessable Ordinary Shares as is determined by dividing the applicable Original Issue Price for the Series B Preferred Shares by the Conversion Price applicable to the Series B Preferred Shares, determined as hereafter provided, in effect on the Conversion Notice Date, or

(B)    from and after the Warrant Exercise Date, into such number of fully paid and nonassessable High-Vote Ordinary Shares as is determined by dividing the applicable Original Issue Price for such series by the applicable Conversion Price for such series, determined as hereafter provided, in effect on the Conversion Notice Date.

The initial “Conversion Price” of the Series B Preferred Shares shall be $5.25 and shall be subject to adjustment as set forth in subsection 4(d).

(b)    Automatic Conversion:

(i)    Each Series A Preferred Share shall automatically be converted into Ordinary Shares at the Conversion Rate at the time in effect for such series of preferred shares immediately upon the earlier of (A) a Qualified Public Offering or (B) the date specified by written consent or agreement of the holders of a majority of the then outstanding Series A Preferred Shares.

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(ii)    Each Series B Preferred Share shall automatically be converted into the applicable class of ordinary shares pursuant to Article 54.4(a)(ii) immediately upon the earlier of (A) the 31^st business day after a Qualified Public Offering or (B) the date specified by written consent or agreement of the holders of a majority of the then outstanding Series B Preferred Shares.

(c)    Mechanics of Conversion:    Before any holder of preferred shares shall be entitled to voluntarily convert the same into ordinary shares he or she shall surrender the certificate or certificates therefor (if any), duly endorsed at the office of the Company or of any transfer agent for the preferred shares and shall give written notice to the Company at its principal corporate office of the election to convert the same and shall state therein the name or person to which the certificate or certificates for ordinary shares are to be issued. The Company shall, as soon as practicable thereafter, issue and deliver at such office to such holder of preferred shares, or to the nominee or nominees of such holder, a certificate or certificates for the type and number of Ordinary Shares to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the preferred shares to be converted, and the person or persons entitled to receive the ordinary shares issuable upon such conversion shall be treated for all purposes as the record holder or holders of such ordinary shares as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933 the conversion may, at the option of any holder tendering preferred shares for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the persons entitled to receive the ordinary shares upon conversion of the preferred shares shall not be deemed to have converted such preferred shares until immediately prior to the closing of such sale of securities. If the conversion is in connection with Automatic Conversion provisions of subsections 4(b)(i)(B) or 4(b)(ii)(B) above, such conversion shall be deemed to have been made on the conversion date described in the member consent approving such conversion, and the persons entitled to receive ordinary shares issuable upon such conversion shall be treated for all purposes as the record holders of such ordinary shares as of such date.

(d)    Conversion Price Adjustments of Preferred Shares for Certain Dilutive Issuances, Splits and Combinations:    The Conversion Price of each series of preferred shares shall be subject to adjustment from time to time as follows:

(i)    (A)    If the Company shall issue, (x) with respect to the Series A Preferred Shares, on or after August 29, 2003 and (y) with respect to the Series B Preferred Shares, on or after July [    ], 2004 (such respective dates being, with respect to such series, the “Filing Date”), any Additional Shares (as defined below) for a consideration per share less than the Conversion Price applicable to a series of preferred shares in effect immediately prior to the issuance of such Additional Shares, the Conversion Price for such series in effect immediately prior to each such issuance shall forthwith (except as otherwise provided in this clause (i)) be adjusted to a price determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the Fully-Diluted Number immediately prior to such issuance plus the number of ordinary shares that the aggregate consideration received by the Company for such issuance would purchase at such Conversion Price; and the denominator of which shall be the Fully-Diluted Number immediately prior to such issuance plus the number of such Additional Shares.

(B)    No adjustment in the Conversion Price with respect to preferred shares shall be made as the result of the issuance of Additional Shares if the

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consideration per share for such Additional Shares of Common Stock issued or deemed to be issued by the Company is equal to or greater than the applicable Conversion Price for such preferred shares in effect immediately prior to the issuance or deemed issuance of such Additional Shares. No adjustment of the Conversion Price for the preferred shares shall be made in an amount less than one cent per share, provided that any adjustments that are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to three (3) years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the end of three (3) years from the date of the event giving rise to the adjustment being carried forward. Except to the limited extent provided for in subsections (E)(3) and (E)(4), no adjustment of such Conversion Price pursuant to this subsection 4(d)(i) shall have the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment.

(C)    In the case of the issuance of ordinary shares for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Company for any underwriting or otherwise in connection with the issuance and sale thereof.

(D)    In the case of the issuance of the ordinary shares for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Directors irrespective of any accounting treatment.

(E)    In the case of the issuance of options to purchase or rights to subscribe for ordinary shares, securities by their terms convertible into or exchangeable for ordinary shares or options to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply for all purposes of this subsection 4(d)(i) and subsection 4(d)(ii):

(1)    The aggregate maximum number of ordinary shares deliverable upon exercise (assuming the satisfaction of any conditions to exercisability, including without limitation, the passage of time, but without taking into account potential antidilution adjustments) of such options to purchase or rights to subscribe for ordinary shares shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in subsections (d)(i)(C) and (d)(i)(D)), if any, received by the Company upon the issuance of such options or rights plus the minimum exercise price payable for such options or rights (without taking into account potential antidilution adjustments) for the ordinary shares covered thereby.

(2)    The aggregate maximum number of ordinary shares deliverable upon conversion of, or in exchange (assuming the satisfaction of any conditions to convertibility or exchangeability, including, without limitation, the passage of time, but without taking into account potential antidilution adjustments) for, any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options or rights were issued

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and for a consideration equal to the consideration, if any, received by the Company for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by the Company (without taking into account potential antidilution adjustments) upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in subsections 4(d)(i)(C) and (d)(i)(D)).

(3)    In the event of any change in the number of ordinary shares deliverable or in the consideration payable to the Company upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities, including, but not limited to, a change resulting from the antidilution provisions thereof, the Conversion Price of the series of preferred shares, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of ordinary shares or any payment of such consideration upon the exercise of any such options or rights or the conversion or exchange of such securities. In no event shall there be any further anti-dilution adjustment to such options, rights or securities as a result of the adjustments made pursuant to this provision.

(4)    Upon the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price of the series of preferred shares, to the extent in any way affected by or computed using such options, rights or securities or options or rights related to such securities, shall be recomputed to reflect the issuance of only the number of ordinary shares (and convertible or exchangeable securities that remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities.

(5)    The number of ordinary shares deemed issued and the consideration deemed paid therefore pursuant to subsections 4(d)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either subsection 4(d)(i)(E)(3) or (4).

(ii)    “Additional Shares” shall mean any ordinary shares issued (or deemed to have been issued pursuant to subsection 4(d)(i)(E)) by the Company on or after the Filing Date other than:

(A)    ordinary shares issued pursuant to a transaction described in subsection 4(d)(iii) hereof;

(B)    up to (x) with respect to adjustment of the Series A Preferred Shares, 6,100,000 Ordinary Shares issued to employees, directors, consultants and other service providers for the primary purpose of soliciting or retaining their services pursuant to plans or agreements approved by the Directors, and (y) with respect to adjustment of the Series B Preferred Shares, the employee stock options representing the right to purchase 1,660,000 Ordinary Shares issued to employees, directors, consultants or other service providers on or about the Filing Date pursuant to the ELong Option Plan (as defined in the Investors Agreement);

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(C)    ordinary shares issued pursuant to a Qualified Public Offering;

(D)    ordinary shares issued pursuant to the conversion or exercise of convertible or exercisable securities outstanding on the Filing Date;

(E)    ordinary shares issued or deemed issued pursuant to subsection 4(d)(i)(E) as a result of a decrease in the Conversion Price of the series of preferred shares resulting from the operation of this subsection 4(d);

(F)    ordinary shares that are issued with the unanimous approval of the Board, and the Directors specifically state that they shall not be Additional Shares; or

(G)    securities actually issued upon the exercise of options, warrants or rights or ordinary shares actually issued upon the conversion or exchange of convertible securities, in each case provided such issuance is pursuant to the terms of such options, warrants, rights or convertible securities.

(iii)    In the event the Company should at any time or from time to time after the Filing Date fix a record date for the effectuation of a split or subdivision of the outstanding ordinary shares or the determination of holders of ordinary shares entitled to receive a dividend or other distribution payable in additional ordinary shares or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional ordinary shares (hereinafter referred to as “Ordinary Shares Equivalents”) without payment of any consideration by such holder for the additional ordinary shares or the Ordinary Shares Equivalents (including the additional ordinary shares issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of the series of preferred shares shall be appropriately decreased so that the number of ordinary shares issuable on conversion of each share of such series shall be increased in proportion to such increase of the aggregate of ordinary shares outstanding and those issuable with respect to such Ordinary Shares Equivalents with the number of shares issuable with respect to Ordinary Shares Equivalents determined from time to time in the manner provided for deemed issuances in subsection 4(d)(i)(E).

(iv)    If the number of ordinary shares outstanding at any time after the Filing Date is decreased by a combination of the outstanding ordinary shares, then, following the record date of such combination, the Conversion Price for the series of preferred shares shall be appropriately increased so that the number of ordinary shares issuable on conversion of each share of such series shall be decreased in proportion to such decrease in outstanding shares.

(e)    Other Distributions:    In the event the Company shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or rights not referred to in subsection 4(d)(iii), then, in each such case for the purpose of this subsection 4(e), the holders of the preferred shares shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of ordinary shares into which their preferred shares are convertible as of the record date fixed for the determination of the holders of ordinary shares entitled to receive such distribution.

(f)    Recapitalizations:

(i)    If at any time or from time to time there shall be a recapitalization of the ordinary shares (other than a subdivision, combination or merger or sale of assets

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transaction provided for elsewhere in this subsection 4 or subsection 2) provision shall be made so that the holders of the preferred shares shall thereafter be entitled to receive upon conversion of the preferred shares the number of shares or other securities or property of the Company or otherwise, to which a holder of ordinary shares deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustments shall be made in the application of the provisions of this subsection 4 with respect to the rights of the holders of the preferred shares after the recapitalization to the end that the provisions of this subsection 4 (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the preferred shares) shall be applicable after that event as nearly equivalent as may be practicable.

(ii)    Subject to the provisions of subsection 2, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Company in which the ordinary shares (but not the preferred shares) are converted into or exchanged for securities, cash or other property (other than a transaction covered by subsections 4(d)(iii), 4(d)(iv), 4(e) or 4(f)(i)), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each preferred share shall thereafter be convertible in lieu of the ordinary shares into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of ordinary shares of the Company issuable upon conversion of one preferred share immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions in this subsection 4(f)(ii) with respect to the rights and interests thereafter of the holders of the preferred shares, to the end that the provisions set forth in this subsection 4(f)(ii) (including provisions with respect to changes in and other adjustments of the Conversion Price) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the preferred shares.

(g)    No Impairment:    The Company will not, without complying with the provisions of the Memorandum and Articles and the laws of the Cayman Islands, by amendment of its Memorandum or Articles or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this subsection 4 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the preferred shares against impairment.

(h)    No Fractional Shares and Certificate as to Adjustments:

(i)    No fractional shares shall be issued upon the conversion of any preferred shares, and the aggregate number of ordinary shares to be issued to particular members shall be rounded down to the nearest whole share and the Company shall pay in cash the fair value of any fractional shares as of the time when entitled to receive such fractions are determined.

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(ii)    Upon the occurrence of each adjustment or readjustment of the Conversion Price of the preferred shares pursuant to this subsection 4, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of preferred shares a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any holder of preferred shares, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Price for such series of preferred shares at the time in effect, and (C) the number of ordinary shares and the amount, if any, of other property that at the time would be received upon the conversion of a preferred share.

(i)    Notices of Record Date:    In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, the Company shall mail to each holder of preferred shares, at least ten (10) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution, and the amount and character of such dividend or distribution.

(j)    Reservation of Shares Issuable Upon Conversion:    The Company shall at all times reserve and keep available out of its authorized but unissued ordinary shares, solely for the purpose of effecting the conversion of the preferred shares, such type and number of its ordinary shares as shall from time to time be sufficient to effect the conversion of all outstanding preferred shares; and if at any time the number of authorized but unissued ordinary shares shall not be sufficient to effect the conversion of all then outstanding preferred shares, in addition to such other remedies as shall be available to the holder of such preferred shares, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued ordinary shares to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite member approval of any necessary amendment to the Memorandum and Articles.

(k)    Notices:    Any notice required by the provisions of this subsection 4 to be given to the holders of preferred shares shall be given in accordance with the Articles.

(l)    Waiver of Adjustment to Conversion Price:    Notwithstanding anything herein to the contrary, any downward adjustment of the Conversion Price of any series of the preferred shares may be waived, either prospectively or retroactively or in a particular instance, by the consent or vote of the holders of a majority of the outstanding shares of such series of preferred shares. Any such waiver shall bind all future holders of such series of preferred shares.

5.    Voting Rights:

(a)    Each holder of Series A Preferred Shares shall have the right to one vote for each Ordinary Share into which such Series A Preferred Shares could then be converted, and with respect to such vote, such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of Ordinary Shares, and shall be entitled, notwithstanding any provision hereof, to notice of any members’ meeting in accordance with the Articles, and shall be entitled to vote, together with holders of ordinary shares, with respect to any question upon which holders of ordinary shares have the right to vote.

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(b)    Each holder of Series B Preferred Shares shall have the right to (i) with respect to the period from the Filing Date until the Warrant Exercise Date, one vote for each Ordinary Share into which such Series B Preferred Shares could then be converted, and (ii) with respect to the period from and after the Warrant Exercise Date, fifteen votes for each High-Vote Ordinary Share into which such Series B Preferred Shares could then be converted, and in each such case, with respect to such vote(s), such holder shall have full voting rights and powers equal to the voting rights and powers of the holders of the applicable ordinary shares, and shall be entitled, notwithstanding any provision hereof, to notice of any members’ meeting in accordance with the Articles, and shall be entitled to vote, together with holders of ordinary shares, with respect to any question upon which holders of ordinary shares have the right to vote.

(c)    Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which preferred shares held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

6.    Protective Provisions:

(a)    Series A Rights:    So long as Series A Preferred Shares are outstanding, the Company shall not (including by amendment, merger, consolidation or otherwise), without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding Series A Preferred Shares, cause or permit (i) the altering or changing of the rights, preferences or privileges of the Series A Preferred Shares so as to affect adversely such series of shares, (ii) an increase in the number of Series A Preferred Shares or (iii) the amendment, revision or repeal of the Company’s Memorandum of Association or the Articles of Association if such amendment, revision or repeal results in an adverse change to the rights, preferences or privileges of the Series A Preferred Shares; provided, however, that, if such altering or changing in clause (i) or such amendment, revision or alteration in clause (iii) similarly affects adversely the rights, preferences or privileges of the Series B Preferred Shares in a similar or more adverse manner, then approval that is required by this subsection shall be of the majority of the voting power of the outstanding preferred shares (voting as a single class and not as a separate series, and on an as-converted basis).

(b)    Series B Rights:    So long as any Series B Preferred Shares are outstanding, the Company shall not (including by amendment, merger, consolidation or otherwise), without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding Series B Preferred Shares, cause or permit either the Company or any direct or indirect subsidiary of the Company or any other Affiliate of the Company (each such entity, including, without limitation, the Company, shall be referred to as an “eLong Entity”) to:

(i)    alter or change the rights, preferences or privileges of the Series B Preferred Shares so as to affect adversely the shares;

(ii)    except to the extent required to effect, or reasonably advisable in connection with, the Qualified Public Offering, amend, revise or repeal an eLong Entity’s Memorandum of Association or the Articles of Association or comparable charter documents, or any part thereof;

(iii)    change the authorized number of directors of any eLong Entity, or increase (or decrease) the size of the Company’s Board other than in accordance with the Investors Agreement;

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(iv)    create, authorize or issue, or obligate itself to issue, any security of the Company (other than Ordinary Shares, High-Vote Ordinary Shares, Series A Preferred Shares and Series B Preferred Shares) or of any other eLong Entity (including, without limitation, any equity, debt (except as specifically permitted by subsection (viii) below) or hybrid securities);

(v)    redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any preferred shares or ordinary shares or the applicable capital stock of any other eLong Entity; provided, however, that this restriction shall not apply to the repurchase of ordinary shares from employees, officers, directors, consultants or other persons performing services for the Company or any subsidiary pursuant to agreements entered into on or prior to the Filing Date or to the extent authorized under the eLong Option Plan (as defined in the Investors Agreement) under which the Company has the option or obligation to repurchase such shares upon the occurrence of certain events, such as the termination of employment, or pursuant to a right of first refusal (“Permitted Payments”) and shall not prohibit the transactions contemplated by the Transaction Agreement (as defined in the Investors Agreement), the Transfer Agreement (as defined in the Transaction Agreement) and the Warrant;

(vi)    directly or indirectly, enter into any transaction or series of related transactions of merger, amalgamation, reorganization, consolidation or combination, or consolidate, liquidate, windup or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or in a series of transactions all or substantially all of its business, property or assets, whether now owned or hereafter acquired, or otherwise consummate a Liquidation Event;

(vii)    declare or make any payment of cash or distribution of assets with respect to any class or series of the Company’s capital shares or of any other eLong Entity, by way of dividend or distribution, other than Permitted Payments, distributions pursuant to a Liquidation Event or distributions from one eLong Entity to another eLong Entity;

(viii)    incur at any time indebtedness for borrowed money or enter into or guarantee any obligation, in either case, outside the ordinary course of business consistent with past practice (it being understood that the incurrence of debt in an aggregate amount in excess of US$1,000,000 in a transaction or series or related transactions shall be deemed to be outside of the ordinary course of business);

(ix)    sell, transfer, assign or otherwise dispose of any material asset(s) of any eLong Entity in a transaction or series of related transactions (it being understood that any asset or series of related assets with an aggregate fair market value in excess of US$ 1,000,000 shall be deemed a “material asset(s)” for purposes of this provision);

(x)    purchase or otherwise acquire (including by merger, consolidation or other business combinations) any material asset(s) or business(s) or make any capital expenditures in excess of US$1,000,000 in a transaction or series of related transactions (it being understood that any business or asset or series of related assets for which an eLong Entity paid in excess of US$1,000,000 shall be deemed a “material asset(s) or business(es)” for purposes of this provision); or

(xi)    change, directly or indirectly, in any material respect the nature of the conduct or operations of the business of the Company and the eLong Entities (taken as a whole) as of May 27, 2004.

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7.    Status of Converted Shares:    In the event any preferred shares shall be converted pursuant to subsection 4 hereof, the shares so converted shall be cancelled and shall not be issuable by the Company. Upon the occurrence of such event, the Memorandum shall be appropriately amended to effect the corresponding alteration in the Company’s authorized capital.

55.    Power to issue shares

(1)    Subject to these Articles, to the Investors Agreement and to any resolution of the Members to the contrary and without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, the Board shall have power to issue any unissued shares of the Company on such terms and conditions as it may determine and any shares or class of shares (including the issue or grant of options, warrants and other rights, renounceable or otherwise in respect of shares) may be issued with such preferred, deferred or other special rights or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the Board may prescribe, provided that no share shall be issued at a discount except in accordance with the Law.

(2)    The Board shall, in connection with the issue of any share, have the power to pay such commission and brokerage as may be permitted by law.

(3)    Subject to these Articles and to the Investors Agreement, the Company may from time to time do any one or more of the following things:

(a)    make arrangements on the issue of shares for a difference between the Members in the amounts and times of payments of calls on their shares;

(b)    accept from any Member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up;

(c)    pay dividends in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others; and

(d)    issue its shares in fractional denominations and deal with such fractions to the same extent as its whole shares and shares in fractional denominations shall have in proportion to the respective fractions represented thereby all of the rights of whole shares including (but without limiting the generality of the foregoing) the right to vote, to receive dividends and distributions and to participate in a winding up.

56.    Alteration of Capital

(1)    Subject to these Articles and to the Investors Agreement, the Company may from time to time by ordinary resolution alter the conditions of its Memorandum of Association to increase its share capital by new shares of such amount as it thinks expedient or, if the Company is exempted and has shares without par value, increase its share capital by such number of shares without nominal or par value, or increase the aggregate consideration for which its shares may be issued, as it thinks expedient.

(2)    Subject to the Law, to the Investors Agreement and to these Articles, the Company may from time to time by ordinary resolution alter the conditions of its Memorandum of Association to:

(a)    consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(b)    subdivide its shares or any of them into shares of an amount smaller than that fixed by the Memorandum of Association; or

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(c)    cancel shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled or, in the case of shares without par value, diminish the number of shares into which its capital is divided.

(3)    For the avoidance of doubt it is declared that sub-paragraphs 2(a) and 2(b) above do not apply if the shares of the Company have no par value.

(4)    Subject to the Law, to the Investors Agreement and to these Articles, the Company may from time to time by special resolution reduce its share capital in any way or alter any conditions of its Memorandum of Association relating to share capital.

57.    Alteration of registered office, name and objects

Subject to the Law, the Company may by resolution of its Directors change the location of its Registered Office.

Subject to the Law, to the Investors Agreement and to these Articles, the Company may from time to time by special resolution change its name or alter its objects or make any other alteration to its Memorandum of Association for which provision has not been made elsewhere in these Articles.

58.    Variation of rights, alteration of share capital and purchase of shares of the Company

(1)    If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing of the holders of all the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate general meeting of the holders of the shares of the class. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

59.    Registered holder of shares

(1)    The Company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person.

(2)    No person shall be entitled to recognition by the Company as holding any share upon any trust and the Company shall not be bound by, or be compelled in any way to recognize, (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any other right in respect of any share except an absolute right to the entirety of the share in the holder. If, notwithstanding this Article, notice of any trust is at the holder’s request entered in the Register or on a share certificate in respect of a share, then, except as aforesaid:

(a)    such notice shall be deemed to be solely for the holder’s convenience;

(b)    the Company shall not be required in any way to recognize any beneficiary, or the beneficiary, of the trust as having an interest in the share or shares concerned;

(c)    the Company shall not be concerned with the trust in any way, as to the identity or powers of the trustees, the validity, purposes or terms of the trust, the question of whether anything done in relation to the shares may amount to a breach of trust or otherwise; and

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(d)    the holder, shall keep the Company fully indemnified against any liability or expense which may be incurred or suffered as a direct or indirect consequence of the Company entering notice of the trust in the Register or on a share certificate and continuing to recognize the holder as having an absolute right to the entirety of the share or shares concerned.

(3)    Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or draft sent through the post directed to the Member at such Member’s address in the Register of Members or, in the case of joint holders, to such address of the holder first named in the Register of Members, or to such person and to such address as the holder or joint holders may in writing direct. If two or more persons are registered as joint holders of any shares any one can give an effectual receipt for any dividend paid in respect of such shares.

60.    Death of a joint holder

Where two or more persons are registered as joint holders of a share or shares then in the event of the death of any joint holder or holders the remaining joint holder or holders shall be absolutely entitled to the said share or shares and the Company shall recognize no claim in respect of the estate of any joint holder except in the case of the last survivor of such joint holders.

61.    Share certificates

(1)    Every Member shall be entitled to a certificate under the seal of the Company (or a facsimile thereof) specifying the number and, where appropriate, the class of shares held by such Member and whether the same are fully paid up and, if not, how much has been paid thereon. The Board may by resolution determine, either generally or in a particular case, that any or all signatures on certificates may be printed thereon or affixed by mechanical means.

(2)    The Company shall be under no obligation to complete and deliver a share certificate unless specifically called upon to do so by the person to whom such shares have been allotted.

(3)    If any such certificate shall be proved to the satisfaction of the Board to have been worn out, lost, mislaid or destroyed the Board may cause a new certificate to be issued and request an indemnity for the lost certificate if it sees fit.

(4)    Share certificates may not be issued in bearer form.

62.    Calls on shares

(1)    The Board may from time to time make such calls as it thinks fit upon the Members in respect of any unpaid par value on the shares allotted to or held by such Members and, if a call is not paid on or before the day appointed for payment thereof, the Member may at the discretion of the Board be liable to pay the Company interest on the amount of such call at such rate as the Board may determine, from the date when such call was payable up to the actual date of payment. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

(2)    The Board may, on the issue of shares, differentiate between the holders as to the amount of calls to be paid and the times of payment of such calls.

63.    Forfeiture of shares

(1)    If any Member fails to pay, on the day appointed for payment thereof, any call in respect of any share allotted to or held by such Member, the Board may, at any time thereafter

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during such time as the call remains unpaid, direct the Secretary to forward to such Member a notice in the form, or as near thereto as circumstances admit, of Form “B” in the Schedule hereto.

(2)    If the requirements of such notice are not complied with, any such share may at any time thereafter before the payment of such call and the interest due in respect thereof be forfeited by a resolution of the Board to that effect, and such share shall thereupon become the property of the Company and may be disposed of as the Board shall determine.

(3)    A Member whose share or shares have been forfeited as aforesaid shall, notwithstanding such forfeiture, be liable to pay to the Company all calls owing on such share or shares at the time of the forfeiture and all interest due thereon.

REGISTER OF MEMBERS

64.    Contents of Register of Members

The Board shall cause to be kept in one or more books a Register of Members which may be kept outside the Cayman Islands at such place as the Directors shall appoint and shall enter therein the following particulars:

(a)    the name and address of each Member, the number and, where appropriate, the class of shares held by such Member and the amount paid or agreed to be considered as paid on such shares;

(b)    the date on which each person was entered in the Register of Members; and

(c)    the date on which any person ceased to be a Member for one year after such person so ceased.

65.    Determination of record dates

Notwithstanding any other provision of these Articles, the Board may fix any date as the record date for:

(a)    determining the Members entitled to receive any dividend; and

(b)    determining the Members entitled to receive notice of and to vote at any general meeting of the Company.

but, unless so fixed, the record date shall be as follows:

(a) as regards the entitlement to receive notice of a meeting or notice of any other matter, the date of despatch of the notice;

(b) as regards the entitlement to vote at a meeting, and any adjournment thereof, the date of the original meeting;

(c) as regards the entitlement to a dividend or other distribution, the date of the Directors’ resolution declaring the same.

TRANSFER OF SHARES

66.    Instrument of transfer

(1)    An instrument of transfer shall be in the form or as near thereto as circumstances admit of Form “C” in the Schedule hereto or in such other common form as the Board may

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accept. Such instrument of transfer shall be signed by or on behalf of the transferor and transferee provided that, in the case of a fully paid share, the Board may accept the instrument signed by or on behalf of the transferor alone.

(2)    The Board may refuse to recognize any instrument of transfer unless it is accompanied by the certificate in respect of the shares to which it relates and by such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer.

67.    Restriction on transfer

(1)    The Board may refuse to register the transfer of a share if such transfer shall not have occurred in accordance with the terms of Article 66.

(2)    If the Board refuses to register a transfer of any share the Secretary shall, within three months after the date on which the transfer was lodged with the Company, send to the transferor and transferee notice of the refusal.

68.    Transfers by joint holders

The joint holders of any share or shares may transfer such share or shares to one or more of such joint holders, and the surviving holder or holders of any share or shares previously held by them jointly with a deceased Member may transfer any such share to the executors or administrators of such deceased Member.

TRANSMISSION OF SHARES

69.    Representative of deceased Member

In the case of the death of a Member, the survivor or survivors where the deceased Member was a joint holder, and the legal personal representatives of the deceased Member where the deceased Member was a sole holder, shall be the only persons recognized by the Company as having any title to the deceased Member’s interest in the shares. Nothing herein contained shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by such deceased Member with other persons. Subject to the provisions of Section 52 of the Law, for the purpose of this Article, legal personal representative means the executor or administrator of a deceased Member or such other person as the Board may in its absolute discretion decide as being properly authorised to deal with the shares of a deceased Member.

70.    Registration on death or bankruptcy

Any person becoming entitled to a share in consequence of the death or bankruptcy of any Member may be registered as a Member upon such evidence as the Board may deem sufficient or may elect to nominate some person to be registered as a transferee of such share, and in such case the person becoming entitled shall execute in favour of such nominee an instrument of transfer in the form, or as near thereto as circumstances admit, of Form “D” in the Schedule hereto. On the presentation thereof to the Board, accompanied by such evidence as the Board may require to prove the title of the transferor, the transferee shall be registered as a Member but the Board shall, in either case, have the same right to decline or suspend registration as it would have had in the case of a transfer of the share by that Member before such Member’s death or bankruptcy, as the case may be.

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DIVIDENDS AND OTHER DISTRIBUTIONS

71.    Declaration of dividends by the Board

(1)    The Board may, subject to these Articles and to the Investors Agreement and any direction of the Company in general meeting declare a dividend to be paid to the Members, in proportion to the number of shares held by them and paid up by them, and such dividend may be paid in cash or wholly or partly in specie in which case the Board may fix the value for distribution in specie of any assets provided that if the shares have no par value, then the dividends shall be paid equally on a per share basis.

(2)    Dividends may be declared and paid out of the profits of the Company, realised or unrealised, or from any reserve set aside from profits which the Directors determine is no longer needed, or not in the same amount. With the sanction of an ordinary resolution dividends may also be declared and paid out of share premium account or any other fund or account which can be authorised for this purpose in accordance with the Law.

(3)    No dividend shall bear interest against the Company.

(4)    With the sanction of an ordinary resolution of the Company the Directors may determine that a dividend shall be paid wholly or partly by the distribution of specific assets (which may consist of the shares or securities of any other company) and may settle all questions concerning such distribution. Without limiting the foregoing generality the Directors may fix the value of such specific assets, may determine that cash payments shall be made to some members in lieu of specific assets and may vest any such specific assets in trustees on such terms as the Directors reasonably think fit.

(5)    With the sanction of an ordinary resolution of the Company (or, as regards a dividend payable in respect of a class of shares, an ordinary resolution passed at a class meeting) the Directors may determine that:

(a)    the persons entitled to participate in the dividend shall have a right of election to accept shares of the Company credited as fully paid in satisfaction of all or (if the Directors so specify or permit) part of their dividend entitlement; or

(b)    a dividend shall be satisfied in whole or specified part by an issue of shares of the Company credited as fully paid up, subject to a right of election on the part of persons entitled to participate in the dividend to receive their dividend entitlement wholly or (if the Directors so permit) partly in cash;

and in either event the Directors may determine all questions that arise concerning the right of election, notification thereof to members, the basis and terms of issue of shares of the Company and otherwise.

72.    Other distributions

Subject to these Articles and to the Investors Agreement, the Board may declare and make such other distributions (in cash or in specie) to the Members as may be lawfully made out of the assets of the Company.

73.    Reserve fund

The Board may from time to time before declaring a dividend set aside, out of the surplus or profits of the Company, such sum as it thinks proper as a reserve fund to be used to meet

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contingencies or for equalizing dividends or for any other special purpose. Pending application, such sums may be employed in the business of the Company or invested, and need not be kept separate from other assets of the Company. The Directors may also, without placing the same to reserve, carry forward any profit which they decide not to distribute.

74.    Deduction of amounts due to the Company

The Board may deduct from the dividends or distributions payable to any Member all monies due from such Member to the Company on account of calls or otherwise.

CAPITALISATION

75.    Issue of bonus shares

(1)    The Board may resolve to capitalize any part of the amount for the time being standing to the credit of any of the Company’s share premium or other reserve accounts or to the credit of the profit and loss account or otherwise available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus shares pro rata to the Members.

(2)    The Board may resolve to capitalize any sum standing to the credit of a reserve account or sums otherwise available for dividend or distribution by applying such amounts in paying up in full partly paid shares of those Members who would have been entitled to such sums if they were distributed by way of dividend or distribution.

SHARE PREMIUM ACCOUNT

Subject to any direction from the Company in general meeting, the Directors may on behalf of the Company exercise all the powers and options conferred on the Company by the Law in regard to the Company’s share premium account, save that unless expressly authorised by other provisions of these Articles the sanction of an ordinary resolution shall be required for any application of the share premium account in paying dividends to members.

ACCOUNTS AND FINANCIAL STATEMENTS

76.    Records of account

(1)    The Board shall cause to be kept proper records of account with respect to all transactions of the Company and in particular with respect to:

(a)    all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure relates;

(b)    all sales and purchases of goods by the Company; and

(c)    the assets and liabilities of the Company.

Such records of account shall be kept and proper books of account shall not be deemed to be kept with respect to the matters aforesaid if these arc not kept such books as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions at such place as the Board thinks fit.

(2)    No member (not being a Director) shall have any right of inspecting any account or book or document of the Company.

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(3)    Subject to any waiver by the Company in general meeting of the requirements of this Article, the Directors shall lay before the Company in general meeting, or circulate to members, financial statements in respect of each financial year of the Company, consisting of:

(a)    a profit and loss account giving a true and fair view of the profit or loss of the Company for the financial year; and

(b)    a balance sheet giving a true and fair view of the state of affairs of the Company at the end of the financial year;

together with a report of the Board reviewing the business of the Company during the financial year. The financial statements and the Directors’ report, together with the auditor’s report, if any, shall be laid before the Company in general meeting, or circulated to members, no later than one hundred and eighty days after the end of the financial year.

(4)    The financial year end of the Company shall be the 31st December in each year but, subject to any direction of the Company in general meeting, the Board may from time to time prescribe some other period to be the financial year, provided that the Board may not without the sanction of an ordinary resolution prescribe or allow any financial year longer than eighteen months.

AUDIT

77.    Appointment of Auditor

(1)    The Company may in a general meeting appoint Auditors to hold office until the conclusion of the next annual general meeting or at a subsequent extraordinary general meeting in each year, an independent representative of the Members shall be appointed by them as Auditor of the accounts of the Company. Such Auditor may be a Member but no Director, Officer or employee of the Company shall, during his or her continuance in office, be eligible to act as an Auditor of the Company.

(2)    Whenever there are no Auditors appointed as aforesaid the Directors may appoint Auditors to hold office until the conclusion of the next annual general meeting or earlier removal from office by the Company in general meeting. Unless fixed by the Company in general meeting the remuneration of the Auditors shall be as determined by the Directors. Nothing in this Article shall be construed as making it obligatory to appoint Auditors.

(3)    The Auditors shall make a report to the members on the accounts examined by them and on every set of financial statements laid before the Company in general meeting, or circulated to members, pursuant to this Article during the Auditors’ tenure of office.

(4)    The Auditors shall have right of access at all times to the Company’s books, accounts and vouchers and shall be entitled to require from the Company’s Directors and Officers such information and explanations as the Auditors think necessary for the performance of the Auditors’ duties; and, if the Auditors fail to obtain all the information and explanations which, to the best of their knowledge and belief, are necessary for the purposes of their audit, they shall state that fact in their report to the members.

(5)    The Auditors shall be entitled to attend any general meeting at which any financial statements which have been examined or reported on by them are to be laid before the Company and to make any statement or explanation they may desire with respect to the financial statements.

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(6)    The financial statements provided for by these Articles shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the Auditor shall be submitted to the Members in general meeting.

NOTICES

78.    Notices to Members of the Company

A notice may be given by the Company to any Member either by delivering it to such Member in person or by sending it to such Member’s address in the Register of Members or to such other address given for the purpose. For the purposes of this Article, a notice may be sent by mail, courier service, cable, email, telex, telecopier, facsimile or other mode of representing words in a legible and non transitory form.

79.    Notices to joint Members

Any notice required to be given to a Member shall, with respect to any shares held jointly by two or more persons, be given to whichever of such persons is named first in the Register of Members and notice so given shall be sufficient notice to all the holders of such shares.

80.    Service and delivery of notice

Any notice shall be deemed to have been served at the time when the same would be delivered in the ordinary course of transmission and, in proving such service, it shall be sufficient to prove that the notice was properly addressed and prepaid, if posted, and the time when it was posted, delivered to the courier or to the cable company or transmitted by telex, facsimile or other method as the case may be.

SEAL OF THE COMPANY

81.    The seal

(1)    The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors in that behalf; and, until otherwise determined by the Directors, the Seal shall be affixed in the presence of a Director or the Secretary or an assistant secretary or some other person authorised for this purpose by the Directors or the committee of Directors.

(2)    Notwithstanding the foregoing the Seal may without further authority be affixed by way of authentication to any document required to be filed with the Registrar of Companies in the Cayman Islands, and may be so affixed by any Director, Secretary or assistant secretary of the Company or any other person or institution having authority to file the document as aforesaid.

(3)    The Company may have one or more duplicate Seals, as permitted by the Law; and, if the Directors think fit, a duplicate Seal may bear on its face the name of the country, territory, district or place where it is to be used.

WINDING UP

82.    Winding up/distribution by liquidator

(1)    Subject to these Articles and to the Investors Agreement, the Company may be voluntarily wound-up by a special resolution of Members.

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(2)    If the Company shall be wound up the liquidator may, with the sanction of a special resolution, divide amongst the Members in specie or in kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as he or she deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Members as the liquidator shall think fit, but so that no Member shall be compelled to accept any shares or other securities or assets whereon there is any liability.

ALTERATION OF ARTICLES

83.    Alteration of Articles

Subject to the Law, to these Articles and to the Investors Agreement, the Company may from time to time by special resolution alter or amend these Articles in whole or in part.

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EX-4.3

Exhibit 4.3

ELONG, INC.

AND

JPMORGAN CHASE BANK,

As Depositary

AND

HOLDERS OF AMERICAN DEPOSITARY RECEIPTS

Deposit Agreement

Dated as of [DATE], 2004

TABLE OF CONTENTS

		Page
PARTIES		1
RECITALS		1
Section 1.	Certain Definitions
(a)	ADR Register	1
(b)	ADRs; Direct Registration ADRs	1
(c)	ADS	1
(d)	Custodian	1
(e)	Deliver, execute, issue et al.	1
(f)	Delivery Order	1
(g)	Deposited Securities	1
(h)	Direct Registration System	1
(i)	Holder	1
(j)	Securities Act of 1933	1
(k)	Securities Exchange Act of 1934	2
(l)	Shares	2
(m)	Transfer Office	2
(n)	Withdrawal Order	2
Section 2.	ADRs	2
Section 3.	Deposit of Shares	2
Section 4.	Issue of ADRs	3
Section 5.	Distributions on Deposited Securities	3
Section 6.	Withdrawal of Deposited Securities	3
Section 7.	Substitution of ADRs	3
Section 8.	Cancellation and Destruction of ADRs	3
Section 9.	The Custodian	3
Section 10.	Co-Registrars and Co-Transfer Agents	5
Section 11.	Lists of Holders.	5
Section 12.	Depositary’s Agents	5
Section 13.	Successor Depositary	5
Section 14.	Reports	5
Section 15.	Additional Shares	5
Section 16.	Indemnification	5
Section 17.	Notices	6
Section 18.	Miscellaneous	6
Section 19.	Consent to Jurisdiction	6
TESTIMONIUM		8
SIGNATURES		8

- i -

EXHIBIT A

		Page
FORM OF FACE OF ADR		A-1
Introductory Paragraph		A-1
(1)	Issuance of ADRs	A-1
(2)	Withdrawal of Deposited Securities	A-2
(3)	Transfers of ADRs	A-2
(4)	Certain Limitations	A-3
(5)	Taxes	A-3
(6)	Disclosure of Interests	A-4
(7)	Charges of Depositary	A-4
(8)	Available Information	A-5
(9)	Execution	A-5
Signature of Depositary		A-5
Address of Depositary’s Office		A-5
FORM OF REVERSE OF ADR		A-6
(10)	Distributions on Deposited Securities	A-6
(11)	Record Dates	A-7
(12)	Voting of Deposited Securities	A-7
(13)	Changes Affecting Deposited Securities	A-7
(14)	Exoneration	A-7
(15)	Resignation and Removal of Depositary; the Custodian	A-8
(16)	Amendment	A-8
(17)	Termination	A-9

- ii -

DEPOSIT AGREEMENT dated as of [DATE], 2004 (the “Deposit Agreement”) among ELONG, INC. and its successors (the “Company”), JPMORGAN CHASE BANK, as depositary hereunder (the “Depositary”), and all holders from time to time of American Depositary Receipts issued hereunder (“ADRs”) evidencing American Depositary Shares (“ADSs”) representing deposited Shares (defined below). The parties hereto agree as follows:

1.    Certain Definitions.

(a)    “ADR Register” is defined in paragraph (3) of the form of ADR.

(b)    “ADRs” mean the American Depositary Receipts executed and delivered hereunder. ADRs may be either in physical certificated form or Direct Registration ADRs. ADRs in physical certificated form, and the terms and conditions governing the Direct Registration ADRs (as hereinafter defined), shall be substantially in the form of Exhibit A annexed hereto (the “form of ADR”). The term “Direct Registration ADR” means an ADR, the ownership of which is recorded on the Direct Registration System. References to “ADRs” shall include certificated ADRs and Direct Registration ADRs, unless the context otherwise requires. The form of ADR is hereby incorporated herein and made a part hereof; the provisions of the form of ADR shall be binding upon the parties hereto.

(c)    Subject to paragraph (13) of the form of ADR, each “ADS” evidenced by an ADR represents the right to receive (                ) Share and a pro rata share in any other Deposited Securities.

(d)    “Custodian” means the agent or agents of the Depositary (singly or collectively, as the context requires) and any additional or substitute Custodian appointed pursuant to Section 9.

(e)    The terms “deliver”, “execute”, “issue”, “register”, “surrender”, “transfer” or “cancel”, when used with respect to Direct Registration ADRs, shall refer to an entry or entries or an electronic transfer or transfers in the Direct Registration System, and, when used with respect to ADRs in physical certificated form, shall refer to the physical delivery, execution, issuance, registration, surrender, transfer or cancellation of certificates representing the ADRs.

(f)    “Delivery Order” is defined in Section 3.

(g)    “Deposited Securities” as of any time means all Shares at such time deposited under this Deposit Agreement and any and all other Shares, securities, property and cash at such time held by the Depositary or the Custodian in respect or in lieu of such deposited Shares and other Shares, securities, property and cash.

(h)    “Direct Registration System” means the system for the uncertificated registration of ownership of securities established by The Depository Trust Company (“DTC”) and utilized by the Depositary pursuant to which the Depositary may record the ownership of ADRs without the issuance of a certificate, which ownership shall be evidenced by periodic statements issued by the Depositary to the Holders entitled thereto. For purposes hereof, the Direct Registration System shall include access to the Profile Modification System maintained by DTC which provides for automated transfer of ownership between DTC and the Depositary.

(i)    “Holder” means the person or persons in whose name an ADR is registered on the ADR Register.

(j)    “Securities Act of 1933” means the United States Securities Act of 1933, as from time to time amended.

(k)    “Securities Exchange Act of 1934” means the United States Securities Exchange Act of 1934, as from time to time amended.

(l)    “Shares” mean the ordinary shares of the Company or interim certificates representing such Shares, and shall include the rights to receive Shares specified in paragraph (1) of the form of ADR.

(m)    “Transfer Office” is defined in paragraph (3) of the form of ADR.

(n)    “Withdrawal Order” is defined in Section 6.

2.    ADRs.    (a) ADRs in certificated form shall be engraved, printed or otherwise reproduced at the discretion of the Depositary in accordance with its customary practices in its American depositary receipt business, or at the request of the Company typewritten and photocopied on plain or safety paper, and shall be substantially in the form set forth in the form of ADR, with such changes as may be required by the Depositary or the Company to comply with their obligations hereunder, any applicable law, regulation or usage or to indicate any special limitations or restrictions to which any particular ADRs are subject. ADRs may be issued in denominations of any number of ADSs. ADRs in certificated form shall be executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary. ADRs in certificated form bearing the facsimile signature of anyone who was at the time of execution a duly authorized officer of the Depositary shall bind the Depositary, notwithstanding that such officer has ceased to hold such office prior to the delivery of such ADRs.

(b)    Direct Registration ADRs.    Notwithstanding anything in this Deposit Agreement or in the form of ADR to the contrary, ADSs shall be evidenced by Direct Registration ADRs, unless certificated ADRs are specifically requested by the Holder.

(c)    Holders shall be bound by the terms and conditions of this Deposit Agreement and of the form of ADR, regardless of whether their ADRs are Direct Registration ADRs or certificated ADRs.

3.    Deposit of Shares.    In connection with the deposit of Shares hereunder, the Depositary or the Custodian may require the following in form satisfactory to it: (a) a written order directing the Depositary to issue to, or upon the written order of, the person or persons designated in such order a Direct Registration ADR or ADRs evidencing the number of ADSs representing such deposited Shares (a “Delivery Order”); (b) proper endorsements or duly executed instruments of transfer in respect of such deposited Shares; (c) instruments assigning to the Custodian or its nominee any distribution on or in respect of such deposited Shares or indemnity therefor; and (d) proxies entitling the Custodian to vote such deposited Shares. As soon as practicable after the Custodian receives Deposited Securities pursuant to any such deposit or pursuant to paragraph (10) or (13) of the form of ADR, the Custodian shall present such Deposited Securities for registration of transfer into the name of the Custodian or its nominee, to the extent such registration is practicable, at the cost and expense of the person making such deposit (or for whose benefit such deposit is made) and shall obtain evidence satisfactory to it of such registration. Deposited Securities shall be held by the Custodian for the account and to the order of the Depositary at such place or places and in such manner as the Depositary shall determine. Deposited Securities may be delivered by the Custodian to any person only under the circumstances expressly contemplated in this Deposit Agreement. To the extent that the provisions of or governing the Shares make delivery of certificates therefor impracticable, Shares may be deposited hereunder by such delivery thereof as the Depositary or the Custodian may reasonably accept, including, without limitation, by causing them to be credited to an account maintained by the Custodian for such purpose with the Company or an accredited intermediary, such as a bank, acting as a registrar for the Shares, together with delivery of the documents, payments and Delivery Order referred to herein to the Custodian or the Depositary.

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4.    Issue of ADRs.    After any such deposit of Shares, the Custodian shall notify the Depositary of such deposit and of the information contained in any related Delivery Order by letter, first class airmail postage prepaid, or, at the request, risk and expense of the person making the deposit, by cable, telex or facsimile transmission. After receiving such notice from the Custodian, the Depositary, subject to this Deposit Agreement, shall properly issue at the Transfer Office, to or upon the order of any person named in such notice, an ADR or ADRs registered as requested and evidencing the aggregate ADSs to which such person is entitled.

5.    Distributions on Deposited Securities.    To the extent that the Depositary determines in its discretion that any distribution pursuant to paragraph (10) of the form of ADR is not practicable with respect to any Holder, the Depositary may make such distribution as it so deems practicable, including the distribution of foreign currency, securities or property (or appropriate documents evidencing the right to receive foreign currency, securities or property) or the retention thereof as Deposited Securities with respect to such Holder’s ADRs (without liability for interest thereon or the investment thereof).

6.    Withdrawal of Deposited Securities.    In connection with any surrender of an ADR for withdrawal of the Deposited Securities represented by the ADSs evidenced thereby, the Depositary may require proper endorsement in blank of such ADR (or duly executed instruments of transfer thereof in blank) and the Holder’s written order directing the Depositary to cause the Deposited Securities represented by the ADSs evidenced by such ADR to be withdrawn and delivered to, or upon the written order of, any person designated in such order (a “Withdrawal Order”). Directions from the Depositary to the Custodian to deliver Deposited Securities shall be given by letter, first class airmail postage prepaid, or, at the request, risk and expense of the Holder, by cable, telex or facsimile transmission. Delivery of Deposited Securities may be made by the delivery of certificates (which, if required by law shall be properly endorsed or accompanied by properly executed instruments of transfer or, if such certificates may be registered, registered in the name of such Holder or as ordered by such Holder in any Withdrawal Order) or by such other means as the Depositary may deem practicable, including, without limitation, by transfer of record ownership thereof to an account designated in the Withdrawal Order maintained either by the Company or an accredited intermediary, such as a bank, acting as a registrar for the Deposited Securities.

7.    Substitution of ADRs.    The Depositary shall execute and deliver a new Direct Registration ADR in exchange and substitution for any mutilated certificated ADR upon cancellation thereof or in lieu of and in substitution for such destroyed, lost or stolen certificated ADR, unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, upon the Holder thereof filing with the Depositary a request for such execution and delivery and a sufficient indemnity bond and satisfying any other reasonable requirements imposed by the Depositary.

8.    Cancellation and Destruction of ADRs.    All ADRs surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy ADRs in certificated form so cancelled in accordance with its customary practices.

9.    The Custodian.    Any Custodian in acting hereunder shall be subject to the directions of the Depositary and shall be responsible solely to it. The Depositary may from time to time appoint one or more agents to act for it as Custodian hereunder. Each Custodian so appointed (other than JPMorgan Chase Bank) shall give written notice to the Company and the Depositary accepting such appointment and agreeing to be bound by the applicable terms hereof. Any Custodian may resign from its duties hereunder by at least 30 days written notice to the Depositary. The Depositary may discharge any Custodian at any time upon notice to the

3

Custodian being discharged. Any Custodian ceasing to act hereunder as Custodian shall deliver, upon the instruction of the Depositary, all Deposited Securities held by it to a Custodian continuing to act.

10.    Co-Registrars and Co-Transfer Agents.    The Depositary may appoint and remove (i) co-registrars to register ADRs and transfers, combinations and split-ups of ADRs and to countersign ADRs in accordance with the terms of any such appointment and (ii) co-transfer agents for the purpose of effecting transfers, combinations and split-ups of ADRs at designated transfer offices in addition to the Transfer Office on behalf of the Depositary. Each co-registrar or co-transfer agent (other than JPMorgan Chase Bank) shall give notice in writing to the Company and the Depositary accepting such appointment and agreeing to be bound by the applicable terms of this Deposit Agreement.

11.    Lists of Holders.    The Company shall have the right to inspect transfer records of the Depositary and its agents and the ADR Register, take copies thereof and require the Depositary and its agents to supply copies of such portions of such records as the Company may request. The Depositary or its agent shall furnish to the Company promptly upon the written request of the Company, a list of the names, addresses and holdings of ADSs by all Holders as of a date within seven days of the Depositary’s receipt of such request.

12.    Depositary’s Agents.    The Depositary may perform its obligations under this Deposit Agreement through any agent appointed by it, provided that the Depositary shall notify the Company of such appointment and shall remain responsible for the performance of such obligations as if no agent were appointed.

13.    Successor Depositary.    The Depositary may at any time resign as Depositary hereunder by written notice of its election so to do delivered to the Company. The Depositary may at any time be removed by the Company by written notice of such removal. Notwithstanding anything to the contrary contained herein, in case at any time the Depositary acting hereunder shall resign or be removed, it shall continue to act as Depositary for the purpose of terminating this Deposit Agreement pursuant to paragraph (17) of the form of ADR. Any bank or trust company into or with which the Depositary may be merged or consolidated, or to which the Depositary shall transfer substantially all its American depositary receipt business, shall be the successor of the Depositary without the execution or filing of any document or any further act.

14.    Reports.    On or before the first date on which the Company makes any communication available to holders of Deposited Securities or any securities regulatory authority or stock exchange, by publication or otherwise, the Company shall transmit to the Depositary a copy thereof in English or with an English translation or summary. The Company has delivered to the Depositary, the Custodian and any Transfer Office, a copy of all provisions of or governing the Shares and any other Deposited Securities issued by the Company or any affiliate of the Company and, promptly upon any change thereto, the Company shall deliver to the Depositary, the Custodian and any Transfer Office, a copy (in English or with an English translation) of such provisions as so changed. The Depositary and its agents may rely upon the Company’s delivery thereof for all purposes of this Deposit Agreement.

15.    Additional Shares.    Neither the Company nor any company controlling, controlled by or under common control with the Company shall issue additional Shares, rights to subscribe for Shares, securities convertible into or exchangeable for Shares or rights to subscribe for any such securities or shall deposit any Shares under this Deposit Agreement, except under circumstances complying in all respects with the Securities Act of 1933. The Depositary will use

4

reasonable efforts to comply with written instructions of the Company not to accept for deposit hereunder any Shares identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company’s compliance with securities laws in the United States.

16.    Indemnification.    The Company shall indemnify, defend and save harmless each of the Depositary and its agents against any loss, liability or expense (including reasonable fees and expenses of counsel) which may arise out of acts performed or omitted, in accordance with the provisions of this Deposit Agreement and of the ADRs, as the same may be amended, modified or supplemented from time to time in accordance herewith (i) by either the Depositary or its agents or their respective directors, employees, agents and affiliates, except, subject to the penultimate paragraph of this Section 16, for any liability or expense directly arising out of the negligence or bad faith of the Depositary, or (ii) by the Company or any of its directors, employees, agents or affiliates.

The indemnities set forth in the preceding paragraph shall apply to any liability or expense which may arise out of any misstatement or alleged misstatement or omission or alleged omission in any registration statement, proxy statement, prospectus (or placement memorandum), or preliminary prospectus (or preliminary placement memorandum) relating to the offer or sale of ADSs, except to the extent any such liability or expense arises out of (i) information relating to the Depositary or its agents (other than the Company), as applicable, furnished in writing by the Depositary and not changed or altered by the Company expressly for use in any of the foregoing documents or (ii) if such information is provided, the failure to state a material fact necessary to make the information provided not misleading.

Except as provided in the next succeeding paragraph, the Depositary shall indemnify, defend and save harmless the Company against any loss, liability or expense incurred by the Company in respect of this Deposit Agreement to the extent such loss, liability or expense is due to the negligence or bad faith of the Depositary and its agents appointed hereunder.

Notwithstanding any other provision of this Deposit Agreement or the form of ADR to the contrary, neither the Company nor the Depositary, nor any of their agents, shall be liable to the other for any indirect, special, punitive or consequential damages (collectively “Special Damages”) except (i) to the extent such Special Damages arise from the gross negligence or willful misconduct of the party from whom indemnification is sought or (ii) to the extent Special Damages arise from or out of a claim brought by a third party (including, without limitation, Holders) against the Depositary or its agents, except to the extent such Special Damages arise out of the gross negligence or willful misconduct of the party seeking indemnification hereunder

The obligations set forth in this Section 16 shall survive the termination of this Deposit Agreement and the succession or substitution of any indemnified person.

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17.    Notices.    Notice to any Holder shall be deemed given when first mailed, first class postage prepaid, to the address of such Holder on the ADR Register or received by such Holder. Notice to the Depositary or the Company shall be deemed given when first received by it at the address or facsimile transmission number set forth in (a) or (b), respectively, or at such other address or facsimile transmission number as either may specify to the other by written notice:

(a) JPMorgan Chase Bank

Four New York Plaza

New York, New York 10004

Attention: ADR Administration

Fax: (212) 623-0079

(b) eLONG, INC.

10 Jiuxianqiao Middle Road

13/F, Xingke Plaza Building B

Chaoyang District

Beijing 100021, China

Attention: Justin Tang

Fax: 86 (10) 6431-5872

18.    Miscellaneous.    This Deposit Agreement is for the exclusive benefit of the Company, the Depositary, the Holders, and their respective successors hereunder, and shall not give any legal or equitable right, remedy or claim whatsoever to any other person. The Holders and owners of ADRs from time to time shall be parties to this Deposit Agreement and shall be bound by all of the provisions hereof. If any such provision is invalid, illegal or unenforceable in any respect, the remaining provisions shall in no way be affected thereby. This Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one instrument.

19.    Consent to Jurisdiction.    The Company irrevocably agrees that any legal suit, action or proceeding against the Company brought by the Depositary or any Holder, arising out of or based upon this Deposit Agreement or the transactions contemplated hereby, may be instituted in any state or federal court in New York, New York, and irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The Company has appointed [CT Corporation System, 111 Eighth Avenue, New York, New York 10011], as its authorized agent (the “Authorized Agent”) upon which process may be served in any such action arising out of or based on this Deposit Agreement or the transactions contemplated hereby which may be instituted in any state or federal court in New York, New York by the Depositary or any Holder, and waives any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that the Authorized Agent has agreed to act as said agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Company shall be deemed, in every respect, effective service of process upon the Company. If, for any reason, the Authorized Agent named above or its successor shall no longer serve as agent of the Company to receive service of process in New York, the Company shall promptly appoint a successor acceptable to the Depositary, so as to serve and will promptly advise the Depositary thereof. In the event the Company fails to continue such designation and appointment in full force and effect, the Company hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered

6

mail, return receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed. Notwithstanding the foregoing, any action based on this Agreement may be instituted by the Depositary or any Holder in any competent court in The People’s Republic of China.

To the extent that the Company or any of its properties, assets or revenues may have or may hereafter be entitled to, or have attributed to it, any right of immunity, on the grounds of sovereignty or otherwise, from any legal action, suit or proceeding, from the giving of any relief in any respect thereof, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to its obligations, liabilities or other matter under or arising out of or in connection with the Shares or Deposited Securities, the ADSs, the ADRs or this Agreement, the Company, to the fullest extent permitted by law, hereby irrevocably and unconditionally waives, and agrees not to plead or claim, any such immunity and consents to such relief and enforcement.

IN WITNESS WHEREOF, ELONG, INC. and JPMORGAN CHASE BANK have duly executed this Deposit Agreement as of the day and year first above set forth and all holders of ADRs shall become parties hereto upon acceptance by them of ADRs issued in accordance with the terms hereof.

ELONG, INC.
By:
Name:
Title:
JPMORGAN CHASE BANK
By:
Name:
Title:	Vice President

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EXHIBIT A

ANNEXED TO AND INCORPORATED IN

DEPOSIT AGREEMENT

[FORM OF FACE OF ADR]

	No. of ADSs:
Number
		Each ADS represents
		[EXCHANGE] Share
		CUSIP:

AMERICAN DEPOSITARY RECEIPT

evidencing

AMERICAN DEPOSITARY SHARES

representing

ORDINARY SHARES

of

ELONG, INC.

(Incorporated under the

laws of the Cayman Islands)

JPMORGAN CHASE BANK, a New York corporation, as depositary hereunder (the “Depositary”), hereby certifies that              is the registered owner (a “Holder”) of      American Depositary Shares (“ADSs”), each (subject to paragraph (13)) representing [EXCHANGE] ordinary shares (including the rights to receive such ordinary shares described in paragraph (1), “Shares” and, together with any other securities, cash or property from time to time held by the Depositary in respect or in lieu of deposited Shares, the “Deposited Securities”), of eLONG, INC., a corporation organized under the laws of The Cayman Islands (the “Company”), deposited under the Deposit Agreement dated as of [DATE], 2004 (as amended from time to time, the “Deposit Agreement”) among the Company, the Depositary and all Holders from time to time of American Depositary Receipts issued thereunder (“ADRs”), each of whom by accepting an ADR becomes a party thereto. The Deposit Agreement and this ADR (which includes the provisions set forth on the reverse hereof) shall be governed by and construed in accordance with the laws of the State of New York.

(1)    Issuance of ADRs.    This ADR is one of the ADRs issued under the Deposit Agreement. Subject to paragraph (4), the Depositary may so issue ADRs for delivery at the Transfer Office (defined in paragraph (3)) only against deposit with the Custodian of: (a) Shares in form satisfactory to the Custodian; (b) rights to receive Shares from the Company or any registrar, transfer agent, clearing agent or other entity recording Share ownership or transactions; or, (c) other rights to receive Shares (until such Shares are actually deposited pursuant to (a) or (b)

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above, “Pre-released ADRs”) only if (i) Pre-released ADRs are fully collateralized (marked to market daily) with cash or U.S. government securities held by the Depositary for the benefit of Holders (but such collateral shall not constitute “Deposited Securities”), (ii) each recipient of Pre-released ADRs agrees in writing with the Depositary that such recipient (a) owns such Shares, (b) assigns all beneficial right, title and interest therein to the Depositary, (c) holds such Shares for the account of the Depositary and (d) will deliver such Shares to the Custodian as soon as practicable and promptly upon demand therefor and (iii) all Pre-released ADRs evidence not more than 30% of all ADSs (excluding those evidenced by Pre-released ADRs), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate. The Depositary may retain for its own account any earnings on collateral for Pre-released ADRs and its charges for issuance thereof. At the request, risk and expense of the person depositing Shares, the Depositary may accept deposits for forwarding to the Custodian and may deliver ADRs at a place other than its office. Every person depositing Shares under the Deposit Agreement represents and warrants that such Shares are validly issued and outstanding, fully paid, nonassessable and free of pre-emptive rights, that the person making such deposit is duly authorized so to do and that such Shares (A) are not “restricted securities” as such term is defined in Rule 144 under the Securities Act of 1933 unless at the time of deposit they may be freely transferred in accordance with Rule 144(k) and may otherwise be offered and sold freely in the United States or (B) have been registered under the Securities Act of 1933. Such representations and warranties shall survive the deposit of Shares and issuance of ADRs. The Depositary will not knowingly accept for deposit under the Deposit Agreement any Shares required to be registered under the Securities Act of 1933 and not so registered; the Depositary may refuse to accept for such deposit any Shares identified by the Company in order to facilitate the Company’s compliance with such Act.

(2)    Withdrawal of Deposited Securities.    Subject to paragraphs (4) and (5), upon surrender of (i) a certificated ADR in form satisfactory to the Depositary at the Transfer Office or (ii) proper instructions and documentation in the case of a Direct Registration ADR, the Holder hereof is entitled to delivery at the Custodian’s office of the Deposited Securities at the time represented by the ADSs evidenced by this ADR. At the request, risk and expense of the Holder hereof, the Depositary may deliver such Deposited Securities at such other place as may have been requested by the Holder. Notwithstanding any other provision of the Deposit Agreement or this ADR, the withdrawal of Deposited Securities may be restricted only for the reasons set forth in General Instruction I.A.(1) of Form F-6 (as such instructions may be amended from time to time) under the Securities Act of 1933.

(3)    Transfers of ADRs.    The Depositary or its agent will keep, at a designated transfer office in the Borough of Manhattan, The City of New York (the “Transfer Office”), (a) a register (the “ADR Register”) for the registration, registration of transfer, combination and split-up of ADRs, and, in the case of Direct Registration ADRs, shall include the Direct Registration System, which at all reasonable times will be open for inspection by Holders and the Company for the purpose of communicating with Holders in the interest of the business of the Company or a matter relating to the Deposit Agreement and (b) facilities for the delivery and receipt of ADRs. The term ADR Register includes the Direct Registration System. Title to this ADR (and to the Deposited Securities represented by the ADSs evidenced hereby), when properly endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer, is transferable by delivery with the same effect as in the case of negotiable instruments under the laws of the State of New York; provided that the Depositary, notwithstanding any notice to the contrary, may treat the person in whose name this ADR is registered on the ADR Register as the absolute owner hereof for all purposes and neither the Depositary nor the Company will have any obligation or be subject to any liability under the Deposit Agreement to any holder of an ADR, unless such holder is the Holder thereof. Subject to

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paragraphs (4) and (5), this ADR is transferable on the ADR Register and may be split into other ADRs or combined with other ADRs into one ADR, evidencing the same number of ADSs evidenced by this ADR, by the Holder hereof or by duly authorized attorney upon surrender of this ADR at the Transfer Office properly endorsed (in the case of ADRs in certificated form) or upon delivery to the Depositary of proper instruments of transfer and duly stamped as may be required by applicable law; provided that the Depositary may close the ADR Register at any time or from time to time when deemed expedient by it or requested by the Company. At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated ADR with a Direct Registration ADR, or vice versa, execute and deliver a certificated ADR or a Direct Registration ADR, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the certificated ADR or Direct Registration ADR, as the case may be, substituted.

(4)    Certain Limitations.    Prior to the issue, registration, registration of transfer, split-up or combination of any ADR, the delivery of any distribution in respect thereof, or, subject to the last sentence of paragraph (2), the withdrawal of any Deposited Securities, and from time to time in the case of clause (b)(ii) of this paragraph (4), the Company, the Depositary or the Custodian may require: (a) payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of Shares or other Deposited Securities upon any applicable register and (iii) any applicable charges as provided in paragraph (7) of this ADR; (b) the production of proof satisfactory to it of (i) the identity and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing Deposited Securities and terms of the Deposit Agreement and this ADR, as it may deem necessary or proper; and (c) compliance with such regulations as the Depositary may establish consistent with the Deposit Agreement. The issuance of ADRs, the acceptance of deposits of Shares, the registration, registration of transfer, split-up or combination of ADRs or, subject to the last sentence of paragraph (2), the withdrawal of Deposited Securities may be suspended, generally or in particular instances, when the ADR Register or any register for Deposited Securities is closed or when any such action is deemed advisable by the Depositary or the Company.

(5)    Taxes.    If any tax or other governmental charge shall become payable by or on behalf of the Custodian or the Depositary with respect to this ADR, any Deposited Securities represented by the ADSs evidenced hereby or any distribution thereon, such tax or other governmental charge shall be paid by the Holder hereof to the Depositary. The Depositary may refuse to effect any registration, registration of transfer, split-up or combination hereof or, subject to the last sentence of paragraph (2), any withdrawal of such Deposited Securities until such payment is made. The Depositary may also deduct from any distributions on or in respect of Deposited Securities, or may sell by public or private sale for the account of the Holder hereof any part or all of such Deposited Securities (after attempting by reasonable means to notify the Holder hereof prior to such sale), and may apply such deduction or the proceeds of any such sale in payment of such tax or other governmental charge, the Holder hereof remaining liable for any deficiency, and shall reduce the number of ADSs evidenced hereby to reflect any such sales of Shares. In connection with any distribution to Holders, the Company will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Company; and the Depositary and the Custodian will remit to the appropriate governmental authority or agency all amounts (if any) required to be withheld and owing to such authority or agency by the Depositary or the Custodian. If the Depositary determines that any distribution in property other than cash (including Shares or rights) on Deposited Securities is subject to any tax that the Depositary or the Custodian is

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obligated to withhold, the Depositary may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes, by public or private sale, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes to the Holders entitled thereto.

(6)    Disclosure of Interests.    To the extent that the provisions of or governing any Deposited Securities may require disclosure of or impose limits on beneficial or other ownership of Deposited Securities, other Shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, Holders and all persons holding ADRs agree to comply with all such disclosure requirements and ownership limitations and to cooperate with the Depositary in the Depositary’s compliance with any Company instructions in respect thereof, and the Depositary will use reasonable efforts to comply with such Company instructions.

(7)    Charges of Depositary.    The Depositary may charge each person to whom ADSs are issued against deposits of Shares, including deposits in respect of Share Distributions, Rights and Other Distributions (as such terms are defined in paragraph (10)), and each person surrendering ADSs for withdrawal of Deposited Securities, U.S. $5.00 for each 100 ADSs (or portion thereof) delivered or surrendered. The Depositary may sell (by public or private sale) sufficient securities and property received in respect of Share Distributions, Rights and Other Distributions prior to such deposit to pay such charge. The following additional charges shall be incurred by the Holders, by any party depositing or withdrawing Shares or by any party surrendering ADRs or to whom ADRs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding the ADRs or the Deposited Securities or a distribution of ADRs pursuant to paragraph (10)), whichever is applicable (i) a fee of $.02 or less per ADS (or portion thereof) for any Cash distribution made pursuant to the Deposit Agreement, (ii) to the extent not prohibited by the rules of any stock exchange or interdealer quotation system upon which the ADSs are traded, a fee of $1.50 per ADR or ADRs for transfers made pursuant to paragraph (3) hereof, (iii) a fee for the distribution or sale of securities pursuant to paragraph (10) hereof, such fee being in an amount equal to the fee for the execution and delivery of ADSs referred to above which would have been charged as a result of the deposit of such securities (for purposes of this paragraph (7) treating all such securities as if they were Shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the Depositary to Holders entitled thereto, (iv) a fee of $0.02 per ADS (or portion thereof) per year to cover such expenses as are incurred by the Depositary in administering the ADR program covered by the Deposit Agreement (which fee shall be assessed against Holders of record as of the date set by the Depositary in accordance with paragraph (11) hereof not more often than once each calendar year and shall be payable in the manner described in (vi) below), (v) such fees and expenses as are incurred by the Depositary (including without limitation expenses incurred on behalf of Holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of Deposited Securities or otherwise in connection with the Depositary’s or its Custodian’s compliance with applicable law, rule or regulation and (vi) any other charge payable by any of the Depositary, any of the Depositary’s agents, including, without limitation, the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Shares or other Deposited Securities (which charge shall be assessed against Holders as of the date or dates set by the Depositary in accordance with paragraph (11) hereof and shall be payable at the sole discretion of the Depositary by billing such Holders or by deducting such charge from one or more Cash dividends or other Cash distributions). The Company will pay all other charges and expenses of the Depositary and any agent of the Depositary (except the Custodian) pursuant to agreements from time to time

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between the Company and the Depositary, except (i) stock transfer or other taxes and other governmental charges (which are payable by Holders or persons depositing Shares), (ii) cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or Holders delivering Shares, ADRs or Deposited Securities (which are payable by such persons or Holders), (iii) transfer or registration fees for the registration or transfer of Deposited Securities on any applicable register in connection with the deposit or withdrawal of Deposited Securities (which are payable by persons depositing Shares or Holders withdrawing Deposited Securities; there are no such fees in respect of the Shares as of the date of the Deposit Agreement), and (iv) expenses of the Depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency). These charges may be changed in the manner indicated in paragraph (16).

(8)    Available Information.    The Deposit Agreement, the provisions of or governing Deposited Securities and any written communications from the Company, which are both received by the Custodian or its nominee as a holder of Deposited Securities and made generally available to the holders of Deposited Securities, are available for inspection by Holders at the offices of the Depositary and the Custodian and at the Transfer Office. The Depositary will distribute copies of such communications (or English translations or summaries thereof) to Holders when furnished by the Company. The Company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 and accordingly files certain reports with the United States Securities and Exchange Commission (the “Commission”). Such reports and other information may be inspected and copied at public reference facilities maintained by the Commission located at the date hereof at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.

(9)    Execution.    This ADR shall not be valid for any purpose unless executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary.

Dated:

JPMORGAN CHASE BANK, as Depositary

By

Authorized Officer

The Depositary’s office is located at 4 New York Plaza, New York, New York 10004.

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[FORM OF REVERSE OF ADR]

(10)    Distributions on Deposited Securities.    Subject to paragraphs (4) and (5), to the extent practicable, the Depositary will distribute to each Holder entitled thereto on the record date set by the Depositary therefor at such Holder’s address shown on the ADR Register, in proportion to the number of Deposited Securities (on which the following distributions on Deposited Securities are received by the Custodian) represented by ADSs evidenced by such Holder’s ADRs: (a) Cash. Any U.S. dollars available to the Depositary resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof authorized in this paragraph (10) (“Cash”), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain Holders, and (iii) deduction of the Depositary’s expenses in (1) converting any foreign currency to U.S. dollars by sale or in such other manner as the Depositary may determine to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the Depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner. (b) Shares. (i) Additional ADRs evidencing whole ADSs representing any Shares available to the Depositary resulting from a dividend or free distribution on Deposited Securities consisting of Shares (a “Share Distribution”) and (ii) U.S. dollars available to it resulting from the net proceeds of sales of Shares received in a Share Distribution, which Shares would give rise to fractional ADSs if additional ADRs were issued therefor, as in the case of Cash. (c) Rights. (i) Warrants or other instruments in the discretion of the Depositary representing rights to acquire additional ADRs in respect of any rights to subscribe for additional Shares or rights of any nature available to the Depositary as a result of a distribution on Deposited Securities (“Rights”), to the extent that the Company timely furnishes to the Depositary evidence satisfactory to the Depositary that the Depositary may lawfully distribute the same (the Company has no obligation to so furnish such evidence), or (ii) to the extent the Company does not so furnish such evidence and sales of Rights are practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Rights as in the case of Cash, or (iii) to the extent the Company does not so furnish such evidence and such sales cannot practicably be accomplished by reason of the nontransferability of the Rights, limited markets therefor, their short duration or otherwise, nothing (and any Rights may lapse). (d) Other Distributions. (i) Securities or property available to the Depositary resulting from any distribution on Deposited Securities other than Cash, Share Distributions and Rights (“Other Distributions”), by any means that the Depositary may deem equitable and practicable, or (ii) to the extent the Depositary deems distribution of such securities or property not to be equitable and practicable, any U.S. dollars available to the Depositary from the net proceeds of sales of Other Distributions as in the case of Cash. Such U.S. dollars available will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the Depositary in accordance with its then current practices.

(11)    Record Dates.    The Depositary may, after consultation with the Company if practicable, fix a record date (which shall be as near as practicable to any corresponding record date set by the Company) for the determination of the Holders who shall be entitled to receive any distribution on or in respect of Deposited Securities, to give instructions for the exercise of any voting rights, for the determination of the Holders who shall be responsible for the fee assessed by the Depositary for administration of the ADR program and for any expenses provided for in paragraph (7) hereof, to receive any notice or to act in respect of other matters and only such Holders shall be so entitled.

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(12)    Voting of Deposited Securities.    As soon as practicable after receipt from the Company of notice of any meeting or solicitation of consents or proxies of holders of Shares or other Deposited Securities, the Depositary shall distribute to Holders a notice stating (a) such information as is contained in such notice and any solicitation materials, (b) that each Holder on the record date set by the Depositary therefor will, subject to any applicable provisions of Cayman Islands law, be entitled to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs and (c) the manner in which such instructions may be given, including instructions to give a discretionary proxy to a person designated by the Company. Upon receipt of instructions of a Holder on such record date in the manner and on or before the date established by the Depositary for such purpose, the Depositary shall endeavor insofar as practicable and permitted under the provisions of or governing Deposited Securities to vote or cause to be voted the Deposited Securities represented by the ADSs evidenced by such Holder’s ADRs in accordance with such instructions. The Depositary will not itself exercise any voting discretion in respect of any Deposited Securities.

(13)    Changes Affecting Deposited Securities.    Subject to paragraphs (4) and (5), the Depositary may, in its discretion, amend this ADR or distribute additional or amended ADRs (with or without calling this ADR for exchange) or cash, securities or property on the record date set by the Depositary therefor to reflect any change in par value, split-up, consolidation, cancellation or other reclassification of Deposited Securities, any Share Distribution or Other Distribution not distributed to Holders or any cash, securities or property available to the Depositary in respect of Deposited Securities from (and the Depositary is hereby authorized to surrender any Deposited Securities to any person and to sell by public or private sale any property received in connection with) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all the assets of the Company, and to the extent the Depositary does not so amend this ADR or make a distribution to Holders to reflect any of the foregoing, or the net proceeds thereof, whatever cash, securities or property results from any of the foregoing shall constitute Deposited Securities and each ADS evidenced by this ADR shall automatically represent its pro rata interest in the Deposited Securities as then constituted.

(14)    Exoneration.    The Depositary, the Company, their agents and each of them shall: (a) incur no liability (i) if any present or future law, regulation of the United States, the People’s Republic of China, the Cayman Islands or any other country, or of any governmental or regulatory authority or stock exchange, the provisions of or governing any Deposited Securities, act of God, war or other circumstance beyond its control shall prevent, delay or subject to any civil or criminal penalty any act which the Deposit Agreement or this ADR provides shall be done or performed by it, or (ii) by reason of any exercise or failure to exercise any discretion given it in the Deposit Agreement or this ADR; (b) assume no liability except to perform its obligations to the extent they are specifically set forth in this ADR and the Deposit Agreement without gross negligence or bad faith; (c) in the case of the Depositary and its agents, be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR; (d) in the case of the Company and its agents hereunder be under no obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or this ADR, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required; or (e) not be liable for any action or inaction by it in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, or any other person believed by it to be competent to give such advice or information. The Depositary, its agents and the Company may rely and shall be protected in acting upon any written notice,

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request, direction or other document believed by them to be genuine and to have been signed or presented by the proper party or parties. The Depositary and its agents will not be responsible for any failure to carry out any instructions to vote any of the Deposited Securities, for the manner in which any such vote is cast or for the effect of any such vote. The Depositary and its agents may own and deal in any class of securities of the Company and its affiliates and in ADRs. Notwithstanding anything to the contrary set forth in the Deposit Agreement or an ADR, the Depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the Deposit Agreement, any Holder or Holders, any ADR or ADRs or otherwise related hereto to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators. The Company has agreed to indemnify the Depositary and its agents under certain circumstances and the Depositary has agreed to indemnify the Company under certain circumstances. Neither the Company nor the Depositary nor any of their respective agents shall be liable to Holders or beneficial owners of interests in ADSs for any indirect, special, punitive or consequential damages. No disclaimer of liability under the Securities Act of 1933 is intended by any provision hereof.

(15)    Resignation and Removal of Depositary; the Custodian.    The Depositary may resign as Depositary by written notice of its election to do so delivered to the Company, or be removed as Depositary by the Company by written notice of such removal delivered to the Depositary. The Depositary may appoint substitute or additional Custodians and the term “Custodian” refers to each Custodian or all Custodians as the context requires.

(16)    Amendment.    Subject to the last sentence of paragraph (2), the ADRs and the Deposit Agreement may be amended by the Company and the Depositary, provided that any amendment that imposes or increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or that shall otherwise prejudice any substantial existing right of Holders, shall become effective 30 days after notice of such amendment shall have been given to the Holders. Every Holder of an ADR at the time any amendment to the Deposit Agreement so becomes effective shall be deemed, by continuing to hold such ADR, to consent and agree to such amendment and to be bound by the Deposit Agreement as amended thereby. In no event shall any amendment impair the right of the Holder of any ADR to surrender such ADR and receive the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act of 1933 or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to prejudice any substantial rights of Holders. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement or the form of ADR to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the ADR at any time in accordance with such changed rules. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance.

(17)    Termination.    Upon the resignation or removal of the Depositary pursuant to the Deposit Agreement, the Depositary may, and shall at the written direction of the Company, terminate the Deposit Agreement and this ADR by mailing notice of such termination to the

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Holders at least 30 days prior to the date fixed in such notice for such termination. After the date so fixed for termination, the Depositary and its agents will perform no further acts under the Deposit Agreement and this ADR, except to receive and hold (or sell) distributions on Deposited Securities and deliver Deposited Securities being withdrawn. As soon as practicable after the expiration of six months from the date so fixed for termination, the Depositary shall sell the Deposited Securities and shall thereafter (as long as it may lawfully do so) hold in a segregated account the net proceeds of such sales, together with any other cash then held by it under the Deposit Agreement, without liability for interest, in trust for the pro rata benefit of the Holders of ADRs not theretofore surrendered. After making such sale, the Depositary shall be discharged from all obligations in respect of the Deposit Agreement and this ADR, except to account for such net proceeds and other cash. After the date so fixed for termination, the Company shall be discharged from all obligations under the Deposit Agreement except for its obligations to the Depositary and its agents.

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EX-4.5

Exhibit 4.5

eLong, Inc.

INVESTORS’ RIGHTS AGREEMENT

August 29, 2003

TABLE OF CONTENTS

			Page
1. Registration Rights			1
	1.1	Definitions	1
	1.2	Request for Registration	2
	1.3	Company Registration	3
	1.4	Form F-3 Registration	4
	1.5	Obligations of the Company	5
	1.6	Information from Holder	7
	1.7	Expenses of Registration	7
	1.8	Delay of Registration	7
	1.9	Indemnification	7
	1.10	Reports Under the 1934 Act	9
	1.11	Assignment of Registration Rights	10
	1.12	Limitations on Subsequent Registration Rights	10
	1.13	Termination of Registration Rights	10
2. Covenants of the Company			10
	2.1	Delivery of Financial Statements	10
	2.2	Inspection	11
	2.3	Termination of Information and Inspection Covenants	11
	2.4	Right of First Offer	11
	2.5	Employee Agreements	13
	2.6	Termination of Certain Covenants	13
3. Miscellaneous			13
	3.1	Successors and Assigns	13
	3.2	Governing Law	13
	3.3	Counterparts	13
	3.4	Titles and Subtitles	14
	3.5	Notices	14
	3.6	Expenses	14
	3.7	Entire Agreement; Amendments and Waivers	14
	3.8	Severability	14
	3.9	Aggregation of Shares	14
Schedule A    Investors
Schedule B    Common Holders

i

INVESTORS’ RIGHTS AGREEMENT

THIS INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is made as of the 29th day of August, 2003, by and among eLong, Inc., an International Business Company under the laws of the British Virgin Islands (the “Company”), the investors listed on Schedule A hereto, each of which is herein referred to as an “Investor” and collectively, the “Investors” and the holders of the Company’s Common Shares (the “Common Shares”) listed on Schedule B hereto, each of which is herein referred to as a “Common Holder” and collectively, the “Common Holders”.

RECITALS

WHEREAS, the Company and the Investors are parties to the Series A Preferred Shares Purchase Agreement of even date herewith (the “Series A Agreement”); and

WHEREAS, in order to induce the Investors to purchase Series A Preferred Shares (the “Series A Preferred Shares” or “Preferred Shares”) and invest funds in the Company pursuant to the Series A Agreement, the Investors, the Common Holders and the Company hereby agree that this Agreement shall govern the rights of the Investors and the Common Holders to cause the Company to register Common Shares issued or issuable to them and certain other matters as set forth herein;

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

1.    Registration Rights.    The Company covenants and agrees as follows:

1.1    Definitions.    For purposes of this Section 1:

(a)    The term “Act” means the Securities Act of 1933, as amended.

(b)    The term “Form F-3” means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

(c)    The term “Holder” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.11 hereof; provided, however, that the Common Holders shall not be deemed to be Holders for purposes of Sections 1.4 and 1.12.

(d)    The term “Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Shares where the shares are subsequently traded primarily on the Nasdaq Stock Market’s National Market, the New York Stock Exchange or another comparable exchange or marketplace approved by the Board of Directors of the Company (the “Board of Directors”).

(e)    The term “1934 Act” means the Securities Exchange Act of 1934, as amended.

(f)    The terms “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.

(g)    The term “Registrable Securities” means (i) the Common Shares issuable or issued upon conversion of the Preferred Shares, (ii) the 17,900,000 Common Shares issued to the Common Holders; provided, however, that such Common Shares shall not be deemed Registrable Securities for the purposes of Sections 1.4, 1.12, 2.1 and 2.2 and (iii) any Common Shares issued as (or issuable upon the conversion or exercise of any

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warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares referenced in (i) and (ii) above, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which his rights under this Section 1 are not assigned.

(h)    The number of shares of Registrable Securities outstanding shall be determined by the number of Common Shares outstanding that are, and the number of Common Shares issuable pursuant to then exercisable or convertible securities that are, Registrable Securities.

(i)    The term “Rule 144” shall mean Rule 144 under the Act.

(j)    The term “Rule 144(k)” shall mean subsection (k) of Rule 144 under the Act.

(k)    The term “SEC” shall mean the Securities and Exchange Commission.

1.2    Request for Registration.

(a)    Subject to the conditions of this Section 1.2, if the Company shall receive at any time after six (6) months after the effective date of the Initial Offering, a written request from the Holders of fifty percent (50%) or more of the Registrable Securities then outstanding and held by the Investors (for purposes of this Section 1.2, the “Initiating Holders”) that the Company file a registration statement under the Act covering the registration of Registrable Securities with anticipated aggregate proceeds of at least $7,500,000, then the Company shall, within twenty (20) days of the receipt thereof, give written notice of such request to all known Holders, and subject to the limitations of this Section 1.2, use all commercially reasonable efforts to effect, as soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request received by the Company within twenty (20) days of the mailing of the Company’s notice pursuant to this Section 1.2(a).

(b)    If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the Company shall include such information in the written notice referred to in Section 1.2(a). In such event the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the Company). Notwithstanding any other provision of this Section 1.2, if the underwriter advises the Company that marketing factors require a limitation of the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders); provided, however, that (i) in no event shall any Registrable Securities held by an Investor be excluded from such underwriting unless all other securities and Registrable Securities held by Common Holders are first excluded and (ii) in no event shall any Registrable Securities be excluded from such underwriting unless all other securities are first excluded. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. For purposes of the second preceding sentence concerning apportionment, for any selling shareholder that is a Holder of Registrable Securities and that is a venture capital fund, partnership or corporation, the affiliated venture

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capital funds, partners, retired partners and shareholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and individuals.

(c)    The Company shall not be required to effect a registration pursuant to this Section 1.2:

(i)    in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act; or

(ii)    after the Company has effected two (2) registrations pursuant to this Section 1.2, and such registrations have been declared or ordered effective (and have not been subject to a “stop order” or otherwise withdrawn); or

(iii)    during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) days following the effective date of, a Company-initiated registration subject to Section 1.3 below, provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration statement to become effective; or

(iv)    if the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form F-3 pursuant to Section 1.4 hereof; or

(v)    if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.2, a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company and its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12)-month period and provided further that the Company shall not register any securities for the account of itself or any other shareholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Shares being registered are Common Shares issuable upon conversion of debt securities that are also being registered).

1.3    Company Registration.

(a)    If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Shares being registered

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are Common Shares issuable upon conversion of debt securities that are also being registered), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 3.5, the Company shall, subject to the provisions of Section 1.3(c), use all commercially reasonable efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered.

(b)    Right to Terminate Registration.    The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 1.7 hereof.

(c)    Underwriting Requirements.    In connection with any offering involving an underwriting of the Company’s shares, the Company shall not be required under this Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with such underwriters, and then only in such quantity as the underwriters determine in their sole reasonable discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by shareholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole reasonable discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering. In no event shall any Registrable Securities be excluded from such offering unless all other shareholders’ securities are first excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders.

1.4    Form F-3 Registration.    In case the Company shall receive from the Holders of Registrable Securities (for purposes of this Section 1.4, the “Initiating Holders”) a written request or requests that the Company effect a registration on Form F-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

(a)    promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders, and

(b)    use all commercially reasonable efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company, provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section 1.4:

(i)    if Form F-3 is not available for such offering by the Holders;

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(ii)    if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than $1,000,000;

(iii)    if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.4, a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company and its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12) month period and provided further that the Company shall not register any securities for the account of itself or any other shareholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Shares being registered are Common Shares issuable upon conversion of debt securities that are also being registered);

(iv)    if the Company has, within the twelve (12) month period preceding the date of such request, already effected one registration on Form F-3 for the Holders pursuant to this Section 1.4; or

(v)    in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance except as may be required by the Act.

(c)    If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.4 and the Company shall include such information in the written notice referred to in Section 1.4(a). The provisions of Section 1.2(b) shall be applicable to such request (with the substitution of Section 1.4 for references to Section 1.2).

(d)    Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders. Registrations effected pursuant to this Section 1.4 shall not be counted as requests for registration effected pursuant to Sections 1.2.

1.5    Obligations of the Company.    Whenever required under this Section 1 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a)    prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed;

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(b)    prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement;

(c)    furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(d)    use all commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

(e)    in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering;

(f)    notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

(g)    cause all such Registrable Securities registered pursuant to this Section 1 to be listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Company are then listed; and

(h)    provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

Notwithstanding the provisions of this Section 1, the Company shall be entitled to postpone or suspend, for a reasonable period of time (provided that such right shall be exercised by the Company not more than once in any twelve (12) month period) the filing, effectiveness or use of, or trading under, any registration statement if the Company shall determine that any such filing or the sale of any securities pursuant to such registration statement would:

(i)    in the good faith judgment of the Board of Directors, materially impede, delay or interfere with any material pending or proposed financing, acquisition, corporate reorganization or other similar transaction involving the Company for which the Board of Directors has authorized negotiations;

(ii)    in the good faith judgment of the Board of Directors, materially adversely impair the consummation of any pending or proposed material offering or sale of any class of securities by the Company; or

(iii)    in the good faith judgment of the Board of Directors, require disclosure of material nonpublic information that, if disclosed at such time, would be materially harmful to the interests of the Company and its shareholders; provided, however, that during any such period all executive officers and directors of the Company are also prohibited from selling securities of the Company (or any security of any of the Company’s subsidiaries or affiliates).

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In the event of the suspension of effectiveness of any registration statement pursuant to this Section 1.5. the applicable time period during which such registration statement is to remain effective shall be extended by that number of days equal to the number of days during which the effectiveness of such registration statement was suspended.

1.6    Information from Holder.    It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities.

1.7    Expenses of Registration.    All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Sections 1.2, 1.3 and 1.4, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holders as a group (not to exceed $50,000 for each registration made pursuant to Section 1.2 and not to exceed $10,000 for each registration made pursuant to Sections 1.3 and 1.4) shall be borne by the Company. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 or Section 1.4 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless, in the case of a registration requested under Section 1.2, the Holders of a majority of the Registrable Securities held by the Investors agree to forfeit their right to one demand registration pursuant to Section 1.2 and provided, however, that if at the time of such withdrawal, Holders have learned of a material adverse change in the condition, business, or prospects of the Company from that known to such Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 1.2 or 1.4.

1.8    Delay of Registration.    No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.

1.9    Indemnification.    In the event any Registrable Securities are included in a registration statement under this Section 1:

(a)    To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers, directors and shareholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”); (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the

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statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, and the Company will reimburse each such Holder, underwriter, controlling person or other aforementioned person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection 1.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter, controlling person or other aforementioned person; provided further, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Holder or underwriter or other aforementioned person, or any person controlling such Holder or underwriter, from whom the person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the most current prospectus was not sent or given by or on behalf of such Holder or underwriter or other aforementioned person to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the shares to such person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

(b)    To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any person intended to be indemnified pursuant to this subsection 1.9(b) for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this subsection 1.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and provided that in no event shall any indemnity under this subsection 1.9(b) exceed the net proceeds from the offering received by such Holder.

(c)    Promptly after receipt by an indemnified party under this Section 1.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 1.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties;

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provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests (as reasonably determined by the indemnified party) between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 1.9 to the extent of such prejudice, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 1.9.

(d)    If the indemnification provided for in this Section 1.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided, however, that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 1.9(b), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

(e)    Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

(f)    The obligations of the Company and Holders under this Section 1.9 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 1, and otherwise.

1.10    Reports Under the 1934 Act.    With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form F-3, the Company agrees to:

(a)    make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the effective date of the Initial Offering;

(b)    file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and

(c)    furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Act and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a

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registrant whose securities may be resold pursuant to Form F-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, provided, however, that if the SEC has granted confidential treatment for any exhibits filed with any such filings, the Company need only provide to the Holders the redacted form of such exhibits as approved by the SEC, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form.

1.11    Assignment of Registration Rights.    The rights to cause the Company to register Registrable Securities pursuant to this Section 1 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities that (i) is a subsidiary, parent, partner, limited partner, retired partner or shareholder of a Holder, (ii) is a Holder’s family member or trust for the benefit of an individual Holder, or (iii) after such assignment or transfer, holds at least 100,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations and other recapitalizations), provided: (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 4 of that certain Right of First Refusal and Co-Sale Agreement of even date herewith; and (c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act.

1.12    Limitations on Subsequent Registration Rights.    From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities held by the Investors, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (a) to include such securities in any registration filed under Section 1.2, Section 1.3 or Section 1.4 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders that are included or (b) to demand registration of their securities.

1.13    Termination of Registration Rights.    No Holder shall be entitled to exercise any right provided for in this Section 1 (i) after five (5) years following the consummation of the Initial Offering or (ii) as to any Holder, such earlier time after the Initial Offering at which such Holder (A) can sell all shares held by it in compliance with Rule 144(k) or (B) holds one percent (1%) or less of the Company’s outstanding Common Shares and all Registrable Securities held by such Holder (together with any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) can be sold in any three (3) month period without registration in compliance with Rule 144.

2.    Covenants of the Company.

2.1    Delivery of Financial Statements.    The Company shall deliver to each Investor (or transferee of an Investor):

(a)    as soon as practicable, but in any event within ninety (90) days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of shareholders’ equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable

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detail, prepared in accordance with United States generally accepted accounting principles (“GAAP”), and audited and certified by independent public accountants of nationally recognized standing selected by the Company;

(b)    as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement, statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter.

(c)    as soon as practicable, but in any event at least thirty (30) days prior to the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis, including balance sheets, income statements and statements of cash flows for such months and, as soon as prepared, any other budgets or revised budgets prepared by the Company;

(d)    with respect to the financial statements called for in subsections (b) of this Section 2.1, an instrument executed by the Chief Financial Officer or President of the Company certifying that such financials were prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment; and

(e)    such other information relating to the financial condition, business or corporate affairs of the Company as the Investors may from time to time reasonably request, provided, however, that the Company shall not be obligated under this subsection (e) or any other subsection of Section 2.1 to provide information that it deems in good faith to be a trade secret or similar confidential information.

2.2    Inspection.    The Company shall permit each Investor, at such Investor’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by the Investor; provided, however, that the Company shall not be obligated pursuant to this Section 2.2 to provide access to any information that it reasonably considers to be a trade secret or similar confidential information.

2.3    Termination of Information and Inspection Covenants.    The covenants set forth in Sections 2.1 and 2.2 shall terminate and be of no further force or effect when the Initial Offering is consummated or when the Company first becomes subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall first occur.

2.4    Right of First Offer.    Subject to the terms and conditions specified in this Section 2.4, the Company hereby grants to each Investor and Common Holder (each a “Participating Investor”) a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). For purposes of this Section 2.4, the term Participating Investor includes any general partners and affiliates of an Investor. A Participating Investor shall be entitled to apportion the right of first offer hereby granted it among itself and its partners and affiliates in such proportions as it deems appropriate.

Each time the Company proposes to offer any shares of, or securities convertible into or exchangeable or exercisable for any shares of, any class of the Company’s shares (“Shares”), the Company shall first make an offering of such Shares to each Participating Investor in accordance with the following provisions:

(a)    The Company shall deliver a notice in accordance with Section 3.5 (“Notice”) to the Participating Investors stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered, and (iii) the price and terms upon which it proposes to offer such Shares.

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(b)    By written notification received by the Company within ten (10) calendar days after receipt of the Notice, each Participating Investor may elect to purchase or obtain, at the price and on the terms specified in the Notice, up to that portion of such Shares that equals the proportion that the number of shares of Registrable Securities issued and held by such Participating Investor bears to the total number of Common Shares then outstanding (assuming full conversion of the Preferred Shares then outstanding, but excluding any options, warrants or other securities convertible into Common Shares). The Company shall promptly, in writing, inform each Participating Investor that elects to purchase all the shares available to it (a “Fully-Exercising Investor”) of any other Participating Investor’s failure to do likewise. During the five (5) day period commencing after such information is given, each Fully-Exercising Investor may elect to purchase that portion of the Shares for which Participating Investors were entitled to subscribe but which were not subscribed for by the Participating Investors that is equal to the proportion that the number of shares of Registrable Securities issued and held by such Fully-Exercising Investor bears to the total number of Common Shares then outstanding (assuming full conversion and exercise of all convertible and exercisable securities then outstanding).

(c)    If all Shares that Investors are entitled to obtain pursuant to subsection 2.4(b) are not elected to be obtained as provided in subsection 2.4(b) hereof, the Company may, during the ninety (90) day period following the expiration of the period provided in subsection 2.4(b) hereof, offer the remaining unsubscribed portion of such Shares to any person or persons at a price not less than that, and upon terms no more favorable to the offeree than those, specified in the Notice. If the Company does not enter into an agreement for the sale of the Shares within such period, or if such agreement is not consummated within sixty (60) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the Participating Investors in accordance herewith.

(d)    The right of first offer in this Section 2.4 shall not be applicable to (i) the issuance or sale of up to 6,100,000 Common Shares (or options therefor) to employees, directors, consultants and other service providers for the primary purpose of soliciting or retaining their services pursuant to plans or agreements approved by the Board of Directors; (ii) the issuance of securities pursuant to an Initial Offering, (iii) the issuance of securities pursuant to the conversion or exercise of convertible or exercisable securities, (iv) the issuance of securities in connection with a bona fide business acquisition of or by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, (v) the issuance and sale of Series A Preferred Shares pursuant to the Series A Agreement, (vi) the issuance of securities that, with unanimous approval of the Board of Directors, are not offered to any existing shareholder of the Company, (vii) the issuance of securities as an equity component in connection with a debt financing, provided such issuance is for other than primary equity financing purposes and provided further that, at the time of such issuance, the aggregate of such issuance and similar issuances in the preceding twelve (12) months do not exceed 1% of the outstanding Common Shares or (viii) the issuance of securities in connection with the consummation of a strategic transaction. In addition to the foregoing, the right of first offer in this Section 2.4 shall not be applicable with respect to any Participating Investor and any subsequent offering of Shares if (i) at the time of such offering, the Participating Investor is not an “accredited investor,” as that term is then defined in Rule 501(a) of the Act and (ii) such offering of Shares is otherwise being offered only to accredited investors.

(e)    The rights provided in this Section 2.4 may not be assigned or transferred by any Participating Investor; provided, however, that a Participating Investor that is a venture capital fund may assign or transfer such rights to an affiliated venture capital fund and

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provided further, that the affiliated venture capital fund executes the necessary documents to become party to the same agreements as those previously governing the rights and obligations of the Participating Investor.

(f)    The covenants set forth in this Section 2.4 shall terminate and be of no further force or effect upon the consummation of the sale of securities pursuant to a bona fide, firmly underwritten public offering of Common Shares registered under the Act.

2.5    Employee Agreements.    Unless approved by the Board of Directors, all future employees of the Company who shall purchase, or receive options to purchase, Common Shares following the date hereof shall be required to execute stock purchase or option agreements providing for (i) vesting of shares over a four (4) year period with the first 25% of such shares vesting following twelve (12) months of continued employment or services, and the remaining shares vesting in equal monthly installments over the following 36 months thereafter and (ii) a 180-day lockup period in connection with the Company’s initial public offering. The Company shall retain a right of first refusal on transfers until the Initial Offering and the right to repurchase unvested shares at cost.

2.6    Termination of Certain Covenants.    The covenants set forth in Section 2.5 shall terminate and be of no further force or effect upon the consummation of the sale of securities pursuant to a bona fide, firmly underwritten public offering of Common Shares registered under the Act.

3.    Miscellaneous.

3.1    Successors and Assigns.    Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any shares of Registrable Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

3.2    Governing Law.    This Agreement shall be governed by and construed under the laws of the State of New York as applied to agreements among New York residents entered into and to be performed entirely within New York. Without limiting the right of any party to bring any action or proceeding arising out of or relating to this Agreement or any of the transactions contemplated hereby or thereby (an “Action”) in the courts of other jurisdictions, each party hereto irrevocably submits in any Action to the jurisdiction of any New York State or Federal court sitting in New York City (“New York Courts”). Each party further agrees that, in the case of any Action instituted by either such party, the New York Courts shall have exclusive jurisdiction thereof, and each party may not institute an Action in any forum other than the New York Courts. Each party hereto consents to venue in the New York Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any Action therein. Each party agrees that the summons and complaint or any other process in any Action may be served by notice given in accordance with Section 3.5, or as otherwise permitted by law.

3.3    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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3.4    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

3.5    Notices.    All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) ten (10) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) two (2) days after deposit with a internationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 3.5).

3.6    Expenses.    If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

3.7    Entire Agreement: Amendments and Waivers.    This Agreement (including the Exhibits hereto, if any) constitutes the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. Any term of this Agreement (other than Section 2.1, Section 2.2, Section 2.3 and Section 2.4) may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities, including the written consent of the holders of a majority of the Registrable Securities then held by the Investors. The provisions of Section 2.1, Section 2.2 and Section 2.3 may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then held by the Investors. The provisions of Section 2.4 may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then held by Participating Investors. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Registrable Securities, each future holder of all such Registrable Securities, and the Company.

3.8    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

3.9    Aggregation of Shares.    All shares of Registrable Securities held or acquired by affiliated entities (including affiliated venture capital funds) or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Investors’ Rights Agreement as of the date first above written.

ELONG, INC.
/s/ Justin Yue Tang
By:	Justin Yue Tang

Name:

Title: Chairman & CEO

Address: Suite 604, Union Plaza 20 Chao Yang Men Wai Avenue Beijing, China

SlGNATURE PAGE TO INVESTORS’ RIGHTS

AGREEMENT FOR ELONG, INC.

15

INVESTORS:
TIGER TECHNOLOGY PRIVATE INVESTMENT PARTNERS, L.P.
By:	Tiger Technology PIP Performance, L.L.C., its General Partner

By: /s/ Scott Shleifer

Name:	Scott Shleifer
Title:	Managing Director

Address: 101 Park Avenue, 48^th Floor New York, NY 10178

SIGNATURE PAGE TO INVESTORS’ RIGHTS

AGREEMENT FOR ELONG, INC.

16

INVESTORS (cont.):
TIGER TECHNOLOGY II, L.P.
By:	Tiger Technology Performance, L.L.C., its General Partner
By:	/s/ Scott Shleifer
Name:	Scott Shleifer
Title:	Managing Director

Address: Walker House, P.O. Box 908GT George Town, Grand Cayman Cayman lslands

SIGNATURE PAGE TO INVESTORS’ RIGHTS

AGREEMENT FOR ELONG, INC.

17

INVESTORS (cont.):
BLUE RIDGE LIMITED PARTNERSHIP
By:	JAG Holdings LLC, General Partner

By:	/s/    Richard S. Bello
Name:	Richard S. Bello
Title:	Managing Director
Address:
RMG HOLDINGS, LLC
By:	/s/    Richard M. Gerson
Name:	Richard M. Gerson
Title:	Managing Director
Address:

SIGNATURE PAGE TO INVESTORS’ RIGHTS

AGREEMENT FOR ELONG, INC.

18

COMMON HOLDERS
Billable Development, Ltd.
By:	/s/    Zhong Xiaojian
Name:	Zhong Xiaojian
Title:

Address:

/s/    Lawrence Auriana

Lawrence Auriana

Address:

/s/    Peter Lerner

Peter Lerner

Address:

Ira S. Nordlicht and Helen S. Scott JTWROS
By	/s/
Name:
Address:

/s/ Justin Yue Tang
Justin Yue Tang
Address:	Suite 604, Union Plaza 20 Chao Yang Men Wai Avenue Beijing, China 100020

SIGNATURE PAGE TO INVESTORS’ RIGHTS

AGREEMENT FOR ELONG, INC.

19

EX-4.6

Exhibit 4.6

INVESTORS AGREEMENT

among

ELONG, INC.,

IACT Asia Pacific Limited

and the other parties named therein

Dated July 23, 2004

TABLE OF CONTENTS

ARTICLE I DEFINITIONS		1
1.1	Defined Terms	1
ARTICLE II VOTING AGREEMENTS		4
2.1	Agreement to Vote; Company Efforts	4
2.2	Election of Board of Directors	4
2.3	Removal; Vacancies	6
2.4	Size of the Board	6
2.5	No Liability for Election of Recommended Directors	6
2.6	Shareholder Approval of Schemes of Arrangement, Mergers and Consolidations	6
2.7	Grant of Proxy	7
ARTICLE III REGISTRATION RIGHTS		7
3.1	Request for Registration	7
3.2	Piggyback Registrations	9
3.3	Non-Investor Registration	9
3.4	Investor Registration	11
3.5	Obligations of the Company	12
3.6	Information from Holder	14
3.7	Expenses of Registration	14
3.8	Delay of Registration	14
3.9	Indemnification	14
3.10	Reports Under the Exchange Act	16
3.11	Assignment of Registration Rights	17
3.12	Limitations on Subsequent Registration Rights	17
3.13	Termination of Registration Rights	17
ARTICLE IV INFORMATIONAL RIGHTS		18
4.1	Delivery of Financial Statements	18
4.2	Inspection	19
4.3	Termination of Information and Inspection Covenants	19
ARTICLE V QUALIFIED PUBLIC OFFERING		19
5.1	Limitation on Qualified Public Offering	19
5.2	Market Stand-Off	19
5.3	Investor Restrictions	20
5.4	Investor Standstill	21
ARTICLE VI INVESTOR RIGHT OF FIRST OFFER		21
6.1	Right of First Offer	21
ARTICLE VII RESTRICTIONS ON TRANSFER		22
7.1	General Restrictions on Transfer	22
7.2	Compliance with Securities Laws	22
7.3	Agreement to be Bound	22
7.4	Tag-Along Rights for the Non-Investor Stockholders	23
7.5	Tag-Along Rights for the Investor	25
7.6	First Option Rights	26
7.7	Drag Along Right	28
ARTICLE VIII INVESTOR RIGHTS		29
8.1	Investor’s Approval Rights	29
8.2	Stock Option Grants	30
8.3	Cooperation Regarding IPO	31

ARTICLE IX TERMINATION OF PREVIOUS SHAREHOLDER AGREEMENTS; NOTIFICATION OF INDEMNIFICATION CLAIMS		31
9.1	Termination of Agreements and Provisions Thereof.	31
9.2	Notification of Indemnification Claims	31
ARTICLE X MISCELLANEOUS		32
10.1	Series A Right to Information for Tax Filings	32
10.2	No Derogation of Rights	32
10.3	Manner of Voting	32
10.4	Public Announcements	33
10.5	Assignment	33
10.6	Binding Effect	33
10.7	Time	33
10.8	Expenses	33
10.9	Notices	33
10.10	Governing Law; Arbitration	34
10.11	Injunctive Relief	35
10.12	Currency	35
10.13	Entire Agreement	35
10.14	Further Assurances	35
10.15	Waivers and Modifications	35
10.16	Counterparts	35
10.17	Date For Any Action	36
10.18	Construction	36
10.19	Interpretation	36
10.20	Severability	36

INVESTORS AGREEMENT

This Investors Agreement (the “Agreement”) made as of the 23rd day of July, 2004, by and among Elong, Inc., an exempted limited liability company under the laws of the Cayman Islands (the “Company”), IACT Asia Pacific Limited, an exempted limited liability company under the laws of the Cayman Islands (the “Investor”), the persons set forth on Schedule 1 hereto (the “Series A Holders”) and the persons listed on Schedule 2 hereto (the “Common Holders” and, together with the Investor and the Series A Holders, the “Stockholders”).

WHEREAS, the Company and certain of the Stockholders are parties to an Investors’ Rights Agreement, dated as of August 29, 2003 (the “Investor Rights Agreement”), a Right of First Refusal and Co-Sale Agreement, dated as of August 29, 2003 (the “Co-Sale Agreement”) and a Voting Agreement, dated as of August 29, 2003 (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, the “Previous Shareholder Agreements”);

WHEREAS, the Company and the Series A Holders are parties to a Series A Preferred Shares Purchase Agreement, dated as of August 29, 2003 (the “Series A Purchase Agreement”);

WHEREAS, the parties to such Previous Shareholder Agreements desire to terminate each of the Previous Shareholders Agreements, and the parties to the Series A Purchase Agreement desire to terminate certain provisions of the Series A Purchase Agreement and to amend certain other provisions;

WHEREAS, the Company, certain subsidiaries thereof, the Investor and certain other Stockholders entered into a Transaction Agreement, dated as of July 22, 2004 (the “Transaction Agreement”), pursuant to which, among other things, the Investor is acquiring certain securities of the Company, including the Warrant (as defined herein);

WHEREAS, the Company and the Stockholders desire to enter into this Agreement to define certain rights and obligations among them with respect to the Company and in order to fulfill such condition;

NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby covenant and agree as follows:

ARTICLE I

DEFINITIONS

1.1    Defined Terms.

As used in this Agreement, the following terms shall have the following meanings:

(a)    “Act” means the United States Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the U.S. Commission issued under such Act, as they each may, from time to time, be in effect.

(b)    “affiliate” shall be construed such that one person shall be deemed to be an affiliate of another person for so long as one of them is controlled (directly or indirectly) by the other or both are controlled (directly or indirectly) by the same person or group of persons, and for this purpose “control” shall be construed such that any combination of a person, its affiliates and persons acting jointly or in concert with either of them (the “Control Group”) shall control another person if the Control Group is the beneficial owner

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of securities of such person, or otherwise has, through contract, voting trust, proxy or otherwise, power, sufficient to elect a majority of the board of directors (or, if the person is not a corporation, any comparable body) of such person or to direct the management of such person (it being understood and agreed that (a) the Company and its subsidiaries shall not be deemed to be “affiliates” of the Investor and (b) Beijing eLong Information Technology Co., Ltd., Beijing Asia Media Interactive Co., Ltd., Beijing eLong Airline Services Co., Ltd., and Jiangsu General Chinese Hotel Reservation Network Co. Ltd. shall each be deemed to be “affiliates” of the Company for so long as such entities continue to be controlled by the Company and the Stockholders).

(c)    “Amended Articles” means the Amended and Restated Articles of Association of Elong, Inc., as amended on July 2004, and as amended thereafter from time to time.

(d)    “Amended Memorandum” means the Amended and Restated Memorandum of Association of Elong, Inc., as amended on July 2004, and as amended thereafter from time to time.

(e)    “Board of Directors” means the Board of Directors of the Company as constituted from time to time.

(f)    “Business Day” means every day except a Saturday, Sunday or a day which is a statutory or a federal holiday in the United States of America.

(g)    “Confidential Information” means any information that is labelled as confidential, proprietary or secret which a Stockholder obtains from the Company pursuant to financial statements, reports and other materials provided by the Company to such Stockholder pursuant to this Agreement or pursuant to visitation or inspection rights granted hereunder. Confidential Information shall include any information provided to a Stockholder pursuant to Article IV hereof.

(h)    “Elong Option Plan” means the Company’s Stock and Annual Incentive Plan, dated July 2004, as the same may be amended, restated or replaced from time to time.

(i)    “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the SEC issued under such Act, as they each may, from time to time, be in effect.

(j)    “Form F-3” means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the U.S. Commission that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the U.S. Commission.

(k)    “Form S-3” means such form under the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

(l)    “Fully-Diluted Number” means the total number of outstanding ordinary shares of the Company, calculated on an as-converted, fully-diluted basis (including, without limitation, all options, warrants (but excluding the Warrant) or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating the Company to issue shares of capital stock (or securities exchangeable for or convertible into shares of the Company’s capital stock, including the Series A Preferred Shares and Series B Preferred Shares), in each case whether or not vested or exercisable.

(m)    “High-Vote Ordinary Shares” shall have the meaning ascribed to it in the Amended Articles.

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(n)    “Holder” means any person owning or having the right to acquire or having the right to exercise or convert into Registrable Securities or any assignee thereof in accordance with Article III; provided, however, that (a) only the Series A Holders and their assignees shall be deemed to be Holders for purposes of Section 3.3 hereof, (b) only the Investor and its assignees shall be deemed to be Holders for purposes of Section 3.4 hereof and (c) only the Series A Holders, the Investor and their respective assignees shall be deemed to be Holders for purposes of Section 3.12 hereof.

(o)    “IAC Control Date” means the first date on which the Investor (together with its affiliates) collectively beneficially own more than 50% of the outstanding ordinary shares (including, for purposes of such calculation, the preferred shares on an as-converted basis).

(p)    “IAC Exercise Date” means the day on which the Investor (or an affiliate thereof) exercises the Warrant, as evidenced by the delivery by the Investor (or an affiliate thereof) to the Company on such day of a Form of Election to Purchase.

(q)    “Option” shall have the meaning ascribed to it in the Transaction Agreement.

(r)    “ordinary shares” shall have the meaning ascribed to it in the Amended Articles.

(s)    “Ordinary Shares” shall have the meaning ascribed to it in the Amended Articles.

(t)    “person” means an individual, corporation, incorporated or unincorporated association, syndicate or organization, partnership, trust, trustee, executor, administrator or other legal representative.

(u)    “preferred shares” shall have the meaning ascribed to it in the Amended Articles.

(v)    “Qualified Public Offering” means the Company’s first sale of Ordinary Shares in a firm commitment underwritten public offering where the Company’s stock is subsequently primarily traded on the Nasdaq Stock Market’s National Market or the New York Stock Exchange (or another comparable exchange or marketplace approved by both the Board of Directors and by each IAC Director).

(w)    “register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.

(x)    “Registrable Securities” means:    (i) the Ordinary Shares or High-Vote Ordinary Shares issuable or issued upon conversion or exercise of the Series A Preferred Shares, Series B Preferred Shares, the Option or the Warrant, as the case may be; provided however, (x) that the Ordinary Shares or High-Vote Ordinary Shares issuable or issued upon the conversion or exercise of the Series B Preferred Shares, the Option or the Warrant, as the case may be, shall not be deemed Registrable Securities for the purpose of Section 3.3 hereof and (y) that the Ordinary Shares issuable or issued upon the conversion of the Series A Preferred Shares shall not be deemed Registrable Securities for the purpose of Section 3.4 hereof; (ii) the Ordinary Shares issued and held by the Common Holders listed on Schedule 1.1(x) hereto; provided, however, that such Ordinary Shares shall not be deemed Registrable Securities for the purposes of Sections 3.4 and 3.12 hereof; and (iii) any Ordinary Shares or High-Vote Ordinary Shares issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend, stock split or other distribution, recapitalization or reclassification with respect to, or in exchange for, or in replacement of, the shares referenced in (i) and (ii) above, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which his rights under Article III hereof are not assigned.

(y)    “Rule 144” shall mean Rule 144 under the Act.

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(z)    “Rule 144(k)” shall mean subsection (k) of Rule 144 under the Act.

(aa)    “SEC” means the Securities and Exchange Commission.

(bb)    “Series A Preferred Shares” shall have the meaning ascribed to it in the Amended Articles.

(cc)    “Series B Preferred Shares” shall have the meaning ascribed to it in the Amended Articles.

(dd)    “Transfer” means to directly or indirectly sell, give, transfer, assign, pledge, encumber, hypothecate or otherwise dispose of in any manner whatsoever (it being understood that the act of conversion or exercise with respect to a convertible security shall not be deemed a Transfer of such convertible security).

(ee)    “Warrant” shall means the warrant to purchase securities of the Company issued to the Investor pursuant to the Warrant Agreement of even date herewith by and between the Company and the Investor.

ARTICLE II

VOTING AGREEMENTS

2.1    Agreement to Vote; Company Efforts.

(a)    Each Stockholder, as a holder of ordinary shares and/or preferred shares, as the case may be, hereby agrees on behalf of itself and any transferee or assignee of such shares (excluding any transferee or assignee who has acquired shares in a public offering registered under the Act or in public market purchases under Rule 144 of the Act if such transferee or assignee is neither a Stockholder nor otherwise required under the terms hereof to become a Stockholder hereunder in connection with such transfer or assignment), to hold all such shares registered in its name (and any securities of the Company issued with respect to, upon conversion of, or in exchange or substitution of the preferred shares, and any other voting securities of the Company subsequently acquired by such Stockholder) (all of such shares and securities hereinafter collectively referred to as the “Stockholder Shares”) subject to, and to vote the Stockholder Shares at any meeting of shareholders (or by written consent) in accordance with the provisions of this Article II. Notwithstanding the foregoing, the Series A Holders shall be released from their obligations under this Article II with respect to their Stockholder Shares from and after the consummation of the Qualified Public Offering.

(b)    The Company agrees to use its best efforts to ensure that the rights granted under this Article II are effective and that the parties hereto enjoy the benefits thereof. Such actions shall include, without limitation, the use of the Company’s best efforts to cause (i) the nomination, election and appointment of the directors as provided below and (ii) the consummation of the scheme of arrangement, merger, consolidation or other business combination as provided below. The Company will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be performed under this Article II by the Company but will at all times in good faith assist in the carrying out of all of the provisions in this Article II and in the taking of all such actions as may be necessary, appropriate or reasonably requested by the Stockholders in order to protect the rights of the Stockholders under this Article II against impairment.

2.2    Election of Board of Directors.

(a)    In any election of directors of the Board of Directors, the Stockholders shall each vote at any meeting of shareholders (or by written consent) such number of Stockholder Shares then

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owned by them (or as to which they then have voting power) as may be necessary to elect (and shall call a meeting of shareholders or act by written consent, and take any other actions necessary, in order to effect the foregoing):

(i)    for as long as at least a majority of the Series A Preferred Shares originally issued on August 29, 2003 remain outstanding, one (1) director elected by a majority vote of the Series A Preferred Shares (it being understood and agreed that for as long as Tiger Technology Private Investment Partners, L.P. (“Tiger”) together with its affiliates owns at least fifty percent (50%) of the Series A Preferred Shares purchased by Tiger on August 29, 2003 (as adjusted for share splits, share dividends, recapitalizations or the like), such director shall be selected by Tiger);

(ii)    for as long as Billable Development, Ltd. (“Billable Development”), together with its affiliates, owns at least fifty percent (50%) of the Ordinary Shares purchased by Billable Development pursuant to that certain Share Purchase Agreement dated on or about April 18, 2001 (the “Common Purchase Agreement”) (as adjusted for share splits, share dividends, recapitalizations or the like), two (2) directors nominated by Billable Development;

(iii)    for as long as Lawrence Auriana, Peter Lerner and Ira S. Nordlicht (the “Auriana Investors”) owns at least fifty percent (50%) of the Ordinary Shares purchased by the Auriana Investors pursuant to the Common Purchase Agreement (as adjusted for share splits, share dividends, recapitalizations or the like), one (1) director nominated by the Auriana Investors;

(iv)    one (1) director nominated by the holders of a majority of the voting power of the Stockholder Shares, who shall be the Company’s then current chief executive officer (as appointed from time to time by the Board of Directors), who shall initially be Justin Tang;

(v)    (A) two (2) directors nominated by the Investor and (B) from and after the IAC Exercise Date, four (4) additional directors (for a total of six (6) directors) nominated by the Investor (such directors selected by the Investors being the “IAC Directors”). Each of the parties hereto agree that (and shall do all things necessary to cause) the IAC Directors set forth on Schedule 2.2(a) hereto shall become members of the Board of Directors immediately after the execution and delivery of this Agreement by the parties hereto.

Notwithstanding the foregoing, Sections 2.2(a)(i), (ii) and (iii) shall terminate (and the rights to nominate directors pursuant to such Sections shall terminate) upon the earlier of (x) the date of the Qualified Public Offering and (b) the IAC Exercise Date; provided, however, that the directors holding positions on the Board of Directors at such time shall have the right (subject to any right of removal for cause provided for under law or the Amended Articles) to remain on the Board of Directors until the one-year anniversary thereof.

(b)    (i)    Subject to subsection (ii) below, the Company shall offer to an IAC Director a seat on the board of directors or comparable governing body of each of the Company’s subsidiaries and each of the Company’s affiliates in whose capital stock (or comparable ownership interest) the Company or any of its direct or indirect subsidiaries or affiliates has an ownership interest (either direct, indirect, by pledge, contract or otherwise), as such interest and as such entities now or hereinafter exist, including, without limitation, the PRC Entities (as defined in the Transaction Agreement). In the event such member of the Board of Directors accepts such offer, then the Company and the Stockholders shall take all necessary action to cause such member of the Board of Directors to be elected, appointed to or designated for the board of directors or comparable governing body of the applicable subsidiary or affiliate of the Company.

(ii)    Without limiting the foregoing, the parties hereto agree that (and shall do all things necessary to cause) (A) the IAC Director set forth on Schedule 2.2(b) hereto shall become a

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member of the board of directors of each of ELong Net Information Technologies (Beijing) Co., Ltd. (the “Subsidiary”) and ELongNet Hi-Tech (Beijing) Co., Ltd. (the “New Subsidiary”) immediately after the execution and delivery of this Agreement by the parties hereto, (B) the boards of each of the Subsidiary and the New Subsidiary shall consist of three (3) directors, (C) from and after the IAC Exercise Date, all three (3) directors on the boards of each of the Subsidiary and New Subsidiary shall be IAC Directors and (D) the other rights of the Investor under this Article II with respect to the Board of Directors shall apply to the same extent to the boards of the Subsidiary and the New Subsidiary (including, without limitation, with respect to rights to remove the Investor designee or fill a vacancy).

2.3    Removal; Vacancies.

Any director of the Board of Directors or any Company subsidiary or affiliate’s board (or comparable governing body) may be removed in the manner allowed by law and the Amended Memorandum and Amended Articles, or the comparable charter documents of a Company subsidiary or affiliate, as applicable, but with respect to a director designated for the Board of Directors or the board of directors (or comparable governing body) of any subsidiary or affiliate pursuant to Sections 2.2(a) and (b) above, such director may only be removed with the affirmative vote, written consent or approval of the Company’s shareholders who are entitled to nominate such director for the Board (and such directors shall be removed upon such vote, consent or approval of such nominating shareholders), provided that such shareholders continue to be entitled to such nomination rights. Vacancies in a board position occupied by a director nominated pursuant to Sections 2.2(a) and (b) above shall be filled by a nominee of the applicable shareholders, provided that such shareholders continue to be entitled to such nomination rights.

2.4    Size of the Board.

The holders of Stockholder Shares shall vote at any meeting of shareholders (or by written consent) such shares that they own (or as to which they have voting power) to ensure that the size of the Board of Directors shall be set and remain at seven (7) directors; provided, however, that each of the parties hereto agrees that (and shall do all things necessary to cause) (a) the size of the Board of Directors shall be increased to eleven (11) directors on the IAC Exercise Date (and continuing thereafter, subject to any additional increase or decrease as determined by the Board of Directors) and (b) the four (4) additional IAC Directors shall become members of the Board of Directors on the IAC Exercise Date.

2.5    No Liability for Election of Recommended Directors.

Neither the parties hereto nor any officer, director, shareholder, partner, retired partner, member, retired member, shareholder, employee, agent or related individual of any party hereto, makes any representation or warranty as to the fitness or competence of the nominee of any party hereunder to serve on the Board of Directors or any other board or comparable governing body by virtue of such party’s execution of this Agreement or by the act of such party in voting for such nominee pursuant to this Article II.

2.6    Shareholder Approval of Schemes of Arrangement, Mergers and Consolidations.

Upon the approval by the Board of Directors of a merger, consolidation, scheme of arrangement, amalgamation or reconstruction or other such business combination which would require a class vote of the Stockholders of the Company pursuant to Section 86(2) of the Companies Law (as amended) (“Companies Law”) in the Cayman Islands (the “Merger

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Transaction”), the parties hereto agree to take all actions necessary to cause a meeting of Stockholders to be called promptly thereafter (but in no event later than 30 days after such Board of Directors approval), at which the Stockholders shall hold a vote (voting together as a single class and not as a separate series, and on an as-converted basis) to determine whether a majority in voting power of the Stockholders is in favor of the Merger Transaction. If a majority in voting power of the Stockholder Shares present and voting at such meeting vote in favor of the Merger Transaction, a second vote shall be held in compliance with the requirements of Section 86(2) of the Companies Law or other applicable voting requirement, and each Stockholder shall vote its Stockholder Shares in favor of the Merger Transaction. If a majority in voting power of the Stockholder Shares present and voting at such meeting vote against the Merger Transaction in the initial vote, then each Stockholder shall vote its Stockholder Shares against such Merger Transaction in such second vote.

2.7    Grant of Proxy.

Upon the failure of any Stockholder to vote their Stockholder Shares in accordance with the terms of this Article II, such Stockholder hereby grants to a shareholder representative designated by the Investor a proxy coupled with an interest in all Stockholder Shares owned by such Stockholder, which proxy shall be irrevocable until this Agreement terminates pursuant to its terms or this Section 2.7 is amended to remove such grant of proxy in accordance with Section 10.14 hereof, to vote all such Stockholder Shares at any meeting of shareholders (or in any written consent) in the manner provided in this Article II.

ARTICLE III

REGISTRATION RIGHTS

3.1    Request for Registration.

(a)    Subject to the terms of this Section 3.1, if the Company shall receive at any time after six (6) months after the effective date of the Qualified Public Offering, a written request from the Holders of fifty percent (50%) or more of the Registrable Securities then outstanding (for purposes of this Section 3.1, the “Initiating Holders”) that the Company file a registration statement under the Act covering the registration of Registrable Securities with anticipated aggregate proceeds of at least US$7,500,000, then the Company shall, within twenty (20) days of the receipt thereof, give written notice of such request to all known Holders, and subject to the terms of this Section 3.1, use all commercially reasonable efforts to effect, as soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request received by the Company within twenty (20) days of the mailing of the Company’s notice pursuant to this Section 3.1(a).

(b)    If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 3.1 and the Company shall include such information in the written notice referred to in Section 3.1(a). In such event the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders (which underwriter or underwriters shall be reasonably

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acceptable to the Company). Notwithstanding any other provision of this Section 3.1, if the underwriter advises the Company that marketing factors require a limitation of the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders); provided, however, that (i) in no event shall any Registrable Securities held by the Investor or the Series A Holders be excluded from such underwriting unless all other securities and Registrable Securities held by Common Holders are first excluded and (ii) in no event shall any Registrable Securities be excluded from such underwriting unless all other securities are first excluded. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. For purposes of the second preceding sentence concerning apportionment, for any selling shareholder that is a Holder of Registrable Securities and that is a venture capital fund, partnership or corporation, the affiliated venture capital funds, partners, retired partners and shareholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and individuals.

(c)    The Company shall not be required to effect a registration pursuant to this Section 3.1:

(i)    in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act; or

(ii)    after the Company has effected two (2) registrations pursuant to this Section 3.1, and such registrations have been declared or ordered effective (and have not been subject to a “stop order” or otherwise withdrawn); or

(iii)    during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) days following the effective date of, a Company-initiated registration subject to Section 3.2 below, provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration statement to become effective; or

(iv)    if the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form F-3 or Form S-3 pursuant to Section 3.3 or 3.4 hereof; or

(v)    if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 3.1, a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company and its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12)-month period and provided further that the Company shall not register any securities for the account of itself or any other shareholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration

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statement covering the sale of the Registrable Securities, or a registration in which the only Ordinary Shares or High-Vote Ordinary Shares being registered are Ordinary Shares or High-Vote Ordinary Shares issuable upon conversion of debt securities that are also being registered).

3.2    Piggyback Registrations.

(a)    If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, or a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with the preceding sentence, the Company shall, subject to the provisions of Section 3.2(c), use all commercially reasonable efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered.

(b)    Right to Terminate Registration.    The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 3.7 hereof.

(c)    Underwriting Requirements.    If the Registration in respect of which the Company gives notice under this Section 3.2 is for an underwritten offering, the Company shall so advise each Holder. In connection with any offering involving an underwriting of the Company’s shares, the Company shall not be required under this Section 3.2 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with such underwriters, and then only in such quantity as the underwriters determine in their sole reasonable discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by shareholders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole reasonable discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering. In no event shall any Registrable Securities be excluded from such offering unless all other shareholders’ securities are first excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders.

3.3    Non-Investor Registration.

In case the Company shall receive from the Holders of Registrable Securities (for purposes of this Section 3.3, the “Initiating Holders”) a written request or requests that the Company

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effect a registration on Form F-3 or Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

(a)    promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

(b)    use all commercially reasonable efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company, provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 3.3:

(i)    if Form F-3 or Form S-3 is not available for such offering by the Holders;

(ii)    if the Holders, together with the holders of any other securities of the Company to be included in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than $1,000,000;

(iii)    if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 3.3, a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company and its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12) month period and provided further that the Company shall not register any securities for the account of itself or any other shareholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, or a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities);

(iv)    if the Company has, within the twelve (12) month period preceding the date of such request, already effected one registration on Form F-3 or Form S-3 for the Holders pursuant to this Section 3.3; or

(v)    in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance except as may be required by the Act.

(c)    If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 3.3 and the Company shall include such information in the written notice referred to in Section 3.3(a). The provisions of Section 3.1(b) shall be applicable to such request (with the substitution of Section 3.3 for references to Section 3.1).

(d)    Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as

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practicable after receipt of the request or requests of the Initiating Holders. Registrations effected pursuant to this Section 3.3 shall not be counted as requests for registration effected pursuant to Section 3.1.

3.4    Investor Registration.

In case the Company shall receive from the Holders of Registrable Securities (for purposes of this Section 3.4, the “Initiating Holders”) a written request or requests that the Company effect a registration on Form F-3 or Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

(a)    promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

(b)    use all commercially reasonable efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company, provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 3.4:

(i)    if Form F-3 or Form S-3 is not available for such offering by the Holders;

(ii)    if the Holders, together with the holders of any other securities of the Company to be included in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than $1,000,000;

(iii)    if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 3.4, a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board of Directors, it would be seriously detrimental to the Company and its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, provided that such right shall be exercised by the Company not more than once in any twelve (12) month period and provided further that the Company shall not register any securities for the account of itself or any other shareholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, or a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities);

(iv)    if the Company has, within the twelve (12) month period preceding the date of such request, already effected two registrations on Form F-3 for the Holders pursuant to this Section 3.4; or

(v)    in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance except as may be required by the Act.

(c)    If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of

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their request made pursuant to this Section 3.4 and the Company shall include such information in the written notice referred to in Section 3.4(a). The provisions of Section 3.1(b) shall be applicable to such request (with the substitution of Section 3.4 for references to Section 3.1).

(d)    Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders. Registrations effected pursuant to this Section 3.4 shall not be counted as requests for registration effected pursuant to Section 3.1.

3.5    Obligations of the Company.

Whenever required under this Article III to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a)    prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective within ninety (90) days thereafter, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed;

(b)    prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement;

(c)    furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

(d)    use all commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

(e)    in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering;

(f)    notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, as promptly as practicable, prepare and file with the SEC an amendment to such prospectus or amend or supplement such prospectus such that such prospectus, as so amended, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, as promptly as is practicable, furnish each Holder a reasonable number of copies of the supplement to or the amendment of such prospectus;

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(g)    promptly notify each Holder of Registrable Securities (i) when a registration statement relating to Registrable Securities has become effective or any supplement to or amendment of any prospectus forming a part of such registration statement has been filed, (ii) when a receipt is obtained for a final prospectus relating to Registrable Securities, (iii) when any amendment of or supplement to a prospectus relating to Registrable Securities shall have been filed, (iv) of any request by the SEC to amend or supplement such registration statement or prospectus or for additional information, (v) of the issuance by the SEC of any order preventing or suspending the use of any preliminary prospectus or prospectus, and (vi) of the suspension of the qualification of such securities for offering or sale in any jurisdiction, or of the institution of any proceedings for any such purposes; provided, however, that notice of any documents described in clauses (i), (ii) and (iii) shall be deemed delivered when such materials become publicly available;

(h)    cause all such Registrable Securities registered pursuant to this Article III to be listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Company are then listed;

(i)    provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

(j)    use commercially reasonable efforts to obtain the lifting of any order that might be issued preventing or suspending the use of any preliminary prospectus or prospectus;

(k)    use commercially reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) opinions, dated as of such date, of the counsel representing the Company for the purposes of such prospectus, in form and substance as is customarily given to the underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any; and

(l)    cooperate in reasonable marketing efforts, including participation by senior executives of the Company in any “roadshow” or similar meeting with potential investors, in order to expedite or facilitate the disposition of the Registrable Securities.

Notwithstanding the provisions of this Article III, the Company shall be entitled to postpone or suspend, for a reasonable period of time (provided that such right shall be exercised by the Company not more than once in any twelve (12) month period) the filing, effectiveness or use of, or trading under, any registration statement if the Company shall determine that any such filing or the sale of any securities pursuant to such registration statement would:

(i)    in the good faith judgment of the Board of Directors, materially impede, delay or interfere with any material pending or proposed financing, acquisition, corporate reorganization or other similar transaction involving the Company for which the Board of Directors has authorized negotiations;

(ii)    in the good faith judgment of the Board of Directors, materially adversely impair the consummation of any pending or proposed material offering or sale of any class of securities by the Company; or

(iii)    in the good faith judgment of the Board of Directors, require disclosure of material non-public information that, if disclosed at such time, would be materially harmful to the interests of the Company and its shareholders; provided, however, that

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during any such period all executive officers and directors of the Company are also prohibited from selling securities of the Company (or any security of any of the Company’s subsidiaries or affiliates).

In the event of the suspension of effectiveness of any registration statement pursuant to this Section 3.5, the applicable time period during which such registration statement is to remain effective shall be extended by that number of days equal to the number of days during which the effectiveness of such registration statement was suspended.

3.6    Information from Holder.

The Company may require the Holders, in connection with a prospectus relating to Registrable Securities, to furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities.

3.7    Expenses of Registration.

All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Sections 3.1, 3.2, 3.3 and 3.4 hereof, including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holders as a group (not to exceed $50,000 for each registration made pursuant to Section 3.1 and not to exceed $10,000 for each registration made pursuant to Sections 3.2, 3.3 and 3.4) shall be borne by the Company. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 3.1, 3.3 or Section 3.4 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless, in the case of a registration requested under Section 3.1, the Holders of a majority of the Registrable Securities held by the Holders agree to forfeit their right to one demand registration pursuant to Section 3.1 and provided, however, that if at the time of such withdrawal, Holders have learned of a material adverse change in the condition, business, or prospects of the Company from that known to such Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 3.1, 3.3 or 3.4 hereof.

3.8    Delay of Registration.

No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article III.

3.9    Indemnification.

In the event any Registrable Securities are included in a registration statement under this Article III:

(a)    To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers, directors and shareholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for

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such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Act, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”):    (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Act, the Exchange Act or any state securities laws, and the Company will reimburse each such Holder, underwriter, controlling person or other aforementioned person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 3.9(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter, controlling person or other aforementioned person; provided further, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Holder or underwriter or other aforementioned person, or any person controlling such Holder or underwriter, from whom the person asserting any such losses, claims, damages or liabilities purchased shares in the offering, if a copy of the most current prospectus was not sent or given by or on behalf of such Holder or underwriter or other aforementioned person to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the shares to such person, and if the prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability.

(b)    To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Act, the Exchange Act, any state securities laws or any rule or regulation promulgated under the Act, the Exchange Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will reimburse any person intended to be indemnified pursuant to this Section 3.9(b) for any legal or other expenses reasonably incurred by such person in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 3.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is

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effected without the consent of the Holder (which consent shall not be unreasonably withheld), and provided that in no event shall any indemnity under this Section 3.9(b) exceed the net proceeds from the offering received by such Holder.

(c)    Promptly after receipt by an indemnified party under this Section 3.9 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 3.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential conflict (as reasonably determined by the indemnified party) between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of liability to the indemnified party under this Section 3.9 to the extent of such prejudice, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 3.9.

(d)    If the indemnification provided for in this Section 3.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided, however, that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 3.9(b), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

(e)    The obligations of the Company and Holders under this Section 3.9 shall survive the completion of any offering of Registrable Securities in a registration statement under this Article III, and otherwise.

3.10    Reports Under the Exchange Act.

With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form F-3 or Form S-3, the Company agrees to:

(a)    make and keep public information available, as those terms are understood and defined in Rule 144, at all times after the effective date of the Qualified Public Offering;

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(b)    file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the Exchange Act; and

(c)    furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form F-3 or Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, provided, however, that if the SEC has granted confidential treatment for any exhibits filed with any such filings, the Company need only provide to the Holders the redacted form of such exhibits as approved by the SEC, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration or pursuant to such form.

3.11    Assignment of Registration Rights.

The rights to cause the Company to register Registrable Securities pursuant to this Article III may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities that (i) is subsidiary, affiliate, parent, partner, limited partner, retired partner or shareholder of a Holder, (ii) is a Holder’s family member or trust for the benefit of an individual Holder, or (iii) after such assignment or transfer, holds at least 100,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations and other recapitalizations), provided:    (a) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (b) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 5.2 hereof; and (c) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act.

3.12    Limitations on Subsequent Registration Rights.

From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities held by Holders (other than the Common Holders), enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (a) to include such securities in any registration filed under Section 3.1, Section 3.2, 3.3 or Section 3.4 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such securities will not reduce the amount of the Registrable Securities of the Holders that are included, (b) to demand registration of their securities or (c) have any registration rights the terms of which are more favorable than the registration rights granted to Holders.

3.13    Termination of Registration Rights.

No Holder shall be entitled to exercise any right provided for in this Article III (i) after five (5) years following the consummation of the Qualified Public Offering or (ii) as to any Holder, such earlier time after the Qualified Public Offering at which such Holder (A) can sell all shares held by it in compliance with Rule 144(k) or (B) holds one percent (1%) or less of the Company’s

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outstanding Ordinary Shares and all Registrable Securities held by such Holder (together with any affiliate of the Holder with whom such Holder must aggregate its sales under Rule 144) can be sold in any three (3) month period without registration in compliance with Rule 144.

ARTICLE IV

INFORMATIONAL RIGHTS

4.1    Delivery of Financial Statements.

The Company shall deliver to the Investor and each Series A Holder (or transferee any of the foregoing) (it being understood and agreed that such Stockholder may refuse to accept or receive such information to the extent it is unwilling to be subject to the confidentiality restrictions set forth in this Article IV):

(a)    (i)    as soon as practicable, but in any event within forty five (45) days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of shareholders’ equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with U.S. GAAP, and (ii) as soon as practicable, but in any event within sixty (60) days after the end of each fiscal year of the Company, the financial statements described in clause (i), prepared in accordance with U.S. GAAP, and audited and certified by independent public accountants of nationally recognized standing selected by the Company;

(b)    as soon as practicable, but in any event within thirty (30) days after the end of each of the first three (3) quarters of each fiscal year of the Company, an unaudited income statement for such quarter, statement of cash flows for such quarter and an unaudited balance sheet as of the end of such quarter;

(c)    as soon as practicable, but in any event within 30 days after the end of each month of each fiscal year of the Company, an unaudited income statement for such month, statement of cash flows for such month and an unaudited balance sheet as of the end such month;

(d)    as soon as practicable, but in any event by December 31st, a budget and business plan for the next fiscal year, prepared on a monthly basis, including balance sheets, income statements and statements of cash flows for such months and, as soon as prepared, any other budgets or revised budgets prepared by the Company or any update to any such business plan or budgets;

(e)    with respect to the financial statements called for in subsections (b) and (c) of this Section 4.1, an instrument executed by the Chief Financial Officer or President of the Company certifying that such financials were prepared in accordance with U.S. GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by U.S. GAAP) and fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment; and

(f)    such other information relating to the financial condition, business or corporate affairs of the Company as the Investor or Series A Holders may from time to time reasonably request, provided, however, that the Company shall not be obligated under this subsection (e) or any other subsection of Section 4.1 to provide information that it deems in good faith to be a trade secret or similar confidential information.

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4.2    Inspection.

The Company shall permit each of the Investor and each Series A Holder, at such Stockholder’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by such Stockholder; provided, however, that the Company shall not be obligated pursuant to this Section 4.2 to provide access to any information that it reasonably considers to be a trade secret or similar confidential information.

Each Stockholder agrees that it will keep confidential and will not disclose, divulge or use for any purpose, other than to monitor its investment in the Company, any Confidential Information, unless such Confidential Information (i) is known or becomes known to the public in general (other than as a result of a breach of this Section 4.2 by such Stockholder), (ii) is or has been independently developed or conceived by the Stockholder without use of the Company’s Confidential Information or (iii) is or has been made known or disclosed to the Stockholder by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that a Stockholder may disclose Confidential Information (a) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company, provided that such person is obligated not to disclose, divulge or use any Confidential Information to the same extent as the Stockholders, (b) to any affiliate, partner, member, stockholder or wholly owned subsidiary of such Stockholder, provided that such person is obligated not to disclose, divulge or use any Confidential Information to the same extent as the Stockholders, or (c) as may otherwise be required by law, provided that the Stockholder takes reasonable steps to minimize the extent of any such required disclosure.

4.3    Termination of Information and Inspection Covenants.

The covenants set forth in Sections 4.1 and 4.2 shall terminate and be of no further force or effect when the Qualified Public Offering is consummated or when the Company first becomes subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the Exchange Act, whichever event shall first occur.

ARTICLE V

QUALIFIED PUBLIC OFFERING

5.1    Limitation on Qualified Public Offering.

In no event shall (a) more than 15% of the then-Fully-Diluted Number (taking into account the shares to be sold in the Qualified Public Offering) be sold by the Company as part of or in connection with the Qualified Public Offering, and no securities other than the Ordinary Shares will be offered in the Qualified Public Offering or (b) the Investor sell any of its Stockholder Shares as part of or in connection with the Qualified Public Offering.

5.2    Market Stand-Off.

(a)    Each Stockholder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to any public offering of the Company’s capital stock and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days in the case of the Qualified Public Offering and ninety (90) days in the case of any

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other public offering of capital stock) (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, or otherwise transfer any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any Stockholder Shares held immediately prior to the effectiveness of the registration statement for such offering, or (ii) enter into any swap or other arrangement that Transfers to another, in whole or part, any of the economic consequences of ownership of the Stockholder Shares, whether any such transaction described in clause (i) or (ii) above is settled by delivery of Stockholder Shares or other securities, in cash or otherwise. The foregoing provisions of this Section 5.2(a) shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall only be applicable to the Stockholders if all officers, directors and greater than two percent (2%) shareholders of the Company enter into similar agreements. Each Stockholder further agrees to execute such agreements as may be reasonably requested by the underwriters in a public offering that are consistent with this Section 5.2(a) or that are necessary to give further effect thereto.

Notwithstanding the foregoing, the restrictions in the paragraph above shall not apply (it being understood and agreed, however, that restrictions other than the one in this Section 5.2(a) may continue to apply) to a transfer by a Stockholder of its Stockholder Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agrees with the parties hereto to comply with the terms and conditions of Section 7.3 hereof (including by agreeing to be bound in writing by the restrictions set forth herein), or (ii) to any trust for the direct or indirect benefit of such Stockholder or the immediate family of such Stockholder, provided that the trustee of the trust agrees with the parties hereto to comply with the terms and conditions of Section 7.3 hereof (including by agreeing to be bound in writing by the restrictions set forth herein), and provided further that any such transfer referred to in (i) and (ii) shall not involve a disposition for value. For purposes of this Section 5.2(a), “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. In addition, if the Stockholder is a corporation, the restrictions in the first paragraph of this Section 5.2(a) shall not apply (it being understood and agreed, however, that restrictions other than the one in this Section 5.2(a) may continue to apply) to a transfer by a corporation of capital stock of the Company to any wholly-owned subsidiary of such corporation, or, if the Stockholder is a limited liability company, to the transfer by the limited liability company to a member or affiliated limited liability company, or, if the Stockholder is a partnership, to the transfer by the partnership to a partner or affiliated partnership; provided, however, that in any such case, it shall be a condition to the transfer that the transferee agrees with the parties hereto to comply with the terms and conditions of Section 7.3 hereof (including by agreeing to be bound in writing by the restrictions set forth herein), and provided further that any such transfer shall not involve a disposition for value.

(b) In order to enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to the ordinary shares of each Stockholder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

5.3    Investor Restrictions.

(a)    Without limiting Section 5.2 hereof, if the Investor shall have exercised the Warrant within thirty (30) Business Days following the consummation of the Qualified Public Offering, the Investor shall not Transfer its Stockholder Shares prior to the one-year anniversary of the consummation of the Qualified Public Offering.

(b)    From the date of the consummation of the Qualified Public Offering until the twenty-four (24) month anniversary thereof, the Investor shall not (and shall cause each of its affiliates and each of their respective employees, officers, directors, representatives and agents not to)

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solicit, initiate, entertain, consider, encourage or accept the submission of any inquiry, proposal or offer relating to the acquisition (whether by merger, purchase of stock, purchase of assets or otherwise) of the Company (i) by any third-party or any Stockholder or affiliate thereof or (ii) as part of an acquisition which would result in the Company no longer being subject to the reporting requirements under the Exchange Act.

5.4    Investor Standstill.

If (i) the Qualified Public Offering is consummated, (ii) the Warrant expires unexercised or is otherwise terminated in accordance with the terms thereof and (iii) the Investor (together with its affiliates) collectively beneficially owns less than 50% of the then-outstanding ordinary shares (including, for purposes of such calculation, the preferred shares on an as-converted basis), then from and after such expiration or termination until the second anniversary thereof, without the prior written consent of the Company, the Investor shall not, nor shall it permit any of its affiliates to, individually or collectively, directly or indirectly, acquire or offer to acquire or agree to acquire from any person, directly or indirectly, by purchase or merger, through the acquisition of control of another person, or otherwise, beneficial ownership of any equity securities of the Company, or direct or indirect rights (including convertible securities) or options to acquire such beneficial ownership; provided, however, that no such acquisition, offer to acquire or agreement to acquire shall be deemed to occur solely due to (a) a stock split, reverse stock split, reclassification, reorganization or other transaction, such as a rights offering, by the Company affecting any class of the outstanding capital stock of the Company generally or (b) a stock dividend or other pro rata distribution by the Company to holders of its outstanding capital stock; and provided, further, however, that this Section 5.4 shall terminate (and the obligations and restrictions hereunder shall cease and be of no further force or effect) upon the earliest to occur of (x) the IAC Control Date, (y) the date on which a Stockholder or an affiliate thereof (other than the Investor or any affiliate thereof) makes a bona fide offer to purchase or otherwise acquire (or consummates a purchase or acquisition if not announced prior thereto) an amount of ordinary shares (or securities exercisable for or convertible into ordinary shares) equal to the number of ordinary shares that, when added together with all other ordinary shares acquired by such Stockholder since the date hereof, would represent 5% or more of the then-Fully-Diluted Number or (z) the date on which a third party (other than a Stockholder or any affiliate thereof) makes a bona fide offer to purchase or otherwise acquire (or consummates a purchase or acquisition if not announced prior thereto) an amount of ordinary shares (or securities exercisable for or convertible into ordinary shares) which would result in such third party holding ordinary shares representing 5% or more of the then-Fully-Diluted Number.

ARTICLE VI

INVESTOR RIGHT OF FIRST OFFER

6.1    Right of First Offer.

Subject to the terms and conditions specified in this Article VI, the Company hereby grants to the Investor and the Series A Holders a right of first offer with respect to future sales or other issuances by the Company of the Shares (as hereinafter defined). Each time the Company proposes to offer or otherwise issue any shares of, or securities convertible into or exchangeable or exercisable for any shares of, any class of the Company’s equity securities (“Shares”), the Company shall first make an offering of such Shares to the Investor and the Series A Holders in accordance with the following provisions:

(a)    The Company shall deliver a notice (“Notice”) to the Investor and the Series A Holders stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered, and (iii) the price and terms upon which it proposes to offer such Shares.

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(b)    By written notification received by the Company within ten (10) calendar days after receipt of the Notice, each of the Investor and the Series A Holders may elect to purchase or obtain, at the price and on the terms specified in the Notice, up to that portion of such Shares that equals the proportion that the number of Stockholder Shares held by such Stockholder at such time bears to the then-Fully Diluted Number.

(c)    The right of first offer in this Section 6.1 shall not be applicable to (i) the issuance on the date hereof of stock options covering 1,660,000 Ordinary Shares pursuant to the Elong Stock Plan; (ii) the issuance of securities pursuant to the Qualified Public Offering, (iii) the issuance of securities pursuant to the conversion or exercise of convertible or exercisable securities; or (iv) the issuance of any shares of capital stock as a stock dividend or upon any subdivision or combination of shares of capital stock.

(d)    The covenants set forth in this Section 6.1 shall terminate and be of no further force or effect upon the consummation of the Qualified Public Offering.

ARTICLE VII

RESTRICTIONS ON TRANSFER

7.1    General Restrictions on Transfer.

Each Stockholder agrees that such Stockholder will not, directly or indirectly, Transfer any Stockholder Shares now or hereafter at any time owned by such Stockholder (or any interest therein) to (each, a “Transferee”) any person, except as permitted by this Agreement. The Company shall not transfer upon its books any Stockholder Shares to any person prohibited by this Agreement and any purported transfer in violation hereof shall be null and void and of no effect.

7.2    Compliance with Securities Laws.

No Stockholder shall Transfer any Stockholder Shares, and the Company shall not transfer on its books any Stockholder Shares, unless (i) the Transfer is pursuant to an effective registration statement under the Act and is in compliance with any applicable foreign and state securities or blue sky laws, (ii) such Stockholder shall have furnished the Company with an opinion of counsel, to the extent reasonably requested by the Company, which opinion of counsel shall be reasonably satisfactory to the Company, to the effect that no such registration is required because of the availability of an exemption from registration under the Act and applicable foreign law, (iii) such Transfer is made by a Stockholder that is an individual to any member of his or her immediate family or any trust solely for the benefit of such Stockholder or any member of his or her immediate family, or (iv) such transfer of Stockholder Shares is to an affiliate (for so long as such affiliate remains an affiliate thereof) and/or partner of such Stockholder which is a partnership and/or member of such Stockholder which is a limited liability company, provided such transferee agrees with the parties hereto to comply with the terms and conditions of Section 7.3 hereof.

7.3    Agreement to be Bound.

No Transfer of Stockholder Shares by a Stockholder shall be effective (and the Company shall not transfer on its books any Stockholder Shares) unless (i) the certificates representing such Stockholder Shares issued to the Transferee shall bear the legend set forth on Schedule 7.3 hereto, if required, and (ii) the Transferee shall have executed and delivered to the Company, as a condition precedent to such Transfer, an instrument or instruments in form and substance satisfactory to the Company confirming that the Transferee agrees to be bound by the terms of

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this Agreement and accepts the rights and obligations set forth hereunder; provided, however, that the terms and conditions set forth in this Section 7.3 shall not apply to any sale of Stockholder Shares pursuant to an effective registration statement under the Act, or pursuant to Rule 144, or to any sale of Stockholder Shares pursuant to Section 7.7 hereof except to the extent that the agreement providing for the sale of any Stockholder Shares pursuant to Section 7.7 provides that the Transferee shall be bound by this Agreement.

7.4    Tag-Along Rights for the Non-Investor Stockholders

(a)    Right to Participate in Sale.

If at any time after the IAC Control Date, the Investor proposes to enter into an agreement to sell or otherwise dispose of for value any Stockholder Shares (except for any disposition to a controlled affiliate of the Investor) in one or more related transactions which will result in the Transfer of capital stock representing at least fifty percent (50%) or more of the combined voting power of all outstanding shares of capital stock of the Company (such sale or other disposition for value being referred to as a “Tag-Along Sale”), then the Investor shall afford the other Stockholders (each individually a “Tag-Along Stockholder” and, collectively, the “Tag-Along Stockholders”) the opportunity to participate proportionately in such Tag-Along Sale on the same terms and conditions provided to the Investor, including the time of payment and the form of consideration, in accordance with this Section 7.4. The number of Stockholder Shares that each Tag-Along Stockholder will be entitled to include in such Tag-Along Sale (the “Tag-Along Allotment”) shall be determined by multiplying (i) the number of Stockholder Shares held of record by such Tag-Along Stockholder as of the close of business on the day immediately prior to the Tag-Along Notice Date (as hereinafter defined) by (ii) a fraction, the numerator of which shall equal the number of Stockholder Shares proposed by the Investor to be sold or otherwise disposed of pursuant to the Tag-Along Sale and the denominator of which shall equal the total number of Stockholder Shares held of record by the Investor as of the close of business on the day immediately prior to the Tag-Along Notice Date. The Tag-Along Allotment of each Stockholder shall be subject to reduction pursuant to the final sentence of the first paragraph of Section 7.4(c).

(b)    Sale Notice.

The Investor shall provide each Tag-Along Stockholder and the Company with written notice (the “Tag-Along Sale Notice”) not more than thirty (30) days nor less than ten (10) Business Days prior to the proposed date of the Tag-Along Sale (the “Tag-Along Sale Date”). Each Tag-Along Sale Notice shall set forth: (i) the name and address of each proposed Transferee of Stockholder Shares in the Tag-Along Sale; (ii) the number of Stockholder Shares proposed to be Transferred by the Investor; (iii) the proposed amount and form of consideration to be paid for such Stockholder Shares and the terms and conditions of payment offered by each proposed Transferee; (iv) the aggregate number of Stockholder Shares held of record by the Investor as of the close of business on the day immediately prior to the date of the Tag-Along Notice (the “Tag-Along Notice Date”); (v) the Tag-Along Stockholder’s Tag-Along Allotment, which shall be based upon the number of Stockholder Shares held of record by such Tag-Along Stockholder as of the close of business on the day immediately prior to the Tag-Along Notice Date, assuming the Tag-Along Stockholder elected to sell the maximum number of Stockholder Shares possible (such allotment subject to reduction on a pro rata basis depending upon the total number of Stockholder Shares the Transferee is willing to acquire); and (vi) the Tag-Along Sale Date.

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(c)    Tag-Along Notice.

Any Tag-Along Stockholder wishing to participate in the Tag-Along Sale shall provide written notice (the “Tag-Along Notice”) to the Investor no less than ten (10) Business Days prior to the Tag-Along Sale Date. The Tag-Along Notice shall set forth the number of Stockholder Shares that such Tag-Along Stockholder elects to include in the Tag-Along Sale, which shall not exceed such Tag-Along Stockholder’s Tag-Along Allotment. The Tag-Along Notice given by any Tag-Along Stockholder shall constitute such Tag-Along Stockholder’s binding agreement to sell the Stockholder Shares specified in the Tag-Along Notice on the terms and conditions applicable to the Tag-Along Sale; provided, however, that in the event that there is any material change in the terms and conditions of such Tag-Along Sale applicable to the Tag-Along Stockholder (including, but not limited to, any decrease in the purchase price that occurs other than pursuant to an adjustment mechanism set forth in any agreement relating to the Tag-Along Sale) after such Tag-Along Stockholder gives its Tag-Along Notice, then, notwithstanding anything to the contrary contained in this Agreement, the Investor shall provide further notice thereof and the Tag-Along Stockholder shall have the right to withdraw from participation in the Tag-Along Sale with respect to all of its Stockholder Shares affected thereby. If the proposed Transferee does not consummate the purchase of all of the Stockholder Shares requested to be included in the Tag-Along Sale by any Tag-Along Stockholder on the same terms and conditions applicable to the Investor, then the Investor shall not consummate the Tag-Along Sale of any of its Stockholder Shares to such Transferee, unless the Stockholder Shares of the Investor and the Tag-Along Stockholders to be sold are reduced or limited pro rata in proportion to the respective number of Stockholder Shares to actually be sold in any such Tag-Along Sale and all other terms and conditions of the Tag-Along Sale are the same for the Investor and the Tag-Along Stockholders.

If a Tag-Along Notice from any Tag-Along Stockholder is not received by the Investor prior to the ten (10) Business Day period specified above, such Investor shall have the right to consummate the Tag-Along Sale without the participation of such Tag-Along Stockholder, but only on terms and conditions which are no more favorable in any material respect to the Investor than as stated in the Tag-Along Sale Notice and only if such Tag-Along Sale occurs on a date within sixty (60) days of the Tag-Along Sale Date, subject to extension for receipt of any required third-party consents or approvals. If such Tag-Along Sale does not occur within such sixty (60) day period (as extended), the Stockholder Shares that were to be subject to such Tag-Along Sale thereafter shall continue to be subject to all of the restrictions contained in this Section 7.4.

(d)    Delivery of Certificates; Other Agreements.

On the Tag-Along Sale Date, each Tag-Along Stockholder shall deliver a certificate or certificates for the Stockholder Shares to be sold by such Tag-Along Stockholder in connection with the Tag-Along Sale, duly endorsed for transfer with signatures guaranteed, to the Transferee in the manner and at the address indicated in the Tag-Along Notice against delivery of the purchase price for such Shares, and shall enter into any other agreements with the Investor and the Transferee reasonably requested in connection with the Transfer, in each case as a condition to such Tag-Along Stockholder’s right to participate in the Tag-Along Sale.

(e)    Termination upon Qualified Public Offering.

This Section 7.4 shall terminate and be of no further force or effect upon the consummation of the Qualified Public Offering.

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7.5    Tag-Along Rights for the Investor

(a)    Right to Participate in Sale.

If at any time after the Warrant expires unexercised or is otherwise terminated in accordance with the terms thereof, the Company or any Stockholder or any group of Stockholders (other than the Investor) (the “Transferor”) proposes to enter into an agreement to sell or otherwise dispose of for value any Stockholder Shares in one or more related transactions which will result in the Transfer of capital stock representing at least five percent (5%) or more of the combined voting power of all outstanding shares of capital stock of the Company (such sale or other disposition for value being referred to as a “Transferor Tag-Along Sale”), then the Transferor shall afford the Investor the opportunity to participate proportionately in such Transferor Tag-Along Sale on the same terms and conditions provided to the Transferor, including the time of payment and the form of consideration, in accordance with this Section 7.5. The number of Stockholder Shares that the Investor will be entitled to include in such Transferor Tag-Along Sale (the “Tag-Along Allotment”) shall be determined by multiplying (i) the number of Stockholder Shares held of record by the Investor as of the close of business on the day immediately prior to the Tag-Along Notice Date (as hereinafter defined) by (ii) a fraction, the numerator of which shall equal the number of Stockholder Shares proposed by the Transferor to be sold or otherwise disposed of pursuant to the Transferor Tag-Along Sale and the denominator of which shall equal the total number of Stockholder Shares held of record by the Transferor as of the close of business on the day immediately prior to the Tag-Along Notice Date. The Tag-Along Allotment of the Investor shall be subject to reduction pursuant to the final sentence of the first paragraph of Section 7.5(c).

(b)    Sale Notice.

The Transferor shall provide the Investor and the Company with written notice (the “Transferor Tag-Along Sale Notice”) not more than thirty (30) days nor less than ten (10) Business Days prior to the proposed date of the Transferor Tag-Along Sale (the “Transferor Tag-Along Sale Date”). Each Transferor Tag-Along Sale Notice shall set forth: (i) the name and address of each proposed Transferee of Stockholder Shares in the Transferor Tag-Along Sale and the name and address of the Transferor(s); (ii) the number of Stockholder Shares proposed to be Transferred by the Transferor; (iii) the proposed amount and form of consideration to be paid for such Stockholder Shares and the terms and conditions of payment offered by each proposed Transferee; (iv) the aggregate number of Stockholder Shares held of record by the Transferor as of the close of business on the day immediately prior to the date of the Transferor Tag-Along Notice (the “Transferor Tag-Along Notice Date”); (v) the Investor’s Tag-Along Allotment, which shall be based upon the number of Stockholder Shares held of record by the Investor as of the close of business on the day immediately prior to the Transferor Tag-Along Notice Date, assuming the Investor elected to sell the maximum number of Stockholder Shares possible (such allotment subject to reduction on a pro rata basis depending upon the total number of Stockholder Shares the Transferee is willing to acquire); and (vi) the Transferor Tag-Along Sale Date.

(c)    Transferor Tag-Along Notice.

If the Investor desires to participate in the Transferor Tag-Along Sale, it shall provide written notice (the “Transferor Tag-Along Notice”) to the Transferor no less than ten (10) Business Days prior to the Transferor Tag-Along Sale Date. The Transferor Tag-Along Notice shall set forth the number of Stockholder Shares that the Investor elects to include in the Transferor Tag-Along Sale, which shall not exceed the Investor’s Tag-Along Allotment. The Transferor Tag-Along Notice given by the Investor shall constitute the Investor’s

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binding agreement to sell the Stockholder Shares specified in the Transferor Tag-Along Notice on the terms and conditions applicable to the Transferor Tag-Along Sale; provided, however, that in the event that there is any material change in the terms and conditions of such Transferor Tag-Along Sale applicable to the Investor (including, but not limited to, any decrease in the purchase price that occurs other than pursuant to an adjustment mechanism set forth in any agreement relating to the Transferor Tag-Along Sale) after the Investor gives its Transferor Tag-Along Notice, then, notwithstanding anything to the contrary contained in this Agreement, the Transferor shall provide further notice thereof and the Investor shall have the right to withdraw from participation in the Transferor Tag-Along Sale with respect to all of its Stockholder Shares affected thereby. If the proposed Transferee does not consummate the purchase of all of the Stockholder Shares requested to be included in the Transferor Tag-Along Sale by the Investor on the same terms and conditions applicable to the Transferor, then the Transferor shall not consummate the Transferor Tag-Along Sale of any of its Stockholder Shares to such Transferee, unless the Stockholder Shares of the Transferor and the Investor to be sold are reduced or limited pro rata in proportion to the respective number of Stockholder Shares to actually be sold in any such Transferor Tag-Along Sale and all other terms and conditions of the Transferor Tag-Along Sale are the same for the Transferor and the Investor.

If a Transferor Tag-Along Notice from the Investor is not received by the Transferor prior to the ten (10) Business Day period specified above, such Transferor shall have the right to consummate the Transferor Tag-Along Sale without the participation of the Investor, but only on terms and conditions which are no more favorable in any material respect to the Transferor than as stated in the Transferor Tag-Along Sale Notice and only if such Transferor Tag-Along Sale occurs on a date within sixty (60) days of the Transferor Tag-Along Sale Date, subject to extension for receipt of any required third-party consents or approvals. If such Transferor Tag-Along Sale does not occur within such sixty (60) day period (as extended), the Stockholder Shares that were to be subject to such Transferor Tag-Along Sale thereafter shall continue to be subject to all of the restrictions contained in this Section 7.5.

(d)    Delivery of Certificates; Other Agreements.

On the Transferor Tag-Along Sale Date, the Investor shall deliver a certificate or certificates for the Stockholder Shares to be sold by the Investor in connection with the Transferor Tag-Along Sale, duly endorsed for transfer with signatures guaranteed, to the Transferee in the manner and at the address indicated in the Transferor Tag-Along Notice against delivery of the purchase price for such Stockholder Shares, and shall enter into any other agreements with the Transferor and the Transferee reasonably requested in connection with the Transfer, in each case as a condition to the Investor’s right to participate in the Transferor Tag-Along Sale.

(e)    Termination upon Qualified Public Offering.

This Section 7.5 shall terminate and be of no further force or effect upon the consummation of the Qualified Public Offering.

7.6    First Option Rights.

(a)    From and after (i) the date hereof, with respect to the Stockholders other than the Investor and (ii) the date the Warrant expires unexercised or is otherwise terminated in accordance with the terms thereof, with respect to the Investor, until, in each case, the Qualified Public Offering, if at any time a Stockholder proposes to sell or otherwise Transfer for value (except for any Transfer to a controlled affiliate thereof) all or any part of the Stockholder Shares held by it, the Stockholder shall provide written notice (the “Sale Notice”) to the Company

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setting forth such proposal to sell or otherwise Transfer for value such Stockholder Shares, which Sale Notice shall set forth the proposed price and terms. Upon the giving of such Sale Notice, the Company shall have the option (the “Purchase Option”) to purchase all, but not less than all, of such Stockholder Shares specified in the Sale Notice, on such proposed price and terms. The Company shall have ten (10) days from receipt of the Sale Notice to provide written notice (the “Acceptance Notice”) to the Stockholder of its desire to exercise such Purchase Option. The Acceptance Notice given by the Company shall constitute a binding agreement by the Company to purchase the Stockholder Shares specified in the Acceptance Notice on the proposed price and terms.

(b)    The closing of the purchase by the Company shall be held on a Business Day within forty-five (45) days after the giving of the relevant Acceptance Notice, at the principal offices of the Company in the Cayman Islands, or at such other time and place as may be mutually agreed to by the Company and the Stockholder.

(c)    If no Acceptance Notice is delivered within the period specified above by the Company with respect to all (but not less than all) of the Stockholder Shares included in the Sale Notice, the Stockholder shall have the right to consummate a sale or sales of the Stockholder Shares covered by the Sale Notice to a third party but only at a price and upon terms no less favorable in any material respect to the Stockholder than those contained in the Sale Notice and only if such sale occurs on a date within forty-five (45) days of the expiration of the applicable ten-day period described above, subject to extension for receipt of any required third-party consents or approvals; provided, however, that in the event the Stockholder has not so transferred such Stockholder Shares to a third party within such 45-day period (as extended), then such Stockholder Shares thereafter shall continue to be subject to all of the restrictions contained in this Section.

(d)    Anything herein to the contrary notwithstanding, the provisions of this Section 7.6 shall not apply to: (i) any transfer of Stockholder Shares by a Stockholder by gift or bequest or through inheritance to, or for the benefit of, any member or members of his or her immediate family (which shall include any spouse, and his or her spouse’s aunts, uncles, lineal ancestors or descendants or siblings) or to a trust, partnership or limited liability company for the benefit of such members, provided such transferee agrees with the parties hereto to comply with the terms and conditions of Section 7.3 hereof; (ii) any transfer of Stockholder Shares by a Stockholder to a trust not included in clause (i) in respect of which he or she serves as trustee, provided that the trust instrument governing said trust shall provide that such Stockholder, as trustee, shall retain sole and exclusive control over the voting and disposition of said Stockholder Shares until the termination of this Agreement, provided such transferee agrees with the parties hereto to comply with the terms and conditions of Section 7.3 hereof; (iii) any transfer of Stockholder Shares to an affiliate and/or partner of such Stockholder which is a partnership and/or member of such Stockholder which is a limited liability company, provided such transferee agrees with the parties hereto to comply with the terms and conditions of Section 7.3 hereof; (iv) in connection with the merger, consolidation, or sale of all of the outstanding stock of the Company; and (v) any repurchase of Stockholder Shares pursuant to stock restriction agreements under which the Company has the option to repurchase such shares at cost (or a lesser amount) upon the occurrence of certain events, including termination of employment.

(e)    This Section 7.6 shall terminate and be of no further force or effect upon the consummation of the Qualified Public Offering.

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7.7    Drag Along Right.

If, at any time any after the IAC Control Date, Stockholders holding in excess of fifty percent (50%) of the combined voting power of the Company (the “Selling Stockholders”) approve an agreement to sell or otherwise dispose of for value Stockholder Shares in one or more related transactions to a third person or third persons unaffiliated with such Selling Stockholders (a “Third Party”) which will result in the Transfer of Stockholder Shares representing at least fifty percent (50%) of the combined voting power of the Company (such sale or other disposition for value being referred to as a “Drag-Along Sale”), then, upon the demand of the Selling Stockholders, each of the other Stockholders (the “Required Sellers”) shall be required to sell to such Third Party all, but not less than all of the Stockholder Shares, if any, then held by them, at the same price and on the same terms and conditions, including the time of payment and the form of consideration, as the Selling Stockholders have agreed to with such Third Party, in accordance with this Section.

(a)    Drag-Along Notice.

Prior to making any Drag-Along Sale, the Selling Stockholders (or a representative thereof) shall promptly provide each Required Seller with written notice (the “Drag-Along Notice”) not more than thirty (30) or less than fifteen (15) days prior to the proposed date of the Drag-Along Sale (the “Drag-Along Sale Date”). The Drag-Along Notice shall set forth: (i) the name and address of the Third Party; (ii) the proposed amount and form of consideration to be paid per Stockholder Share and the terms and conditions of payment offered by the Third Party; (iii) the number of Stockholder Shares held of record as of the close of business on the date of the Drag-Along Sale Notice (the “Drag-Along Notice Date”) by the Required Seller to whom the notice is sent; (iv) the aggregate number of Stockholder Shares held of record as of the Drag-Along Notice Date by the Selling Stockholders; (v) confirmation that the Selling Stockholders are selling all or substantially all of the aggregate number of Stockholder Shares then held by them to the Third Party; and (vi) the Drag-Along Sale Date.

(b)    Delivery of Certificates; Other Agreements.

On the Drag-Along Sale Date, each Required Seller shall deliver a certificate or certificates for all of its Stockholder Shares duly endorsed for transfer with signatures guaranteed, to such Third Party in the manner and at the address indicated in the Drag-Along Notice against delivery of the purchase price for such Required Seller’s Stockholder Shares, and shall enter into any other agreements with the Selling Stockholders and the Third Party reasonably requested in connection with the Drag-Along Sale.

(c)    Consideration.

The provisions of this Section shall apply regardless of the form of consideration received in the Drag-Along Sale.

(d)    Termination upon Qualified Public Offering.

This Section 7.7 shall terminate and be of no further force or effect upon the consummation of the Qualified Public Offering.

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ARTICLE VIII

INVESTOR RIGHTS

8.1    Investor’s Approval Rights.

From and after the date hereof until the earlier to occur of (x) the date on which six (6) IAC Directors are on the Board of Directors and such IAC Directors represent a majority of the Board of Directors or (y) the date on which the Warrant expired unexercised or was otherwise terminated, the Company shall not (by amendment, merger, consolidation or otherwise), without first obtaining the written approval of the Investor, cause or permit either the Company, any direct or indirect subsidiary of the Company or any other affiliate of the Company (each such entity, including, without limitation, the Company, shall be referred to as an “eLong Entity”) to:

(a)    except to the extent required to effect, or reasonably advisable in connection with, the Qualified Public Offering, amend, revise or repeal an eLong Entity’s Memorandum of Association or the Articles of Association or comparable charter documents, or any part thereof;

(b)    change the authorized number of directors of any eLong Entity, or increase (or decrease) the size of the Company’s Board of Directors other than in accordance with the Investors Agreement;

(c)    except to the extent required to effect the Qualified Public Offering (provided that the Company comply with Section 5.1(a) hereof), issue, or obligate itself to issue, any security of any eLong Entity, including without limitation, any shares of capital stock of any eLong Entity (including, without limitation, any options, warrants or other rights obligating or permitting such eLong Entity to issue shares of capital stock, or securities exchangeable for or convertible into shares of capital stock); provided, however, that this Section 8.1(c) shall not restrict the Company from issuing shares of capital stock that it is obligated to issue pursuant to the conversion or exercise of convertible or exercisable securities that were outstanding on the date hereof or that were issued after the date hereof with the prior written approval of the Investor;

(d)    create or authorize a new class or series of securities of any eLong Entity (including, without limitation, any equity, debt (except as specifically permitted by subsection (j) below) or hybrid securities), or, except to the extent required to effect, or reasonably advisable in connection with, the Qualified Public Offering, increase or decrease (other than by redemption or conversion) the authorized share capital of the ordinary shares or preferred shares of the Company or the applicable capital stock of any other eLong Entity;

(e)    redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any preferred shares or ordinary shares or the applicable capital stock of any other eLong Entity; provided, however, that this restriction shall not apply to the repurchase of ordinary shares from employees, officers, directors, consultants or other persons performing services for the Company or any other eLong Entity pursuant to agreements entered into the by the Company prior to the date hereof or to the extent authorized under the eLong Option Plan under which the Company has the option or obligation to repurchase such shares upon the occurrence of certain events, such as the termination of employment, or pursuant to a right of first refusal (“Permitted Payments”), and shall not prohibit the transactions contemplated by the Transaction Agreement, Transfer Agreement (as defined in the Transaction Agreement) and the Warrant;

(f)    authorize or create any new subsidiary or affiliate of any eLong Entity (except for a wholly-owned subsidiary incorporated or organized in a jurisdiction outside of the PRC and

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which is subject to the approval rights in this Article XIII) (it being understood that the creation of a branch office or department within a subsidiary or affiliate shall not be deemed to constitute a creation of a new subsidiary or affiliate), or otherwise change in any manner the current corporate and operating structure of the eLong Entities (it being understood and agreed that a change in “operating structure” shall not be deemed to include any changes to the internal operations of an eLong Entity, but shall be deemed to include any structural change to the way the business of the eLong Entities (taken as a whole) is conducted among the eLong Entities and with non-eLong Entities (including, without limitation, changing which eLong Entity holds materials licenses and other material assets);

(g)    amend, revise, repeal or terminate any Structure Contract (as defined in the Transaction Agreement;

(h)    directly or indirectly, enter into any transaction or series of related transactions of merger, amalgamation, reorganization, consolidation or combination, or consolidate, liquidate, windup or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or in a series of transactions of all or substantially all of its business, property or assets, whether now owned or hereafter acquired;

(i)    declare or make any payment of cash or distribution of assets with respect to any shares of capital stock of any eLong Entity, by way of dividend or distribution, other than Permitted Payments, distributions pursuant to a Liquidation Event (as defined in the Amended Articles);

(j)    incur at any time indebtedness for borrowed money or enter into or guarantee any obligation, in either case, outside the ordinary course of business consistent with past practice (it being understood that the incurrence of debt in an aggregate amount in excess of US$1,000,000 in a transaction or series or related transactions shall be deemed to be outside of the ordinary course of business);

(k)    sell, transfer, assign or otherwise dispose of any material asset(s) of any eLong Entity in a transaction or series of related transactions (it being understood that any asset or series of related assets with an aggregate fair market value in excess of US$1,000,000 shall be deemed a “material asset(s)” for purposes of this provision);

(l)    purchase or otherwise acquire (including by merger, consolidation or other business combinations) any material asset(s) or business(s) or make any capital expenditures in excess of US$1,000,000 in a transaction or series of related transactions (it being understood that any business or asset or series of related assets for which an eLong Entity paid in excess of US$1,000,000 shall be deemed a “material asset(s) or business(es)” for purposes of this provision); or

(m)    change, directly or indirectly, in any material respect the ordinary and usual course and nature of the conduct or operations of the business of the Company and the eLong Entities (taken as a whole), including, without limitation, by ceasing to carry on in any material respect the business conducted by the Company and the eLong Entities (taken as a whole) as of May 27, 2004 or by engaging in any business not conducted on or undertaken by or reasonably related to the business conducted by the Company and the eLong Entities (taken as a whole) as of May 27, 2004.

8.2    Stock Option Grants.

(a)    In connection with the Qualified Public Offering, the Company shall form a compensation committee (the “Compensation Committee”) which shall consist of three (3)

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members of the Board of Directors (who shall all be independent directors in accordance with the Nasdaq Stock Market Marketplace Rules), one of whom shall be one of the IAC Directors; provided, however, that from and after the IAC Exercise Date, two (2) of the three (3) members of the Compensation Committee shall be IAC Directors. Notwithstanding Section 8.1(c) hereof, the Compensation Committee shall have the authority to issue stock options to employees of any eLong Entity who are below the Vice President level from and after the 31^st Business Day after the consummation of the Qualified Public Offering; provided, however, that if the Investor exercises its Warrant on or prior to such 31^st Business Day, the Compensation Committee shall not issue, or authorize the issuance of, any stock options until such two (2) IAC Directors shall have become members of the Compensation Committee.

(b)    Notwithstanding anything to the contrary herein, in no event shall any stock options be issued to the persons listed in that certain Letter Agreement, of even date herewith, by and between the Company and the Investor prior to the first anniversary of the date hereof without the prior approval of the Investor.

8.3    Cooperation Regarding IPO.

At the Company’s request the Investor shall in good faith cooperate with the Company in order to facilitate the Company’s plans to effect the Qualified Public Offering, and in connection with the foregoing the Investor shall take such actions as may be reasonably requested from time to time by the Company and the Investor agrees that it shall not take any action which is intended to impair, delay or hamper such plans, provided, that (a) the Company comply with the restriction in Section 5.1(a) hereof, and (b) only Ordinary Shares are offered in the Qualified Public Offering. In connection with the Qualified Public Offering, the Investor shall have the reasonable right of approval with regard to how it or its affiliates are to be described in the Registration Statement relating thereto.

ARTICLE IX

TERMINATION OF PREVIOUS SHAREHOLDER AGREEMENTS; NOTIFICATION

OF INDEMNIFICATION CLAIMS

9.1    Termination of Agreements and Provisions Thereof.

Each of the parties to the respective Previous Shareholder Agreements hereby agree that each of such agreements shall terminate and be of no further force or effect, effective simultaneously with the execution and delivery of this Agreement by each of the parties hereto. Each of the parties to the Series A Preferred Purchase Agreement hereby agree that, (a) simultaneously with the execution and delivery of this Agreement by each of the parties hereto, all of the covenants in Section 6 of the Series A Preferred Purchase Agreement shall terminate and be of no further force or effect and (b) the indemnification obligations of the Company under the Series A Preferred Purchase Agreement shall terminate and be of no further force or effect on March 31, 2006 with respect to matters as to which no claim notice has been given prior to that date.

9.2    Notification of Indemnification Claims.

If any Series A Holder (or any representative thereof) pursues an indemnification claim against the Company (or notifies the Company of a potential indemnification claim), such Series A Holder shall promptly provide the Investor with written notice of such claim, which notice shall include a reasonably detailed description of the claim. If the Investor pursues an indemnification claim against the Company (or notifies the Company of a potential

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indemnification claim), the Investor shall promptly provide Tiger (or if Tiger is no longer a Series A Holder, the largest holder of Series A Preferred Shares at such time as determined by the Secretary of the Company) with written notice of such claim, which notice shall include a reasonably detailed description of the claim. If the Company receives any notice or other evidence that any person is or will pursue an indemnification claim against it, the Company shall promptly provide the Investor and the Series A Holders with written notice of such claim, which notice shall include a reasonably detailed description of the claim.

ARTICLE X

MISCELLANEOUS

10.1    Series A Right to Information for Tax Filings

(a)    No later than two (2) months following the end of each Company taxable year, the Company shall provide the following information to the Series A Holders: (i) the Company’s capitalization table as of the end of the last day of such taxable year and (ii) a report regarding the Company’s status as a “controlled foreign corporation” (a “CFC”) under the Internal Revenue Code of 1986, as amended (including any successor thereto, the “Code”). In addition, the Company shall provide the Series A Holders with access to such other Company information as may be required by such Series A Holders to determine the Company’s status as a CFC or a “foreign personal holding company” (a “FPHC”) as defined in Section 552 of the Code, to determine whether each such Series A Holder is required to report its pro rata portion of the Company’s “Subpart F income” (as defined in the Code) on its United States federal income tax return, or to allow such Series A Holders to otherwise comply with applicable United States federal income tax laws.

(b)    In connection with a “Qualified Electing Fund” election made by a Series A Holder pursuant to Section 1295 of the Code (or any successor thereto), the Company shall provide annual financial information to the Series A Holders in the an Annual Information Statement (substantially in the form attached hereto as Exhibit A) and shall provide the Series A Holders with access to such other Company information as may be required for purposes of filing United States federal income tax returns in connection with such Qualified Electing Fund election.

(c)    Except to the extent that the Series A Holders agree otherwise, the Company shall take such actions, including making an election to be treated as a corporation or refraining from making an election to be treated as a partnership, as may be required to ensure that at all times the Company is treated as a corporation for United States federal income tax purposes.

(d)    This Section 10.1 shall terminate and be of no further force or effect on the first date that less than 25% of the Series A Preferred Shares originally issued on August 29, 2003 remain outstanding.

10.2    No Derogation of Rights.

The granting of any rights hereunder to the Stockholders, and the exercise thereof, shall in no way detract from or restrict the rights otherwise possessed by the Stockholders as holders of securities of the Company.

10.3    Manner of Voting.

The voting of Stockholder Shares pursuant to this Agreement may be effected in person, by proxy, by written consent, or in any other manner permitted by the Amended Articles and applicable law.

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10.4    Public Announcements.

The Company shall not make any press release or other public announcement concerning the transactions contemplated by this Agreement without the prior written consent of the Investor (which shall not be unreasonably withheld or delayed) except as and to the extent that the Company shall be obligated to make any such disclosure under applicable law and then only after reasonable consultation with the Investor regarding the basis of such obligation and the content of such press release or other public announcement. The Investor shall be entitled to make any such press release or other announcement without the consent of the Company provided that such release or announcement does not contain any misrepresentation or any misleading information pertaining to the Company or the transactions contemplated by this Agreement.

10.5    Assignment.

Except as set forth in Article VII hereof, no assignment of this Agreement may be made by any party at any time, whether or not by operation of law, without the other parties’ prior written consent; provided, however, the Investor may assign any of its rights hereunder to an affiliate of the Investor to whom the Series B Preferred Shares or Warrant are transferred without the other parties’ consent provided that such affiliate or other party expressly assumes in writing all of the Investor’s obligations hereunder as if an original signatory hereto.

10.6    Binding Effect.

This Agreement shall be binding upon and shall enure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

10.7    Time.

Time shall be of the essence of this Agreement in each and every matter or thing herein provided.

10.8    Expenses.

If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

10.9    Notices.

(a)    Each party shall give prompt notice to the other of any breach of its obligations under this Agreement, provided that no such notification shall affect the covenants or agreements of the parties under this Agreement.

(b)    All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, first-class mail, telex, telecopier, or overnight air courier guaranteeing next day delivery:

(i)    if to the Company, to

eLong, Inc.

Block B, XingKe Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Telecopy No.: (8610) 64386830

Attention: Chief Executive Officer

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With a copy to:

Goulston & Storrs, A Professional Corporation

400 Atlantic Avenue

Boston, MA 02110

Telecopy No.: (617) 574-4112

Attention: Timothy B. Bancroft, Esq.

(ii)    if to the Investor, to

IACT Asia Pacific Limited

c/o InterActiveCorp.

152 West 57th Street

42nd Floor

New York, New York 10019

Telecopy No.: (212) 314-7497

Attention: General Counsel

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, New York 10019

Telecopy No.: (212) 403-2000

Attention: Andrew J. Nussbaum, Esq.

(iii)    if to the Stockholders other than Investor, to the addresses listed on Schedule 10.9 hereto.

(c)    All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed (so long as a fax copy is sent and receipt acknowledged within two Business Days after mailing); when answered back if telexed; when receipt acknowledged, if telecopied; and the Business Day guaranteed by the courier, if sent by air courier guaranteeing timely delivery. The parties may change the addresses to which notices are to be given by giving five days’ prior written notice of such change in accordance herewith.

10.10    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of the Investor, each of the parties hereto agrees for the benefit of the Investor that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 10.9, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of the Investor set out in subsection (b) below, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration

34

Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including the courts in the People’s Republic of China (PRC)) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre- arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

10.11    Injunctive Relief.

The parties agree that the remedy at law for any breach of the provisions of this Agreement will be inadequate and that the party that is not in breach, on any application to a court, shall be entitled, without the need to post any bond or provide any indemnity, to temporary and permanent injunctive relief, specific performance and any other equitable relief against the party or parties in breach of the provisions of this Agreement.

10.12    Currency.

Except as expressly indicated otherwise, all sums of money referred to in this Agreement are expressed and shall be payable in United States dollars.

10.13    Entire Agreement.

This Agreement, together with the Transaction Agreement, and the documents referred to herein or therein, constitute the entire agreement among the parties with respect to subject matter set forth herein.

10.14    Further Assurances.

Each party shall, from time to time, and at all times hereafter, at the request of any other party hereto, but without further consideration, do all such further acts and execute and deliver all such further documents and instruments as shall be reasonably required in order to fully perform and carry out the terms and intent hereof.

10.15    Waivers and Modifications.

Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities; provided, however, that (i) for so long as the Investor owns at least a majority of the Registrable Securities purchased by it under the Transaction Agreement, no amendment to, or waiver of, this Agreement shall be effective without the written consent of the Investor, (ii) no amendment to, or waiver of, this Agreement that alters or changes the rights, preferences or privileges of the Series A Holders or the Common Holders so as to affect adversely such holders, shall be effective without the written consent of Stockholders holding at least a majority of the then outstanding Series A Preferred Shares or Ordinary Shares, as the case may be and (iii) no amendment to, or waiver of, any Stockholder’s right to designate directors pursuant to Article II shall be effective without the written consent of such Stockholder.

10.16    Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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10.17    Date For Any Action.

In the event that any date on which any action is required to be taken under this Agreement by either of the parties hereto is not a Business Day, such actions shall be required to be taken on the next succeeding day which is a Business Day.

10.18     Construction.

In this Agreement:

(a)    words denoting the singular include the plural and vice versa and words denoting any gender include all genders;

(b)    the words “including”, “include”, and “includes” shall mean “including without limitation”, “include, without limitation” and “includes, without limitation”, respectively;

(c)    any reference to a statute shall mean the statute in force as at the date hereof and any regulation in force thereunder, unless otherwise expressly provided; and

(d)    The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

10.19    Interpretation.

When a reference is made in this Agreement to a Section or Schedule, such reference shall be to a Section or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this agreement are for reference purposes only and shall not affect in any way the meaning, construction or interpretation of this Agreement.

10.20    Severability.

If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

10.21    Effectiveness.

This Agreement shall become effective (the “Effective Date”) upon the Closing (as defined in the Transaction Agreement). This Agreement shall terminate if the Transaction Agreement is terminated in accordance with the terms thereof, and each party’s signature hereto is irrevocable unless and until this Agreement is so terminated. All requisite corporate, partnership and limited liability company action on the part of each party hereto, and all shareholder and member action on the part of each party hereto that is a corporation or limited liability company, necessary for the authorization, execution and delivery of this Agreement and the performance by such party of its obligations hereunder, has been taken, and this Agreement constitutes the valid and legally binding obligations of each party hereto, enforceable in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

10.22    Not a Partnership

Nothing in this Agreement shall constitute or be deemed to constitute a partnership or quasi-partnership between the parties hereto.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

eLong, INC.
By:	/s/
Name:
Title:
IACT ASIA PACIFIC LIMITED
By:	/s/
Name:
Title:

SERIES A HOLDERS:
Tiger Technology Private Investment Partners, L.P.
By:	Tiger Technology PIP Performance, L.L.C., its General Partner
By:	/s/
Name:
Title:

Tiger Technology II, L.P.
By:	Tiger Technology Performance, L.L.C., its General Partner
By:	/s/
Name:
Title:

Blue Ridge Limited Partnership
By:	JAG Holdings LLC, its General Partner
By:	/s/
Name: Richard S. Bello
Title: Managing Director

Blue Ridge Offshore Master Limited Partnership
By:	JAG Offshore Holdings, its General Partner
By:	/s/
Name: Richard S. Bello
Title: Managing Director

RMG Holdings, LLC
By:	/s/
Name: Richard M. Gerson
Title: Managing Director
Derek Palaschuk
COMMON HOLDERS:
Billable Development, Ltd.
By:	/s/
Name:
Title:
/s/
Lawrence Auriana
/s/
Peter Lerner
/s/
Ira S. Nordlicht and Helen S. Scott JTWROS

Purple Mountain Holding, Ltd.
By:	/s/
Name:
Title:
Time Intelligent Finance Limited
By:	/s/
Name:
Title:

Mind Trade Assets Limited
By:	/s/
Name:
Title:

Gold Partner Consultants Limited
By:	/s/
Name:
Title:
/s/ Zhu Saiying
/s/ Wang Gui Ying
/s/ Sun Li Ming
/s/ Wang Yi Jie
/s/ Pan Dai
/s/ Bo Liu
/s/ Michael Rapp
/s/ Philip Wagenheim
/s/ Wayne Sturman

EX-4.7

Exhibit 4.7

WARRANT AGREEMENT

Warrant Agreement dated as of August 22, 2003, by and between eLong, Inc., a British Virgin Islands international business company (“eLong” or the “Company”), and Broadband Capital Management LLC, a New York limited liability company (“Holder”).

RECITALS

WHEREAS, effective May 5, 2002, eLong granted to Holder warrants to purchase Common Shares of the Company; and

WHEREAS, pursuant to the terms of that certain letter agreement dated August 22, 2003, eLong and Holder have agreed, inter alia, to make certain revisions to the operative terms of such warrants and have agreed to enter into this Warrant Agreement in order to modify the original May 5, 2002 grant pursuant to the August 22, 2003 letter agreement;

NOW THEREFORE, in consideration of the premises and the mutual promises and agreements of the parties set forth herein, the parties hereto agree as follows:

1.    Certain Definitions.    As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a)    “Affiliate”    means as to any entity (i) any other person or entity that directly or indirectly controls, is controlled by, or is under common control with such specified person or entity and (ii) any officer, director, general partner, manager or managing member of such entity. “Control” means the power to direct or cause the direction of the management or policies of an entity whether, through the ownership of voting securities, by agreement or otherwise.

(b)    “Common Shares”    means eLong’s common shares, par value US $.01 per share.

(c)    “Company”    means eLong and any other company that shall succeed to or assume the obligations of eLong hereunder.

(d)    “Other Securities”    refers to any stock and other securities of the Company (other than Common Shares) or any securities of any other person (corporate or otherwise) which the Holder shall, at any time, be entitled to receive, or shall have received, upon the exercise of the Warrant, in lieu of or in addition to Common Shares, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Shares or Other Securities pursuant to this Agreement or otherwise.

(e)    “Securities Act”    means the Securities Act of 1933, as the same shall be in effect at the time.

(f)    “Warrant Expiration Date”    means 5:00 p.m. New York City time on May 5, 2012.

(g)    “Warrant Shares”    means shares of Common Shares or Other Securities that Holder shall be entitled to receive upon the exercise of the Warrants pursuant to this Agreement.

2.    Issuance of Warrant.    Simultaneous with the execution of this Agreement, eLong will issue to Holder a Warrant Certificate (the “Warrant”) evidencing the right of Holder to purchase an aggregate of 500,000 Common Shares at an exercise price of US $0.75 per share (the “Exercise Price”), subject to adjustment, vesting and exercise restrictions as provided herein. The Warrant Certificate and all replacement Certificates shall be substantially in the form attached hereto as Exhibit 1.

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3.    Vesting and Exercise of Warrant.

(a)    Vesting.    The Warrant and Holder’s rights under this Agreement shall vest in full and become immediately exercisable as of the date hereof. If not earlier exercised, the Warrant shall expire on the Warrant Expiration Date.

(b)    Exercise in Full.    Subject to the provisions hereof, the Warrant may be exercised in full by Holder by surrender of the Warrant, with the form of subscription attached hereto as Exhibit 2 (the “Subscription Form”) duly executed by Holder, to the Company at its principal office in Beijing, P. R. China, accompanied by payment in the amount obtained by multiplying the number of Warrant Shares by the Exercise Price (subject to any applicable adjustments provided for herein). Payment may be made either (i) in cash, (ii) by wire transfer of immediately available funds to an account designated by the Company, (iii) by certified or official bank check payable to the order of the Company, (iv) by the assignment of the proceeds of a sale of some or all of the Warrant Shares being acquired upon the exercise of the Warrant in a customary cashless warrant exercise transaction, or (v) by any combination of the methods of payment provided in clauses (i) through (iv).

(c)    Partial Exercise.    Subject to the provisions hereof, the Warrant may be exercised in part by surrender of the Warrant in the manner and at the place provided in Section 3(b) hereof, except that the amount payable by Holder upon any partial exercise shall be the amount obtained by multiplying (i) the number of Warrant Shares designated by Holder in the Subscription Form by (ii) the Exercise Price, subject to any applicable adjustment provided for herein. Upon any such partial exercise, the Company, at its expense, will promptly issue and deliver to Holder a new Warrant, in the name of Holder, in an amount equal to the remainder of (i) the original number of Common Shares indicated on the face of the surrendered Warrant minus (ii) the number of Warrant Shares issued upon such partial exercise as specified in the Subscription Form. The Subscription Form delivered by the Holder shall not take into account any adjustments provided for herein, which will be calculated by the Company upon receipt of the Subscription Form.

(d)    Delivery of Stock Certificates, etc., on Exercise.    As soon as practicable after the exercise of the Warrant in full or in part, and in any event within (10) days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to Holder, a certificate or certificates for the number of fully paid and non-assessable Warrant Shares to which Holder shall be entitled upon such exercise, together with any other stock or Other Securities and property (including cash, where applicable) to which such holder is entitled upon such exercise pursuant this Agreement. In the event Holder is entitled to receive any fractional share, such fractional share shall be rounded up to the nearest whole number.

4.    Adjustment for Dividends in Other Stock, Property, etc.; Reclassification, etc.

(a)    If the Company shall subdivide its outstanding shares of Common Shares into a greater number of shares, or declare and pay a dividend on its Common Shares payable in additional shares of its Common Shares, the Exercise Price as then in effect shall be proportionately reduced, and the number of Warrant Shares then subject to exercise under the Warrant (and not previously exercised), shall be proportionately increased. For example, if the Company implements a 2:1 stock split, the number of Warrant Shares will be increased to 1,000,000.

(b)    If the Company shall combine its outstanding shares of the Common Shares into a smaller number of shares, the Exercise Price, as then in effect, shall be proportionately

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increased, and the number of Warrant Shares then subject to exercise under the Warrant (and not previously exercised), shall be proportionately reduced. For example, if the Company implements a 1:2 reverse stock split, the number of Warrant Shares will be reduced to 250,000.

5.    Reorganization, Consolidation, Merger, etc.

(a)    General.    In case of any reclassification or change of the outstanding shares of Common Shares other than a change in par value to no par value, or from no par value to par value or as a result of a subdivision or combination) or in the case of any consolidation of the Company with, or merger of the Company into, another corporation (other than a consolidation or merger in which the Company is the surviving corporation and which does not result in any reclassification or change of the outstanding shares of Common Shares), or in the case of a sale or conveyance to another corporation of all or substantially all of the property or assets of the Company, the Holder shall thereafter have the right to purchase the kind and number of shares of stock and Other Securities and property receivable upon such reclassification, change, consolidation, merger, sale or conveyance as if the Holder was the owner of the Common Shares underlying the Warrant immediately prior to any such events at a price equal to the product of the (x) number of shares issuable upon exercise of the Warrant and (y) Exercise Price in effect immediately prior to the record date for such reclassification, change, consolidation, merger, sale or conveyance as if such Registered Holders had exercised the Warrants, subject to further adjustment as provided for herein.

(b)    Warrant to Continue in Full Force and Effect.    Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) as contemplated in Section 5(a) hereof, the Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and Other Securities and property receivable upon the exercise of the Warrant after the consummation of such reorganization, consolidation, merger, transfer or dissolution, as the case may be, and shall be binding upon the issuer of any such stock or Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the Company’s obligations under the Warrant.

6.    Registration Rights.    The Company hereby grants to Holder and to all persons to whom Holder may assign all or any part of the Warrant or the Warrant Shares the rights set forth in Schedule A attached hereto and made a part of this Warrant Agreement.

7.    Further Assurances.    The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non- assessable shares of Common Shares (or Other Securities) upon the exercise of the Warrant.

8.    Certificate as to Adjustments.    In each case of any adjustment or readjustment in the shares of Common Shares (or Other Securities) issuable upon the exercise of the Warrant, the Company will compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company will forthwith mail a copy of such certificate to Holder.

9.    Holder’s Representations and Covenants.    Holder represents and warrants to the Company as follows:

(a)    Holder is making these representations in connection with the issuance to it of the Warrant. Holder acknowledges that no representations or warranties have been made to it

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by the Company or anyone acting on its behalf, with respect to the business of the Company, the financial condition of the Company and/or the economic, tax, or any other aspects or consequences of an investment in the Company, except as set forth in writing.

(b)    Holder has substantial experience in evaluating and investing in restricted securities so that it is capable of evaluating the merits and risks of an investment in the Company. Holder has been represented by independent legal counsel in this transaction.

(c)    Holder is an “accredited investor,” as such term is defined in Regulation D promulgated under the Securities Act. Holder can bear the economic risks of an investment in the Company for an indefinite period of time. Holder has adequate means of providing for its current needs and possible contingencies and has no present or contemplated need for liquidity of the Warrant or the Warrant Shares to satisfy any existing or contemplated undertaking, need or indebtedness.

(d)    Holder has been represented by such advisors, each of whom has been personally selected by Holder, as Holder has found necessary to consult concerning the transaction contemplated herein, including but not limited to the issuance of the Warrant, and such representation has included an examination of applicable documents and an analysis of all financial, corporate and securities law aspects of this transaction.

(e)    With respect to any tax aspects related to the issuance and exercise of the Warrant, Holder is relying solely upon the advice of its own tax advisors, and/or upon its own knowledge with respect thereto.

(f)    The Company has made available to Holder or its counsel and advisors, prior to the date hereof, the opportunity to ask questions of, and to receive answers from, its officers, directors, consultants, employees or their authorized representatives concerning the Company and access to obtain any information, documents, financial statements, records and books (i) relative to the Company, its business and an investment in the Warrant and the Warrant Shares and (ii) necessary to verify the accuracy of any information, documents, financial statements, records and books furnished. All materials and information requested by either Holder, Holder’s counsel, advisors, or others representing Holder, including any information requested to verify any information furnished, have been made available and examined.

(g)    Holder understands that the Warrant and the Warrant Shares have not been registered under the Securities Act, nor pursuant to the provisions of the securities laws or other laws of any other applicable jurisdictions, in reliance on exemptions set forth in Sections 3 and/or 4 of the Securities Act, Regulation D promulgated under the Securities Act and the laws and regulations of such jurisdictions. Holder is fully aware that the Warrant is to be issued in reliance upon such exemptions based upon Holder’s representations, warranties, and agreements set forth herein. Holder is fully aware of the restrictions on sale, transferability and assignment of the Warrant and the Warrant Shares and that Holder must bear the economic risk of its investment in the Warrant and the Warrant Shares for an indefinite period of time. Holder acknowledges that (i) there may not be any public market for the Warrant or the Warrant Shares issuable upon the exercise of the Warrant in the foreseeable future, (ii) Rule 144 promulgated under the Securities Act is not presently available with respect to sales of any securities of the Company, and such Rule is not anticipated to be available with respect to sales of any securities of the Company in the foreseeable future; (iii) when and if the Warrant and Warrant Shares may be disposed of without registration in reliance upon Rule 144, such disposition can be made only in limited amounts and in accordance with the terms and conditions of such Rule; and (iv) if the exemption afforded by Rule 144 is not available, public sale without registration will require the availability of an exemption under the Securities Act. Holder therefore agrees that it will

4

not offer or sell the Warrant or any securities issuable upon the exercise of the Warrant unless and until the Warrant and/or such securities are subsequently registered under the Securities Act and applicable state securities laws, or unless exemptions from such registration requirements are available. Holder acknowledges and agrees that a notation shall be made in the appropriate records of the Company indicating that the Warrant, and any securities to be issued upon the exercise of the Warrant, are subject to restrictions on transfer and, if the Company should in the future engage the services of a stock transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Warrant and the Warrant Shares.

(h)    Holder is acquiring the Warrant and the Warrant Shares for its own account and not for the account of others. Holder is acquiring the Warrant and the Warrant Shares for investment purposes only and not with a view to or for the transfer, assignment, resale or distribution thereof, in whole or in part, and Holder is not participating directly or indirectly in a distribution or transfer of the Warrant or the Warrant Shares, or in the underwriting of any such distribution or transfer of the Warrant and the Warrant Shares. Holder has no present plans to enter into any such contract, undertaking, agreement or arrangement. Holder agrees that it will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of the Warrant or the Warrant Shares (or solicit any offers to buy, purchase or other acquire or take a pledge of the Warrant or the Warrant Shares) except in compliance with (i) the Securities Act and the rules and regulations thereunder and (ii) any other applicable laws, rules and regulations.

(i)    Holder is aware that the Warrant and the Warrant Shares represent a speculative investment involving a high degree of risk. Holder understands and is able to bear the risks and consequences of the following: (a) the risks involved in investing in the Company, including the speculative nature of an investment in the Company’s securities; (b) the financial hazards involved in an investment in the Company’s securities, including the risk of losing Holder’s entire investment; (c) the lack of liquidity of the Warrant and the Warrant Shares; (d) the restrictions on transferability of the Warrant and the Warrant Shares; and (e) the tax consequences of an investment in the Company’s securities.

(j)    Holder is a New York limited liability company.

(k)    Holder understands and is fully aware that no federal or state agency has made any finding or determination as to the fairness of investment in, nor any recommendation or endorsement of, the Warrant or the Warrant Shares.

(l)    The execution and delivery of this Agreement by Holder have been duly and validly authorized and approved by all necessary action, and no other proceedings on the part of such Holder are necessary to authorize or approve this Agreement. This Agreement has been duly executed and delivered by Holder and is enforceable against Holder in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally, and by general principles of equity, including the exercise of judicial discretion in the enforcement of equitable remedies.

10.    eLong’s Representations and Warranties.    eLong represents and warrants to Holder as follows:

(a)    eLong is an international business company duly organized, validly existing and in good standing under the laws of the British Virgin Islands, has all requisite power and authority to own or lease and operate its properties and to carry on its business as now conducted; and is duly licensed or qualified to do business as a foreign corporation in each jurisdiction in which it owns or leases property or in which the conduct of its business requires it to be so licensed or qualified.

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(b)    eLong has all requisite power and authority to enter into and perform its obligations under this Agreement, to issue the Warrant and the Warrant Shares, and to carry out the transactions contemplated hereby.

(c)    The execution and delivery of this Agreement by eLong have been duly and validly authorized and approved by all necessary action, and no other proceedings on the part of eLong are necessary to authorize or approve this Agreement. This agreement has been duly executed and delivered by eLong and is enforceable against eLong in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally, and by general principles of equity, including the exercise of judicial discretion in the enforcement of equitable remedies.

11.    Notices of Record Date, etc.    In the event of

(a)    any taking by the Company of a record of the holders of Common Shares for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend payable out of earned surplus of the Company) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any Other Securities or property, or to receive any other right, or

(b)    any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or consolidation or merger of the Company with or into any other person or entity, or

(c)    any voluntary or involuntary dissolution, liquidation or winding-up of the Company, then and in each such event the Company will mail or cause to be mailed to Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any, as of which the holder of record of Common Shares (or Other Securities) shall be entitled to exchange their shares of Common Shares (or Other Securities) for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up. Such notice shall be mailed at least ten (10) days prior to the date therein specified.

12.    Reservation of Stock, etc. Issuable on Exercise of Warrants.    The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of the Warrants, all shares of Common Shares (or Other Securities) from time to time issuable upon the exercise of the Warrants.

13.    Exchange of Warrants.    Subject to the provisions of this Agreement, upon surrender for exchange of the Warrant, properly endorsed, to the Company, the Company, at its own expense, will issue and deliver to or upon the order of Holder a new warrant or warrants of like tenor, in the name of Holder (upon payment by Holder of any applicable transfer taxes) in the aggregate on the face or faces thereof for the number of shares of Common Shares called for on the face of the Warrant.

14.    Replacement of Warrants.    Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction of mutilation of the Warrant and, in the case of any such

6

loss, theft or destruction, upon delivery of an indemnity agreement satisfactory in form and substance to the Company, in its sole discretion, or, in the case of any such mutilation, upon surrender and cancellation of the Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

15.    Warrant Agent.    The Company may, by written notice to Holder, appoint an agent for the purpose of issuing Warrant Shares upon the exercise of the Warrant, exchange of the Warrant or replacement of the Warrant, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

16.    Transfer.

(a)    In General.    Subject to the provisions of this Agreement, all rights under this Agreement, the Warrant and the Warrant Shares are transferable on the books of the Company upon surrender of the Warrant Certificate or certificates for the Warrant Shares, as the case may be, at the offices of the Company. Holder agrees that with respect to any transfer of the Warrant or Warrant Shares (i) such transfer must comply with all applicable laws, including federal and state securities laws, and the transferee must be an “accredited investor” and (ii) prior to implementing any transfer, the Company will receive (a) from Holder, an Assignment in the form attached hereto as Exhibit 3 and a Transferor Letter in the form attached hereto as Exhibit 4, (b) from the proposed transferee, an Accredited Investor Letter, including an agreement to be bound by the terms of this Agreement, in the form attached hereto as Exhibit 5, and (c) a signed opinion of counsel to Holder in form and substance satisfactory to the Company pertaining to the compliance of such transfer with the Securities Act and other applicable securities laws.

(b)    Restriction on Transfer to Competitors.    Notwithstanding anything to the contrary set forth herein, the Warrant and any and all securities that may be issued upon the exercise of the Warrant may not be transferred to any individual, corporation, partnership, limited liability company, trust or other entity engaged in a business that is competitive with the business of the Company. Any transfer of the Warrant or the securities issuable upon the exercise of the Warrant which does not comply with the foregoing shall be deemed null and void. The restrictions on transferability set forth in this Section 16(b) shall be binding upon all transferees of the Warrant and the securities that may be issued upon exercise of the Warrant, but shall terminate upon the consummation by the Company of an initial public offering.

(c)    Legend.    Each certificate representing the Warrant and the Warrant Shares, and any certificate issued at any time upon transfer of, or in exchange for or replacement of any certificate, shall bear the following legend:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR COUNTRY. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT AND LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF, AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH, THE WARRANT AGREEMENT DATED AS OF AUGUST 22, 2003 BETWEEN BROADBAND CAPITAL MANAGEMENT AND eLONG, INC., COPIES OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF eLONG, INC.”

(d)    Effect of Transfer on Prior Holder.    Subject to the terms and conditions of this Agreement, any person in possession of the Warrant properly endorsed is authorized to

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represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof in accordance with the terms of this Agreement. Each prior holder of the Warrant renounces all of its equities or rights in the Warrant in favor of each such bona fide purchaser and each such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby.

(e)    Rights of Company.    Until the Warrant is transferred on the books of the Company in accordance with the terms of this Agreement, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

17.    Notices, etc.    All notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows:

If to the Company:

eLong, Inc.

Suite 602, 603 and 604

Union Plaza

20 Chao Yang Men Wai Avenue

Beijing 100020

People’s Republic of China

with a copy to:

Nordlicht & Hand

645 Fifth Avenue

New York, NY 10022

Fax:(212) 421-0499

Tel: (212) 421-6500

Attention: Brian M. Hand, Esq;

and if to Holder, to the last address furnished by Holder in writing to the Company;

or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith. Any such notice or communication shall be deemed to have been received

(i)    in the case of personal delivery, on the date of such delivery,

(ii)    in the case of nationally-recognized overnight courier, on the next business day after the date when sent, to be established by a receipt confirming delivery, and

(iii)    in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.

18.    Miscellaneous.

(a)    Entire Agreement.    This Agreement (together with the Warrant and the Exhibits referred to herein) constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings of the parties, written and oral, with respect to such subject matter.

(b)    Amendment.    This Agreement and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

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(c)    Assignment.    This Agreement is binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by Holder other than in connection with a transfer of the Warrant or Warrant Shares in accordance with the terms hereof.

(d)    Third Party Beneficiaries.    Each party intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any person or entity other than parties hereto and their successors and permitted assigns.

(e)    Headings.    The headings in this Agreement are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

(f)    Governing Law.    This Agreement is being executed in the State of New York and shall be construed and enforced in accordance with and governed by the laws of such State without giving effect to the principles of conflicts of laws. Venue for any action to enforce the provisions of the Warrant shall be exclusive in the federal and state courts located in the City of New York, State of New York.

(g)    Expenses.    Regardless of whether the transactions contemplated herein are consummated, each party shall pay its own costs and expenses incurred or to be incurred in negotiating, closing and carrying out this Agreement and in consummating the transactions contemplated herein unless otherwise expressly stated herein.

(h)    Counterparts.    This Agreement may be executed in two or more counterparts each of which shall be deemed an original, and all of such counterparts together shall constitute one and the same document.

(i)    Termination.    This Agreement shall terminate on the earlier of (i) the Warrant Expiration Date or (ii) the date on which the Warrant has been exercised in full.

(j)    Mutual Drafting.    This Agreement constitutes the joint product of the parties and each provision has been subject to the mutual consultation, negotiation and agreement of the parties and shall not be construed for or against either of them by virtue of the authorship thereof.

- SIGNATURES APPEAR ON THE NEXT PAGE -

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ELONG, INC.
By:	/s/
Name:
Title:
BROADBAND CAPITAL MANAGEMENT LLC
By:	/s/
Name:
Title:

10

EX-4.8

Exhibit 4.8

WARRANT AGREEMENT

Warrant Agreement dated as of August 26, 2003, by and between eLong, Inc., a British Virgin Islands international business company (“eLong” or the “Company”), and Liu Hao (“Holder”).

RECITALS

WHEREAS, effective August 26, 2003, eLong granted to Holder warrants to purchase Common Shares of the Company;

NOW THEREFORE, in consideration of the premises and the mutual promises and agreements of the parties set forth herein, the parties hereto agree as follows:

1.    Certain Definitions.    As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

(a)    “Affiliate” means as to any entity (i) any other person or entity that directly or indirectly controls, is controlled by, or is under common control with such specified person or entity and (ii) any officer, director, general partner, manager or managing member of such entity. “Control” means the power to direct or cause the direction of the management or policies of an entity whether, through the ownership of voting securities, by agreement or otherwise.

(b)    “Common Shares” means eLong’s common shares, par value US $.01 per share.

(c)    “Company” means eLong and any other company that shall succeed to or assume the obligations of eLong hereunder.

(d)    “Other Securities” refers to any stock and other securities of the Company (other than Common Shares) or any securities of any other person (corporate or otherwise) which the Holder shall, at any time, be entitled to receive, or shall have received, upon the exercise of the Warrant, in lieu of or in addition to Common Shares, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Shares or Other Securities pursuant to this Agreement or otherwise.

(e)    “Securities Act” means the Securities Act of 1933, as the same shall be an effect at the time.

(f)    “Warrant Expiration Date” means 5:00 p.m. New York City time on August 26, 2013.

(g)    “Warrants Shares” means shares of Common Shares or Other Securities that Holder shall be entitled to receive upon the exercise of the Warrants pursuant to this Agreement.

2.    Issuance of Warrant.    Simultaneous with the execution of this Agreement, eLong will issue to Holder a Warrant Certificate (the “Warrant”) evidencing the right of Holder to purchase an aggregate of 50,000 Common Shares at an exercise price of US $0.75 per share (the “Exercise Price”), subject to adjustment, vesting and exercise restrictions as provided herein. The Warrant Certificate and all replacement Certificates shall be substantially in the form attached hereto as Exhibit 1.

3.    Vesting and Exercise of Warrant.

(a)    Vesting.    The Warrant and Holder’s rights under this Agreement shall vest in full and become immediately exercisable as of the date hereof. If not earlier exercised, the Warrant shall expire on the Warrant Expiration Date.

(b)    Exercise in Full.    Subject to the provisions hereof, the Warrant may be exercised in full by Holder by surrender of the Warrant, with the form of subscription attached hereto as Exhibit 2 (the “Subscription Form”) duly executed by Holder, to the Company at its principal office in Beijing, P. R. China, accompanied by payment in the amount obtained by multiplying the number of Warrant Shares by the Exercise Price (subject to any applicable adjustments provided for herein). Payment may be made either (i) in cash, (ii) by wire transfer of immediately available funds to an account designated by the Company, (iii) by certified or official bank check payable to the order of the Company, (iv) by the assignment of the proceeds of a sale of some or all of the Warrant Shares being acquired upon the exercise of the Warrant in a customary cashless warrant exercise transaction, or (v) by any combination of the methods of payment provided in clauses (i) through (iv).

(c)    Partial Exercise.    Subject to the provisions hereof, the Warrant may be exercised in part by surrender of the Warrant in the manner and at the place provided in Section 3(b) hereof, except that the amount payable by Holder upon any partial exercise shall be the amount obtained by multiplying (i) the number of Warrant Shares designated by Holder in the Subscription Form by (ii) the Exercise Price, subject to any applicable adjustment provided for herein. Upon any such partial exercise, the Company, at its expense, will promptly issue and deliver to Holder a new Warrant, in the name of Holder, in an amount equal to the remainder of (i) the original number of Common Shares indicated on the face of the surrendered Warrant minus (ii) the number of Warrant Shares issued upon such partial exercise as specified in the Subscription Form. The Subscription Form delivered by the Holder shall not take into account any adjustments provided for herein, which will be calculated by the Company upon receipt of the Subscription Form.

(d)    Delivery of Stock Certificates, etc., on Exercise.    As soon as practicable after the exercise of the Warrant in full or in part, and in any event within (10) days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to Holder, a certificate or certificates for the number of fully paid and non-assessable Warrant Shares to which Holder shall be entitled upon such exercise, together with any other stock or Other Securities and property (including cash, where applicable) to which such holder is entitled upon such exercise pursuant this Agreement. In the event Holder is entitled to receive any fractional share, such fractional share shall be rounded up to the nearest whole number.

4.    Adjustment for Dividends in Other Stock, Property, etc.; Reclassification, etc.

(a)    If the Company shall subdivide its outstanding shares of Common Shares into a greater number of shares, or declare and pay a dividend on its Common Shares payable in additional shares of its Common Shares, the Exercise Price as then in effect shall be proportionately reduced, and the number of Warrant Shares then subject to exercise under the Warrant (and not previously exercised), shall be proportionately increased. For example, if the Company implements a 2:1 stock split, the number of Warrant Shares will be increased to 100,000.

(b)    If the Company shall combine its outstanding shares of the Common Shares into a smaller number of shares, the Exercise Price, as then in effect, shall be proportionately increased, and the number of Warrant Shares then subject to exercise under the Warrant (and not previously exercised), shall be proportionately reduced. For example, if the Company implements a 1:2 reverse stock split, the number of Warrant Shares will be reduced to 25,000.

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5.    Reorganization, Consolidation, Merger, etc.

(a)    General.    In case of any reclassification or change of the outstanding shares of Common Shares other than a change in par value to no par value, or from no par value to par value or as a result of a subdivision or combination) or in the case of any consolidation of the Company with, or merger of the Company into, another corporation (other than a consolidation or merger in which the Company is the surviving corporation and which does not result in an reclassification or change of the outstanding shares of Common Shares), or in the case of a sale or conveyance to another corporation of all or substantially all of the property or assets of the Company, the Holder shall thereafter have the right to purchase the kind and number of shares of stock and Other Securities and property receivable upon such reclassification, change consolidation, merger, sale or conveyance as if the Holder was the owner of the Common Shares underlying the Warrant immediately prior to any such events at a price equal to the product of the (x) number of shares issuable upon exercise of the Warrant and (y) Exercise Price in effect immediately prior to the record date for such reclassification, change, consolidation, merger, sale or conveyance as if such Registered Holders had exercised the Warrants, subject to further adjustment as provided for herein.

(b)    Warrant to Continue in Full Force and Effect.    Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) as contemplated in Section 5(a) hereof, the Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and Other Securities and property receivable upon the exercise of the Warrant after the consummation of such reorganization, consolidation, merger, transfer or dissolution, as the case may be, and shall be binding upon the issuer of any such stock or Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the Company’s obligations under the Warrant.

6.    Registration Rights.    The Company hereby grants to Holder and to all persons to whom Holder may assign all or any part of the Warrant or the Warrant Shares the rights set forth it Schedule A attached hereto and made a part of this Warrant Agreement.

7.    Further Assurances.    The Company will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Shares (or Other Securities) upon the exercise of the Warrant.

8.    Certificate as to Adjustments.    In each case of any adjustment or readjustment in the shares of Common Shares (or Other Securities) issuable upon the exercise of the Warrant, the Company will compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company will forthwith mail a copy of such certificate to Holder.

9.    Holder’s Representations and Covenants.    Holder represents and warrants to the Company as follows:

(a)    Holder is making these representations in connection with the issuance to it of the Warrant. Holder acknowledges that no representations or warranties have been made to it by the Company or anyone acting on its behalf, with respect to the business of the Company, the financial condition of the Company and/or the economic, tax, or any other aspects consequences of an investment in the Company, except as set forth in writing.

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(b)    Holder has substantial experience in evaluating and investing in restricted securities so that it is capable of evaluating the merits and risks of an investment in the Company. Holder has been represented by independent legal counsel in this transaction.

(c)    Holder is an “accredited investor,” as such term is defined in Regulation D promulgated under the Securities Act. Holder can bear the economic risks of an investment in the Company for an indefinite period of time. Holder has adequate means of providing for its current needs and possible contingencies and has no present or contemplated need for liquidity of the Warrant or the Warrant Shares to satisfy any existing or contemplated undertaking, need of indebtedness.

(d)    Holder has been represented by such advisors, each of whom has been personally selected by Holder, as Holder has found necessary to consult concerning the transaction contemplated herein, including but not limited to the issuance of the Warrant, and such representation has included an examination of applicable documents and an analysis of all financial, corporate and securities law aspects of this transaction.

(e)    With respect to any tax aspects related to the issuance and exercise of the Warrant, Holder is relying solely upon the advice of its own tax advisors, and/or upon its own knowledge with respect thereto.

(f)    The Company has made available to Holder or its counsel and advisors, prior to the date hereof, the opportunity to ask questions of, and to receive answers from, its officers, directors, consultants, employees or their authorized representatives concerning the Company and access to obtain any information, documents, financial statements, records and books (i) relative to the Company, its business and an investment in the Warrant and the Warrant Shares and (ii) necessary to verify the accuracy of any information, documents, financial statements, records and books furnished. All materials and information requested by either Holder, Holder’s counsel, advisors, or others representing Holder, including any information requested to verify any information furnished, have been made available and examined.

(g)    Holder understands that the Warrant and the Warrant Shares have not been registered under the Securities Act, nor pursuant to the provisions of the securities laws or other laws of any other applicable jurisdictions, in reliance on exemptions set forth in Sections 3 and/or 4 of the Securities Act, Regulation D promulgated under the Securities Act and the laws and regulations of such jurisdictions. Holder is fully aware that the Warrant is to be issued in reliance upon such exemptions based upon Holder’s representations, warranties, and agreements set forth herein. Holder is fully aware of the restrictions on sale, transferability and assignment of the Warrant and the Warrant Shares and that Holder must bear the economic risk of its investment in the Warrant and the Warrant Shares for an indefinite period of time. Holder acknowledges that (i) there may not be any public market for the Warrant or the Warrant Shares issuable upon the exercise of the Warrant in the foreseeable future, (ii) Rule 144 promulgated under the Securities Act is not presently available with respect to sales of any securities of the Company, and such Rule is not anticipated to be available with respect to sales of any securities of the Company in the foreseeable future; (iii) when and if the Warrant and Warrant Shares may be disposed of without registration in reliance upon Rule 144, such disposition can be made only in limited amounts and in accordance with the terms and conditions of such Rule; and (iv) if the exemption afforded by Rule 144 is not available, public sale without registration will require the availability of an exemption under the Securities Act. Holder therefore agrees that it will not offer or sell the Warrant or any securities issuable upon the exercise of the Warrant unless and until the Warrant and/or such securities are subsequently registered under the Securities Act and applicable state securities laws, or unless exemptions from such registration requirements are available. Holder acknowledges and agrees that a notation

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shall be made in the appropriate records of the Company indicating that the Warrant, and any securities to be issued upon the exercise of the Warrant, are subject to restrictions on transfer and, if the Company should in the future engage the services of a stock transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with respect to the Warrant and the Warrant Shares.

(h)    Holder is acquiring the Warrant and the Warrant Shares for its own account and not for the account of others. Holder is acquiring the Warrant and the Warrant Shares for investment purposes only and not with a view to or for the transfer, assignment, resale or distribution thereof, in whole or in part, and Holder is not participating directly or indirectly in a distribution or transfer of the Warrant or the Warrant Shares, or in the underwriting of any such distribution or transfer of the Warrant and the Warrant Shares. Holder has no present plans to enter into any such contract, undertaking, agreement or arrangement. Holder agrees that it will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of the Warrant or the Warrant Shares (or solicit any offers to buy, purchase or other acquire or take a pledge of the Warrant or the Warrant Shares) except in compliance with (i) the Securities Act and the rules and regulations thereunder and (ii) any other applicable laws, rules and regulations.

(i)    Holder is aware that the Warrant and the Warrant Shares represent a speculative investment involving a high degree of risk. Holder understands and is able to bear the risks and consequences of the following: (a) the risks involved in investing in the Company, including the speculative nature of an investment in the Company’s securities; (b) the financial hazards involved in an investment in the Company’s securities, including the risk of losing Holder’s entire investment; (c) the lack of liquidity of the Warrant and the Warrant Shares; (d) the restrictions on transferability of the Warrant and the Warrant Shares; and (e) the tax consequences of an investment in the Company’s securities.

(j)    Holder is a New York limited liability company.

(k)    Holder understands and is fully aware that no federal or state agency has made any finding or determination as to the fairness of investment in, nor any recommendation or endorsement of, the Warrant or the Warrant Shares.

(l)    The execution and delivery of this Agreement by Holder have been duly and validly authorized and approved by all necessary action, and no other proceedings on the part of such Holder are necessary to authorize or approve this Agreement. This Agreement has been duly executed and delivered by Holder and is enforceable against Holder in accordance with its terms, except insofar as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally, and by general principles of equity including the exercise of judicial discretion in the enforcement of equitable remedies.

10.    eLong’s Representations and Warranties.    eLong represents and warrants to Holder as follows:

(a)    eLong is an international business company duly organized, validly existing and in good standing under the laws of the British Virgin Islands, has all requisite power and authority to own or lease and operate its properties and to carry on its business as now conducted; and is duly licensed or qualified to do business as a foreign corporation in each jurisdiction in which it owns or leases property or in which the conduct of its business requires it to be so licensed or qualified.

(b)    eLong has all requisite power and authority to enter into and perform its obligations under this Agreement, to issue the Warrant and the Warrant Shares, and to carry out the transactions contemplated hereby.

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(c)    The execution and delivery of this Agreement by eLong have been duly and validly authorized and approved by all necessary action, and no other proceedings on the part of eLong are necessary to authorize or approve this Agreement. This agreement has been duly executed and delivered by eLong and is enforceable against eLong in accordance with its terms except insofar as enforceability may be limited by bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally, and by general principles of equity, including the exercise of judicial discretion in the enforcement of equitable remedies.

11.    Notices of Record Date, etc.    In the event of

(a)    any taking by the Company of a record of the holders of Common Shares for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend payable out of earned surplus of the Company) or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any Other Securities or property, or to receive any other right, or

(b)    any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or consolidation or merger of the Company with or into any other person or entity, or

(c)    any voluntary or involuntary dissolution, liquidation or winding-up of the Company, then and in each such event the Company will mail or cause to be mailed to Holder a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, and (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is to take place, and the time, if any, as of which the holder of record of Common Shares (or Other Securities) shall be entitled to exchange their shares of Common Shares (or Other Securities) for securities or other property deliverable upon such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up. Such notice shall be mailed at least ten (10) days prior to the date therein specified.

12.    Reservation of Stock, etc. Issuable on Exercise of Warrants.    The Company will at all times reserve and keep available, solely for issuance and delivery upon the exercise of the Warrants, all shares of Common Shares (or Other Securities) from time to time issuable upon the exercise of the Warrants.

13.    Exchange of Warrants.    Subject to the provisions of this Agreement, upon surrender for exchange of the Warrant, properly endorsed, to the Company, the Company, at its own expense, will issue and deliver to or upon the order of Holder a new warrant or warrants of like tenor, in the name of Holder (upon payment by Holder of any applicable transfer taxes) in the aggregate on the face or faces thereof for the number of shares of Common Shares called for on the face of the Warrant.

14.    Replacement of Warrants.    Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction of mutilation of the Warrant and, in the case of any such loss, theft or destruction, upon delivery of an indemnity agreement satisfactory in form and substance to the Company, in its sole discretion, or, in the case of any such mutilation, upon surrender and cancellation of the Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

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15.    Warrant Agent.    The Company may, by written notice to Holder, appoint an agent for the purpose of issuing Warrant Shares upon the exercise of the Warrant, exchange of the Warrant or replacement of the Warrant, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

16.    Transfer.

(a)    In General.    Subject to the provisions of this Agreement, all rights under this Agreement, the Warrant and the Warrant Shares are transferable on the books of the Company upon surrender of the Warrant Certificate or certificates for the Warrant Shares, as the case may be, at the offices of the Company. Holder agrees that with respect to any transfer of the Warrant or Warrant Shares (i) such transfer must comply with all applicable laws, including federal and state securities laws, and the transferee must be an “accredited investor” and (ii) prior to implementing any transfer, the Company will receive (a) from Holder, an Assignment in the form attached hereto as Exhibit 3 and a Transferor Letter in the form attached hereto as Exhibit 4, (b) from the proposed transferee, an Accredited Investor Letter, including an agreement to be bound by the terms of this Agreement, in the form attached hereto as Exhibit 5, and (c) a signed opinion of counsel to Holder in form and substance satisfactory to the Company pertaining to the compliance of such transfer with the Securities Act and other applicable securities laws.

(b)    Restriction on Transfer to Competitors.    Notwithstanding anything to the contrary set forth herein, the Warrant and any and all securities that may be issued upon the exercise of the Warrant may not be transferred to any individual, corporation, partnership, limited liability company, trust or other entity engaged in a business that is competitive with the business of the Company. Any transfer of the Warrant or the securities issuable upon the exercise of the Warrant which does not comply with the foregoing shall be deemed null and void. The restrictions on transferability set forth in this Section 16(b) shall be binding upon all transferees of the Warrant and the securities that may be issued upon exercise of the Warrant, but shall terminate upon the consummation by the Company of an initial public offering.

(c)    Legend.    Each certificate representing the Warrant and the Warrant Shares, and any certificate issued at any time upon transfer of, or in exchange for or replacement of any certificate, shall bear the following legend:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR COUNTRY. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH ACT AND LAWS. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF, AND MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH, THE WARRANT AGREEMENT DATED AS OF AUGUST 26, 2003 BETWEEN LIU HAO AND eLONG, INC., COPIES OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF eLONG, INC.”

(d)    Effect of Transfer on Prior Holder.    Subject to the terms and conditions of this Agreement, any person in possession of the Warrant properly endorsed is authorized to represent himself as absolute owner hereof and is empowered to transfer absolute title hereto by endorsement and delivery hereof to a bona fide purchaser hereof in accordance with the terms of this Agreement. Each prior holder of the Warrant renounces all of its equities or rights in the Warrant in favor of each such bona fide purchaser and each such bona fide purchaser shall acquire absolute title hereto and to all rights represented hereby.

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(e)    Rights of Company.    Until the Warrant is transferred on the books of the Company in accordance with the terms of this Agreement, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

17.    Notices, etc.    All notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or if sent by nationally-recognized overnight courier or by registered or certified mail, return receipt requested and postage prepaid, addressed as follows:

If to the Company:

eLong, Inc.

Suite 602, 603 and 604

Union Plaza

20 Chao Yang Men Wai Avenue

Beijing 100020

People’s Republic of China

with a copy to:

Nordlicht & Hand

645 Fifth Avenue

New York, NY 10022

Fax: (212) 421 -0499

Tel: (212) 421 -6500

Attention: Brian M. Hand, Esq;

and if to Holder, to the last address furnished by Holder in writing to the Company;

or to such other address as the party to whom notice is to be given may have furnished to the other parties in writing in accordance herewith. Any such notice or communication shall be deemed to have been received

(i) in the case of personal delivery, on the date of such delivery,

(ii) in the case of nationally-recognized overnight courier, on the next business day after the date when sent, to be established by a receipt confirming delivery, and

(iii) in the case of mailing, on the third business day following that on which the piece of mail containing such communication is posted.

18.    Miscellaneous.

(a)    Entire Agreement.    This Agreement (together with the Warrant and the Exhibits referred to herein) constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings of the parties, written and oral, with respect to such subject matter.

(b)    Amendment.    This Agreement and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

(c)    Assignment.    This Agreement is binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by Holder other than in connection with a transfer of the Warrant or Warrant Shares in accordance with the terms hereof.

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(d)    Third Party Beneficiaries.    Each party intends that this Agreement shall not benefit or create any right or cause of action in or on behalf of any person or entity other than parties hereto and their successors and permitted assigns.

(e)    Headings.    The headings in this Agreement are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

(f)    Governing Law.    This Agreement is being executed in the State of New York and shall be construed and enforced in accordance with and governed by the laws of such State without giving effect to the principles of conflicts of laws. Venue for any action to enforce the provisions of the Warrant shall be exclusive in the federal and state courts located in the City of New York, State of New York.

(g)    Expenses.    Regardless of whether the transactions contemplated herein are consummated, each party shall pay its own costs and expenses incurred or to be incurred in negotiating, closing and carrying out this Agreement and in consummating the transactions contemplated herein unless otherwise expressly stated herein.

(h)    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one and the same document.

(i)    Termination.    This Agreement shall terminate on the earlier of (i) the Warrant Expiration Date or (ii) the date on which the Warrant has been exercised in full.

(j)    Mutual Drafting.    This Agreement constitutes the joint product of the parties and each provision has been subject to the mutual consultation, negotiation and agreement of the parties and shall not be construed for or against either of them by virtue of the authorship thereof.

– SIGNATURES APPEAR ON THE NEXT PAGE –

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

ELONG, INC.

By:

Name:

Title:

Liu Hao

10

EX-4.9

Exhibit 4.9

WARRANT AGREEMENT

among

ELONG, INC.,

and

IACT Asia Pacific Limited

Dated July 23, 2004

TABLE OF CONTENTS

ARTICLE 1

DEFINITIONS

ARTICLE 2

WARRANT CERTIFICATES

		Page
Section 2.1	Issuance of Warrant	5
Section 2.2	Rights of Holder under the Warrant Certificates	5
	ARTICLE 3
	DURATION AND EXERCISE OF THE WARRANT
Section 3.1	Exercise Period of the Warrant	5
Section 3.2	Obligation to Sell and Transfer	6
Section 3.3	Expiration of the Warrant	6
Section 3.4	Exercise of the Warrant; Consummation of the Purchase	6
Section 3.5	Exercise Price	7
Section 3.6	Control Number of Shares	7
Section 3.7	Delivery of FMV Materials; Fair Market Value Determination	7
Section 3.8	Post-Consummation Adjustment	8
	ARTICLE 4
	PAYMENT OF TAXES
Section 4.1	Payment of Taxes	8
	ARTICLE 5
	FUNDAMENTAL CHANGE; WORKING CAPITAL
Section 5.1.	Adjustment for Fundamental Change	8
Section 5.2	Working Capital	9
	ARTICLE 6
	TRANSFER OF WARRANT
Section 6.1	Transfers	9
	ARTICLE 7
	OTHER PROVISIONS RELATING TO RIGHTS OF THE HOLDER AND THE COMPANY
Section 7.1	Rights of the Holder	9
Section 7.2	Mutilated or Missing Warrant Certificate	9
Section 7.3	Injunctive Relief	9
Section 7.4	Exercise of the Company’s Rights Hereunder after Investor Control	10

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		Page
	ARTICLE 8
	MISCELLANEOUS
Section 8.1	Representations and Warranties	10
Section 8.2	Dispute Resolution	10
Section 8.3	Termination by Holder	11
Section 8.4	Notices and Demands to the Company and the Holder	12
Section 8.5	Certain Supplements and Amendments	12
Section 8.6	Successors	12
Section 8.7	Termination	13
Section 8.8	Monetary Units	13
Section 8.9	Governing Law; Arbitration	13
Section 8.10	Benefits of this Agreement	13
Section 8.11	Headings	13
Section 8.12	Counterparts	13

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WARRANT AGREEMENT (the “Agreement”), by and among eLong, Inc., an exempted limited liability company under the laws of the Cayman Islands (the “Company”) and IACT Asia Pacific Limited, an exempted limited liability company under the laws of the Cayman Islands (the “Holder”), dated as of July 23, 2004.

WHEREAS, the Company, the Holder and certain other parties named therein have entered into a Transaction Agreement, dated as of July 23, 2004 (the “Transaction Agreement”), pursuant to which, among other things, the Holder is to receive a warrant (the “Warrant”), evidenced by the certificate attached hereto as Exhibit A (the “Warrant Certificate”) entitling the Holder to buy additional securities of the Company, on the terms and subject to the conditions set forth herein;

WHEREAS, the Company, the Holder, the persons listed on Schedule 2 to the Investors Agreement, defined below (each, a “Common Holder” and collectively, the “Common Holders”), the persons listed on Schedule 1 to the Investors Agreement (each, a “Series A Holder” and collectively, the “Series A Holders”) (the Common Holders and the Series A Holders collectively, the “Selling Holders”) and the other shareholders of the Company have entered into an Investors Agreement, dated as of July 23, 2004 (the “Investors Agreement”), which sets forth, among other things, certain rights of the Holder, in its capacity as the holder of the Warrant, with respect to the governance of the Company and otherwise; and

WHEREAS, the Company and the Holder desire to establish in this Agreement certain terms and conditions concerning the Warrant.

NOW, THEREFORE, in consideration of the foregoing and for the purpose of defining the terms and provisions of the Warrant and the respective rights and obligations thereunder of the parties hereto, the Company and the Holder each hereby agree as follows:

ARTICLE 1

DEFINITIONS

“Cash and Cash Equivalents” means (a) cash and (b) short-term, highly liquid investments (with original maturities (at time of purchase) of three months or less) that are both (i) readily convertible to known amounts of cash, and (ii) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates; provided that such term shall not include any cash and cash equivalents to the extent resulting from the Company’s breach of Section 5.2 hereof.

“Definitive Resolution” shall mean the earlier of (a) the twelfth U.S. business day after the Holder’s delivery of the Form of Election to Purchase (if such Form of Election to Purchase sets forth the Holder’s proposal for the applicable Control Number and Exercise Price) if the Company shall not have delivered a notice of disagreement prior thereto, or (b) the earlier of (x) the day that the Holder and the Company (whether on behalf of itself or a Selling Holder) agree in writing that they have resolved all disputes relating to the determination of Exercise Price or Control Number with respect to an exercise hereunder and (y) the date of the final resolution by the Arbiter with respect to Schedule 1 or Section 8.2 hereof, as the case may be.

“Equity Value” means, with respect to the Company, the applicable implied enterprise value of the Company, minus the Indebtedness of the Company (and its subsidiaries, on a consolidated basis), plus (i) the Cash and Cash Equivalents of the Company (and its subsidiaries, on a consolidated basis) and (ii) the pro forma consideration that would be received for the exercise of all options, warrants (but excluding the Warrant) or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating the Company

to issue shares of capital stock (or securities exchangeable for or convertible into shares of the Company’s capital stock, including the Series A Preferred Shares and Series B Preferred Shares) in each case whether or not vested or exercisable, and in the case of (i) and (ii), calculated in accordance with U.S. GAAP on the date of exercise; provided, however, that options, warrants or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating the Company to issue shares of capital stock (or securities exchangeable for or convertible into shares of the Company’s capital stock) with an exercise price that is greater than the then Fair Market Value of the underlying capital stock will not be included in the calculation of “Equity Value”.

“Escrow Agreement” shall have the meaning ascribed to it in the Transaction Agreement.

“Exercise Price” shall have the meaning set forth in Section 3.5.

“Expiration Date” means the final day of the Exercise Period.

“Expiration Time” means 5:00 p.m. New York City time on the Expiration Date.

“Fair Market Value” means the price per share equal to the amount that a willing buyer would pay a willing seller in an arm’s length transaction at such time. The Fair Market Value shall be determined, based on this definition, in accordance with the procedures set forth in Section 3.7 hereof and on Schedule 1 hereof (and/or Section 8.2 if there is a dispute relating to the determination of Fair Market Value for purposes of clause (ii) of the “Equity Value” definition).

“FMV Materials” means all financial, operating and other valuation information and material that a financial institution of international repute would require in order to determine a fair market value for the Company, including, but not limited to, (a) historical detailed financial results (including balance sheet, income statement, and statement of cash flows prepared in accordance with U.S. GAAP) for the past two years, the most recent quarter and the most recent month, (b) detailed forward-looking financial projections (including balance sheet, income statement, and statement of cash flows projections prepared in accordance with U.S. GAAP) for the next two years, and (c) historical and projected key operating metrics by line of business.

“Force Majeure Event” means acts of God, war, serious epidemics such as severe acute respiratory syndrome or other similar catastrophic events that are beyond the Company’s reasonable control and which has a material adverse affect on the Company’s operations, business and value; provided, however, that (1) only extraordinary adverse financial or market conditions (including, without limitation, adverse macroeconomic conditions in the People’s Republic of China resulting in a severe economic downturn) will constitute a Force Majeure Event, and (2) no Force Majeure Event shall act to delay or excuse the Company from its obligations hereunder.

“Fully-Diluted Number” means the total number of outstanding ordinary shares of the Company, calculated on an as-converted, fully-diluted basis (including, without limitation, all options, warrants (but excluding the Warrant) or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating the Company to issue shares of capital stock (or securities exchangeable for or convertible into shares of the Company’s capital stock, including the Series A Preferred Shares and Series B Preferred Shares)), in each case whether or not vested or exercisable; provided, however, that options, warrants or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating the Company to issue shares of capital stock (or securities exchangeable for or convertible into

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shares of the Company’s capital stock) with an exercise price that is greater than the then Fair Market Value of the underlying capital stock will not be included in the Fully-Diluted Number for purposes of calculating the IPO Price, the Notice Price under clause (a) of the definition of Notice Price and the proviso of the definition of Notice Price, or the Private Price under clause (a) of the definition of Private Price and the proviso of the definition of Private Price; and provided, further, however, that the Option will not be included in the Fully-Diluted Number for purposes of the calculation in Section 3.6(a) hereof. For illustrative purposes, the Fully-Diluted Number on the date hereof is set forth on Schedule 2 hereto.

“Fundamental Change” shall mean any transaction or event pursuant to which all or substantially all of the relevant class of Shares shall be exchanged for, converted into or acquired for or constitute the right to receive securities, cash or other property (whether by means of a tender or exchange offer, redemption, reclassification, consolidation, merger, sale or other disposition of all or substantially all of the assets of the Company, compulsory share exchange, liquidation or otherwise); provided that the IPO shall not be considered a Fundamental Change. In the case of a Fundamental Change involving more than one such transaction or event, for purposes of adjusting exercise rights as set forth herein, such Fundamental Change shall be deemed to have occurred when substantially all of the Shares shall be exchanged for, converted into or acquired for or constitute the right to receive securities, cash or other property, but the adjustment shall be based upon the highest weighted average of consideration per share that a holder of Shares could have received in such transactions or events as a result of which more than 50% of the Shares shall have been exchanged for, converted into or acquired for or constitute the right to receive securities, cash or other property.

“High-Vote Ordinary Shares” shall have the meaning ascribed thereto in the Investors Agreement.

“Indebtedness” means, with respect to any person, without duplication, (i) all obligations of such person for borrowed money, (ii) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (iii) all obligations of such person under conditional sale or other title retention agreements relating to property purchased by such person (other than customary reservations of retentions of title under agreements with suppliers entered into in the ordinary course of business), (iv) all obligations of such person issued or assumed as the deferred purchase price of property or services purchased by such person (other than trade debt incurred in the ordinary course of business and due within six (6) months of the incurrence thereof) which would appear as liabilities on a balance sheet of such person, (v) all obligations of such person under take-or-pay or similar arrangements or under commodities agreements, (vi) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any lien on, or payable out of the proceeds of production from, property owned or acquired by such person, whether or not the obligations secured thereby have been assumed, (vii) all obligations of others guaranteed by such person, (viii) the principal portion of all obligations of such person under capital leases, (ix) all obligations of such person in respect of interest rate protection agreements, foreign currency exchange agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements, (x) the maximum amount of all standby letters of credit issued or bankers’ acceptances facilities created for the account of such person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (xi) other than Series B Preferred Shares, all preferred stock issued by such person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date, and (xii) the principal balance outstanding under any synthetic lease. The Indebtedness of any

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person shall include the Indebtedness of any partnership or joint venture in which such person is a general partner or a joint venturer, but only to the extent to which there is recourse to such person for payment of such Indebtedness.

“IPO” has the meaning ascribed to the term “Qualified Public Offering” in the Investors Agreement.

“IPO Price” means the price per share of the Ordinary Shares offered to the public in connection with the IPO; provided, however, that the IPO Price shall not, for purposes of this Agreement, exceed the price per Share equal to (a) the Equity Value of the Company (based on an implied enterprise value of $205 million), divided by (b) the Fully-Diluted Number, in each case as of the date of exercise.

“Notice Price” means (a) with respect to an exercise of the Warrant during the first 30 U.S. business days of the applicable Exercise Period, the price per Share that is equal to (i) the Equity Value of the Company (based on an implied enterprise value of $205 million), divided by (ii) the Fully-Diluted Number, in each case as of the date of exercise and (b) with respect to an exercise of the Warrant during the remaining portion of such Exercise Period, the price per Share equal to the Fair Market Value as of the date of exercise; provided, however, that if the Company notifies the Holder in writing (within ten (10) U.S. business days of the date of exercise) that a Force Majeure Event has occurred (and such Force Majeure Event has occurred) and the Notice Price would have otherwise been calculated in accordance with clause (b) hereof, then the Notice Price shall be, at the Holder’s election (it being understood that the Holder shall have until the end of the applicable Valuation Assessment Period to make such election), (i) the price per Share that is equal to (x) the Equity Value of the Company (based on an implied enterprise value of $160 million), divided by (y) the Fully-Diluted Number, in each case as of the date of exercise or (ii) the price per Share that is equal to (x) the Equity Value of the Company (based on an implied enterprise value of $205 million), divided by (y) the Fully-Diluted Number, in each case as of the date of exercise; provided, further, however, that if the Holder makes the election in clause (i) of the first proviso in this definition, then the Company shall be entitled, within 180 days of the Holder’s date of exercise, to require that the Notice Price be the Fair Market Value as of the date of the Company’s election.

“Option” has the meaning ascribed thereto in the Transaction Agreement.

“ordinary shares” shall have the meaning ascribed thereto in the Investors Agreement.

“Ordinary Shares” shall have the meaning ascribed thereto in the Investors Agreement.

“preferred shares” shall have the meaning ascribed thereto in the Investors Agreement.

“Private Price” means (a) with respect to an exercise of the Warrant prior to April 30, 2005, the price per Share that is equal to (i) the Equity Value of the Company (based on an implied enterprise value of $205 million), divided by (ii) the Fully-Diluted Number, in each case as of the date of exercise and (b) with respect to an exercise of the Warrant during the remaining portion of such Exercise Period, the price per Share equal to the Fair Market Value as of the date of exercise; provided, however, that if the Company notifies the Holder in writing (within five (5) U.S. business days of the date of exercise) that a Force Majeure Event has occurred (and such Force Majeure Event has occurred) and the Notice Price would have otherwise been calculated in accordance with clause (b) hereof, then the Notice Price shall be, at the Holder’s election (it being understood that the Holder shall have until the end of the applicable Valuation Assessment Period to make such election), (i) the price per Share that is equal to (x) the Equity Value of the Company (based on an implied enterprise value of $160 million), divided by (y) the

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Fully-Diluted Number, in each case as of the date of exercise or (ii) the price per Share that is equal to (x) the Equity Value of the Company (based on an implied enterprise value of $205 million), divided by (y) the Fully-Diluted Number, in each case as of the date of exercise; provided, further, however, that if the Holder makes the election in clause (i) of the first proviso in this definition, then the Company shall be entitled, within 180 days of the Holder’s date of exercise, to require that the Notice Price be the Fair Market Value as of the date of the Company’s election.

“Series A Preferred Shares” shall have the meaning ascribed thereto in the Investors Agreement.

“Series B Preferred Shares” shall have the meaning ascribed thereto in the Investors Agreement.

“Shares” means (a) if there has been an IPO on or prior to the date of the consummation of the purchase of the Shares by the Holder pursuant to Article 3 hereof, High-Vote Ordinary Shares and (b) if there has not been an IPO on or prior to the date of the consummation of the purchase of the Shares by the Holder pursuant to Article 3 hereof, Series B Preferred Shares.

“Transfer” shall mean any direct or indirect offer, sale, gift, transfer, assignment or other disposition and shall include agreeing to do any of the foregoing; provided, however, that a pledge, a grant of a security interest, or other similar encumbrances shall not be deemed to be a Transfer.

“Transfer Agreement” shall have the meaning ascribed to it in the Transaction Agreement.

“U.S. business day” means any weekday, other than a weekday on which banks in the city of New York are authorized or required to be closed.

“Valuation Assessment Period” means the fifteen (15) U.S. business day period following the delivery by the Company to the Holder of the FMV Materials in accordance with Section 3.7.1 (b) or (c) hereof.

ARTICLE 2

WARRANT CERTIFICATES

Section 2.1    Issuance of Warrant.    Simultaneously with the execution and delivery of this Agreement, the Company shall issue and deliver to the Holder the Warrant Certificate attached hereto as Exhibit A.

Section 2.2    Rights of Holder under the Warrant Certificates.    The Warrant Certificate shall entitle the Holder, subject to the provisions of this Agreement and those set fort in the Warrant Certificate, to purchase the type and number of securities of the Company equal to the number provided for therein and herein.

ARTICLE 3

DURATION AND EXERCISE OF THE WARRANT

Section 3.1    Exercise Period of the Warrant.    The Holder shall have the right to exercise the Warrant, in whole but not in part, subject to the provisions of this Article 3, during one exercise period (the “Exercise Period”) commencing upon the earliest of (i) the consummation of the IPO (in which case the Exercise Period shall be the period commencing with such IPO

5

consummation and ending 30 U.S. business days thereafter), (ii) the date upon which the Holder receives written notice from the Company that it is no longer pursuing the IPO (in which case the Exercise Period shall be the period commencing with such date and ending 395 days thereafter) or (iii) March 31, 2005 (in which case the Exercise Period shall be the period commencing with such date and ending at the end of the tenth calendar month thereafter).

Section 3.2    Obligation to Sell and Transfer.    Upon the exercise of the Warrant on or prior to the Expiration Time, pursuant to Section 3.4 hereto, the Company shall sell and transfer to the Holder, and the Holder shall purchase and accept from the Company, for a purchase price per Share equal to the Exercise Price, a number of Shares equal to the Control Number.

Section 3.3    Expiration of the Warrant.    If the Warrant is not exercised in accordance with the terms thereof and hereof by the Expiration Time, the Warrant shall become null and void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease as of such time.

Section 3.4    Exercise of the Warrant; Consummation of the Purchase.

3.4.1    The Warrant may be exercised by the Holder, at any time within an Exercise Period and before the Expiration Time, by properly completing and signing a form of election to purchase in the form attached to the Warrant Certificate (the “Form of Election to Purchase”) and delivering it to the Company. Once so delivered, the Form of Election to Purchase shall be a binding obligation of the Holder.

3.4.2    Within five (5) days of the Definitive Resolution, (a) (i) the Holder shall deliver and surrender the Warrant Certificate to the Company at eLong, Inc., Block B, XingKe Plaza, 10 Jiuxianqiao Zhonglu, Chaoyang District, Beijing 100016, People’s Republic of China, or at such other location as the Company may from time to time notify the Holder in writing, during its normal business hours and (ii) (x) deliver a certified cheque or bank draft or wire to the Company in an amount equal to 87.5% of the amount due to the Company for the purchase of the Shares in accordance with the terms hereof and (y) deliver a certified cheque or bank draft or wire to the Escrow Agent (as defined in the Escrow Agreement) in an amount equal to 12.5% of the amount due to the Company for the purchase of the Shares in accordance with the terms hereof (it being understood and agreed that such 12.5% amount shall, subject to the terms of the Escrow Agreement Transaction Agreement and Transfer Agreement, be released to the Company, the Holder or the Selling Holders, as the case may be, subject to and in accordance with the escrow and indemnity provisions of the Transaction Agreement and Transfer Agreement) and (b) the Company shall concurrently (or within two (2) U.S. Business Days thereof) deliver and/or release to the Holder stock certificates representing the applicable Shares, endorsed in blank or accompanied by stock powers duly executed in blank, in proper form for transfer and with any stock transfer stamps attached. The amounts in escrow under this Section 3.4.2 shall be released to the Company, the Holder or the Selling Holders in accordance with and subject to the terms of the Escrow Agreement. Notwithstanding anything herein to the contrary, in the event that the Investor exercises the Warrant (a) after the date which is one (1) year after the Closing but prior to the Survival Date (as such terms are defined in the Transaction Agreement), then only 75% of the amount which would have otherwise been paid into escrow pursuant to this section shall be paid into escrow and the remaining 25% of such amount shall be paid to the Company, in addition to the amount otherwise payable under clause (ii)(x) above, or (b) after the Survival Date, then any amounts which would have otherwise been paid into escrow pursuant to this section shall not be paid into escrow but instead the Holder shall pay to the Company the entire amount due to the Company for the purchase of the Shares.

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Section 3.5    Exercise Price.    “Exercise Price” means:

3.5.1    With respect to an exercise of the Warrant during the Exercise Period set forth in Section 3.1(i) hereof, a per Share price equal to the IPO Price;

3.5.2    With respect to an exercise of the Warrant during the Exercise Period set forth in Section 3.1(ii) hereof, a per Share price equal to the Notice Price; or

3.5.3    With respect to an exercise of the Warrant during the Exercise Period set forth in Section 3.1 (iii) hereof, a per Share price equal to the Private Price.

Section 3.6    Control Number of Shares.    For the purposes hereof, “Control Number” means the number of Shares, equal to (a) (1) 51% of the Fully-Diluted Number minus (2) the number of shares of Ordinary Shares (including securities exchangeable for or convertible into Ordinary Shares, but excluding the Option and the Warrant) held by the Holder at such time divided by (b) 0.745.

Section 3.7    Delivery of FMV Materials; Fair Market Value Determination.

3.7.1    The Company shall deliver to the Holder the FMV Materials: (a) on the first day of the applicable Exercise Period; (b) within ten (10) U.S. business days of the date on which the Holder exercises the Warrant, if such exercise occurs within the respective time periods set forth in clause (b) of the Notice Price definition or clause (b) of the Private Price definition; (c) on the day that the Company makes a Force Majeure Event election during the applicable 180 day periods in the definitions of the Notice Price and the Private Price; and (d) at any time after delivery of FMV Materials pursuant to subsections (b) and (c) above, when there have been changes (other than immaterial ones) to any portion of the FMV Materials as delivered.

3.7.2    During the applicable Valuation Assessment Period, the Company shall promptly respond in sufficient detail (to the Holder’s reasonable satisfaction) to the inquiries of the Holder regarding the FMV Materials (it being understood and agreed that the Company shall make its CFO and other key management members available to the Holder for a reasonable period during such Valuation Assessment Period in order to respond to the Holder’s inquiries).

3.7.3    After the conclusion of the applicable Valuation Assessment Period, the Company and the Holder shall comply with the provisions and procedures set forth on Schedule 1 hereto to determine the Fair Market Value.

3.7.4    If the Company does not comply with (a) the delivery requirements of Section 3.7.1 hereof within the applicable time periods, (b) the requirement that the FMV Materials include sufficient information to allow a third party to determine the Company’s Fair Market Value or (c) the requirements under Section 3.7.2 hereof to promptly respond in a satisfactory manner to the Holder’s inquiries regarding the FMV Materials, the subsequent time periods with respect to the procedures to determine Fair Market Value shall be tolled until the Company complies in full with such requirements. If any such non-compliance continues for more than fifteen (15) U.S. business days (beginning on the day that the Holder sends notice to the Company of the Holder’s reasonable belief that the Company is non-compliant), the Holder shall be entitled to determine the applicable Fair Market Value (in its reasonable discretion) (by delivering to the Company within fifteen (15) U.S. business days after such 15 U.S. business day non-compliance period its determination of the Fair Market Value, along with the financial and other information relating to the Company upon which such determination was based (the date of such delivery being the “Holder FMV Determination Date”), and such determination shall be binding on all of the parties hereto; provided, however, that the Company shall have the right to contest such determination of non-compliance and such determination of the Fair Market Value to the Arbiter in accordance with the terms of Section 8.2.2 hereof.

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Section 3.8    Post-Consummation Adjustment.    If the applicable Exercise Price with respect to an exercise is based on clause (i) of the first proviso in the definitions of either Notice Price or Private Price, then notwithstanding Section 3.4.2 hereof, the Holder shall deliver to the Escrow Agent 27.5% (as opposed to the 12.5% required under Section 3.4.2 hereof) of the amount due to the Company for the purchase of the Shares (such additional 15% of the proceed constituting the “Force Majeure Escrow Deposit”) (it being understood that the Holder would still receive the applicable Shares (and the relevant stock certificates) at such time in accordance with Section 3.4.2 hereof). Within ten (10) U.S. business days following the Definitive Resolution with respect to the Fair Market Value calculations in a Force Majeure election, based on such Definitive Resolution (A) the Escrow Agent shall deliver the appropriate amount from the Force Majeure Escrow Deposit to the Company, and return any excess amount to the Holder, (B) to the extent there remains an excess amount in the hands of the Company from previous payments under such clause (i) after such payment by the Escrow Agent, the Company shall pay to the Holder such excess, and (C) to the extent there is a shortfall, the Holder shall make the appropriate payments to the Company to cover such shortfall. Notwithstanding anything herein to the contrary, in the event that the Investor exercises the Warrant (a) after the date which is one (1) year after the Closing but prior to the Survival Date (as such terms are defined in the Transaction Agreement), then only 24.375% of the amount due to the Company for the purchase of the Shares shall be paid into escrow and the remaining 75.625% shall be paid to the Company, or (b) after the Survival Date, then only 15% of the amount due to the Company for the purchase of the Shares shall be paid into escrow and the remaining 85% shall be paid to the Company.

ARTICLE 4

PAYMENT OF TAXES

Section 4.1    Payment of Taxes.    The Company will pay all documentary stamp taxes and other governmental charges (excluding all foreign, federal or state income, franchise, property, estate, inheritance, gift or similar taxes) in connection with the issuance or delivery of the Warrant hereunder, as well as all such taxes attributable to the issuance, exchange or delivery of the securities of the Company issuable upon the exercise of the Warrant.

ARTICLE 5

FUNDAMENTAL CHANGE; WORKING CAPITAL

Section 5.1    Adjustment for Fundamental Change.    In the event that the Company shall be a party to any Fundamental Change, then lawful provisions shall be made as part of the terms of such Fundamental Change whereby the Holder shall have the right thereafter to exercise the Warrant only for the kind and amount of securities, cash and other property receivable upon such Fundamental Change by a holder of the number of Shares for which the Warrant could have been exercised immediately prior to such Fundamental Change. In such event, the Exercise Price in effect immediately prior to such Fundamental Change shall become the Exercise Price immediately after such Fundamental Change with respect to the kind and amount of securities, cash and other property receivable upon such Fundamental Change by a holder of one Share. The Company, or the person formed by the applicable consolidation or resulting from the applicable merger or that acquires the applicable assets or capital stock of the Company, as the case may be, pursuant to such Fundamental Change shall make lawful provisions to establish such right and to provide for adjustments that, for events subsequent to consummation of such Fundamental Change, shall be as nearly equivalent as may be

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practicable to the adjustments provided for herein, and the Company agrees that it will not be a party to or permit such Fundamental Change to occur unless such provisions are so made as a part of the terms thereof. The substance of this paragraph shall similarly apply to successive Fundamental Changes.

Section 5.2    Working Capital.    From and after the date hereof until the Warrant expires unexercised or is otherwise terminated in accordance with this Agreement, the Company hereby agrees to manage the current assets and current liabilities (as each such term is used in accordance with U.S. GAAP) of it and its subsidiaries in the ordinary course of business consistent with past practice, with extensions of credit, time for payment and collection of payables or receivables reasonably consistent with past practice.

ARTICLE 6

TRANSFER OF WARRANTS

Section 6.1    Transfers.

6.1.1    The Warrant may not be Transferred by the Holder, other than to a controlled affiliate thereof (for so long as such affiliate remains under common control with the Holder), and any other attempted Transfer shall be void and of no force and effect. For purposes of this Article, a “controlled affiliate” of a person or entity will mean an entity that is controlled by, controlling, or under common control with such person or entity, provided having “control” will mean having at least a majority of the voting power and the power to elect a majority of the board of directors or other governing body of an entity.

6.1.2    The Company shall promptly process any Transfer of the Warrant to a controlled affiliate of the Holder upon the due execution and delivery by the Holder and such controlled affiliate of the Transfer Form attached to the Warrant Certificate.

ARTICLE 7

OTHER PROVISIONS RELATING TO RIGHTS OF THE HOLDER AND THE COMPANY

Section 7.1    Rights of the Holder.    The Holder, in its capacity as the holder of the Warrant, shall not be entitled to any of the rights of a stockholder of the Company or any other governance rights with respect to the Company, except as set forth in the Investors Agreement.

Section 7.2    Mutilated or Missing Warrant Certificate.    If a mutilated Warrant Certificate is surrendered by the Holder to the Company, or if the Holder submits an affidavit or other evidence to the Company to the effect that a Warrant Certificate has been lost, destroyed or wrongfully taken, the Company shall issue a replacement Warrant Certificate. If reasonably required by the Company, the Holder must provide an indemnity bond, or other form of indemnity sufficient in the reasonable judgment of the Company to protect the Company from any loss which it may suffer if a Warrant Certificate is replaced.

Section 7.3    Injunctive Relief.    The Company agrees that the remedy at law for any breach of the provisions of this Warrant Agreement or the Warrant Certificate will be inadequate and that the Holder, on any application to a court, shall be entitled to temporary and permanent injunctive relief, specific performance and any other equitable relief (without the provision of any bond or indemnity) against the Company. These remedies shall be in addition to any other remedies, at law or in equity, to which the Holder may be entitled.

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Section 7.4    Exercise of the Company’s Rights Hereunder after Investor Control.    From and after the date on which the IAC Directors (as defined in the Investors Agreement) first constitute a majority of the Board of Directors of the Company, the Directors of the Company who are not IAC Directors shall, without further action on the part of the Board of Directors, constitute a Committee of the Board of Directors (the “Special Committee”). All actions by the Company with respect to its rights under this Agreement, including without limitation decisions not to take action under this Agreement, shall be made by the Special Committee, and shall be confidential to the Special Committee, and the Special Committee shall not be required or expected to share any information regarding its proceedings with the full Board of Directors.

ARTICLE 8

MISCELLANEOUS

Section 8.1    Representations and Warranties.    Each party hereto (as to itself only and not as to any other party hereto) hereby represents and warrants that:

8.1.1    Such party is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the state of its organization.

8.1.2    The execution, delivery and performance by such party of this Agreement and the Warrant Certificate, and the consummation of the transactions contemplated hereby and thereby: (i) are within such party’s corporate, limited liability company or partnership power; (ii) assuming the due authorization, execution and delivery by the other parties hereto, have been duly authorized by all necessary corporate, limited liability company or partnership action and constitute the legal, valid and binding obligation of such party, enforceable against it in accordance with its terms; (iii) are not in contravention of any provision of such party’s certificate of incorporation, by-laws, certificate of formation, limited liability company agreement, certificate of limited partnership or limited partnership agreement, as applicable; (iv) will not result in the breach of or constitute a default under any material contract, lease, license, franchise, permit, indenture, mortgage, deed of trust, note, agreement or other instrument to which such party is a party or by which it is bound; and (v) will not violate any law or order applicable to or bearing upon such party or its assets or businesses, except in the case of clauses (iv) and (v) for such breaches, defaults or violations that could not reasonably be expected to have a material adverse effect on the legal ability of such party to consummate the transactions contemplated by this Agreement and the Warrant Certificate.

Section 8.2    Dispute Resolution.

8.2.1    If the Company (on behalf of itself or on behalf of a Selling Holder) disagrees with the Exercise Price or the Control Number set forth on the Holder’s Form of Election to Purchase (in connection with an exercise of the Warrant where the applicable Exercise Price is the IPO Price, the Notice Price determined by clause (a) of the definition thereof or the Private Price determined by clause (a) of the definition thereof), then the Company may deliver a notice of disagreement to the Holder, within five (5) U.S. business days of the Holder’s delivery of such Form, in which case the Company (on behalf of itself and the Selling Holders) shall attempt to resolve the dispute with the Holder by engaging in negotiations with respect thereto during the five (5) U.S. Business Day period following the Company’s notice of disagreement. If the Holder and the Company (on behalf of and in concurrence with any Selling Shareholder who has indicated its disagreement) do not reach agreement by the end of such 5-day period, each such

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party shall submit the matter to the Arbiter (as defined in the Transaction Agreement), who shall decide the final resolution of the matter (which shall be binding on all of the parties hereto) within ten (10) U.S. Business Days of the submission of the matter.

8.2.2    If the Company (on behalf of itself or on behalf of a Selling Holder) elects to contest the Holder’s determination of either (a) the Fair Market Value or (b) the Company’s non-compliance, in each case as provided by Section 3.7.4 hereof, the Company shall deliver to the Arbiter within 5 U.S. business days of the Holder FMV Determination Date (and simultaneously deliver to the Holder) its notice of objection (which notice of objection shall set forth in reasonable detail the reasons for the Company’s objections). The Holder shall have 10 U.S. business days to prepare and deliver to the Arbiter a response to such notice of objection (which notice of objection shall set forth the Holder’s response in reasonable detail). Within 10 U.S. business days of such Holder’s delivery, the Arbiter shall decide the final resolution of such matters on the following basis:

(i)    with respect to the Company’s non-compliance, the Arbiter shall decide whether the Company’s actions were non-compliant based on the quality of the FMV Materials that were delivered, as well as evidence submitted by each of the Company and the Holder regarding the Company’s compliance with the delivery and other requirements thereunder (it being understood and agreed that (x) if the Arbiter decides that the Company satisfied its obligations and requirements under Section 3.7.4, the parties shall resume with the applicable Fair Market Value determination procedures and (y) if the Arbiter decides that the Company did not satisfy such obligations and requirements, the Arbiter shall then make the determinations in clause (ii) below), and

(ii)    if the Arbiter has determined that the Company was non-compliant (or if the Company did not contest such non-compliance to the Arbiter), the Arbiter shall decide whether the Holder’s determination of the Fair Market Value was within a reasonable range of possible values, based solely on the financial and other information related to the Company that the Holder submitted to the Company on the Holder FMV Determination Date (it being understood and agreed that (x) if the Holder’s determination is deemed by the Arbiter to be within such reasonable range, such determination of the Fair Market Value by the Holder shall be final and binding on all the parties hereto and (y) if the Holder’s determination is deemed by the Arbiter to be outside of the reasonable range, the Arbiter shall determine the lowest Fair Market Value that is within such reasonable range, and such determination shall be final and binding on all the parties hereto).

8.2.3    The fees for the services performed by the Arbiter in connection with this Agreement shall be borne 50% by the Holder and 50% by the Company.

Section 8.3    Termination by Holder.    This Agreement may be terminated at any time by the Holder at any time prior to the Exercise Date, effective upon the delivery of a termination notice to the Company. Upon such termination, this Agreement shall forthwith become null and void and of no force and effect, and there will be no liability or obligation on the part of any party hereto with respect to this Agreement, except for breaches of this Agreement prior to the time of such termination (the liability for which shall be borne by the party who commits the breach).

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Section 8.4    Notices and Demands to the Company and the Holder.    All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, first-class mail, telecopier, or overnight air courier guaranteeing two-day delivery:

(a)    if to the Holder, to

IACT Asia Pacific Limited

c/o InterActiveCorp.

152 West 57th Street

42nd Floor

New York, New York 10019

Telecopy No.: (212) 314-7497

Attention: General Counsel

with a copy to

Wachtell, Lipton, Rosen & Katz

51 W. 52nd Street

New York, New York 10019

Telecopy No.: (212) 403-2000

Attention: Andrew J. Nussbaum, Esq.

and

(b)    if to the Company, to

eLong, Inc.

Block B, XingKe Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Telecopy No.: (    )        -

Attention: Chief Executive Officer

with a copy to

Goulston & Storrs

400 Atlantic Avenue

Boston, Massachusetts 02110

Attention: Timothy B. Bancroft, Esq.

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five U.S. business days after being deposited in the mail, postage prepaid, if mailed to an address within the U.S. from and address within the U.S. (so long as a fax copy is sent and receipt acknowledged within two U.S. business days after mailing); when receipt acknowledged, if telecopied; and such number of U.S. business days after timely delivery to the courier, if sent by overnight air courier as is guaranteed by the courier. The parties may change the addresses to which notices are to be given by giving five days’ prior written notice of such change in accordance herewith.

Section 8.5    Certain Supplements and Amendments.    This Agreement may not be amended or modified without the prior written consent of each party hereto, unless such amendment or modification does not affect the rights or obligations of a party hereunder, in which case the consent of such party shall not be required.

Section 8.6    Successors.    All the covenants and provisions of this Agreement by or for the benefit of the Company or the Holder shall bind and inure to the benefit of their respective successors, heirs and assigns hereunder.

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Section 8.7    Termination.    This Agreement shall terminate if the Warrant has expired unexercised. Upon such termination, this Agreement shall forthwith become null and void and of no force and effect, and there will be no liability or obligation on the part of any party hereto with respect to this Agreement, except for breaches of this Agreement prior to the time of such termination (the liability for which shall be borne by the party who commits the breach).

Section 8.8    Monetary Units.    All amounts referred to herein are expressed in United States dollars and all payments by Escrow Agent shall be made in such dollars.

Section 8.9    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of the Holder, each of the parties hereto agrees for the benefit of the Holder that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 8.4, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of the Holder set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

Section 8.10    Benefits of this Agreement.    Nothing in this Agreement shall be construed to give to any person or other entity other than the Company and the Holder any legal or equitable right, remedy or claim under this Agreement.

Section 8.11    Headings.    The descriptive headings of the several Articles and Sections and the Table of Contents of this Agreement are for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

Section 8.12    Counterparts.    This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

[Signature pages follow.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

ELONG, INC.
By:	/s/
	Name:
	Title:
IACT ASIA PACIFIC LIMITED
By:	/s/
	Name:
	Title:

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EX-4.10

Exhibit 4.10

STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT (this “Agreement”) dated as of July 23 2004, is by and among eLong, Inc., an exempted limited liability company under the laws of the Cayman Islands (the “Company”), and IACT Asia Pacific Limited, an exempted limited liability company under the laws of the Cayman Islands (the “Investor”).

RECITALS

WHEREAS, the Company, certain subsidiaries thereof, an affiliate of the Investor and the Investor have entered into a Transaction Agreement, dated as of July 23, 2004 (the “Transaction Agreement”), pursuant to which, among other things, the Investor is to be granted an option, entitling the Investor to buy additional securities of the Company, on the terms and subject to the conditions set forth herein;

WHEREAS, the Company shall issue, as of the Closing (as defined in the Transaction Agreement), stock options covering 1,660,000 Ordinary Shares (as defined in the Transaction Agreement) pursuant to the Company’s Stock and Annual Incentive Plan, dated July 23, 2004 (as may be amended or restated from time to time - the “Elong Option Plan” and the “Employee Stock Options”, respectively, and the Ordinary Shares issued upon exercise of the Employee Stock Options, the “Employee Shares”));

WHEREAS, on the terms and subject to the conditions set forth in the Transaction Agreement and as a condition to Investor’s entering into the Transaction Agreement, the Company and Investor have agreed to enter into this Agreement pursuant to which the Company shall grant to Investor an option, that mirrors the provisions of each of the Employee Stock Options in the Elong Option Plan and award agreements thereunder, to purchase Ordinary Shares upon the terms and conditions set forth herein; and

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and in the Transaction Agreement, the Company and Investor agree as follows:

1.    Grant of Option.    Subject to the provisions of Section 5 hereof, effective immediately upon the Closing (as such term is defined in the Transaction Agreement), the Company hereby grants to Investor an unconditional, irrevocable option to purchase 711,429 fully paid and nonassessable Ordinary Shares (the “Stock Option” and “Option Shares”), at an exercise price equal to $5.25 (the “Option Price”). The Option Shares and Employee Shares, collectively, are referred to as the “Contingent Shares”. The number of Option Shares is equal to 30% of the total number of the Contingent Shares.

2.    Exercise; Stock Option Closing.    

(a)    Exercise.    The Stock Option shall be exercisable from time to time in increments equal in each instance to the Exercisable Portion (as defined below). Each Exercisable Portion of the Option shall be exercisable by Investor’s delivery to the Company of a written notice (“Option Notice”), on the terms and conditions set forth in Section 2(b) below, within 120 days following a Triggering Event, but only if, with respect to the portion of the Stock Option so exercised, a Triggering Event (as defined below) shall have occurred. The term “Triggering Event” shall mean, with respect to a portion of the Stock Option, the time an employee of the Company or any permitted transferee who has been granted an Employee Stock Option as of the Closing shall have exercised all or any portion of the Employee Stock Option held by such employee or

1

transferee (any such exercise, an “Employee Exercise”). For each such Employee Exercise, the Investor shall have the right to exercise the Stock Option to purchase a number of shares such that, immediately after such Investor exercise, 30% of the Contingent Shares issued with respect to such Employee Exercise shall be Option Shares and 70% of the Contingent Shares issued with respect to such Employee Exercise shall be Employee Shares. The number of shares so purchased by the Investor in each such exercise shall be the “Exercisable Portion”. In the event the Exercisable Portion would result in a fractional share, (i) initially the number of shares constituting the Exercisable Portion will be rounded up to the nearest whole number, and (ii) upon subsequent exercises, the number of shares constituting the Exercisable Portion will be rounded up or down as necessary so that the aggregate number of Option Shares that have been issued shall always be equal, as nearly as practicable, to 30% of the total number of Contingent Shares that have been issued. The Company shall notify the Investor promptly (but in no event later than 3 days after such exercise) in writing of the occurrence of each Triggering Event, it being understood that the giving of such notice by the Company shall not be a condition to the right of the Investor to exercise the Exercisable Portion of the Stock Option.

(b)    Option Notice.    The Option Notice shall specify (i) the total number of Option Shares that the Investor wishes to exercise and (ii) the date that the closing (the “Stock Option Closing”) with respect to such exercise shall take place (it being understood and agreed that the Stock Option Closing shall occur on such date specified in the Option Notice, subject to extension in connection in case of any required regulatory approval). In addition, each Option Notice shall contain the following representations by Investor: Investor represents and warrants to the Company that Investor is acquiring the Option Shares that are the subject of this notice of exercise for its own account and not with a view to distribution or resale in any manner which would be in violation of the Securities Act of 1933, as amended (the “Act”). Investor understands that the Option Shares it is acquiring upon this exercise constitute “restricted securities” under applicable United States federal securities laws, and Investor may dispose of such shares only pursuant to an effective registration statement under the Act or an exemption from registration if available. Investor has made, either alone or together with its advisors, such independent investigation of the Company, its management and related matters as Investor deems to be, or such advisors have advised to be, necessary or advisable in connection with the investment in the Company contemplated by this option exercise; and Investor and its advisors have received all information and data that Investor and such advisors believe to be necessary in order to reach an informed decision as to the advisability of such option exercise.

(c)    Stock Option Closing.    The Stock Option Closing shall take place at the offices of the Investor at the address specified in Section 9(g). At each Stock Option Closing, the Investor shall pay to the Company the aggregate purchase price (based on the then-applicable Option Price) for the Option Shares purchased pursuant to the exercise of any such portion of the Stock Option by wire transfer of immediately available funds to the account of the Company set forth on Schedule 1.2 of the Transaction Agreement and the Company shall simultaneously deliver to the Investor a certificate or certificates representing the number of Option Shares purchased by the Investor. Upon tendering the applicable purchase price in immediately available funds, the Investor shall be deemed to be the holder of record of the Option Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Option Shares shall not then be actually delivered to the Investor. The Company shall pay all expenses, and any and all United States federal, state and local taxes and other charges that may be payable in connection with the preparation, issuance and delivery of stock certificates under this Section 2 in the name of the Investor or its assignee, transferee or designee as provided herein.

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3.    Restrictions on Transfer.

(a)    The Investor may not “Transfer” (as hereinafter defined) the Stock Option (or any portion thereof) except to an affiliate, and any other attempted Transfer shall be void and of no force and effect. “Transfer” shall have the meaning given in the Investors Agreement, dated as of the date hereof, among the Company, the Investor and certain other parties (the “Investors Agreement”)

(b)    The Company shall promptly process any Transfer of the Stock Option to an affiliate of the Investor provided that (x) such affiliate shall undertake the obligations of Investor hereunder, and (y) such affiliate shall agree that any Option Shares purchased by the affiliate shall be subject to the terms and conditions of, and shall constitute “Stockholder Shares” under, the Investors Agreement.

4.    Adjustment in the Event of Change in Stock.

In the event of (i) a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event of or by the Company (each, a “Share Change”), or (ii) a merger, consolidation, acquisition of property or shares, separation, spinoff, reorganization, stock rights offering, liquidation, disaffiliation, or similar event of or by the Company (each, a “Corporate Transaction”), then (A) the number and kind of shares subject to the Stock Option will be adjusted and (B) the Option Price per share of the Stock Option will be adjusted, in each case, in the same manner as the Employee Stock Options are adjusted in connection with such Share Change or Corporate Transaction.

5.    Expiration.    On the date that a portion of an Employee Stock Option expires or otherwise terminates, the applicable portion of the Stock Option (i.e., that portion equal to 30% of the portion of the Employee Stock Option that is expiring or terminating) shall expire (the “Expiration Date”).

6.    Representations and Warranties of the Company.    The Company hereby represents and warrants to Investor as of the Closing (as defined in the Transaction Agreement):

(a)    Organization.    The Company has been duly organized, and is validly existing and in good standing, under the laws of its jurisdiction of incorporation or formation, as applicable, and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing or good standing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “Material Adverse Effect” means any change affecting, or event or condition having an effect on, the representing party or any of its subsidiaries that is or will be materially adverse to the ability of the representing party to perform its obligations under this Agreement or consummate the transactions contemplated by this Agreement.

(b)    Authority.    The Company has all necessary corporate power and authority to execute and deliver this Agreement, and to perform its obligations hereunder and to consummate the transactions contemplated herein to be consummated by the Company. The execution and delivery by the Company of this Agreement and the performance of its

3

obligations hereunder, and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all necessary corporate action (including by the Board of Directors of the Company), and no other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery and performance of this Agreement or the consummation by the Company of the transactions contemplated hereby. This Agreement constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms (assuming that this Agreement is duly executed and delivered by and is valid and binding as against Investor).

(c)    No Conflict.    There is no requirement applicable to the Company or its affiliates to make any filing with, or to obtain any permit, authorization, consent or approval of, any Governmental Authority in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of the transactions contemplated hereby, except for such permits, authorizations, consent or approvals the absence of which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or prevent the consummation of the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company will not, and the performance by the Company of its obligations under this Agreement will not, (i) violate any provision of the Company’s governing agreements, (ii) result in a default or breach (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any material indebtedness of the Company or its subsidiaries, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, excluding from the foregoing clauses such violations, defaults or breaches (or rights of termination, cancellation or acceleration) which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. For the purposes of this Agreement, “Governmental Authority” shall mean any national, local or foreign (including U.S. federal, state or local) or supranational governmental, judicial or regulatory agency, commission, bureau, entity or authority.

(d)    Option Shares.    The Option Shares, or any portion thereof, when transferred to Investor pursuant to the terms of this Agreement, shall be duly and validly issued, fully paid and nonassessable, and shall be delivered free and clear of all Liens, including any preemptive rights of any stockholder of the Company. For the purposes of this Agreement, “Liens” shall mean any liens, encumbrances, pledges, restrictions upon voting or transfer, security interests, claims, charges, options, rights of first refusal, or other legal or equitable encumbrances and any other matters affecting title, the right to transfer and vote and the right to exercise all rights applicable to any ordinary shareholder.

7.    Covenants of the Company.

(a)    Further Assurances.    Upon exercise of the Stock Option or any portion thereof, the Company shall take all actions necessary to fulfill the obligations of the Company pursuant to this Agreement including obtaining any required regulatory or other approvals.

(b)    Reservation of Shares.    In addition to its other agreements and covenants herein, the Company agrees: (i) that it shall at all times maintain, free from subscriptive or preemptive rights, sufficient authorized but unissued or treasury shares of the Ordinary Shares so that the Stock Option may be exercised without additional authorization of such Ordinary Shares after giving effect to all other options, warrants, convertible securities and other rights to purchase such Ordinary Shares; (ii) that it will not, by charter amendment or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be

4

observed or performed hereunder by Company; and (iii) promptly to take all action provided herein to protect the rights of the Investor against dilution.

8.    Representations and Warranties of Investor.    Investor hereby represents and warrants to the Company as of the Closing (as defined in the Transaction Agreement):

(a)    Organization.    Investor has been duly organized, and is validly existing and in good standing, under the laws of its jurisdiction of formation, as applicable, and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Investor is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing or good standing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)    Authority.    Investor has all necessary company power and authority to execute and deliver this Agreement, and to perform its obligations hereunder and to consummate the transactions contemplated herein to be consummated by Investor. The execution and delivery by Investor of this Agreement and the performance of its obligations hereunder, and the consummation by Investor of the transactions contemplated hereby, have been duly authorized by all necessary corporate action (including by the Board of Directors of Investor), and no other corporate proceedings on the part of Investor are necessary to authorize the execution, delivery and performance of this Agreement or the consummation by Investor of the transactions contemplated hereby. This Agreement constitutes a valid and binding agreement of Investor, enforceable against Investor in accordance with its terms (assuming that this Agreement is duly executed and delivered by and is valid and binding as against the Company).

9.    Miscellaneous.

(a)    Certain Supplements and Amendments.    This Agreement may not be amended or modified without the prior written consent of each party hereto, unless such amendment or modification does not affect the rights or obligations of a party hereunder, in which case the consent of such party shall not be required.

(b)    Entire Agreement.    This Agreement together with the Transaction Agreement and the documents referred to herein and in the Transaction Agreement constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein.

(c)    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

(d)    Definitions.    For the purposes of this Agreement:

(i)    “affiliate” or “affiliates” means, with respect to a person, any other person in which the first such person has a direct or indirect controlling interest or by which the first such

5

person is directly or indirectly controlled or which is under direct or indirect common control with the first such person;

(ii)    “control”, when used with respect to any person, means the power to direct the management and policies of such person, directly or indirectly, by or through stock ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one or more other persons; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing;

(iii)    “include” and “including” (and words of similar import) shall be deemed to be followed by the phrase “without limitation”; and

(iv)    “person” or “persons” include natural persons, corporations, limited liability companies, trusts, joint ventures, associations, companies, partnerships, governments or agencies or political subdivisions thereof and other entities;

(e)    Governing Law; Arbitration.

(i)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(ii)    Notwithstanding subsection (iii) below, at the option of the Investor, each of the parties hereto agrees for the benefit of the Investor that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 9(g), or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(iii)    Subject to the option in favor of the Investor set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

(f)    Descriptive Headings.     The descriptive headings contained herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

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(g)    Notices.    All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, first-class mail, telex, telecopier, or overnight air courier guaranteeing next day delivery:

(i)    if to the Investor, to

IACT Asia Pacific Limited

c/o InterActive Corp.

152 West 57th Street

42nd Floor

New York, New York 10019

Telecopy No.: (212) 314-7497

Attention: General Counsel

with a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, New York 10019

Telecopy No.: (212) 403-2000

Attention: Andrew J. Nussbaum, Esq.

and

(ii)    if to the Company, to

eLong, Inc.

Block B, XingKe Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Telecopy No.: (8610) 64386830

Attention: Chief Executive Officer

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five U.S. business days after being deposited in the mail, postage prepaid, if mailed (so long as a fax copy is sent and receipt acknowledged within two U.S. business days after mailing); when answered back if telexed; when receipt acknowledged, if telecopied; and the next U.S. business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. The parties may change the addresses to which notices are to be given by giving five days’ prior written notice of such change in accordance herewith.

(h)    Counterparts.    This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by the other party.

(i)    Further Assurances.    In the event of any exercise of the Stock Option by Investor, the Company and Investor shall execute and deliver all other documents and instruments and take all other action that may be reasonably necessary in order to consummate the transactions provided for by such exercise.

(j)    Specific Performance.    The parties hereto hereby acknowledge and agree that the failure of any party to this Agreement to perform its agreements and covenants hereunder will cause irreparable injury to the other party to this Agreement for which damages, even if

7

available, will not be an adequate remedy. Accordingly, each of the parties hereto hereby consents to the granting of equitable relief (including specific performance and injunctive relief) by any court of competent jurisdiction to enforce any party’s obligations hereunder. The parties further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such equitable relief and that this provision is without prejudice to any other rights that the parties hereto may have for any failure to perform this Agreement.

(k)    Costs and Expenses.    Any cost, expense, burden, tax, duty, or stamp arising out from the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby shall be borne and paid for by the Company.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

ELONG, INC.

By:

Name:

Title:

IACT ASIA PACIFIC LIMITED

By:

Name:

Title:

9

EX-4.11

Exhibit 4.11

STOCK OPTION AGREEMENT

This STOCK OPTION AGREEMENT (this “Agreement”) dated as of October 1, 2004, is by and among eLong, Inc., an exempted limited liability company under the laws of the Cayman Islands (the “Company”), and IACT Asia Pacific Limited, an exempted limited liability company under the laws of the Cayman Islands (the “Investor”).

RECITALS

WHEREAS, the Company, the Investor and other shareholders of the Company entered into an Investors Agreement, dated as of July 23, 2004 (the “Investors Agreement”), pursuant to which, among other things, the Company is prohibited from issuing any of its securities (including stock options) without the prior written approval of the Investor;

WHEREAS, simultaneously with the execution and delivery of this Agreement by the parties hereto, the Company shall issue stock options covering a total of 250,000 Ordinary Shares (as defined in the Investors Agreement) to Richard Chen (in the amount of 150,000 options) and Frank Zheng (in the amount of 100,000 options) (such 250,000 stock options being the “Employee Stock Options”, and the Ordinary Shares issued upon exercise of the Employee Stock Options, the “Employee Shares”) pursuant to the Company’s Stock and Annual Incentive Plan, dated July 23, 2004 (as may be amended or restated from time to time, the “Elong Option Plan”);

WHEREAS, as a condition to Investor’s approving the issuance of the Employee Stock Options, the Company and Investor have agreed to enter into this Agreement pursuant to which the Company shall grant to Investor an option, that mirrors the provisions of each of the Employee Stock Options and the award agreements thereunder, to purchase Ordinary Shares upon the terms and conditions set forth herein; and

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, the Company and Investor agree as follows:

1.    Grant of Option.    Subject to the provisions of Section 5 hereof, effective simultaneously with the execution and delivery of this Agreement by the parties hereto, the Company hereby grants to Investor an unconditional, irrevocable option to purchase 260,204 fully paid and nonassessable Ordinary Shares (the “Stock Option” and “Option Shares”), at an exercise price equal to $5.25 (the “Option Price”). The Option Shares and Employee Shares, collectively, are referred to as the “Contingent Shares”. The number of Option Shares is equal to 51% of the total number of the Contingent Shares.

2.    Exercise; Stock Option Closing.

(a)    Exercise.    The Stock Option shall be exercisable from time to time in increments equal in each instance to the Exercisable Portion (as defined below). Each Exercisable Portion of the Option shall be exercisable by Investor’s delivery to the Company of a written notice (“Option Notice”), on the terms and conditions set forth in Section 2(b) below, within 120 days following a Triggering Event, but only if, with respect to the portion of the Stock Option so exercised, a Triggering Event (as defined below) shall have occurred. The term “Triggering Event” shall mean, with respect to a portion of the Stock Option, the time an employee of the Company or

1

any permitted transferee who has been granted an Employee Stock Option as of the date hereof shall have exercised all or any portion of the Employee Stock Option held by such employee or transferee (any such exercise, an “Employee Exercise”). For each such Employee Exercise, the Investor shall have the right to exercise the Stock Option to purchase a number of shares such that, immediately after such Investor exercise, 51% of the Contingent Shares issued with respect to such Employee Exercise shall be Option Shares and 49% of the Contingent Shares issued with respect to such Employee Exercise shall be Employee Shares. The number of shares so purchased by the Investor in each such exercise shall be the “Exercisable Portion”. In the event the Exercisable Portion would result in a fractional share, (i) initially the number of shares constituting the Exercisable Portion will be rounded up to the nearest whole number, and (ii) upon subsequent exercises, the number of shares constituting the Exercisable Portion will be rounded up or down as necessary so that the aggregate number of Option Shares that have been issued shall always be equal, as nearly as practicable, to 51% of the total number of Contingent Shares that have been issued. The Company shall notify the Investor promptly (but in no event later than 3 days after such exercise) in writing of the occurrence of each Triggering Event, it being understood that the giving of such notice by the Company shall not be a condition to the right of the Investor to exercise the Exercisable Portion of the Stock Option.

(b)    Option Notice.    The Option Notice shall specify (i) the total number of Option Shares that the Investor wishes to exercise and (ii) the date that the closing (the “Stock Option Closing”) with respect to such exercise shall take place (it being understood and agreed that the Stock Option Closing shall occur on such date specified in the Option Notice, subject to extension in connection in case of any required regulatory approval). In addition, each Option Notice shall contain the following representations by Investor: Investor represents and warrants to the Company that Investor is acquiring the Option Shares that are the subject of this notice of exercise for its own account and not with a view to distribution or resale in any manner which would be in violation of the Securities Act of 1933, as amended (the “Act”). Investor understands that the Option Shares it is acquiring upon this exercise constitute “restricted securities” under applicable United States federal securities laws, and Investor may dispose of such shares only pursuant to an effective registration statement under the Act or an exemption from registration if available. Investor has made, either alone or together with its advisors, such independent investigation of the Company, its management and related matters as Investor deems to be, or such advisors have advised to be, necessary or advisable in connection with the investment in the Company contemplated by this option exercise; and Investor and its advisors have received all information and data that Investor and such advisors believe to be necessary in order to reach an informed decision as to the advisability of such option exercise.

(c)    Stock Option Closing.    The Stock Option Closing shall take place at the offices of the Investor at the address specified in Section 9(g). At each Stock Option Closing, the Investor shall pay to the Company the aggregate purchase price (based on the then-applicable Option Price) for the Option Shares purchased pursuant to the exercise of any such portion of the Stock Option by wire transfer of immediately available funds to the account of the Company set forth on Schedule 1.2 of the Transaction Agreement (as defined in the Investors Agreement) and the Company shall simultaneously deliver to the Investor a certificate or certificates representing the number of Option Shares purchased by the Investor. Upon tendering the applicable purchase price in immediately available funds, the Investor shall be deemed to be the holder of record of the Option Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Option Shares shall not then be actually delivered to the Investor. The Company shall pay all expenses, and any and all United States federal, state and local taxes and other charges that may be payable in connection with the preparation, issuance and delivery of stock certificates under this Section 2 in the name of the Investor or its assignee, transferee or designee as provided herein.

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3.    Restrictions on Transfer.

(a)    The Investor may not “Transfer” (as hereinafter defined) the Stock Option (or any portion thereof) except to an affiliate, and any other attempted Transfer shall be void and of no force and effect. “Transfer” shall have the meaning given in the Investors Agreement.

(b)    The Company shall promptly process any Transfer of the Stock Option to an affiliate of the Investor provided that (x) such affiliate shall undertake the obligations of Investor hereunder, and (y) such affiliate shall agree that any Option Shares purchased by the affiliate shall be subject to the terms and conditions of, and shall constitute “Stockholder Shares” under, the Investors Agreement.

4.    Adjustment in the Event of Change in Stock.

In the event of (i) a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event of or by the Company (each, a “Share Change”), or (ii) a merger, consolidation, acquisition of property or shares, separation, spinoff, reorganization, stock rights offering, liquidation, disaffiliation, or similar event of or by the Company (each, a “Corporate Transaction”), then (A) the number and kind of shares subject to the Stock Option will be adjusted and (B) the Option Price per share of the Stock Option will be adjusted, in each case, in the same manner as the Employee Stock Options are adjusted in connection with such Share Change or Corporate Transaction.

5.    Expiration.    On the date that a portion of an Employee Stock Option expires or otherwise terminates, the applicable portion of the Stock Option (i.e., that portion equal to 51% of the portion of the Employee Stock Option that is expiring or terminating) shall expire (the “Expiration Date”).

6.    Representations and Warranties of the Company.    The Company hereby represents and warrants to Investor as of the date hereof:

(a)    Organization.    The Company has been duly organized, and is validly existing and in good standing, under the laws of its jurisdiction of incorporation or formation, as applicable, and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing or good standing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. For purposes of this Agreement, “Material Adverse Effect” means any change affecting, or event or condition having an effect on, the representing party or any of its subsidiaries that is or will be materially adverse to the ability of the representing party to perform its obligations under this Agreement or consummate the transactions contemplated by this Agreement.

(b)    Authority.    The Company has all necessary corporate power and authority to execute and deliver this Agreement, and to perform its obligations hereunder and to consummate the transactions contemplated herein to be consummated by the Company. The execution and delivery by the Company of this Agreement and the performance of its obligations hereunder,

3

and the consummation by the Company of the transactions contemplated hereby, have been duly authorized by all necessary corporate action (including by the Board of Directors of the Company), and no other corporate proceedings on the part of the Company are necessary to authorize the execution, delivery and performance of this Agreement or the consummation by the Company of the transactions contemplated hereby. This Agreement constitutes a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms (assuming that this Agreement is duly executed and delivered by and is valid and binding as against Investor).

(c)    No Conflict.    There is no requirement applicable to the Company or its affiliates to make any filing with, or to obtain any permit, authorization, consent or approval of, any Governmental Authority in connection with the execution, delivery and performance by the Company of this Agreement or the consummation by the Company of the transactions contemplated hereby, except for such permits, authorizations, consent or approvals the absence of which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or prevent the consummation of the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company will not, and the performance by the Company of its obligations under this Agreement will not, (i) violate any provision of the Company’s governing agreements, (ii) result in a default or breach (or give rise to any right of termination, cancellation or acceleration) under any of the terms, conditions or provisions of any material indebtedness of the Company or its subsidiaries, or (iii) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, excluding from the foregoing clauses such violations, defaults or breaches (or rights of termination, cancellation or acceleration) which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. For the purposes of this Agreement, “Governmental Authority” shall mean any national, local or foreign (including U.S. federal, state or local) or supranational governmental, judicial or regulatory agency, commission, bureau, entity or authority.

(d)    Option Shares.    The Option Shares, or any portion thereof, when transferred to Investor pursuant to the terms of this Agreement, shall be duly and validly issued, fully paid and nonassessable, and shall be delivered free and clear of all Liens, including any preemptive rights of any stockholder of the Company. For the purposes of this Agreement, “Liens” shall mean any liens, encumbrances, pledges, restrictions upon voting or transfer, security interests, claims, charges, options, rights of first refusal, or other legal or equitable encumbrances and any other matters affecting title, the right to transfer and vote and the right to exercise all rights applicable to any ordinary shareholder.

7.    Covenants of the Company.

(a)    Further Assurances.    Upon exercise of the Stock Option or any portion thereof, the Company shall take all actions necessary to fulfill the obligations of the Company pursuant to this Agreement including obtaining any required regulatory or other approvals.

(b)    Reservation of Shares.    In addition to its other agreements and covenants herein, the Company agrees: (i) that it shall at all times maintain, free from subscriptive or preemptive rights, sufficient authorized but unissued or treasury shares of the Ordinary Shares so that the Stock Option may be exercised without additional authorization of such Ordinary Shares after giving effect to all other options, warrants, convertible securities and other rights to purchase such Ordinary Shares; (ii) that it will not, by charter amendment or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek

4

to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by Company; and (iii) promptly to take all action provided herein to protect the rights of the Investor against dilution.

8.    Representations and Warranties of Investor.    Investor hereby represents and warrants to the Company as of the date hereof:

(a)    Organization.    Investor has been duly organized, and is validly existing and in good standing, under the laws of its jurisdiction of formation, as applicable, and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted, except where the failure to be so organized, existing or in good standing or to have such power, authority and governmental approvals would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Investor is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing or good standing necessary, except for such failures to be so qualified or licensed and in good standing that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)    Authority.    Investor has all necessary company power and authority to execute and deliver this Agreement, and to perform its obligations hereunder and to consummate the transactions contemplated herein to be consummated by Investor. The execution and delivery by Investor of this Agreement and the performance of its obligations hereunder, and the consummation by Investor of the transactions contemplated hereby, have been duly authorized by all necessary corporate action, and no other corporate proceedings on the part of Investor are necessary to authorize the execution, delivery and performance of this Agreement or the consummation by Investor of the transactions contemplated hereby. This Agreement constitutes a valid and binding agreement of Investor, enforceable against Investor in accordance with its terms (assuming that this Agreement is duly executed and delivered by and is valid and binding as against the Company).

9.    Miscellaneous.

(a)    Certain Supplements and Amendments.    This Agreement may not be amended or modified without the prior written consent of each party hereto, unless such amendment or modification does not affect the rights or obligations of a party hereunder, in which case the consent of such party shall not be required.

(b)    Entire Agreement.    This Agreement constitutes the entire agreement among the parties with respect to the subject matter set forth herein and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein.

(c)    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

5

(d)    Definitions.    For the purposes of this Agreement:

(i) “affiliate” or “affiliates” means, with respect to a person, any other person in which the first such person has a direct or indirect controlling interest or by which the first such person is directly or indirectly controlled or which is under direct or indirect common control with the first such person;

(ii) “control”, when used with respect to any person, means the power to direct the management and policies of such person, directly or indirectly, by or through stock ownership, agency or otherwise, or pursuant to or in connection with an agreement, arrangement or understanding (written or oral) with one or more other persons; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing;

(iii) “include” and “including” (and words of similar import) shall be deemed to be followed by the phrase “without limitation”; and

(iv) “person” or “persons” include natural persons, corporations, limited liability companies, trusts, joint ventures, associations, companies, partnerships, governments or agencies or political subdivisions thereof and other entities.

(e)    Governing Law; Arbitration.

(i) This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(ii) Notwithstanding subsection (iii) below, at the option of the Investor, each of the parties hereto agrees for the benefit of the Investor that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 9(g), or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(iii) Subject to the option in favor of the Investor set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

6

(f)    Descriptive Headings.    The descriptive headings contained herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

(g)    Notices.    All notices and other communications provided for or permitted hereunder shall be made by hand-delivery, first-class mail, telex, telecopier, or overnight air courier guaranteeing next day delivery:

(A)    if to the Investor, to

IACT Asia Pacific Limited

c/o InterActive Corp.

152 West 57th Street

42nd Floor

New York, New York 10019

Telecopy No.: (212) 314-7497

Attention: General Counsel

with a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, New York 10019

Telecopy No.: (212) 403-2000

Attention: Andrew J. Nussbaum, Esq.

and

(B)    if to the Company, to

eLong, Inc.

Block B, XingKe Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Telecopy No.: (8610) 64386830

Attention: Chief Executive Officer

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five U.S. business days after being deposited in the mail, postage prepaid, if mailed (so long as a fax copy is sent and receipt acknowledged within two U.S. business days after mailing); when answered back if telexed; when receipt acknowledged, if telecopied; and the next U.S. business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. The parties may change the addresses to which notices are to be given by giving five days’ prior written notice of such change in accordance herewith.

(h)    Counterparts.    This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by the other party.

(i)    Further Assurances.    In the event of any exercise of the Stock Option by Investor, the Company and Investor shall execute and deliver all other documents and instruments and take

7

all other action that may be reasonably necessary in order to consummate the transactions provided for by such exercise.

(j)    Specific Performance.    The parties hereto hereby acknowledge and agree that the failure of any party to this Agreement to perform its agreements and covenants hereunder will cause irreparable injury to the other party to this Agreement for which damages, even if available, will not be an adequate remedy. Accordingly, each of the parties hereto hereby consents to the granting of equitable relief (including specific performance and injunctive relief) by any court of competent jurisdiction to enforce any party’s obligations hereunder. The parties further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such equitable relief and that this provision is without prejudice to any other rights that the parties hereto may have for any failure to perform this Agreement.

(k)    Costs and Expenses.    Any cost, expense, burden, tax, duty, or stamp arising out from the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby shall be borne and paid for by the Company.

8

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

ELONG, INC.
By:
	Name: Title:

IACT ASIA PACIFIC LIMITED
By:
	Name: Title:

9

EX-4.12

Exhibit 4.12

IACT Asia Pacific Limited

c/o IAC/InterActiveCorp

152 West 57^th Street

42^nd Floor

New York, New York 10019

October 1, 2004

eLong, Inc.

Block B, XingKe Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Telecopy No.: (8610) 64386830

Attention: Chief Executive Officer

With a copy to:

Goulston & Storrs, A Professional Corporation

400 Atlantic Avenue

Boston, MA 02110

Telecopy No.: (617) 574-4112

Attention: Timothy B. Bancroft, Esq.

Dear Mr. Tang:

Reference is hereby made to Sections 8.1 and 10.9 of the Investors Agreement, dated as of July 23, 2004 (the “Investors Agreement”), among eLong, Inc. (the “Company”), IACT Asia Pacific Limited (“IAC”) and the other shareholders of the Company named therein. Capitalized terms used in this letter agreement (the “Letter Agreement”) and not defined in this Letter Agreement shall have the meanings ascribed to such terms in the Investors Agreement.

Pursuant to Sections 8.1 and 10.9 of the Investors Agreement, the undersigned hereby notifies the Company that it consents to the Stock Option Issuances. “Stock Option Issuances” means the issuance by the Company to (i) Richard Chen of options to purchase 150,000 Ordinary Shares pursuant to the stock option agreement attached hereto as Exhibit A, (ii) Frank Zheng of options to purchase 100,000 Ordinary Shares pursuant to the stock option agreement attached hereto as Exhibit B and (iii) IAC of options to purchase 260,204 Ordinary Shares pursuant to the stock option agreement attached hereto as Exhibit C (the “IAC Stock Option Agreement”), in the case of each of (i), (ii), and (iii), to be issued simultaneously with the execution and delivery of this Letter Agreement.

Reference is also hereby made to the Warrant Agreement, by and between the Company and IAC, dated as of August 4, 2004 (the “Warrant Agreement”). Each of the Company and IAC hereby agree that for all purposes under the Warrant Agreement, the term “Option” shall mean, collectively, (a) the option to purchase 711,429 Ordinary Shares pursuant to the Stock Option

Agreement, by and between the Company and IAC, dated August 4, 2004 and (b) the option to purchase 260,204 Ordinary Shares pursuant to the IAC Stock Option Agreement.

This Letter Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, each of the Company and IAC have executed and delivered this Letter Agreement as of the day and year first written above.

IACT Asia Pacific Limited

By:

Name:

Title:

ACCEPTED AND AGREED:

eLong, Inc.

By:

Name:

Title:

EX-5.1

Exhibit 5.1

[·], 2004

eLong, Inc.

Block B, Xing Ke Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Dear Sirs,

eLong, Inc. (the “Company”)

We have acted as special Cayman legal counsel to the Company in connection with an initial public offering of certain ordinary shares in the Company (the “Shares”) as described in the prospectus contained in the Company’s registration statement on Form F-1 filed with the United States Securities and Exchange Commission (the “Registration Statement” which term does not include any exhibits thereto).

For the purposes of giving this opinion, we have examined and relied upon copies of the following documents:

(i)    the Registration Statement to be filed by the Company under the United States Securities Act of 1933 (the “Securities Act”) with the United States Securities and Exchange Commission (the “Commission”) on [·], 2004; and

(ii)    a draft of the prospectus (the “Prospectus”) contained in the Registration Statement.

We have also reviewed and relied upon (1) the certificate of registration by way of continuation and the amended and restated memorandum and articles of association of the Company, (2) copies of the minutes of meetings of and written resolutions passed by directors and shareholders of the Company (collectively the “Minutes”), (3) the register of members of the Company, and (4) such other documents and made such enquiries as to questions of law as we have deemed necessary in order to render the opinion set forth below.

We have assumed (i) the genuineness and authenticity of all signatures, stamps and seals and the conformity to the originals of all copies of documents (whether or not certified) examined by us and the authenticity and completeness of the originals from which such copies were taken; (ii) the accuracy and completeness of all factual representations made in the Prospectus and Registration Statement and other documents reviewed by us, (iii) that the resolutions contained in the Minutes are full and accurate records of resolutions passed at meetings duly convened and held by the directors and shareholders of the Company in accordance with the articles of association of the Company and that such resolutions have not been amended or rescinded and remain in full force and effect; (iv) that there is no provision of the law of any jurisdiction, other than the Cayman Islands, which would have any implication in relation to the opinions expressed herein; (v) the validity and binding effect under the laws of the United States of America of the Registration Statement and the Prospectus and that the Registration Statement will be duly filed with or declared effective by the Commission; and (vi) that the Prospectus, when published, will be in substantially the same form as that examined by us for purposes of this opinion.

We have made no investigation of and express no opinion in relation to the laws of any jurisdiction other than the Cayman Islands. This opinion is to be governed by and construed in accordance with the laws of the Cayman Islands and is limited to and is given on the basis of the current law and practice in the Cayman Islands.

eLong, Inc.

[·], 2004

On the basis of and subject to the foregoing, we are of the opinion that:

(1)    The Company has been duly continued into the Cayman Islands and is validly existing under the laws of the Cayman Islands.

(2)    The issue of the Shares as described in the Prospectus has been duly authorised and, when issued, delivered and paid for in the manner described in and pursuant to the terms of the Prospectus and the Registration Statement, the Shares will be validly issued, fully paid and non-assessable (meaning that no further sums are payable to the Company with respect to the holding of such Shares).

We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the references to us under the headings “Enforceability of Civil Liabilities” and “Legal Matters” in the Prospectus contained in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act, or the Rules and Regulations of the Commission thereunder.

Yours faithfully,

CONYERS DILL & PEARMAN, CAYMAN

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EX-8.1

Exhibit 8.1

September             , 2004

eLong, Inc.

Block B. Xing Ke Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Ladies and Gentlemen:

We have acted as special United States counsel to eLong, Inc., a company limited organized under the laws of the Cayman Islands (the “Company”), in connection with the issuance and sale by the Company of              American Depositary Shares (the “ADSs”) pursuant to a Registration Statement on Form F-1 (File No.             ) filed with the Securities and Exchange Commission (the “Commission”), as amended through the date hereof (the “Registration Statement”).

In connection with this opinion, we have examined and relied upon originals or copies, certified or otherwise identified to our satisfaction, of (i) the Registration Statement, (ii) the final prospectus, dated             , 2004, relating to the ADSs, in the form filed with the Commission (the “Prospectus”), and (iii) such other documents, certificates, and records as we have deemed necessary or appropriate as a basis for the opinion set forth herein. Our opinion is conditioned on the initial and continuing accuracy of the facts, information, and analyses set forth in such documents, certificates, and records.

For purposes of our opinion, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed, or photostatic copies, and the authenticity of the originals of such latter documents. We have assumed that such documents, certificates, and records are duly authorized, valid, and enforceable.

In addition, we have relied upon statements and representations of the officers and other representatives of the Company and others, and we have assumed that such statements and representations are and will continue to be correct without regard to any qualification as to knowledge or belief.

Our opinion is based on the Internal Revenue Code of 1986, as amended, Treasury regulations, judicial decisions, published positions of the Internal Revenue Service, and such other authorities as we have considered relevant, all as in effect as of the date of this opinion and all of which are subject to differing interpretations or change at any time (possibly with retroactive effect). A change in the authorities upon which our opinion is based could affect the conclusions expressed herein. There can be no assurance, moreover, that our opinion expressed herein will be accepted by the Internal Revenue Service or, if challenged, by a court.

Based upon and subject to the foregoing, we are of the opinion that under current United States federal income tax law, although the discussion set forth under the caption “United States Federal Income Taxation” does not purport to summarize all possible United States federal income tax consequences of the purchase, ownership, and disposition of the ADSs, such discussion constitutes, in all material respects, a fair and accurate summary of the United States federal income tax consequences that are anticipated to be material to U.S. Holders (as defined in the Prospectus) who purchase the ADSs pursuant to the Prospectus.

eLong, Inc.

September         , 2004

Page 2

Except as set forth above, we express no other opinion. This opinion is furnished to you solely for your benefit in connection with the sale of the ADSs pursuant to the Prospectus and is not to be relied upon by anyone else without our prior written consent. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes in respect of the matters stated or assumed herein or any subsequent changes in applicable law.

We hereby consent to the filing of this opinion as Exhibit 8.1 to the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

/s/ Skadden, Arps, Slate, Meagher & Flom LLP

EX-8.2

Exhibit 8.2

[·], 2004

eLong, Inc.

Block B, Xing Ke Plaza

10 Jiuxianqiao Zhonglu

Chaoyang District, Beijing 100016

People’s Republic of China

Dear Sirs,

eLong, Inc. (the “Company”)

We have acted as special Cayman legal counsel to the Company in connection with an initial public offering of certain ordinary shares in the Company (the “Shares”) as described in the prospectus contained in the Company’s registration statement on Form F-1 filed with the United States Securities and Exchange Commission (the “Registration Statement” which term does not include any exhibits thereto).

For the purposes of giving this opinion, we have examined and relied upon copies of the following documents:

(i)    the Registration Statement to be filed by the Company under the United States Securities Act of 1933 (the “Securities Act”) with the United States Securities and Exchange Commission (the “Commission”) on [·], 2004; and

(ii)    a draft of the prospectus (the “Prospectus”) contained in the Registration Statement.

We have also reviewed and relied upon (1) the certificate of registration by way of continuation and the amended and restated memorandum and articles of association of the Company, (2) a copy of an undertaking in respect of the Company from the Governor-in-Council of the Cayman Islands under the Tax Concessions Law (1999 Revision) dated [·], 2004, and (3) such other documents and made such enquiries as to questions of law as we have deemed necessary in order to render the opinion set forth below.

We have assumed (i) the genuineness and authenticity of all signatures, stamps and seals and the conformity to the originals of all copies of documents (whether or not certified) examined by us and the authenticity and completeness of the originals from which such copies were taken; (ii) the accuracy and completeness of all factual representations made in the Prospectus and Registration Statement and other documents reviewed by us, (iii) that there is no provision of the law of any jurisdiction, other than the Cayman Islands, which would have any implication in relation to the opinions expressed herein; (iv) the validity and binding effect under the laws of the United States of America of the Registration Statement and the Prospectus and that the Registration Statement will be duly filed with or declared effective by the Commission; and (v) that the Prospectus, when published, will be in substantially the same form as that examined by us for purposes of this opinion.

We have made no investigation of and express no opinion in relation to the laws of any jurisdiction other than the Cayman Islands. This opinion is to be governed by and construed in accordance with the laws of the Cayman Islands and is limited to and is given on the basis of the current law and practice in the Cayman Islands.

On the basis of and subject to the foregoing, we are of the opinion that the statements relating to certain Cayman Islands tax matters set forth under the heading “Taxation—Cayman Islands Taxation” in the Prospectus are true and accurate based on current law and practice at

eLong, Inc.

[·], 2004

the date of this opinion, and nothing has been omitted from such statements which would make the same misleading in any material respect.

We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the references to us under the headings “Enforceability of Civil Liabilities” and “Legal Matters” in the Prospectus contained in the Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act, or the Rules and Regulations of the Commission thereunder.

Yours faithfully,

CONYERS DILL & PEARMAN, CAYMAN

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EX-10.1

Exhibit 10.1

PRIVILEGED AND CONFIDENTIAL

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, by and between eLong Inc. (the “Company”), a Cayman Islands corporation, InterActiveCorp (“IAC”) (for purposes of Section 5(c), 11(h) and Annex 3 only), a Delaware corporation and Justin Tang, an individual (the “Employee”) effective as of the consummation of the transactions contemplated by the Transaction Agreement (the “Transaction Agreement”) by and among IAC, the Selling Shareholders listed on Exhibit A thereto, and eLong Inc., dated as of the date hereof (the “Effective Date”).

1.    Definitions.    Capitalized terms used herein and not otherwise defined in the text below will have the meanings ascribed thereto on Annex 1.

2.    Employment; Duties.

(a)    The Company agrees to employ the Employee in the capacity and with such responsibilities as are generally set forth on Annex 2.

(b)    The Employee hereby agrees to devote his or her full time and best efforts in such capacities as are set forth on Annex 2 on the terms and conditions set forth herein. Notwithstanding the foregoing, the Employee may engage in other activities, such as activities involving professional, charitable, educational, religious and similar types of organizations, provided that that the Employee complies with the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement attached hereto as Annex 3 (the “Employee Obligations Agreement”) and such other activities do not interfere with or prohibit the performance of the Employee’s duties under this Agreement, or conflict in any material way with the business of the Company or of its subsidiaries and affiliates. The Employee will be allowed to hold a board of director position with another entity if it has been disclosed to and approved by the Board of Directors of the Company (the “Board”).

(c)    The Employee will use best efforts during the Term to ensure that the Company’s business and those of its subsidiaries and affiliates are conducted in accordance with all applicable laws and regulations of all jurisdictions in which such businesses are conducted.

3.    Compensation.

(a)    Base Annual Payments.    During the Term, the Company will pay the Employee annual base payments as set forth on Annex 2, payable pursuant to the Company’s normal payroll practices.

(b)    Discretionary Bonus.    During the Term, commencing in 2005, the Company, in its sole discretion, may award to the Employee an annual bonus based on the Employee’s performance, the Company’s performance, and other factors deemed relevant by the Company’s Compensation Committee, based upon a target bonus range of 15-50% of annual base salary.

(c)    Stock Options.    The Employee has been granted and may in the future be granted options (the “Company Options”) to purchase Company shares. The Employee shall be permitted to transfer Company Options only with the approval of IAC, so long as IAC beneficially owns at least 15% of the voting power of the Company shares. Notwithstanding the foregoing, any Company Options which were granted to the Employee prior to July 1, 2004 and approved for transfer by the Company’s Board of Directors prior to the date hereof may be so transferred by the Employee without lAC’s approval. Other than terms mentioned herein, the

Company Options shall be subject to the terms and conditions of the applicable Company share option plan and any related stock option agreement in effect at the time of grant of the Company Option; provided that, with respect to any Company Options granted on or after July 1, 2004, in the event of a Change in Control, and a Termination by the Employee with Good Reason or a Termination by the Company without Cause following such Change in Control, the Executive shall be entitled to immediate vesting for an additional 12 months for the remaining Company Options that are unvested as of the date of the Termination by the Employee with Good Reason or Termination by the Company without Cause following the Change in Control.

(d)    Reimbursement of Expenses.    The Company will reimburse the Employee for reasonable expenses incurred by the Employee in the course of, and necessary in connection with, the performance by the Employee of his duties to the Company, provided that such expenses are substantiated in accordance with the Company’s policies.

4.    Other Employee Benefits.

(a)    Vacation; Sick Leave.    The Employee will be entitled to such number of weeks of paid vacation each year as are set forth on Annex 2, the taking of which must be coordinated with the Employee’s supervisor in accordance with the Company’s standard vacation policy. Unless otherwise approved by the Board, vacation that is not used in a particular year may only be carried forward to subsequent years in accordance with the Company’s policies in effect from time to time. The Employee will be eligible for sick leave in accordance with the Company’s policies in effect from time to time.

(b)    Healthcare Plan.    The Company will arrange for membership in the Company’s group healthcare plan for the Employee, the Employee’s spouse and the Employee’s children under 18 years old, in accordance with the Company’s standard policies from time to time with respect to health insurance and in accordance with the rules established for individual participation in such plan and under applicable law.

(c)    Life and Disability Insurance.    The Company will provide term life and disability insurance payable to the Employee, in each case in an amount up to a maximum of one times the Employee’s base salary in effect from time to time, provided however, that such amount will be reduced by the amount of any life insurance or death or disability benefit coverage, as applicable, that is provided to the Employee under any other benefit plans or arrangements of the Company. Such policies will be in accordance with the Company’s standard policies from time to time with respect to such insurance and the rules established for individual participation in such plans and under applicable law.

(d)    Other Benefits.    Pursuant to the Company’s policies in effect from time to time and the applicable plan rules, the Employee will be eligible to participate in the other employee benefit plans of general application, which shall include the benefits at the levels set forth on Annex 2.

5.    Certain Representations, Warranties and Covenants of the Employee.

(a)    Related Company Positions.    The Employee agrees that the Employee and members of the Employee’s immediate family will not have any financial interest directly or indirectly (including through any entity in which the Employee or any member of the Employee’s immediate family has a position or financial interest) in any transactions with the Company or any subsidiaries or affiliates thereof unless all such transactions, prior to being entered into, have been disclosed to the Board and approved by a majority of the independent members of the Board and comply with all other Company policies and applicable law as may be in effect

2

from time to time. The Employee also agrees that he or she will inform the Board of any transactions involving the Company or any of its subsidiaries or affiliates in which senior officers, including but not limited to the Employee, or their immediate family members have a financial interest.

(b)    Discounts, Rebates or Commissions.    Unless expressly permitted by written policies and procedures of the Company in effect from time to time that may be applicable to the Employee, neither the Employee nor any immediate family member will be entitled to receive or obtain directly or indirectly any discount, rebate or commission in respect of any sale or purchase of goods or services effected or other business transacted (whether or not by the Employee) by or on behalf of the Company or any of its subsidiaries or affiliates, and if the Employee or any immediate family member (or any firm or company in which the Employee or any immediate family member is interested) obtains any such discount, rebate or commission, the Employee will pay to the Company an amount equal to the amount so received (or the proportionate amount received by any such firm or company to the extent of the Employee’s or family member’s interest therein).

(c)    Sale and Transfer Restrictions.    The Employee acknowledges and agrees that (i) the Employee will sell no more than 7% of his total shareholding, as part of the IAC investment pursuant to the Transaction Agreement and the exercise by IAC of its warrant (the “Warrant”) to purchase the amount of shares required for IAC to hold in the aggregate 51% of fully diluted shares of the Company (the “IAC investment”) and an offering of securities by the Company on the Nasdaq National Market (“the IPO”), and (ii) the Employee will further be restricted to sell in the aggregate (i.e., including the 7% or less portion sold as part of the IAC investment and the IPO) no more than 12% of his total shareholding (the “12% Restriction”) during the three years following the IPO or three years following the exercise of the Warrant in the event there is no IPO (the “Sale Limit Period”). In the event of a Termination of this Agreement for any reason, whether by the Company or the Employee, then the Sale Limit Period applicable to the Employee will end upon the earlier of (a) the date which is three years following the IPO or the three years following the exercise of the Warrant in the event there is no IPO, if and as applicable, and (b) the date which is one year following the date of such Termination; provided, that following the Effective Date, the Company and IAC will discuss and consider in good faith potential individual exceptions to the 12% Restriction on members of the Company’s senior management team to the extent such request is made by the Employee in writing and provided that the any exception must be approved by IAC in its sole discretion so long as IAC beneficially owns 15% or more of the voting interests in the Company. Notwithstanding the foregoing, if the Employee Terminates the Agreement with Good Reason or the Company Terminates without Cause, the Sale Limit Period will end if: (i) there are no outstanding claims by the Company or IAC against the Employee or Purple Mountain for a Qualifying Structure Contract Breach (as defined in Section 6(f)), a breach of the Employee Obligations Agreement or the Transfer Agreement, (ii) the Company and the Employee have entered into a mutually acceptable general release of claims and (iii) the Employee has requested in writing to be on or continue to remain on the Board of Directors and the Company does not nominate him to be on the Board of Directors.

6.    Term; Termination.

(a)    Unless sooner terminated pursuant to the provisions of this Section 6, the term of this Agreement (the “Term”) will commence on the Effective Date and end on the third anniversary of the Effective Date.

(b)    Voluntary Termination by the Employee.    Notwithstanding anything herein to the contrary, the Employee may voluntarily Terminate this Agreement by providing the Company

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with thirty (30) days’ advance written notice (“Voluntary Termination”), in which case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate as of the date of Termination, other than any continuation required by applicable law. Without limiting the foregoing, if, in connection with a Change in Control, the surviving entity or successor to eLong’s business offers the Employee employment on substantially equivalent terms (including position as Chief Executive Officer) to those set forth in this Agreement and such offer is not accepted by the Employee, the refusal by the Employee to accept such offer and the subsequent termination of the Employee’s employment by the Company shall be deemed to be a Voluntary Termination of employment by the Employee and shall not be treated as a termination by the Company without Cause.

(c)    Termination by the Company for Cause.    Notwithstanding anything herein to the contrary, the Company may Terminate this Agreement for Cause by written notice to the Employee, effective immediately upon the delivery of such notice. In such case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate, other than any continuation required by applicable law.

(d)    Termination by the Employee with Good Reason or Termination by the Company without Cause.    Notwithstanding anything herein to the contrary, the Employee may Terminate this Agreement for Good Reason, and the Company may Terminate this Agreement without Cause, in either case upon thirty (30) days’ advance written notice by the party Terminating this Agreement to the other party and the Termination shall be effective as of the expiration of such thirty (30) day period. If the Employee Terminates with Good Reason or the Company Terminates without Cause, the Employee will be entitled to continue to receive payment of severance benefits equal to the Employee’s monthly base salary in effect on the date of Termination for the remainder of the Term of this Agreement (the “Severance Period”), provided that the Employee complies with the Employee Obligations Agreement during the Severance Period and executes a release agreement in the form requested by the Company at the time of such Termination that releases the Company from any and all claims arising from or related to the employment relationship and/or such Termination. Such payments will be made ratably over the Severance Period according to the Company’s standard payroll schedule. Health insurance benefits with the same coverage provided to the Employee prior to the Termination (e.g., medical, dental, optical, mental health) and in all other material respects comparable to those in place immediately prior to the Termination will be provided at the Company’s expense during the Severance Period. If the Company has such an insurance policy, the Company will also continue to carry the Employee on its Directors and Officers insurance policy for six (6) years following the Date of Termination at the Company’s expense with respect to insurable events which occurred during the Employee’s term as a director or officer of the Company, with such coverage being at least comparable to that in effect immediately prior to the Termination Date; provided, however, that (i) such terms, conditions and exceptions will not be, in the aggregate, materially less favorable to the Employee than those in effect on the Termination Date and (ii) if the aggregate annual premiums for such insurance at any time during such period exceed two hundred percent (200%) of the per annum rate of premium currently paid by the Company for such insurance, then the Company will provide the maximum coverage that will then be available at an annual premium equal to two hundred percent (200%) of such rate.

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(e)    Termination by Reason of Death or Disability.    A Termination of the Employee’s employment by reason of death or Disability shall not be deemed to be a Termination by the Company (for or without Cause) or by the Employee (for or without Good Reason). In the event that the Employee’s employment with the Company Terminates as a result of the Employee’s death or Disability, the Employee or the Employee’s estate or representative, as applicable, will receive all accrued salary and accrued vacation as of the date of the Employee’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, the Employee or the Employee’s estate or representative, as applicable, will receive the bonus for the year in which the death or Disability occurs to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Company’s CEO, Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees.

(f)    Misconduct After Termination of Employment.    Notwithstanding the foregoing or anything herein to the contrary, if the Employee after the termination of his or her employment violates or fails to materially comply with the Employee Obligations Agreement or the Transfer Agreement (including a violation by Purple Mountain) or if a PRC Entity breaches the Structure Contract while the Employee is a member of the board of directors or controlling shareholder of that PRC Entity (a “Qualifying Structure Contract Breach”) thereafter (1) the Employee shall not be entitled to any payments from the Company, (2) any insurance or other benefits that have continued shall terminate immediately, (3) the Employee shall promptly reimburse to the Company all amounts that have been paid to the Employee pursuant to this Section 6; and (4) if the Employee would not, in the absence of such violation or failure to comply, have been entitled to severance payments from the Company equal to at least six (6) months’ base salary, pay to the Company an amount equal to the difference between six (6) months’ base salary and the amount of severance pay measured by base salary reimbursed to the Company by the Employee pursuant to clause 3 of this sentence.

(g)    Offset.    If the Employee obtains other employment during the Term, the amount of any payment or benefit provided for under Section 6(d) hereof which has been paid to the Employee shall be refunded to the Company by the Employee in an amount equal to any compensation earned by the Employee as a result of employment with or services provided to another employer after the date of the Employee’s termination of employment and prior to the otherwise applicable expiration of the Term, and all future amounts payable by the Company to the Employee during the remainder of the Term shall be offset by the amount earned by the Employee from another employer; provided, that “amounts payable by the Company to the Employee” shall not be construed for purposes of this Section 6(g) to include any amounts earned by the Company from the exercise or sale of Company Options. For purposes of this Section 6(g), the Employee shall have an obligation to inform the Company regarding the Employee’s employment status following termination and during the period encompassing the Term.

7.    Option-Related Provisions.    If this Agreement is Terminated for Cause by the Company or if within two years following any Termination of this Agreement, the Company determines the Employee had engaged in acts while employed by the Company which would have been grounds for Termination for Cause (a “Deemed Cause Event”) or, subject to any applicable statutes of limitations, if the Executive violates the Employee Obligations Agreement or the Transfer Agreement (directly or through a controlled entity) or engages in a Qualifying Structure Contract Breach(each, an “Options Breach”) the Employee will forfeit any equity awards that

5

have been granted to him or her or to which the Employee may be entitled, whether the same are then vested or not, and the same shall thereafter not be exercisable at all, and all shares of common stock of the Company, if any, purchased by the Employee pursuant to the exercise of equity awards and still then owned by the Employee may be repurchased by the Company, at its sole discretion, at the price paid by the Employee for such shares of common stock, and, in the case of Company Options, if the Employee has sold or otherwise transferred such shares of common stock prior to (x) the Employee’s Termination for Cause or (y) the Company’s knowledge of a Deemed Cause Event or (z) an Options Breach, the Company, in its sole discretion, may require the Employee to repay to the Company the excess of (A) the Fair Market Value (as defined in the applicable option plan) of the shares subject to such Company Options on the date of sale or transfer over (B) the exercise price of such Company Options (the “Repayment Amount”), but in no event shall the Repayment Amount exceed the amount of damages resulting from the Employee’s action or inaction (or, in the case of a breach of the Transfer Agreement, the amount of damages necessary to provide for full repayment by the Employee with respect to any applicable indemnities), as determined by the Company (with the approval of IAC so long as it beneficially owns 15% or more of the voting interests of the Company) in its reasonable discretion. The terms of all outstanding option grants are hereby amended to conform with this Section 7. For purposes of this Section 7, the definition of Cause shall not include clauses (vi) or (viii) of the Cause definition in Annex 1.

8.    Employee Obligations Agreement.    By signing this Agreement, the Employee hereby agrees to execute and deliver to the Company the Employee Obligations Agreement, and such execution and delivery shall be a condition to the Employee’s entitlement to his or her rights under this Agreement.

9.    Governing Law; Arbitration.    (a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of IAC or the Company, each of the parties hereto agrees for the benefit of IAC or the Company that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 10, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of IAC or the Company set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any

6

competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

10.    Notices.    All notices, requests and other communications under this Agreement will be in writing (including facsimile or similar writing and express mail or courier delivery or in person delivery, but excluding ordinary mail delivery) and will be given to the address stated below:

(a)    if to the Employee, to the address or facsimile number that is on file with the Company from time to time, as may be updated by the Employee;

(b)    if to the Company:

Attention: Chief Financial Officer

10 Jiuxianqiao Middle Road

13/F, Xingke Plaza Building B

Chaoyang District

Beijing, China

100021

With a copy to:

Goulston & Storrs

400 Atlantic Avenue

Boston, MA 02110

Attention: Timothy B. Bancroft, Esq.

(c)    if to IAC:

InterActiveCorp

152 West 57^th Street

New York, NY 10019

Attention: General Counsel

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, NY 10019

Attention: Michael S. Katzke, Esq.

or to such other address or facsimile number as either party may hereafter specify for the purpose by written notice to the other party in the manner provided in this Section 10. All such notices, requests and other communications will be deemed received: (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section 10 if confirmation of receipt is received; (ii) if given by express mail or courier delivery, five (5) days after sent; and (iii) if given in person, when delivered.

11.    Miscellaneous.

(a)    Entire Agreement.    This Agreement constitutes the entire understanding between the Company and the Employee relating to the subject matter hereof and supersedes and cancels all prior and contemporaneous written and oral agreements and understandings with respect to the subject matter of this Agreement, including, without limitation, the employment agreement between the Company and the Employee, dated as of September 1, 2003. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

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(b)    Modification; Waiver.    No provision of this Agreement may be modified, waived or discharged unless modification, waiver or discharge is agreed to in writing signed by the Employee and such officer of the Company as may be specifically designated by its Board of Directors. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(c)    Successors; Binding Agreement.    This Agreement will be binding upon and will inure to the benefit of the Employee, the Employee’s heirs, executors, administrators and beneficiaries, and the Company and its successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) and any affiliate of the Company to which this Agreement is assigned, subject to the terms and conditions set forth herein.

(d)    Withholding Taxes.    All amounts payable to the Employee under this Agreement and with respect to Company Options will be subject to applicable withholding of income, wage and other taxes to the extent required by applicable law. The Employee hereby agrees to report any amounts paid or benefits provided under this Agreement or under Company Options for purposes of any applicable taxes in a manner consistent with the manner in which the Company reports any such amounts. To the extent that compensation under this Agreement or any other arrangement (including Company Options) may be subject to applicable taxes, the Company may withhold from amounts payable or benefits provided hereunder and may also withhold from any other amounts otherwise due to the Employee any amounts due to the appropriate taxing authority.

(e)    Validity.    The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

(f)    Language.    This Agreement is written in the English language only. The English language also will be the controlling language for all future communications between the parties hereto concerning this Agreement.

(g)    Counterparts.    This Agreement may be signed in any number of counterparts, each of which will be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(h)    Annex 3.    IAC may enforce the provisions of Annex 3, so long as IAC remains a shareholder of eLong.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on July 23, 2004.

Signature of Employee:	eLong Inc.
/s/	By:	/s/
Printed name of employee:		Name: Derek Palaschuk
		Title: Chief Financial Officer
Justin Tang
	InterActiveCorp (for purposes of Section 5(c), 11(h) and Annex 3 only)
	By:	/s/
		Name:
		Title:

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EX-10.2

Exhibit 10.2

PRIVILEGED AND CONFIDENTIAL

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, by and between eLong Inc. (the “Company”), a Cayman Islands corporation, InterActiveCorp (“IAC”) (for purposes of Section 5(c), 11(h) and Annex 3 only), a Delaware corporation and Derek Palaschuk, an individual (the “Employee”) effective as of the consummation of the transactions contemplated by the Transaction Agreement (the “Transaction Agreement”) by and among IAC, the Selling Shareholders listed on Exhibit A thereto, and eLong Inc., dated as of the date hereof (the “Effective Date”).

1.    Definitions.    Capitalized terms used herein and not otherwise defined in the text below will have the meanings ascribed thereto on Annex 1.

2.    Employment; Duties.

(a)    The Company agrees to employ the Employee in the capacity and with such responsibilities as are generally set forth on Annex 2.

(b)    The Employee hereby agrees to devote his or her full time and best efforts in such capacities as are set forth on Annex 2 on the terms and conditions set forth herein. Notwithstanding the foregoing, the Employee may engage in other activities, such as activities involving professional, charitable, educational, religious and similar types of organizations, provided that that the Employee complies with the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement attached hereto as Annex 3 (the “Employee Obligations Agreement”) and such other activities do not interfere with or prohibit the performance of the Employee’s duties under this Agreement, or conflict in any material way with the business of the Company or of its subsidiaries and affiliates. The Employee will be allowed to hold a board of director position with another entity if it has been disclosed to and approved by the Board of Directors of the Company (the “Board”).

(c)    The Employee will use best efforts during the Term to ensure that the Company’s business and those of its subsidiaries and affiliates are conducted in accordance with all applicable laws and regulations of all jurisdictions in which such businesses are conducted.

3.    Compensation.

(a)    Base Annual Payments.    During the Term, the Company will pay the Employee annual base payments as set forth on Annex 2, payable pursuant to the Company’s normal payroll practices.

(b)    Discretionary Bonus.    During the Term, commencing in 2005, the Company, in its sole discretion, may award to the Employee an annual bonus based on the Employee’s performance, the Company’s performance, and other factors deemed relevant by the Company’s Compensation Committee, based upon a target bonus range of 15-50% of annual base salary.

(c)    Stock Options.    The Employee has been granted any may in the future be granted options (the “Company Options”) to purchase Company shares. The Employee shall be permitted to transfer Company Options only with the approval of IAC, so long as IAC beneficially owns at least 15% of the voting power of the Company shares. Notwithstanding the foregoing, any Company Options which were granted to the Employee prior to July 1, 2004 and approved for transfer by the Company’s Board of Directors prior to the date hereof may be so

transferred by the Employee without IAC’s approval. Other than terms mentioned herein, the Company Options shall be subject to the terms and conditions of the applicable Company share option plan and any related stock option agreement in effect at the time of grant of the Company Option; provided that, in the event of a Change in Control, and a Termination by the Employee with Good Reason or a Termination by the Company without Cause following such Change in Control, the Executive shall be entitled to immediate vesting for an additional 12 months for the remaining Company Options that are unvested as of the date of the Termination by the Employee with Good Reason or Termination by the Company without Cause following the Change in Control. In addition, for Company Options granted prior to July 1, 2004, in the event of a Change in Control, a Termination by the Employee with Good Reason or a Termination by the Company without Cause, the Employee shall be entitled to immediate vesting for an additional 12 months for the remaining Company Options that are unvested as of the date of the Termination by the Employee with Good Reason, Termination by the Company without Cause or the Change in Control. With respect to the Company Options granted prior to July 1, 2004, the definition of Change in Control shall not include, for purposes of construing the effect of a change in control on those options under the share option plan and any related stock option agreement in effect at the time of grant, as well as for purposes of the foregoing sentence, references to IAC, Barry Diller, Liberty Media Corporation and their respective Affiliates and shall not include the final paragraph of the definition.

(d)    Reimbursement of Expenses.    The Company will reimburse the Employee for reasonable expenses incurred by the Employee in the course of, and necessary in connection with, the performance by the Employee of his duties to the Company, provided that such expenses are substantiated in accordance with the Company’s policies.

4.    Other Employee Benefits.

(a)    Vacation; Sick Leave.    The Employee will be entitled to such number of weeks of paid vacation each year as are set forth on Annex 2, the taking of which must be coordinated with the Employee’s supervisor in accordance with the Company’s standard vacation policy. Unless otherwise approved by the Board, vacation that is not used in a particular year may only be carried forward to subsequent years in accordance with the Company’s policies in effect from time to time. The Employee will be eligible for sick leave in accordance with the Company’s policies in effect from time to time.

(b)    Healthcare Plan.    The Company will arrange for membership in the Company’s group healthcare plan for the Employee, the Employee’s spouse and the Employee’s children under 18 years old, in accordance with the Company’s standard policies from time to time with respect to health insurance and in accordance with the rules established for individual participation in such plan and under applicable law.

(c)    Life and Disability Insurance.    The Company will provide term life and disability insurance payable to the Employee, in each case in an amount up to a maximum of one times the Employee’s base salary in effect from time to time, provided however, that such amount will be reduced by the amount of any life insurance or death or disability benefit coverage, as applicable, that is provided to the Employee under any other benefit plans or arrangements of the Company. Such policies will be in accordance with the Company’s standard policies from time to time with respect to such insurance and the rules established for individual participation in such plans and under applicable law.

(d)    Other Benefits.    Pursuant to the Company’s policies in effect from time to time and the applicable plan rules, the Employee will be eligible to participate in the other employee benefit plans of general application, which shall include the benefits at the levels set forth on Annex 2.

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5.    Certain Representations, Warranties and Covenants of the Employee.

(a)    Related Company Positions.    The Employee agrees that the Employee and members of the Employee’s immediate family will not have any financial interest directly or indirectly (including through any entity in which the Employee or any member of the Employee’s immediate family has a position or financial interest) in any transactions with the Company or any subsidiaries or affiliates thereof unless all such transactions, prior to being entered into, have been disclosed to the Board and approved by a majority of the independent members of the Board and comply with all other Company policies and applicable law as may be in effect from time to time. The Employee also agrees that he or she will inform the Board of any transactions involving the Company or any of its subsidiaries or affiliates in which senior officers, including but not limited to the Employee, or their immediate family members have a financial interest.

(b)    Discounts, Rebates or Commissions.    Unless expressly permitted by written policies and procedures of the Company in effect from time to time that may be applicable to the Employee, neither the Employee nor any immediate family member will be entitled to receive or obtain directly or indirectly any discount, rebate or commission in respect of any sale or purchase of goods or services effected or other business transacted (whether or not by the Employee) by or on behalf of the Company or any of its subsidiaries or affiliates, and if the Employee or any immediate family member (or any firm or company in which the Employee or any immediate family member is interested) obtains any such discount, rebate or commission, the Employee will pay to the Company an amount equal to the amount so received (or the proportionate amount received by any such firm or company to the extent of the Employee’s or family member’s interest therein).

(c)    Sale and Transfer Restrictions.    The Employee acknowledges and agrees that (i) the Employee will sell no more than 7% of his total shareholding, as part of the IAC investment pursuant to the Transaction Agreement and the exercise by IAC of its warrant (the “Warrant”) to purchase the amount of shares required for IAC to hold in the aggregate 51% of fully diluted shares of the Company (the “IAC investment”) and an offering of securities by the Company on the Nasdaq National Market (“the IPO”), and (ii) the Employee will further be restricted to sell in the aggregate (i.e., including the 7% or less portion sold as part of the IAC investment and the IPO) no more than 15% of his total shareholding (the “15% Restriction”) during the three years following the IPO or three years following the exercise of the Warrant in the event there is no IPO (the “Sale Limit Period”). In the event of a Termination of this Agreement for any reason, whether by the Company or the Employee, then the Sale Limit Period applicable to the Employee will end upon the earlier of (a) the date which is three years following the IPO or the three years following the exercise of the Warrant in the event there is no IPO, if and as applicable, and (b) the date which is one year following the date of such Termination; provided, that following the Effective Date, the Company and IAC will discuss and consider in good faith potential individual exceptions to the 15% Restriction on members of the Company’s senior management team to the extent such request is made by the Employee in writing and provided that any exception must be approved by IAC in its sole discretion so long as IAC beneficially owns 15% or more of the voting interests in the Company.

6.    Term; Termination.

(a)    Unless sooner terminated pursuant to the provisions of this Section 6, the term of this Agreement (the “Term”) will commence on the Effective Date and end on the third anniversary of the Effective Date.

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(b)    Voluntary Termination by the Employee.    Notwithstanding anything herein to the contrary, the Employee may voluntarily Terminate this Agreement by providing the Company with thirty (30) days’ advance written notice (“Voluntary Termination”), in which case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate as of the date of Termination, other than any continuation required by applicable law. Without limiting the foregoing, if, in connection with a Change in Control, the surviving entity or successor to eLong’s business offers the Employee employment on substantially equivalent terms (including position as Chief Financial Officer) to those set forth in this Agreement and such offer is not accepted by the Employee, the refusal by the Employee to accept such offer and the subsequent termination of the Employee’s employment by the Company shall be deemed to be a Voluntary Termination of employment by the Employee and shall not be treated as a termination by the Company without Cause.

(c)    Termination by the Company for Cause.    Notwithstanding anything herein to the contrary, the Company may Terminate this Agreement for Cause by written notice to the Employee, effective immediately upon the delivery of such notice. In such case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate, other than any continuation required by applicable law.

(d)    Termination by the Employee with Good Reason or Termination by the Company without Cause.    Notwithstanding anything herein to the contrary, the Employee may Terminate this Agreement for Good Reason, and the Company may Terminate this Agreement without Cause, in either case upon thirty (30) days’ advance written notice by the party Terminating this Agreement to the other party and the Termination shall be effective as of the expiration of such thirty (30) day period. If the Employee Terminates with Good Reason or the Company Terminates without Cause, the Employee will be entitled to continue to receive payment of severance benefits equal to the Employee’s monthly base salary in effect on the date of Termination for the remainder of the Term of this Agreement (the “Severance Period”), provided that the Employee complies with the Employee Obligations Agreement during the Severance Period and executes a release agreement in the form requested by the Company at the time of such Termination that releases the Company from any and all claims arising from or related to the employment relationship and/or such Termination. Such payments will be made ratably over the Severance Period according to the Company’s standard payroll schedule. Health insurance benefits with the same coverage provided to the Employee prior to the Termination (e.g., medical, dental, optical, mental health) and in all other material respects comparable to those in place immediately prior to the Termination will be provided at the Company’s expense during the Severance Period. If the Company has such an insurance policy, the Company will also continue to carry the Employee on its Directors and Officers insurance policy for six (6) years following the Date of Termination at the Company’s expense with respect to insurable events which occurred during the Employee’s term as a director or officer of the Company, with such coverage being at least comparable to that in effect immediately prior to the Termination Date; provided, however, that (i) such terms, conditions and exceptions will not be, in the aggregate, materially less favorable to the Employee than those in effect on the Termination Date and (ii) if the aggregate annual premiums for such insurance at any time during such period exceed two hundred percent (200%) of the per annum rate of premium currently paid by the Company for such insurance, then the Company will provide the maximum coverage that will then be available at an annual premium equal to two hundred percent (200%) of such rate.

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(e)    Termination by Reason of Death or Disability.    A Termination of the Employee’s employment by reason of death or Disability shall not be deemed to be a Termination by the Company (for or without Cause) or by the Employee (for or without Good Reason). In the event that the Employee’s employment with the Company Terminates as a result of the Employee’s death or Disability, the Employee or the Employee’s estate or representative, as applicable, will receive all accrued salary and accrued vacation as of the date of the Employee’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, the Employee or the Employee’s estate or representative, as applicable, will receive the bonus for the year in which the death or Disability occurs to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Company’s CEO, Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees.

(f)    Misconduct After Termination of Employment.    Notwithstanding the foregoing or anything herein to the contrary, if the Employee after the termination of his or her employment violates or fails to materially comply with the Employee Obligations Agreement or the Transfer Agreement or, in the event that the Employee becomes a member of the board of directors or controlling shareholder of a PRC Entity and such entity breaches the Structure Contract, (a “Qualifying Structure Contract Breach”) thereafter (1) the Employee shall not be entitled to any payments from the Company, (2) any insurance or other benefits that have continued shall terminate immediately, (3) the Employee shall promptly reimburse to the Company all amounts that have been paid to the Employee pursuant to this Section 6; and (4) if the Employee would not, in the absence of such violation or failure to comply, have been entitled to severance payments from the Company equal to at least six (6) months’ base salary, pay to the Company an amount equal to the difference between six (6) months’ base salary and the amount of severance pay measured by base salary reimbursed to the Company by the Employee pursuant to clause 3 of this sentence.

(g)    Offset.    If the Employee obtains other employment during the Term, the amount of any payment or benefit provided for under Section 6(d) hereof which has been paid to the Employee shall be refunded to the Company by the Employee in an amount equal to any compensation earned by the Employee as a result of employment with or services provided to another employer after the date of the Employee’s termination of employment and prior to the otherwise applicable expiration of the Term, and all future amounts payable by the Company to the Employee during the remainder of the Term shall be offset by the amount earned by the Employee from another employer; provided, that “amounts payable by the Company to the Employee” shall not be construed for purposes of this Section 6(g) to include any amounts earned by the Company from the exercise or sale of Company Options. For purposes of this Section 6(g), the Employee shall have an obligation to inform the Company regarding the Employee’s employment status following termination and during the period encompassing the Term.

7.    Option-Related Provisions.    If this Agreement is Terminated for Cause by the Company or if within two years following any Termination of this Agreement, the Company determines the Employee had engaged in acts while employed by the Company which would have been grounds for Termination for Cause (a “Deemed Cause Event”) or, subject to any applicable statutes of limitations, if the Executive violates the Employee Obligations Agreement or the Transfer Agreement (directly or through a controlled entity) or engages in a Qualifying Structure Contract Breach (each, an “Options Breach”) the Employee will forfeit any equity awards that

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have been granted to him or her or to which the Employee may be entitled, whether the same are then vested or not, and the same shall thereafter not be exercisable at all, and all shares of common stock of the Company, if any, purchased by the Employee pursuant to the exercise of equity awards and still then owned by the Employee may be repurchased by the Company, at its sole discretion, at the price paid by the Employee for such shares of common stock, and, in the case of Company Options, if the Employee has sold or otherwise transferred such shares of common stock prior to (x) the Employee’s Termination for Cause or (y) the Company’s knowledge of a Deemed Cause Event or (z) an Options Breach, the Company, in its sole discretion, may require the Employee to repay to the Company the excess of (A) the Fair Market Value (as defined in the applicable option plan) of the shares subject to such Company Options on the date of sale or transfer over (B) the exercise price of such Company Options (the “Repayment Amount”), but in no event shall the Repayment Amount exceed the amount of damages resulting from the Employee’s action or inaction (or, in the case of a breach of the Transfer Agreement, the amount of damages necessary to provide for full repayment by the Employee with respect to any applicable indemnities), as determined by the Company (with the approval of IAC so long as it beneficially owns 15% or more of the voting interests of the Company) in its reasonable discretion. The terms of all outstanding option grants are hereby amended to conform with this Section 7. For purposes of this Section 7, the definition of Cause shall not include clauses (vi) or (viii) of the Cause definition in Annex 1.

8.    Employee Obligations Agreement.    By signing this Agreement, the Employee hereby agrees to execute and deliver to the Company the Employee Obligations Agreement, and such execution and delivery shall be a condition to the Employee’s entitlement to his or her rights under this Agreement.

9.    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of IAC or the Company, each of the parties hereto agrees for the benefit of IAC or the Company that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 10, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of IAC or the Company set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties

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hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

10.    Notices.    All notices, requests and other communications under this Agreement will be in writing (including facsimile or similar writing and express mail or courier delivery or in person delivery, but excluding ordinary mail delivery) and will be given to the address stated below:

(a)    if to the Employee, to the address or facsimile number that is on file with the Company from time to time, as may be updated by the Employee;

(b)    if to the Company:

Attention: Justin Tang, Chief Executive Officer

10 Jiuxianqiao Middle Road

13/F, Xingke Plaza Building B

Chaoyang District

Beijing, China

100021

With a copy to:

Goulston & Storrs

400 Atlantic Avenue

Boston, MA 02110

Attention: Timothy B. Bancroft, Esq.

(c)    if to IAC:

InterActiveCorp

152 West 57^th Street

New York, NY 10019

Attention: General Counsel

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, NY 10019

Attention: Michael S. Katzke, Esq.

or to such other address or facsimile number as either party may hereafter specify for the purpose by written notice to the other party in the manner provided in this Section 10. All such notices, requests and other communications will be deemed received: (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section 10 if confirmation of receipt is received; (ii) if given by express mail or courier delivery, five (5) days after sent; and (iii) if given in person, when delivered.

11.    Miscellaneous.

(a)    Entire Agreement.    This Agreement constitutes the entire understanding between the Company and the Employee relating to the subject matter hereof and supersedes and cancels all prior and contemporaneous written and oral agreements and understandings with respect to the subject matter of this Agreement, including, without limitation, the employment agreement

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between the Company and the Employee, dated as of April 23, 2004. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

(b)    Modification; Waiver.    No provision of this Agreement may be modified, waived or discharged unless modification, waiver or discharge is agreed to in writing signed by the Employee and such officer of the Company as may be specifically designated by its Board of Directors. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(c)    Successors; Binding Agreement.    This Agreement will be binding upon and will inure to the benefit of the Employee, the Employee’s heirs, executors, administrators and beneficiaries, and the Company and its successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) and any affiliate of the Company to which this Agreement is assigned, subject to the terms and conditions set forth herein.

(d)    Withholding Taxes.    All amounts payable to the Employee under this Agreement and with respect to Company Options will be subject to applicable withholding of income, wage and other taxes to the extent required by applicable law. The Employee hereby agrees to report any amounts paid or benefits provided under this Agreement or under Company Options for purposes of any applicable taxes in a manner consistent with the manner in which the Company reports any such amounts. To the extent that compensation under this Agreement or any other arrangement (including Company Options) may be subject to applicable taxes, the Company may withhold from amounts payable or benefits provided hereunder and may also withhold from any other amounts otherwise due to the Employee any amounts due to the appropriate taxing authority.

(e)    Validity.    The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

(f)    Language.    This Agreement is written in the English language only. The English language also will be the controlling language for all future communications between the parties hereto concerning this Agreement.

(g)    Counterparts.    This Agreement may be signed in any number of counterparts, each of which will be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(h)    Annex 3.    IAC may enforce the provisions of Annex 3, so long as IAC remains a shareholder of eLong.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on July 23, 2004.

Signature of Employee:	eLong Inc.
/s/	By:	/s/
Printed name of employee:		Name: Justin Tang
		Title: Chief Executive Officer
Derek Palaschuk
	InterActiveCorp (for purposes of Section 5(c), 11(h) and Annex 3 only)
	By:	/s/
		Name:
		Title:

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EX-10.3

Exhibit 10.3

PRIVILEGED AND CONFIDENTIAL

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, by and between eLong Inc. (the “Company”), a Cayman Islands corporation, InterActiveCorp (“IAC”) (for purposes of Section 5(c), 11(h) and Annex 3 only), a Delaware corporation and Richard Chen, an individual (the “Employee”) effective as of the consummation of the transactions contemplated by the Transaction Agreement (the “Transaction Agreement”) by and among IAC, the Selling Shareholders listed on Exhibit A thereto, and eLong Inc., dated as of the date hereof (the “Effective Date”).

1.    Definitions.    Capitalized terms used herein and not otherwise defined in the text below will have the meanings ascribed thereto on Annex 1.

2.    Employment; Duties.

(a)    The Company agrees to employ the Employee in the capacity and with such responsibilities as are generally set forth on Annex 2.

(b)    The Employee hereby agrees to devote his or her full time and best efforts in such capacities as are set forth on Annex 2 on the terms and conditions set forth herein. Notwithstanding the foregoing, the Employee may engage in other activities, such as activities involving professional, charitable, educational, religious and similar types of organizations, provided that that the Employee complies with the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement attached hereto as Annex 3 (the “Employee Obligations Agreement”) and such other activities do not interfere with or prohibit the performance of the Employee’s duties under this Agreement, or conflict in any material way with the business of the Company or of its subsidiaries and affiliates. The Employee will be allowed to hold a board of director position with another entity if it has been disclosed to and approved by the Board of Directors of the Company (the “Board”).

(c)    The Employee will use best efforts during the Term to ensure that the Company’s business and those of its subsidiaries and affiliates are conducted in accordance with all applicable laws and regulations of all jurisdictions in which such businesses are conducted.

3.    Compensation.

(a)    Base Annual Payments.    During the Term, the Company will pay the Employee annual base payments as set forth on Annex 2, payable pursuant to the Company’s normal payroll practices.

(b)    Discretionary Bonus.    During the Term, commencing in 2005, the Company, in its sole discretion, may award to the Employee an annual bonus based on the Employee’s performance, the Company’s performance, and other factors deemed relevant by the Company’s Compensation Committee, based upon a target bonus range of 15-50% of annual base salary.

(c)    Stock Options.    The Employee has been granted and may in the future be granted options (the “Company Options”) to purchase Company shares. The Employee shall be permitted to transfer Company Options only with the approval of IAC, so long as IAC beneficially owns at least 15% of the voting power of the Company shares. Notwithstanding the foregoing, any Company Options which were granted to the Employee prior to July 1, 2004 and

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approved for transfer by the Company’s Board of Directors prior to the date hereof may be so transferred by the Employee without IAC’s approval. Other than terms mentioned herein, the Company Options shall be subject to the terms and conditions of the applicable Company share option plan and any related stock option agreement in effect at the time of grant of the Company Option; provided that, with respect to any Company Options granted on or after July 1, 2004, in the event of a Change in Control, and a Termination by the Employee with Good Reason or a Termination by the Company without Cause following such Change in Control, the Executive shall be entitled to immediate vesting for an additional 12 months for the remaining Company Options that are unvested as of the date of the Termination by the Employee with Good Reason or Termination by the Company without Cause following the Change in Control.

(d)    Reimbursement of Expenses.    The Company will reimburse the Employee for reasonable expenses incurred by the Employee in the course of, and necessary in connection with, the performance by the Employee of his duties to the Company, provided that such expenses are substantiated in accordance with the Company’s policies.

4.    Other Employee Benefits.

(a)    Vacation; Sick Leave.    The Employee will be entitled to such number of weeks of paid vacation each year as are set forth on Annex 2, the taking of which must be coordinated with the Employee’s supervisor in accordance with the Company’s standard vacation policy. Unless otherwise approved by the Board, vacation that is not used in a particular year may only be carried forward to subsequent years in accordance with the Company’s policies in effect from time to time. The Employee will be eligible for sick leave in accordance with the Company’s policies in effect from time to time.

(b)    Healthcare Plan.    The Company will arrange for membership in the Company’s group healthcare plan for the Employee, the Employee’s spouse and the Employee’s children under 18 years old, in accordance with the Company’s standard policies from time to time with respect to health insurance and in accordance with the rules established for individual participation in such plan and under applicable law.

(c)    Life and Disability Insurance.    The Company will provide term life and disability insurance payable to the Employee, in each case in an amount up to a maximum of one times the Employee’s base salary in effect from time to time, provided however, that such amount will be reduced by the amount of any life insurance or death or disability benefit coverage, as applicable, that is provided to the Employee under any other benefit plans or arrangements of the Company. Such policies will be in accordance with the Company’s standard policies from time to time with respect to such insurance and the rules established for individual participation in such plans and under applicable law.

(d)    Other Benefits.    Pursuant to the Company’s policies in effect from time to time and the applicable plan rules, the Employee will be eligible to participate in the other employee benefit plans of general application, which shall include the benefits at the levels set forth on Annex 2.

5.    Certain Representations, Warranties and Covenants of the Employee.

(a)    Related Company Positions.    The Employee agrees that the Employee and members of the Employee’s immediate family will not have any financial interest directly or indirectly (including through any entity in which the Employee or any member of the Employee’s immediate family has a position or financial interest) in any transactions with the Company or any subsidiaries or affiliates thereof unless all such transactions, prior to being entered into,

2

have been disclosed to the Board and approved by a majority of the independent members of the Board and comply with all other Company policies and applicable law as may be in effect from time to time. The Employee also agrees that he or she will inform the Board of any transactions involving the Company or any of its subsidiaries or affiliates in which senior officers, including but not limited to the Employee, or their immediate family members have a financial interest.

(b)    Discounts, Rebates or Commissions.    Unless expressly permitted by written policies and procedures of the Company in effect from time to time that may be applicable to the Employee, neither the Employee nor any immediate family member will be entitled to receive or obtain directly or indirectly any discount, rebate or commission in respect of any sale or purchase of goods or services effected or other business transacted (whether or not by the Employee) by or on behalf of the Company or any of its subsidiaries or affiliates, and if the Employee or any immediate family member (or any firm or company in which the Employee or any immediate family member is interested) obtains any such discount, rebate or commission, the Employee will pay to the Company an amount equal to the amount so received (or the proportionate amount received by any such firm or company to the extent of the Employee’s or family member’s interest therein).

(c)    Sale and Transfer Restrictions.    The Employee acknowledges and agrees that (i) the Employee will sell no more than 7% of his total shareholding, as part of the IAC investment pursuant to the Transaction Agreement and the exercise by IAC of its warrant (the “Warrant”) to purchase the amount of shares required for IAC to hold in the aggregate 51% of fully diluted shares of the Company (the “IAC investment”) and an offering of securities by the Company on the Nasdaq National Market (“the IPO”), and (ii) the Employee will further be restricted to sell in the aggregate (i.e., including the 7% or less portion sold as part of the IAC investment and the IPO) no more than 15% of his total shareholding (the “15% Restriction”) during the three years following the IPO or three years following the exercise of the Warrant in the event there is no IPO (the “Sale Limit Period”). In the event of a Termination of this Agreement for any reason, whether by the Company or the Employee, then the Sale Limit Period applicable to the Employee will end upon the earlier of (a) the date which is three years following the IPO or the three years following the exercise of the Warrant in the event there is no IPO, if and as applicable, and (b) the date which is one year following the date of such Termination; provided, that following the Effective Date, the Company and IAC will discuss and consider in good faith potential individual exceptions to the 15% Restriction on members of the Company’s senior management team to the extent such request is made by the Employee in writing and provided that any exception must be approved by IAC in its sole discretion so long as IAC beneficially owns 15% or more of the voting interests in the Company.

6.    Term; Termination.

(a)    Unless sooner terminated pursuant to the provisions of this Section 6, the term of this Agreement (the “Term”) will commence on the Effective Date and end on the third anniversary of the Effective Date.

(b)    Voluntary Termination by the Employee.    Notwithstanding anything herein to the contrary, the Employee may voluntarily Terminate this Agreement by providing the Company with thirty (30) days’ advance written notice (“Voluntary Termination”), in which case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate as of the date of Termination, other than any continuation required by applicable law. Without limiting the

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foregoing, if, in connection with a Change in Control, the surviving entity or successor to eLong’s business offers the Employee employment on substantially equivalent terms (including position as Chief Technical Officer) to those set forth in this Agreement and such offer is not accepted by the Employee, the refusal by the Employee to accept such offer and the subsequent termination of the Employee’s employment by the Company shall be deemed to be a Voluntary Termination of employment by the Employee and shall not be treated as a termination by the Company without Cause.

(c)    Termination by the Company for Cause.    Notwithstanding anything herein to the contrary, the Company may Terminate this Agreement for Cause by written notice to the Employee, effective immediately upon the delivery of such notice. In such case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate, other than any continuation required by applicable law.

(d)    Termination by the Employee with Good Reason or Termination by the Company without Cause.    Notwithstanding anything herein to the contrary, the Employee may Terminate this Agreement for Good Reason, and the Company may Terminate this Agreement without Cause, in either case upon thirty (30) days’ advance written notice by the party Terminating this Agreement to the other party and the Termination shall be effective as of the expiration of such thirty (30) day period. If the Employee Terminates with Good Reason or the Company Terminates without Cause, the Employee will be entitled to continue to receive payment of severance benefits equal to the Employee’s monthly base salary in effect on the date of Termination for the remainder of the Term of this Agreement (the “Severance Period”), provided that the Employee complies with the Employee Obligations Agreement during the Severance Period and executes a release agreement in the form requested by the Company at the time of such Termination that releases the Company from any and all claims arising from or related to the employment relationship and/or such Termination. Such payments will be made ratably over the Severance Period according to the Company’s standard payroll schedule. Health insurance benefits with the same coverage provided to the Employee prior to the Termination (e.g., medical, dental, optical, mental health) and in all other material respects comparable to those in place immediately prior to the Termination will be provided at the Company’s expense during the Severance Period. If the Company has such an insurance policy, the Company will also continue to carry the Employee on its Directors and Officers insurance policy for six (6) years following the Date of Termination at the Company’s expense with respect to insurable events which occurred during the Employee’s term as a director or officer of the Company, with such coverage being at least comparable to that in effect immediately prior to the Termination Date; provided, however, that (i) such terms, conditions and exceptions will not be, in the aggregate, materially less favorable to the Employee than those in effect on the Termination Date and (ii) if the aggregate annual premiums for such insurance at any time during such period exceed two hundred percent (200%) of the per annum rate of premium currently paid by the Company for such insurance, then the Company will provide the maximum coverage that will then be available at an annual premium equal to two hundred percent (200%) of such rate.

(e)    Termination by Reason of Death or Disability.    A Termination of the Employee’s employment by reason of death or Disability shall not be deemed to be a Termination by the Company (for or without Cause) or by the Employee (for or without Good Reason). In the event that the Employee’s employment with the Company Terminates as a result of the Employee’s death or Disability, the Employee or the Employee’s estate or representative, as applicable, will receive all accrued salary and accrued vacation as of the date of the Employee’s death or

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Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, the Employee or the Employee’s estate or representative, as applicable, will receive the bonus for the year in which the death or Disability occurs to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Company’s CEO, Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees.

(f)    Misconduct After Termination of Employment.    Notwithstanding the foregoing or anything herein to the contrary, if the Employee after the termination of his or her employment violates or fails to materially comply with the Employee Obligations Agreement or the Transfer Agreement or, in the event that the Employee becomes a member of the board of directors or controlling shareholder of a PRC Entity and such entity breaches the Structure Contract, (a “Qualifying Structure Contract Breach”) thereafter (1) the Employee shall not be entitled to any payments from the Company, (2) any insurance or other benefits that have continued shall terminate immediately, (3) the Employee shall promptly reimburse to the Company all amounts that have been paid to the Employee pursuant to this Section 6; and (4) if the Employee would not, in the absence of such violation or failure to comply, have been entitled to severance payments from the Company equal to at least six (6) months’ base salary, pay to the Company an amount equal to the difference between six (6) months’ base salary and the amount of severance pay measured by base salary reimbursed to the Company by the Employee pursuant to clause 3 of this sentence.

(g)    Offset.    If the Employee obtains other employment during the Term, the amount of any payment or benefit provided for under Section 6(d) hereof which has been paid to the Employee shall be refunded to the Company by the Employee in an amount equal to any compensation earned by the Employee as a result of employment with or services provided to another employer after the date of the Employee’s termination of employment and prior to the otherwise applicable expiration of the Term, and all future amounts payable by the Company to the Employee during the remainder of the Term shall be offset by the amount earned by the Employee from another employer; provided, that “amounts payable by the Company to the Employee” shall not be construed for purposes of this Section 6(g) to include any amounts earned by the Company from the exercise or sale of Company Options. For purposes of this Section 6(g), the Employee shall have an obligation to inform the Company regarding the Employee’s employment status following termination and during the period encompassing the Term.

7.    Option-Related Provisions.    If this Agreement is Terminated for Cause by the Company or if within two years following any Termination of this Agreement, the Company determines the Employee had engaged in acts while employed by the Company which would have been grounds for Termination for Cause (a “Deemed Cause Event”) or, subject to any applicable statutes of limitations, if the Executive violates the Employee Obligations Agreement or the Transfer Agreement (directly or through a controlled entity) or engages in a Qualifying Structure Contract Breach (each, an “Options Breach”) the Employee will forfeit any equity awards that have been granted to him or her or to which the Employee may be entitled, whether the same are then vested or not, and the same shall thereafter not be exercisable at all, and all shares of common stock of the Company, if any, purchased by the Employee pursuant to the exercise of equity awards and still then owned by the Employee may be repurchased by the Company, at its sole discretion, at the price paid by the Employee for such shares of common stock, and, in the case of Company Options, if the Employee has sold or otherwise transferred such shares of

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common stock prior to (x) the Employee’s Termination for Cause or (y) the Company’s knowledge of a Deemed Cause Event or (z) an Options Breach, the Company, in its sole discretion, may require the Employee to repay to the Company the excess of (A) the Fair Market Value (as defined in the applicable option plan) of the shares subject to such Company Options on the date of sale or transfer over (B) the exercise price of such Company Options (the “Repayment Amount”), but in no event shall the Repayment Amount exceed the amount of damages resulting from the Employee’s action or inaction (or, in the case of a breach of the Transfer Agreement, the amount of damages necessary to provide for full repayment by the Employee with respect to any applicable indemnities), as determined by the Company (with the approval of IAC so long as it beneficially owns 15% or more of the voting interests of the Company) in its reasonable discretion. The terms of all outstanding option grants are hereby amended to conform with this Section 7. For purposes of this Section 7, the definition of Cause shall not include clauses (vi) or (viii) of the Cause definition in Annex 1.

8.    Employee Obligations Agreement.    By signing this Agreement, the Employee hereby agrees to execute and deliver to the Company the Employee Obligations Agreement, and such execution and delivery shall be a condition to the Employee’s entitlement to his or her rights under this Agreement.

9.    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of IAC or the Company, each of the parties hereto agrees for the benefit of IAC or the Company that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 10, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of IAC or the Company set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

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10.    Notices.    All notices, requests and other communications under this Agreement will be in writing (including facsimile or similar writing and express mail or courier delivery or in person delivery, but excluding ordinary mail delivery) and will be given to the address stated below:

(a)    if to the Employee, to the address or facsimile number that is on file with the Company from time to time, as may be updated by the Employee;

(b)    if to the Company:

Attention: Justin Tang, Chief Executive Officer

10 Jiuxianqiao Middle Road

13/F, Xingke Plaza Building B

Chaoyang District

Beijing, China

100021

With a copy to:

Goulston & Storrs

400 Atlantic Avenue

Boston, MA 02110

Attention: Timothy B. Bancroft, Esq.

(c)    if to IAC:

InterActiveCorp

152 West 57^th Street

New York, NY 10019

Attention: General Counsel

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, NY 10019

Attention: Michael S. Katzke, Esq.

or to such other address or facsimile number as either party may hereafter specify for the purpose by written notice to the other party in the manner provided in this Section 10. All such notices, requests and other communications will be deemed received: (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section 10 if confirmation of receipt is received; (ii) if given by express mail or courier delivery, five (5) days after sent; and (iii) if given in person, when delivered.

11.    Miscellaneous.

(a)    Entire Agreement.    This Agreement constitutes the entire understanding between the Company and the Employee relating to the subject matter hereof and supersedes and cancels all prior and contemporaneous written and oral agreements and understandings with respect to the subject matter of this Agreement, including, without limitation, the employment agreement between the Company and the Employee, dated as of September 1, 2003. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

(b)    Modification; Waiver.    No provision of this Agreement may be modified, waived or discharged unless modification, waiver or discharge is agreed to in writing signed by the Employee and such officer of the Company as may be specifically designated by its Board of Directors. No waiver by either party at any time of any breach by the other party of, or

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compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(c)    Successors; Binding Agreement.    This Agreement will be binding upon and will inure to the benefit of the Employee, the Employee’s heirs, executors, administrators and beneficiaries, and the Company and its successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) and any affiliate of the Company to which this Agreement is assigned, subject to the terms and conditions set forth herein.

(d)    Withholding Taxes.    All amounts payable to the Employee under this Agreement and with respect to Company Options will be subject to applicable withholding of income, wage and other taxes to the extent required by applicable law. The Employee hereby agrees to report any amounts paid or benefits provided under this Agreement or under Company Options for purposes of any applicable taxes in a manner consistent with the manner in which the Company reports any such amounts. To the extent that compensation under this Agreement or any other arrangement (including Company Options) may be subject to applicable taxes, the Company may withhold from amounts payable or benefits provided hereunder and may also withhold from any other amounts otherwise due to the Employee any amounts due to the appropriate taxing authority.

(e)    Validity.    The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

(f)    Language.    This Agreement is written in the English language only. The English language also will be the controlling language for all future communications between the parties hereto concerning this Agreement.

(g)    Counterparts.    This Agreement may be signed in any number of counterparts, each of which will be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(h)    Annex 3.    IAC may enforce the provisions of Annex 3, so long as IAC remains a shareholder of eLong.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on July 23, 2004.

Signature of Employee:	eLong Inc.
/s/	By:	/s/
Printed name of employee:		Name: Justin Tang
		Title: Chief Executive Officer
Richard Chen
	InterActiveCorp (for purposes of Section 5(c), 11(h) and Annex 3 only)
	By:	/s/
		Name:
		Title:

EX-10.4

Exhibit 10.4

PRIVILEGED AND CONFIDENTIAL

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, by and between eLong Inc. (the “Company”), a Cayman Islands corporation, InterActiveCorp (“IAC”) (for purposes of Section 5(c), 11(h) and Annex 3 only), a Delaware corporation and Richard Xue, an individual (the “Employee”) effective as of the consummation of the transactions contemplated by the Transaction Agreement (the “Transaction Agreement”) by and among IAC, the Selling Shareholders listed on Exhibit A thereto, and eLong Inc., dated as of the date hereof (the “Effective Date”).

1.    Definitions.    Capitalized terms used herein and not otherwise defined in the text below will have the meanings ascribed thereto on Annex 1.

2.    Employment; Duties.

(a)    The Company agrees to employ the Employee in the capacity and with such responsibilities as are generally set forth on Annex 2.

(b)    The Employee hereby agrees to devote his or her full time and best efforts in such capacities as are set forth on Annex 2 on the terms and conditions set forth herein. Notwithstanding the foregoing, the Employee may engage in other activities, such as activities involving professional, charitable, educational, religious and similar types of organizations, provided that that the Employee complies with the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement attached hereto as Annex 3 (the “Employee Obligations Agreement”) and such other activities do not interfere with or prohibit the performance of the Employee’s duties under this Agreement, or conflict in any material way with the business of the Company or of its subsidiaries and affiliates. The Employee will be allowed to hold a board of director position with another entity if it has been disclosed to and approved by the Board of Directors of the Company (the “Board”).

(c)    The Employee will use best efforts during the Term to ensure that the Company’s business and those of its subsidiaries and affiliates are conducted in accordance with all applicable laws and regulations of all jurisdictions in which such businesses are conducted.

3.    Compensation.

(a)    Base Annual Payments.    During the Term, the Company will pay the Employee annual base payments as set forth on Annex 2, payable pursuant to the Company’s normal payroll practices.

(b)    Discretionary Bonus.    During the Term, commencing in 2005, the Company, in its sole discretion, may award to the Employee an annual bonus based on the Employee’s performance, the Company’s performance, and other factors deemed relevant by the Company’s Compensation Committee, based upon a target bonus range of 15-50% of annual base salary.

(c)    Stock Options.    The Employee has been granted and may in the future be granted options (the “Company Options”) to purchase Company shares. The Employee shall be permitted to transfer Company Options only with the approval of IAC, so long as IAC beneficially owns at least 15% of the voting power of the Company shares. Notwithstanding the foregoing, any Company Options which were granted to the Employee prior to July 1, 2004 and

approved for transfer by the Company’s Board of Directors prior to the date hereof may be so transferred by the Employee without IAC’s approval. Other than terms mentioned herein, the Company Options shall be subject to the terms and conditions of the applicable Company share option plan and any related stock option agreement in effect at the time of grant of the Company Option; provided that (1) with respect to any Company Options granted on or after July 1, 2004, in the event of a Change in Control, and a Termination by the Employee with Good Reason or a Termination by the Company without Cause following such Change in Control, the Executive shall be entitled to immediate vesting for an additional 12 months for the remaining Company Options that are unvested as of the date of the Termination by the Employee with Good Reason or Termination by the Company without Cause following the Change in Control and (2) the Employee’s grant of 240,000 Company Options on December 1, 2003 shall vest 1/3^rd on the first anniversary of the date of grant and 1/12^th on each three month anniversary thereafter, subject to the Employee’s continued employment with the Company through each applicable vesting date, except as otherwise provided in the immediately following sentence. In addition, for Company Options granted prior to July 1, 2004, in the event of a Change in Control, a Termination by the Employee with Good Reason or a Termination by the Company without Cause, the Employee shall be entitled to immediate vesting for an additional 12 months for the remaining Company Options that are unvested as of the date of the Termination by the Employee with Good Reason, Termination by the Company without Cause or the Change in Control. With respect to the Company Options granted prior to July 1, 2004, the definition of Change in Control shall not include, for purposes of construing the effect of a change in control on those options under the share option plan and any related stock option agreement in effect at the time of grant, as well as for purposes of the foregoing sentence, references to IAC, Barry Diller, Liberty Media Corporation and their respective Affiliates and shall not include the final paragraph of the definition.

(d)    Reimbursement of Expenses.    The Company will reimburse the Employee for reasonable expenses incurred by the Employee in the course of, and necessary in connection with, the performance by the Employee of his duties to the Company, provided that such expenses are substantiated in accordance with the Company’s policies.

4.    Other Employee Benefits.

(a)    Vacation; Sick Leave.    The Employee will be entitled to such number of weeks of paid vacation each year as are set forth on Annex 2, the taking of which must be coordinated with the Employee’s supervisor in accordance with the Company’s standard vacation policy. Unless otherwise approved by the Board, vacation that is not used in a particular year may only be carried forward to subsequent years in accordance with the Company’s policies in effect from time to time. The Employee will be eligible for sick leave in accordance with the Company’s policies in effect from time to time.

(b)    Healthcare Plan.    The Company will arrange for membership in the Company’s group healthcare plan for the Employee, the Employee’s spouse and the Employee’s children under 18 years old, in accordance with the Company’s standard policies from time to time with respect to health insurance and in accordance with the rules established for individual participation in such plan and under applicable law.

(c)    Life and Disability Insurance.    The Company will provide term life and disability insurance payable to the Employee, in each case in an amount up to a maximum of one times the Employee’s base salary in effect from time to time, provided however, that such amount will be reduced by the amount of any life insurance or death or disability benefit coverage, as applicable, that is provided to the Employee under any other benefit plans or arrangements of

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the Company. Such policies will be in accordance with the Company’s standard policies from time to time with respect to such insurance and the rules established for individual participation in such plans and under applicable law.

(d)    Other Benefits.    Pursuant to the Company’s policies in effect from time to time and the applicable plan rules, the Employee will be eligible to participate in the other employee benefit plans of general application, which shall include the benefits at the levels set forth on Annex 2.

5.    Certain Representations, Warranties and Covenants of the Employee.

(a)    Related Company Positions.    The Employee agrees that the Employee and members of the Employee’s immediate family will not have any financial interest directly or indirectly (including through any entity in which the Employee or any member of the Employee’s immediate family has a position or financial interest) in any transactions with the Company or any subsidiaries or affiliates thereof unless all such transactions, prior to being entered into, have been disclosed to the Board and approved by a majority of the independent members of the Board and comply with all other Company policies and applicable law as may be in effect from time to time. The Employee also agrees that he or she will inform the Board of any transactions involving the Company or any of its subsidiaries or affiliates in which senior officers, including but not limited to the Employee, or their immediate family members have a financial interest.

(b)    Discounts, Rebates or Commissions.    Unless expressly permitted by written policies and procedures of the Company in effect from time to time that may be applicable to the Employee, neither the Employee nor any immediate family member will be entitled to receive or obtain directly or indirectly any discount, rebate or commission in respect of any sale or purchase of goods or services effected or other business transacted (whether or not by the Employee) by or on behalf of the Company or any of its subsidiaries or affiliates, and if the Employee or any immediate family member (or any firm or company in which the Employee or any immediate family member is interested) obtains any such discount, rebate or commission, the Employee will pay to the Company an amount equal to the amount so received (or the proportionate amount received by any such firm or company to the extent of the Employee’s or family member’s interest therein).

(c)    Sale and Transfer Restrictions.    The Employee acknowledges and agrees that (i) the Employee will sell no more than 7% of his total shareholding, as part of the IAC investment pursuant to the Transaction Agreement and the exercise by IAC of its warrant (the “Warrant”) to purchase the amount of shares required for IAC to hold in the aggregate 51% of fully diluted shares of the Company (the “IAC investment”) and an offering of securities by the Company on the Nasdaq National Market (“the IPO”), and (ii) the Employee will further be restricted to sell in the aggregate (i.e., including the 7% or less portion sold as part of the IAC investment and the IPO) no more than 15% of his total shareholding (the “15% Restriction”) during the three years following the IPO or three years following the exercise of the Warrant in the event there is no IPO (the “Sale Limit Period”). In the event of a Termination of this Agreement for any reason, whether by the Company or the Employee, then the Sale Limit Period applicable to the Employee will end upon the earlier of (a) the date which is three years following the IPO or the three years following the exercise of the Warrant in the event there is no IPO, if and as applicable, and (b) the date which is one year following the date of such Termination; provided, that following the Effective Date, the Company and IAC will discuss and consider in good faith potential individual exceptions to the 15% Restriction on members of the Company’s senior management team to the extent such request is made by the Employee in writing and provided that any exception must be approved by IAC in its sole discretion so long as IAC beneficially owns 15% or more of the voting interests in the Company.

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6.    Term; Termination.

(a)    Unless sooner terminated pursuant to the provisions of this Section 6, the term of this Agreement (the “Term”) will commence on the Effective Date and end on the third anniversary of the Effective Date.

(b)    Voluntary Termination by the Employee.    Notwithstanding anything herein to the contrary, the Employee may voluntarily Terminate this Agreement by providing the Company with thirty (30) days’ advance written notice (“Voluntary Termination”), in which case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate as of the date of Termination, other than any continuation required by applicable law. Without limiting the foregoing, if, in connection with a Change in Control, the surviving entity or successor to eLong’s business offers the Employee employment on substantially equivalent terms (including position as Vice President, Strategy and Business Development) to those set forth in this Agreement and such offer is not accepted by the Employee, the refusal by the Employee to accept such offer and the subsequent termination of the Employee’s employment by the Company shall be deemed to be a Voluntary Termination of employment by the Employee and shall not be treated as a termination by the Company without Cause.

(c)    Termination by the Company for Cause.    Notwithstanding anything herein to the contrary, the Company may Terminate this Agreement for Cause by written notice to the Employee, effective immediately upon the delivery of such notice. In such case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate, other than any continuation required by applicable law.

(d)    Termination by the Employee with Good Reason or Termination by the Company without Cause.    Notwithstanding anything herein to the contrary, the Employee may Terminate this Agreement for Good Reason, and the Company may Terminate this Agreement without Cause, in either case upon thirty (30) days’ advance written notice by the party Terminating this Agreement to the other party and the Termination shall be effective as of the expiration of such thirty (30) day period. If the Employee Terminates with Good Reason or the Company Terminates without Cause, the Employee will be entitled to continue to receive payment of severance benefits equal to the Employee’s monthly base salary in effect on the date of Termination for the remainder of the Term of this Agreement (the “Severance Period”), provided that the Employee complies with the Employee Obligations Agreement during the Severance Period and executes a release agreement in the form requested by the Company at the time of such Termination that releases the Company from any and all claims arising from or related to the employment relationship and/or such Termination. Such payments will be made ratably over the Severance Period according to the Company’s standard payroll schedule. Health insurance benefits with the same coverage provided to the Employee prior to the Termination (e.g., medical, dental, optical, mental health) and in all other material respects comparable to those in place immediately prior to the Termination will be provided at the Company’s expense during the Severance Period. If the Company has such an insurance policy, the Company will also continue to carry the Employee on its Directors and Officers insurance policy for six (6) years following the Date of Termination at the Company’s expense with respect to insurable events which occurred during the Employee’s term as a director or officer of the Company, with such coverage being at least comparable to that in effect immediately prior to the Termination Date; provided, however, that (i) such terms, conditions and exceptions will not be, in the aggregate, materially less favorable to the Employee than those in effect on the

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Termination Date and (ii) if the aggregate annual premiums for such insurance at anytime during such period exceed two hundred percent (200%) of the per annum rate of premium currently paid by the Company for such insurance, then the Company will provide the maximum coverage that will then be available at an annual premium equal to two hundred percent (200%) of such rate.

(e)    Termination by Reason of Death or Disability.    A Termination of the Employee’s employment by reason of death or Disability shall not be deemed to be a Termination by the Company (for or without Cause) or by the Employee (for or without Good Reason). In the event that the Employee’s employment with the Company Terminates as a result of the Employee’s death or Disability, the Employee or the Employee’s estate or representative, as applicable, will receive all accrued salary and accrued vacation as of the date of the Employee’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, the Employee or the Employee’s estate or representative, as applicable, will receive the bonus for the year in which the death or Disability occurs to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Company’s CEO, Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees.

(f)    Misconduct After Termination of Employment.    Notwithstanding the foregoing or anything herein to the contrary, if the Employee after the termination of his or her employment violates or fails to materially comply with the Employee Obligations Agreement or the Transfer Agreement or, in the event that the Employee becomes a member of the board of directors or controlling shareholder of a PRC Entity and such entity breaches the Structure Contract, (a “Qualifying Structure Contract Breach”) thereafter (1) the Employee shall not be entitled to any payments from the Company, (2) any insurance or other benefits that have continued shall terminate immediately, (3) the Employee shall promptly reimburse to the Company all amounts that have been paid to the Employee pursuant to this Section 6; and (4) if the Employee would not, in the absence of such violation or failure to comply, have been entitled to severance payments from the Company equal to at least six (6) months’ base salary, pay to the Company an amount equal to the difference between six (6) months’ base salary and the amount of severance pay measured by base salary reimbursed to the Company by the Employee pursuant to clause 3 of this sentence.

(g)    Offset.    If the Employee obtains other employment during the Term, the amount of any payment or benefit provided for under Section 6(d) hereof which has been paid to the Employee shall be refunded to the Company by the Employee in an amount equal to any compensation earned by the Employee as a result of employment with or services provided to another employer after the date of the Employee’s termination of employment and prior to the otherwise applicable expiration of the Term, and all future amounts payable by the Company to the Employee during the remainder of the Term shall be offset by the amount earned by the Employee from another employer; provided, that “amounts payable by the Company to the Employee” shall not be construed for purposes of this Section 6(g) to include any amounts earned by the Company from the exercise or sale of Company Options. For purposes of this Section 6(g), the Employee shall have an obligation to inform the Company regarding the Employee’s employment status following termination and during the period encompassing the Term.

7.    Option-Related Provisions.    If this Agreement is Terminated for Cause by the Company or if within two years following any Termination of this Agreement, the Company determines

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the Employee had engaged in acts while employed by the Company which would have been grounds for Termination for Cause (a “Deemed Cause Event”) or, subject to any applicable statutes of limitations, if the Executive violates the Employee Obligations Agreement or the Transfer Agreement (directly or through a controlled entity) or engages in a Qualifying Structure Contract Breach(each, an “Options Breach”) the Employee will forfeit any equity awards that have been granted to him or her or to which the Employee may be entitled, whether the same are then vested or not, and the same shall thereafter not be exercisable at all, and all shares of common stock of the Company, if any, purchased by the Employee pursuant to the exercise of equity awards and still then owned by the Employee may be repurchased by the Company, at its sole discretion, at the price paid by the Employee for such shares of common stock, and, in the case of Company Options, if the Employee has sold or otherwise transferred such shares of common stock prior to (x) the Employee’s Termination for Cause or (y) the Company’s knowledge of a Deemed Cause Event or (z) an Options Breach, the Company, in its sole discretion, may require the Employee to repay to the Company the excess of (A) the Fair Market Value (as defined in the applicable option plan) of the shares subject to such Company Options on the date of sale or transfer over (B) the exercise price of such Company Options (the “Repayment Amount”), but in no event shall the Repayment Amount exceed the amount of damages resulting from the Employee’s action or inaction (or, in the case of a breach of the Transfer Agreement, the amount of damages necessary to provide for full repayment by the Employee with respect to any applicable indemnities), as determined by the Company (with the approval of IAC so long as it beneficially owns 15% or more of the voting interests of the Company) in its reasonable discretion. The terms of all outstanding option grants are hereby amended to conform with this Section 7. For purposes of this Section 7, the definition of Cause shall not include clauses (vi) or (viii) of the Cause definition in Annex 1.

8.    Employee Obligations Agreement.    By signing this Agreement, the Employee hereby agrees to execute and deliver to the Company the Employee Obligations Agreement, and such execution and delivery shall be a condition to the Employee’s entitlement to his or her rights under this Agreement.

9.    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of IAC or the Company, each of the parties hereto agrees for the benefit of IAC or the Company that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 10, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of IAC or the Company set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be

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New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

10.    Notices.    All notices, requests and other communications under this Agreement will be in writing (including facsimile or similar writing and express mail or courier delivery or in person delivery, but excluding ordinary mail delivery) and will be given to the address stated below:

(a)    if to the Employee, to the address or facsimile number that is on file with the Company from time to time, as may be updated by the Employee;

(b)    if to the Company:

Attention: Justin Tang, Chief Executive Officer

10 Jiuxianqiao Middle Road

13/F, Xingke Plaza Building B

Chaoyang District

Beijing, China

100021

With a copy to:

Goulston & Storrs

400 Atlantic Avenue

Boston, MA 02110

Attention: Timothy B. Bancroft, Esq.

(c)    if to IAC:

InterActiveCorp

152 West 57^th Street

New York, NY 10019

Attention: General Counsel

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, NY 10019

Attention: Michael S. Katzke, Esq.

or to such other address or facsimile number as either party may hereafter specify for the purpose by written notice to the other party in the manner provided in this Section 10. All such notices, requests and other communications will be deemed received: (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section 10 if confirmation of receipt is received; (ii) if given by express mail or courier delivery, five (5) days after sent; and (iii) if given in person, when delivered.

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11.    Miscellaneous.

(a)    Entire Agreement.    This Agreement constitutes the entire understanding between the Company and the Employee relating to the subject matter hereof and supersedes and cancels all prior and contemporaneous written and oral agreements and understandings with respect to the subject matter of this Agreement, including, without limitation, the employment agreement between the Company and the Employee, dated as of December 8, 2003. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

(b)    Modification; Waiver.    No provision of this Agreement may be modified, waived or discharged unless modification, waiver or discharge is agreed to in writing signed by the Employee and such officer of the Company as may be specifically designated by its Board of Directors. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(c)    Successors; Binding Agreement.    This Agreement will be binding upon and will inure to the benefit of the Employee, the Employee’s heirs, executors, administrators and beneficiaries, and the Company and its successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) and any affiliate of the Company to which this Agreement is assigned, subject to the terms and conditions set forth herein.

(d)    Withholding Taxes.    All amounts payable to the Employee under this Agreement and with respect to Company Options will be subject to applicable withholding of income, wage and other taxes to the extent required by applicable law. The Employee hereby agrees to report any amounts paid or benefits provided under this Agreement or under Company Options for purposes of any applicable taxes in a manner consistent with the manner in which the Company reports any such amounts. To the extent that compensation under this Agreement or any other arrangement (including Company Options) may be subject to applicable taxes, the Company may withhold from amounts payable or benefits provided hereunder and may also withhold from any other amounts otherwise due to the Employee any amounts due to the appropriate taxing authority.

(e)    Validity.    The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

(f)    Language.    This Agreement is written in the English language only. The English language also will be the controlling language for all future communications between the parties hereto concerning this Agreement.

(g)    Counterparts.    This Agreement may be signed in any number of counterparts, each of which will be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(h)    Annex 3.    IAC may enforce the provisions of Annex 3, so long as IAC remains a shareholder of eLong.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on July 23, 2004.

Signature of Employee:	eLong Inc.
/s/	By:	/s/
Printed name of employee:		Name: Justin Tang
		Title: Chief Executive Officer
Richard Xue
	InterActiveCorp (for purposes of Section 5(c), 11(h) and Annex 3 only)
	By:	/s/
		Name:
		Title:

EX-10.5

Exhibit 10.5

PRIVILEGED AND CONFIDENTIAL

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT, by and between eLong Inc. (the “Company”), a Cayman Islands corporation, InterActiveCorp (“IAC”) (for purposes of Section 5(c), 11 (h) and Annex 3 only), a Delaware corporation and Frank Zheng, an individual (the “Employee”) effective as of the consummation of the transactions contemplated by the Transaction Agreement (the “Transaction Agreement”) by and among IAC, the Selling Shareholders listed on Exhibit A thereto, and eLong Inc., dated as of the date hereof (the “Effective Date”).

1.    Definitions.    Capitalized terms used herein and not otherwise defined in the text below will have the meanings ascribed thereto on Annex 1.

2.    Employment; Duties.

(a)    The Company agrees to employ the Employee in the capacity and with such responsibilities as are generally set forth on Annex 2.

(b)    The Employee hereby agrees to devote his or her full time and best efforts in such capacities as are set forth on Annex 2 on the terms and conditions set forth herein. Notwithstanding the foregoing, the Employee may engage in other activities, such as activities involving professional, charitable, educational, religious and similar types of organizations, provided that that the Employee complies with the Employee Non-competition, Non-solicitation, Confidential Information and Work Product Agreement attached hereto as Annex 3 (the “Employee Obligations Agreement”) and such other activities do not interfere with or prohibit the performance of the Employee’s duties under this Agreement, or conflict in any material way with the business of the Company or of its subsidiaries and affiliates. The Employee will be allowed to hold a board of director position with another entity if it has been disclosed to and approved by the Board of Directors of the Company (the “Board”).

(c)    The Employee will use best efforts during the Term to ensure that the Company’s business and those of its subsidiaries and affiliates are conducted in accordance with all applicable laws and regulations of all jurisdictions in which such businesses are conducted.

3.    Compensation.

(a)    Base Annual Payments.    During the Term, the Company will pay the Employee annual base payments as set forth on Annex 2, payable pursuant to the Company’s normal payroll practices.

(b)    Discretionary Bonus.    During the Term, commencing in 2005, the Company, in its sole discretion, may award to the Employee an annual bonus based on the Employee’s performance, the Company’s performance, and other factors deemed relevant by the Company’s Compensation Committee, based upon a target bonus range of 15-50% of annual base salary.

(c)    Stock Options.    The Employee has been granted and may in the future be granted options (the “Company Options”) to purchase Company shares. The Employee shall be permitted to transfer Company Options only with the approval of IAC, so long as IAC beneficially owns at least 15% of the voting power of the Company shares. Notwithstanding the foregoing, any Company Options which were granted to the Employee prior to July 1, 2004 and approved for transfer by the Company’s Board of Directors prior to the date hereof may be so

transferred by the Employee without IAC’s approval. Other than terms mentioned herein, the Company Options shall be subject to the terms and conditions of the applicable Company share option plan and any related stock option agreement in effect at the time of grant of the Company Option; provided that, with respect to any Company Options granted on or after July 1, 2004, in the event of a Change in Control, and a Termination by the Employee with Good Reason or a Termination by the Company without Cause following such Change in Control, the Executive shall be entitled to immediate vesting for an additional 12 months for the remaining Company Options that are unvested as of the date of the Termination by the Employee with Good Reason or Termination by the Company without Cause following the Change in Control.

(d)    Reimbursement of Expenses.    The Company will reimburse the Employee for reasonable expenses incurred by the Employee in the course of, and necessary in connection with, the performance by the Employee of his duties to the Company, provided that such expenses are substantiated in accordance with the Company’s policies.

4.    Other Employee Benefits.

(a)    Vacation; Sick Leave.    The Employee will be entitled to such number of weeks of paid vacation each year as are set forth on Annex 2, the taking of which must be coordinated with the Employee’s supervisor in accordance with the Company’s standard vacation policy. Unless otherwise approved by the Board, vacation that is not used in a particular year may only be carried forward to subsequent years in accordance with the Company’s policies in effect from time to time. The Employee will be eligible for sick leave in accordance with the Company’s policies in effect from time to time.

(b)    Healthcare Plan.    The Company will arrange for membership in the Company’s group healthcare plan for the Employee, the Employee’s spouse and the Employee’s children under 18 years old, in accordance with the Company’s standard policies from time to time with respect to health insurance and in accordance with the rules established for individual participation in such plan and under applicable law.

(c)    Life and Disability Insurance.    The Company will provide term life and disability insurance payable to the Employee, in each case in an amount up to a maximum of one times the Employee’s base salary in effect from time to time, provided however, that such amount will be reduced by the amount of any life insurance or death or disability benefit coverage, as applicable, that is provided to the Employee under any other benefit plans or arrangements of the Company. Such policies will be in accordance with the Company’s standard policies from time to time with respect to such insurance and the rules established for individual participation in such plans and under applicable law.

(d)    Other Benefits.    Pursuant to the Company’s policies in effect from time to time and the applicable plan rules, the Employee will be eligible to participate in the other employee benefit plans of general application, which shall include the benefits at the levels set forth on Annex 2.

5.    Certain Representations, Warranties and Covenants of the Employee.

(a)    Related Company Positions.    The Employee agrees that the Employee and members of the Employee’s immediate family will not have any financial interest directly or indirectly (including through any entity in which the Employee or any member of the Employee’s immediate family has a position or financial interest) in any transactions with the Company or any subsidiaries or affiliates thereof unless all such transactions, prior to being entered into, have been disclosed to the Board and approved by a majority of the independent members of the Board and comply with all other Company policies and applicable law as may be in effect from time to time. The Employee also agrees that he or she will inform the Board of any

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transactions involving the Company or any of its subsidiaries or affiliates in which senior officers, including but not limited to the Employee, or their immediate family members have a financial interest.

(b)    Discounts, Rebates or Commissions.    Unless expressly permitted by written policies and procedures of the Company in effect from time to time that may be applicable to the Employee, neither the Employee nor any immediate family member will be entitled to receive or obtain directly or indirectly any discount, rebate or commission in respect of any sale or purchase of goods or services effected or other business transacted (whether or not by the Employee) by or on behalf of the Company or any of its subsidiaries or affiliates, and if the Employee or any immediate family member (or any firm or company in which the Employee or any immediate family member is interested) obtains any such discount, rebate or commission, the Employee will pay to the Company an amount equal to the amount so received (or the proportionate amount received by any such firm or company to the extent of the Employee’s or family member’s interest therein).

(c)    Sale and Transfer Restrictions.    The Employee acknowledges and agrees that (i) the Employee will sell no more than 7% of his total shareholding, as part of the IAC investment pursuant to the Transaction Agreement and the exercise by IAC of its warrant (the “Warrant”) to purchase the amount of shares required for IAC to hold in the aggregate 51% of fully diluted shares of the Company (the “IAC investment”) and an offering of securities by the Company on the Nasdaq National Market (“the IPO”), and (ii) the Employee will further be restricted to sell in the aggregate (i.e., including the 7% or less portion sold as part of the IAC investment and the IPO) no more than 15% of his total shareholding (the “15% Restriction”) during the three years following the IPO or three years following the exercise of the Warrant in the event there is no IPO (the “Sale Limit Period”). In the event of a Termination of this Agreement for any reason, whether by the Company or the Employee, then the Sale Limit Period applicable to the Employee will end upon the earlier of (a) the date which is three years following the IPO or the three years following the exercise of the Warrant in the event there is no IPO, if and as applicable, and (b) the date which is one year following the date of such Termination; provided, that following the Effective Date, the Company and IAC will discuss and consider in good faith potential individual exceptions to the 15% Restriction on members of the Company’s senior management team to the extent such request is made by the Employee in writing and provided that any exception must be approved by IAC in its sole discretion so long as IAC beneficially owns 15% or more of the voting interests in the Company.

6.    Term; Termination.

(a)    Unless sooner terminated pursuant to the provisions of this Section 6, the term of this Agreement (the “Term”) will commence on the Effective Date and end on the third anniversary of the Effective Date.

(b)    Voluntary Termination by the Employee.    Notwithstanding anything herein to the contrary, the Employee may voluntarily Terminate this Agreement by providing the Company with thirty (30) days’ advance written notice (“Voluntary Termination”), in which case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate as of the date of Termination, other than any continuation required by applicable law. Without limiting the foregoing, if, in connection with a Change in Control, the surviving entity or successor to eLong’s business offers the Employee employment on substantially equivalent terms (including position as Vice President, Operations) to those set forth in this Agreement and such offer is not accepted by the Employee, the refusal by the Employee to accept such offer and the subsequent

3

termination of the Employee’s employment by the Company shall be deemed to be a Voluntary Termination of employment by the Employee and shall not be treated as a termination by the Company without Cause.

(c)    Termination by the Company for Cause.    Notwithstanding anything herein to the contrary, the Company may Terminate this Agreement for Cause by written notice to the Employee, effective immediately upon the delivery of such notice. In such case, the Employee will not be entitled to receive payment of any severance benefits or other amounts by reason of the Termination other than accrued salary and vacation through the date of the Termination. The Employee’s right to all other benefits will terminate, other than any continuation required by applicable law.

(d)    Termination by the Employee with Good Reason or Termination by the Company without Cause.    Notwithstanding anything herein to the contrary, the Employee may Terminate this Agreement for Good Reason, and the Company may Terminate this Agreement without Cause, in either case upon thirty (30) days’ advance written notice by the party Terminating this Agreement to the other party and the Termination shall be effective as of the expiration of such thirty (30) day period. If the Employee Terminates with Good Reason or the Company Terminates without Cause, the Employee will be entitled to continue to receive payment of severance benefits equal to the Employee’s monthly base salary in effect on the date of Termination for the remainder of the Term of this Agreement (the “Severance Period”), provided that the Employee complies with the Employee Obligations Agreement during the Severance Period and executes a release agreement in the form requested by the Company at the time of such Termination that releases the Company from any and all claims arising from or related to the employment relationship and/or such Termination. Such payments will be made ratably over the Severance Period according to the Company’s standard payroll schedule. Health insurance benefits with the same coverage provided to the Employee prior to the Termination (e.g., medical, dental, optical, mental health) and in all other material respects comparable to those in place immediately prior to the Termination will be provided at the Company’s expense during the Severance Period. If the Company has such an insurance policy, the Company will also continue to carry the Employee on its Directors and Officers insurance policy for six (6) years following the Date of Termination at the Company’s expense with respect to insurable events which occurred during the Employee’s term as a director or officer of the Company, with such coverage being at least comparable to that in effect immediately prior to the Termination Date; provided, however, that (i) such terms, conditions and exceptions will not be, in the aggregate, materially less favorable to the Employee than those in effect on the Termination Date and (ii) if the aggregate annual premiums for such insurance at any time during such period exceed two hundred percent (200%) of the per annum rate of premium currently paid by the Company for such insurance, then the Company will provide the maximum coverage that will then be available at an annual premium equal to two hundred percent (200%) of such rate.

(e)    Termination by Reason of Death or Disability.    A Termination of the Employee’s employment by reason of death or Disability shall not be deemed to be a Termination by the Company (for or without Cause) or by the Employee (for or without Good Reason). In the event that the Employee’s employment with the Company Terminates as a result of the Employee’s death or Disability, the Employee or the Employee’s estate or representative, as applicable, will receive all accrued salary and accrued vacation as of the date of the Employee’s death or Disability and any other benefits payable under the Company’s then existing benefit plans and policies in accordance with such plans and policies in effect on the date of death or Disability and in accordance with applicable law. In addition, the Employee or the Employee’s estate or representative, as applicable, will receive the bonus for the year in which the death or Disability

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occurs to the extent that a bonus would have been earned had the Employee continued in employment through the end of such year, as determined in good faith by the Company’s CEO, Board of Directors or its Compensation Committee based on the specific corporate and individual performance targets established for such fiscal year, and only to the extent that bonuses are paid for such fiscal year to other similarly situated employees.

(f)    Misconduct After Termination of Employment.    Notwithstanding the foregoing or anything herein to the contrary, if the Employee after the termination of his or her employment violates or fails to materially comply with the Employee Obligations Agreement or the Transfer Agreement or if a PRC Entity breaches the Structure Contract while the Employee is a member of the board of directors or controlling shareholder of that PRC Entity (a “Qualifying Structure Contract Breach”) thereafter (1) the Employee shall not be entitled to any payments from the Company, (2) any insurance or other benefits that have continued shall terminate immediately, (3) the Employee shall promptly reimburse to the Company all amounts that have been paid to the Employee pursuant to this Section 6; and (4) if the Employee would not, in the absence of such violation or failure to comply, have been entitled to severance payments from the Company equal to at least six (6) months’ base salary, pay to the Company an amount equal to the difference between six (6) months’ base salary and the amount of severance pay measured by base salary reimbursed to the Company by the Employee pursuant to clause 3 of this sentence.

(g)    Offset.    If the Employee obtains other employment during the Term, the amount of any payment or benefit provided for under Section 6(d) hereof which has been paid to the Employee shall be refunded to the Company by the Employee in an amount equal to any compensation earned by the Employee as a result of employment with or services provided to another employer after the date of the Employee’s termination of employment and prior to the otherwise applicable expiration of the Term, and all future amounts payable by the Company to the Employee during the remainder of the Term shall be offset by the amount earned by the Employee from another employer; provided, that “amounts payable by the Company to the Employee” shall not be construed for purposes of this Section 6(g) to include any amounts earned by the Company from the exercise or sale of Company Options. For purposes of this Section 6(g), the Employee shall have an obligation to inform the Company regarding the Employee’s employment status following termination and during the period encompassing the Term.

7.    Option-Related Provisions.    If this Agreement is Terminated for Cause by the Company or if within two years following any Termination of this Agreement, the Company determines the Employee had engaged in acts while employed by the Company which would have been grounds for Termination for Cause (a “Deemed Cause Event”) or, subject to any applicable statutes of limitations, if the Executive violates the Employee Obligations Agreement or the Transfer Agreement (directly or through a controlled entity) or engages in a Qualifying Structure Contract Breach(each, an “Options Breach”) the Employee will forfeit any equity awards that have been granted to him or her or to which the Employee may be entitled, whether the same are then vested or not, and the same shall thereafter not be exercisable at all, and all shares of common stock of the Company, if any, purchased by the Employee pursuant to the exercise of equity awards and still then owned by the Employee may be repurchased by the Company, at its sole discretion, at the price paid by the Employee for such shares of common stock, and, in the case of Company Options, if the Employee has sold or otherwise transferred such shares of common stock prior to (x) the Employee’s Termination for Cause or (y) the Company’s knowledge of a Deemed Cause Event or (z) an Options Breach, the Company, in its sole discretion, may require the Employee to repay to the Company the excess of (A) the Fair Market Value (as defined in the applicable option plan) of the shares subject to such Company Options

5

on the date of sale or transfer over (B) the exercise price of such Company Options (the “Repayment Amount”), but in no event shall the Repayment Amount exceed the amount of damages resulting from the Employee’s action or inaction (or, in the case of a breach of the Transfer Agreement, the amount of damages necessary to provide for full repayment by the Employee with respect to any applicable indemnities), as determined by the Company (with the approval of IAC so long as it beneficially owns 15% or more of the voting interests of the Company) in its reasonable discretion. The terms of all outstanding option grants are hereby amended to conform with this Section 7. For purposes of this Section 7, the definition of Cause shall not include clauses (vi) or (viii) of the Cause definition in Annex 1.

8.    Employee Obligations Agreement.    By signing this Agreement, the Employee hereby agrees to execute and deliver to the Company the Employee Obligations Agreement, and such execution and delivery shall be a condition to the Employee’s entitlement to his or her rights under this Agreement.

9.    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of IAC or the Company, each of the parties hereto agrees for the benefit of IAC or the Company that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 10, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of IAC or the Company set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

10.    Notices.    All notices, requests and other communications under this Agreement will be in writing (including facsimile or similar writing and express mail or courier delivery or in person delivery, but excluding ordinary mail delivery) and will be given to the address stated below:

(a)    if to the Employee, to the address or facsimile number that is on file with the Company from time to time, as may be updated by the Employee;

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(b)    if to the Company:

Attention: Justin Tang, Chief Executive Officer

10 Jiuxianqiao Middle Road

13/F, Xingke Plaza Building B

Chaoyang District

Beijing, China

100021

With a copy to:

Goulston & Storrs

400 Atlantic Avenue

Boston, MA 02110

Attention: Timothy B. Bancroft, Esq.

(c)    if to IAC:

InterActiveCorp

152 West 57^th Street

New York, NY 10019

Attention: General Counsel

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, NY 10019

Attention: Michael S. Katzke, Esq.

or to such other address or facsimile number as either party may hereafter specify for the purpose by written notice to the other party in the manner provided in this Section 10. All such notices, requests and other communications will be deemed received: (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section 10 if confirmation of receipt is received; (ii) if given by express mail or courier delivery, five (5) days after sent; and (iii) if given in person, when delivered.

11.    Miscellaneous.

(a)    Entire Agreement.    This Agreement constitutes the entire understanding between the Company and the Employee relating to the subject matter hereof and supersedes and cancels all prior and contemporaneous written and oral agreements and understandings with respect to the subject matter of this Agreement, including, without limitation, the employment agreement between the Company and the Employee, dated as of September 1, 2003. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

(b)    Modification; Waiver.    No provision of this Agreement may be modified, waived or discharged unless modification, waiver or discharge is agreed to in writing signed by the Employee and such officer of the Company as may be specifically designated by its Board of Directors. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(c)    Successors; Binding Agreement.    This Agreement will be binding upon and will inure to the benefit of the Employee, the Employee’s heirs, executors, administrators and

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beneficiaries, and the Company and its successors (whether direct or indirect, by purchase, merger, consolidation or otherwise) and any affiliate of the Company to which this Agreement is assigned, subject to the terms and conditions set forth herein.

(d)    Withholding Taxes.    All amounts payable to the Employee under this Agreement and with respect to Company Options will be subject to applicable withholding of income, wage and other taxes to the extent required by applicable law. The Employee hereby agrees to report any amounts paid or benefits provided under this Agreement or under Company Options for purposes of any applicable taxes in a manner consistent with the manner in which the Company reports any such amounts. To the extent that compensation under this Agreement or any other arrangement (including Company Options) may be subject to applicable taxes, the Company may withhold from amounts payable or benefits provided hereunder and may also withhold from any other amounts otherwise due to the Employee any amounts due to the appropriate taxing authority.

(e)    Validity.    The invalidity or unenforceability of any provision or provisions of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

(f)    Language.    This Agreement is written in the English language only. The English language also will be the controlling language for all future communications between the parties hereto concerning this Agreement.

(g)    Counterparts.    This Agreement may be signed in any number of counterparts, each of which will be deemed an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(h)    Annex 3.    IAC may enforce the provisions of Annex 3, so long as IAC remains a shareholder of eLong.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on July 23, 2004.

Signature of Employee:	eLong Inc.
/s/	By:	/s/
Printed name of employee:		Name: Justin Tang
		Title: Chief Executive Officer
Frank Zheng
	InterActiveCorp (for purposes of Section 5(c), 11(h) and Annex 3 only)
	By:	/s/
		Name:
		Title:

EX-10.6

Exhibit 10.6

Amended and Restated Technical Services Agreement

This Amended and Restated Technical Services Agreement (the “Agreement”) is entered into as of July 20, 2004 in Beijing between the following two parties:

Party A:	eLongNet Information Technologies (Beijing) Co., Ltd.
Legal Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative	Tang Yue
Party B:	Beijing eLong Information Technologies Co., Ltd.
Legal Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing
Legal Representative	Tang Yue

WHEREAS,

1.    Party A is a wholly foreign-owned enterprise registered in People’s Republic of China (hereinafter “PRC”) under the laws of PRC;

2.    Party B is a limited company registered in PRC under the laws of PRC. Party B owns the qualification of operating the Internet information service business, and shall operate the website of www.elong.com (hereinafter “eLong.com”);

3.    Party A and Party B signed a Technical Services Agreement on February 1, 2001, and amended the aforesaid agreement on August 22, 2003. Both parties now decide to conduct further amendment and restatement in accordance with the relevant declaration of the agreement; and

4.    Party A agrees to provide the Technical Services for operating elong.com to Party B, Party B agrees to accept the Technical Services provided by Party A in accordance with the articles and terms of the agreement.

NOW THEREFORE, the parties through mutual negotiation agree as follows:

Article One    Providing Technical Services

1.    Party A agrees to provide Party B with technical services for operating elong.com as the exclusive technical service provider according to this Agreement, including but not limited:

(1)    The development, update and upgrade of the application software of serve, and the application of elong.com;

(2)    The development, update and upgrade of the Internet application software;

(3)    Technical services of electronic business;

(4)    Technical training; and

(5)    Party B’s other demands for technical services

2.    Party B agrees that Party A is the exclusive technical service provider of elong.com, and Party B promises not to employ any third party to provide the technical services for operating elong.com without the prior written consent of Party A.

3.    Party B agrees to provide the exclusive Internet entrust service to Party A.

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Article Two    Price of Technical Services and Software Licenses, Way of Payment

1.    The fee for technical services and software provided by Party A according to the agreement will be determined in accordance with the particular service items and software provided by Party A upon the market price of the aforesaid services and licenses by both parties through negotiations. The fee for technical services and software licenses should be paid quarterly.

Article Three    Intellectual Property

1.    Any invention, modification, creation and designation accomplished by Party A during the performance of the obligations under this Agreement, and the copyright, trademark, sign (whether all these mentioned is or can be registered) of the works Party A produces, shall be Party A’s absolute belongings, and Party A owns exclusive and monopoly rights and interests to them.

2.    Party A authorizes Party B to non-exclusively make a copy of the application program of elong.com’s website or any other website for free, or make a copy of the other application program of the other application programs provided to Party B for Party A’s providing the network entrust services under Article 1 Item 3, the aforesaid right shall not be transferred.

3.    Party B agrees to transfer the following property rights created, developed or created for entrust by Party B:

(a)    All the intellectual property rights of the application program of elong.com’s website or any other any other websites or other application programs provided by Party A.

(b)    All the intellectual property rights (including copyright and data base right) related with Party B’s operation, not including any loan or expense of the third party, or liabilities of the third party. Party B shall sign the further documents and adopt the further actions in accordance with the reasonable requirements advanced by Party B from time to time, and guarantee the rights transferred in accordance with Article 1 Item 3 in further.

4.    Party A authorizes Party B to use the application program of elong.com’ website and the registered application programs or unregistered application programs in possession of Party B. the aforesaid license should be non-exclusive and not be transferred.

Article Four    Representations and Warranties

1.    Party A represents and warrants to Party B as follows, within any time of the signing day and the period of this Agreement:

(1)    Party A is a wholly foreign-owned enterprise duly registered under the laws of the PRC, validly existing and with good operation record. Party A has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party A has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party A’s lawful, valid and binding obligations after the signature, and it can be enforced to Party A according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party A does not need to apply to any government department or acquire any approval.

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(4)    Party A’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party A’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party A enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party A is one party or is restricted by; or (4) need any permission of other persons.

(5)    As for Party A, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party A does not disclose to Party B and that will interfere the signature and performance of this Agreement adversely.

2.    Party B represents and warrants to Party A as follows, within any time of the signing day and the period of this Agreement:

(1)    Party B is a limited company duly registered under the company laws of the PRC, validly existing and with good operation record. Party B has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party B has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party B’s lawful, valid and binding obligations after the signature, and it can be enforced to Party B according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party B does not need to apply to any government department or acquire any approval.

(4)    Party B’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party B’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party B enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party B is one party or is restricted by; or (4) need any permission of other persons.

(5)    As for Party B, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party B does not disclose to Party A and that will interfere the signature and performance of this Agreement adversely.

Article Five    Confidentiality

1.    Any party of this Agreement shall protect and maintain the confidentiality of any confidential data and information (“Confidential Information”) acquired from the other party through signing and performing this Agreement. Unless with the written consent of the other party in advance, any party should not disclose any Confidential Information to any third party, unless the disclosure is required by law, or by enforceable orders of court and related government department. In the situation, the party required to disclose the Confidential Information shall notify the other party immediately, and take all possible measures to keep the disclosure in the scope as small as possible, and proclaim the disclosed persons the obligation of confidentiality.

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2.    Upon the termination of this Agreement, any party shall, at the other party’s option, return any document, material, database, equipment or software containing the Confidential Information to the other party; if the return becomes impossible for any reason, the party shall destroy all the Confidential Information or delete the Confidential Information from any memory devices. No party can keep using any Confidential Information in any way after the termination of this Agreement.

3.    There is no time limit to the Confidentiality stipulated in Article Five, and it will survive after the termination of this Agreement, unless the Confidential Information is open to the public, and the open of the Confidential Information is not due to the breach of contract by any party.

Article Six    Effectiveness and Term

1.    This Agreement is entered into with the “Transfer Agreement”, and takes effect as of the date of signature.

2.    This Agreement shall keep effective during expiration period (and any extended period of validity), except that the agreement is terminated in advance according to Article 6 Item 3.

3.    Party A shall terminate this Agreement at any time by delivering written notice to Party A. except the conditions regulated by the applicable law, Party B has no right to terminate this Agreement in any other event.

Article Seven    Settlement of Disputes

1    Any dispute, tangle or claim arising from this Agreement or relating to this agreement (including any issue relating to the existence, validity or termination of this Agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

2    Arbitration place shall be in Beijing, PRC.

3    Arbitration language shall be English.

4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with China’s Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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Article Eight    Other Clauses

1.    All notices and other communications under this Agreement should be made in written form (including fax) and be sent via courier or fax to the following address, or any other address

One party designated to the other party in written form. If the notices and communications mentioned above are sent via courier, they take effect 72 hours after the mail is delivered to the courier Company; if they are sent through fax, they take effect 24 hours after being sent.

Party A:	eLongNet Information Technologies (Beijing) Co., Ltd
Recipients:	Tang Yue
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Telephone:	010-58602288
Fax:	010-64315872
Party B:	Beijing eLong Information Technologies Co., Ltd.
Recipients:	Tang Yue
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing
Telephone:	010-58602288
Fax:	010-64315872

2.    This Agreement is binding upon both parties and their successors and approved assignees respectively, and is entered into only for the benefit of the persons mentioned above. Without the prior written consent of the other party, any party should not transfer, pledge or transfer in other ways the rights, benefits or obligations under this Agreement.

3.    Without the prior written consent of both parties of the agreement, the agreement shall not be amended or changed; for those not included, both parties shall make a supplement to this Agreement through signing written agreements. Any amendment, modification, supplement and appendix to this Agreement shall be part of this Agreement, and shall have the same legal effect as this Agreement.

4.    This Agreement is separable, the invalidity or unenforceability of any clause in this Agreement will not interfere the effect and enforceability of other clauses.

5.    All topics in this Agreement are set only for convenience, and they should not be deemed part of this Agreement.

6.    This Agreement is executed in duplicate, each party holds one, and each copy has the same legal effect.

IN WITNESS THEREOF the parties hereto have caused this Agreement to be signed by a duly authorized representative as of the date first set forth above.

eLongNet Information Technologies (Beijing) Co., Ltd

Signature of Authorized Representative:    /s/

Name:    Tang Yue

Position:    Legal Representative

Beijing eLong Information Technologies Co., Ltd

Signature of Authorized Representative:    /s/

Name:    Tang Yue

Position:    Legal Representative

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EX-10.7

Exhibit 10.7

Amended and Restated Loan Agreement

The Amended and Restated Loan Agreement (hereinafter the “Agreement”) is executed on July 20, 2004 by the following three parties.

eLong, Inc (hereinafter “Party A”)
Legal Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands
Tang Yue (hereinafter “Party B”)
Address:	Room 23A No. 1 Building, Yujing Garden, No.5 Shoutudong Street, Chaoyang District, Beijing, P. R. China
ID No.:	3201061971032121236
Qu Zhi (hereinafter “Party C”)
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing, P. R. China
ID No.:	11010897307116344

Whereas:

1.    Party A is a company registered in Cayman Islands; Party B and Party C are the citizens of the People’s Republic of China. Party B holds 75% equity interest in Beijing eLong Information Technology Co., Ltd (hereinafter the “Beijing eLong”) and Party C holds 25% equity interest of Beijing eLong. The eLongNet Technology (Beijing) Co., Ltd. (hereinafter the “eLongNet Technology”) is a wholly foreign owned enterprise registered and validly existing under the laws of PRC and Party A holds 100% equity interest of it.

2.    The eLongNet Technology has provided RMB 1,000,000 to Party B and Party C for the investment in Beijing eLong.

3.    For the development of the Beijing eLong, Party B and Party C need to increase the registered capital of it. At the same time, Party B, Party C and the eLongNet Technology decide to terminate the financing relationship arising from setting up the Beijing eLong, and Party B as well as Party C have to refund RMB 1,000,000 to the eLongNet Technology. So Party B and Party C need the financial help from Party A, and Party A agrees to provide the help.

4.    The three parties signed a Loan Agreement on 5^th March 2004. The three parties agree to amend and restate the Agreement in accordance with the regulations of the Agreement.

NOW THEREFORE, after the negotiation all the parties come to agree as follows:

1.    Party A agree to provide a loan to Party B and Party C with the total as RMB 16,000,000 in accordance with the terms and conditions under the Agreement, of which there is RMB12,000,000 to Party B and RMB 4,000,000 to party C. Party B and Party C accept such loan.

2.    Party B and Party C agree such loan shall be used only to pay the amount of capital subscribed or to invest in Beijing eLong by the other forms. Each Party should confirm that RMB1,000,000 shall be paid to eLongNet Technology for the refund of the debt arising from the investment in Beijing eLong by Party B and Party C. Party B and Party C should use such loan in accordance with this term only. Without the prior written consent of Party A and eLongNet Technology, Party B and Party C shall not use such loan for any other purpose.

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3.    The preconditions of the Loan provided by Party A to Party B and Party C:

(1).    Party B and Party C as well as eLongNet Technology have formally executed a Equity Interest pledge contract (Hereinafter the “Equity Interest Pledge Contract”), by virtue of which Party B and Party C agree to pledge all their equity interest in Beijing eLong to eLongNet Technology.

(2).    Party B, Party C and Party A have executed an exclusive purchase contract (the “Exclusive Purchase Contract”) under the fifth term of The Agreement, as per which Party B and Party C grant Party A an option to purchase all or part of equity interest in Beijing eLong, provided that it is permitted by laws of PRC.

(3).    The above-mentioned Equity Interest Pledge Contract and Exclusive Purchase Contract are in full effectiveness, of which there is none of default event and all relevant filing procedures, approval, authorization, registration and governmental proceedings have been obtained or completed (if needed).

(4).    The representation and warranties of Party B and Party C under Section 10 are true, integrate, correct and un-misleading.

(5).    Party B and Party C breaches none of its commitments under Section 11, Section 12 and no event which will affect their performance of the obligations hereunder, happens or threatens to happen.

4.    Party A agrees to remit the amount of such loan in a lump sum or in installments to the account designated by the Borrower, provided that all of the preconditions set forth in Section 3 of the Agreement are satisfied or are waived by Party A in writing. Party B and Party C shall issue confirmation notification to Party A on the day receiving the amount of the loan. Each party agree and confirm the commitments of loan under the Agreement by Party A are effective only to Party B and Party C themselves, but not their inheritor or transferee.

5.    Each party agree and confirm that, subject to the permission of the law, Party A has the right to, but has no obligation to, at any time, purchase or designate the other (legal person or natural person) to purchase all or part of Party B and Party C’s equity interest in Beijing eLong (the “Option to Purchase”). Party A shall issue a written notification to Party B and Party C for the purchase. Once Party A issues the written notification, as per which Party B and Party C shall transfer their equity interest in Beijing eLong to Party A or the person designated by Party A at purchase price equals to the original price of investment or be granted by Party A. All the parties jointly agree to sign an exclusive purchase contract according to the aforesaid item.

6.    Party B and Party C agree that, when they transfer their Equity Interest in Beijing eLong to Party A or the person designated by Party A according to the exclusive purchase contract, any proceeds raised from the transfer shall be paid promptly to Party A as the refund of the loan under the Agreement.

7.    All the parties jointly agree and confirm that, the loan under the Agreement shall be deemed as the loan without interest, except there exists other stipulation hereunder. But when the equity interest transfer under Section 5 happens and if its necessary to appraise the equity interest according to the relevant laws and if the equity interest transfer price is higher than the principle of loan according to the appraisal result, the exceed part shall be paid back to Party A as the cost occupied by the interest of the loan or the capital burdened by Party A.

8.    Term for the loan hereunder will be ten (10) years and shall be extended upon the Agreement of all parties through negotiations. But during the term or extended term of such

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loan, Party B and Party C shall refund the loan ahead of the loan term or the extended loan term, if either of the following events occurs:

(1)    Party B quits from or dismissed by Party A or its affiliates;

(2)    Party B and Party C become dead or becomes a person without capacity or with limited capacity for civil acts;

(3)    Party B and Party C commit a crime or involve a crime;

(4)    Any other third party claim more than RMB100,000 against Party B and Party C;

(5)    Party A or other designated by Party A may invest in the telecommunications internet information service business or other business of Beijing eLong, and according to the Exclusive Purchase Contract, Party A shall issue a written notification to the Party for the purchase of Beijing eLong’s equity interest and perform the right of purchase.

When the loan is due, the corresponding borrower (or its successor or transferee) shall transfer its equity interest in Beijing eLong to the person designated by Party A promptly (or to Party A, provided that it is permitted under the laws of PRC). Any proceeds raised from the transfer shall be paid to Party A as the refund of the loan and the right as well as the obligation under the Agreement shall terminate simultaneously.

9.    Party A represents and warrants to Party B and Party C that, on the execution date of the Agreement,

(1)    Party A is a company registered in Cayman Islands and validly existing under the laws of it.

(2)    Subject to its business scope, constitution and other organizational documents, Party A has full right, power and all necessary and appropriate approval and authorization to execute and perform this Agreement;

(3)    The execution and the performance of this Agreement shall not be against any enforceable and effective laws and regulations, governmental approval, authorization and notification, other government documents and any contracts executed with, or commitments made to, any third party; and

(4)    This Agreement shall constitute the legal, valid and binding obligations of Party A, which is enforceable against Party A in accordance with its terms upon its execution.

10.    Party B and Party C represents and warrants to Party A that, from the execution date of this Agreement until the date this Agreement terminates,

(1)    Beijing eLong is a limited liability company registered and validly existing under the laws of PRC. Party B and Party C is the shareholder of the company.

(2)    Subject to its constitution and other organizational documents, Party B and Party C has full right, power and all necessary and appropriate approval and authorization to execute and perform this Agreement;

(3)    The execution and the performance of this Agreement shall not be against any enforceable and effective laws and regulations, governmental approval, authorization and notification, other government documents and any contracts executed with, or commitments made to, any third party;

(4)    This Agreement shall constitute the legal and valid obligations of Party B and Party C, which is enforceable against Party B and Party C in accordance with its terms upon its execution;

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(5)    Party B and Party C has paid contribution in full for its equity in Beijing eLong in accordance with applicable laws and regulations and has acquired capital contribution verification report issued by the qualified accounting firm;

(6)    Party B and Party C neither create pledge or any other security, nor make third party any offer to transfer their equity, nor make acceptance for the offer of any third party to purchase their equity, nor execute agreement with any third party to transfer Borrower’s equity, except the terms of the Equity Pledge Contract;

(7)    There are no disputes and legal or other proceedings pending or threatened before any court, tribunal or other regulatory authority and involving Party B and Party C or involving the equity interest in Beijing eLong held by Party B and Party C; and

(8)    Beijing eLong has completed all governmental approval, authorization, license, and register, filing and otherwise necessary to carry out the business subject to its business license and to possess its assets.

11.    The Borrower agrees that it shall, during the term of this Agreement,

(1)    Not sell, transfer, mortgage, dispose of in any other way, or create other security interest on, any of its legal right of equity or equity interest in Beijing eLong without Party A’s prior written consent, except the terms of the Agreement;

(2)    Without Party A’s prior written consent, not to consent, support or execute any resolution in the shareholders’ meeting of Beijing Interactive for the sale, transfer, mortgage, any other disposal of Beijing eLong’s legal right of equity or equity interest or to create any other security interest of Beijing eLong’s legal right of equity or equity interest, except that the counter party is Party A or those designated by Party A;

(3)    Without Party A’s prior written consent, not to consent, support or execute any resolution in the shareholders’ meeting of Beijing eLong for the merge or combination with, buy or investment in, any person without Party A’s prior consent;

(4)    Promptly inform Party A of the pending or threatened suit, arbitration or regulatory procedure concerning the equity interest of Beijing eLong.

(5)    Execute all necessary or appropriate documents, take all necessary or appropriate action and bring all necessary or appropriate lawsuit or make all necessary and appropriate defending against all claims, in order to maintain the ownership of Beijing eLong for all its assets;

(6)    Do nothing that may materially affect the assets, business and liabilities of Beijing eLong without Party A’s prior written consent;

(7)    Appoint any person to be the director of Beijing eLong subject to Party A’s request;

(8)    Transfer promptly and unconditionally, at once, all of the Equity Interest of Party B and Party C in Beijing eLong to Party A or representative designated by Party A and cause the other shareholder of Beijing eLong to waive its option to purchase such equity hereof, subject to the requesting of the then holding company of Party A, provided that such transfer is permitted under the laws of PRC;

(9)    Not require Beijing eLong to issue dividends or allocate its allocable profits to Party B and Party C;

(10)    Cause the other shareholder of Beijing eLong to transfer promptly and unconditionally, at once, all equity interest of the other shareholder in Beijing eLong to Party A or the representative designated by Party A and Party B and Party C hereby waive its option to purchase such equity interest hereof, subject to the requesting of the then holding company of Party A, provided that such transfer is permitted under the laws of PRC;

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(11)    Once Party B and Party C transfer the equity interest in Beijing eLong to Party A or the representative designated by Party A, Any proceeds raised from the transfer shall be refund to Party A promptly.

(12)    Comply strictly with the terms of this Agreement, Equity Pledge Contract and Exclusive Purchase Contract, fully perform all obligations under such contracts and do nothing affecting the validity and enforceability of such contracts.

12.    Party B and Party C, as major shareholder of Beijing eLong, agrees that it shall cause Beijing eLong, during the term of this Agreement,

(1)    Not to supply, amend or modify its articles of constitution, to increase or decrease its registered capital, or to change its capital structure in any way without Party A’s prior written consent;

(2)    Subject to good financial and business rules and practices, to maintain and operate its business and handle matters prudently and effectively;

(3)    Not to sell, transfer, mortgage, dispose of in any other way, or to create other security interest on, any of its assets, business or legal right to collect interests without Party A’s prior written consent;

(4)    Without Party A’s prior written consent, not to create, succeed to, guarantee or permit any debt, except (i) the debt arising in the course of the ordinary or daily business operation, but not arising from the loan, and (ii) the debt being reported to Party A or having approved Party A in writing;

(5)    To operate persistently all the business of Beijing eLong and to maintain the value of its assets;

(6)    Without Party A’s prior written consent, not to execute any material contracts (During this stage, a contract will be deemed material if the value of it exceeds RMB100,000) except those executed during the ordinary operation;

(7)    To provide information concerning all of its operation and financial affairs subject to Party A’s request;

(8)    Not to merger or combine with, buy or invest in, any other person without Party A’s prior written consent;

(9)    Without Party A’s prior written consent, not to issue dividends to each shareholder in any form, however, Beijing eLong shall promptly allocate all its allocable profits to each of its shareholders upon Party A’s request;

(10)    To inform promptly Party A of the pending or threatened suit, arbitration or regulatory procedure concerning the assets, business or income of Beijing eLong;

(11)    to execute all necessary or appropriate documents, to take all necessary or appropriate action and to bring all necessary or appropriate lawsuit or to make all necessary and appropriate defending against all claims, in order to maintain the ownership of Beijing eLong for all its assets;

(12)    To comply strictly with the terms under the technical service Contract and other contracts, fully perform all obligations under such contracts and do nothing affecting the validity and enforceability of such contracts.

13.    Party B and Party C further agree that, they shall pledge all their equity interest in Beijing eLong to eLongNet Technologies for the warrant of the payment obligation of Beijing eLong under the technical service Contract. Party B and Party C shall handle procedures for the registrations of the pledge at the company registration authority promptly after execute the Agreement.

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14.    The Agreement are effective to all the parties and their inheritor or transferee, and executed only for the interest of them. Without the other party’s prior written consent, any party shall not transfer, pledge or transfer in any other way the right, interest or obligation under the Agreement.

15.    The execution, validity, interpretation, performance, implementation, termination and settlement of disputes of this Agreement shall be governed by the laws of PRC.

16.    Arbitration

(1)    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

(2)    Arbitration place shall be in Beijing, PRC.

(3)    Arbitration language shall be English.

(4)    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator. The chief arbitrator shall not be Chinese citizen or United State citizen.

(5)    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with China’s Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including China’s Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

(6)    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

17. From the date of signing of this Agreement, all parties agree that the items and conditions of the Agreement should be effective from February 1, 2004 and expire on the date of all parties satisfying their obligations under this Agreement.

18.    Party B and Party C will not cancel or terminate this Agreement under any circumstance, except (1) Party A has gross negligence, commits fraud or other serious illegal act, or (2) Party A bankrupt or insolvent;

19.    Any amendment and supplement of this Agreement shall come into force only after all the parties execute a written agreement. The amendment, supplement executed by all the parties and any appendix of this Agreement shall be the indispensable part of this Agreement.

20.    This Agreement is the integral agreement of the transaction stipulated in this Agreement and it will replaced all the oral negotiation or written opinion for this transaction heretofore.

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21.    This Agreement is divisible and any invalid or unenforceable clause of this Agreement will not affect the effectiveness and enforceability of other clause of this Agreement.

22.    The business, operation, financial affairs and other confidential documents concerning any party of this Agreement are confidential data. All the parties shall strictly protect and maintain the confidentiality of all such confidential data acquired from The Agreement or from the performance of The Agreement.

23.    This Agreement is executed in triplicate and each Party holds one copy. Each original has the same legal effect.

IN WITNESS WHEREOF, Parties to this Agreement or through their duly authorized representatives have executed this Agreement as of the date first written above in Beijing.

Party A:    eLong, Inc.

Authorized Representative (Signature):    /s/

Official Seal:    /s/

Party B:    Yue Tang

Signature:    /s/

Party C:    Qu Zhi

Signature:    /s/

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EX-10.8

Exhibit 10.8

Amended and Restated Equity Interests Pledge Agreement

This Amended and Restated Equity Interests Pledge Agreement (the “Agreement”) is entered into on the day of July 20, 2004 by and between the following parties:

Pledgee:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue
Pledgor:	Tang Yue
ID No.:	3201061971032121236
Address:	Room 23A No. 1 Building, Yujing Garden, No.5 Shoutudong Street, Chaoyang District, Beijing

WHEREAS,

(1).    The Pledgor owns 75% of the equity interest in Beijing eLong Information Technology Co., Ltd. (hereinafter “Beijing eLong”). Beijing eLong is a wholly domestic-owned company registered under the People’s Republic of China (hereinafter “China”) laws and regulations and qualified to engage in Internet information service business and operate the website of www.elong.com (hereinafter “eLongNet”);

(2).    The Pledgee and Beijing eLong entered into Exclusive Technical Consulting and Services Agreement on the date of February 1, 2001 and entered into the Supplementary Agreement of Exclusive Technical Consulting and Services Agreement on the date of August 22, 2003 (the Exclusive Technical Consulting and Services Agreement and the relevant Supplementary Agreement hereinafter “Service Agreement”). Both parties amend and restate the Service Agreement in further on July 20, 2004, in which the Pledgee agreed that Pledgee has the exclusive right to provide Beijing Information with technical services relating to its website operations;

(3).    The Pledgee and Beijing eLong signed a Amended and Restated Trademark License Agreement (“Trademark License Agreement”) on July 20, 2004, the Pledgee agrees that Beijing eLong shall use some trademarks in accordance with the agreement;

(4).    The Pledgee and Beijing eLong signed a Amended and Restated Domain Name License Agreement (“Domain Name License Agreement”) on July 20, 2004, the Pledgee agrees that Beijing eLong shall use some domain names in accordance with the agreement;

(5).    The Pledgee, the Pledgor and Beijing eLong sign an Amended and Restated Business Operation Agreement (“Business Operation Agreement“) on July 20, 2004. According to the agreement, Beijing eLong agrees not to conduct any business probably taking great effect on the capital, debt or right of the Pledgee, without the prior written consent of the Pledgee;

(6)    The Pledgee and Beijing eLong signed a Amended and Restated Cooperation Agreement (“Cooperation Agreement”) on July 20, 2004. According to the agreement, Beijing eLong agrees to cooperate with the Pledgee, and make joint efforts to engage the online hotel reservation through www.elong.com and the relevant business;

(7)    In order to make sure that Beijing eLong performs the obligations of payment for the technical service and software license of eLongNet’s operation, and performs the obligations

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related with the Pledgee in “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, the Pledgee collect technical consulting service fees as normal from Pledgor, the Pledgor is willing to pledge all of its equity interest in Beijing eLong to the Pledgee.

Therefore the Pledgee and the Pledgor through mutual negotiations hereby enter into this Agreement based upon the following terms:

1.    Definitions And Interpretation

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1    Pledge means the full content of Article 2 hereunder

1.2    Equity Interest means all equity interests in Beijing eLong legally held by the Pledgor.

1.3    Rate of Pledge means the ratio between the value of the pledge under this Agreement and the exclusive technical consulting and service fees under the Service Agreement.

1.4    Term of Pledge means the period provided for under Article 3.2 hereunder.

1.5    Service Agreement means the Exclusive Technical Consulting and Service Agreement entered into by and between Beijing eLong and the Pledgee on the date of February 1, 2001 and the Supplementary Agreement of Exclusive Technical Consulting and Service Agreement entered into on the date of August 22, 2003, and the further amendment and restatement of the aforesaid agreement on the date of July 20, 2004.

1.6    Event of Default means any event in accordance with Article 7.1 hereunder.

1.7    Notice of Default means the notice of default issued by the Pledgee in accordance with this Agreement.

2.    Assignments And Pledge

2.1    The Pledgor agrees to pledge all its equity interest in Beijing eLong to the Pledgee. Pledge under this Agreement refers to the rights owned by the Pledgee who shall be entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of the equity interests pledged by the Pledgor to the Pledgee.

3.    Rate Of Pledge And Term Of Pledge

3.1    The rate of Pledge

3.1.1    The rate of pledge shall be 100%

3.2    The term of Pledge

3.2.1    This Agreement shall take effect as of the date when the equity interests under this Agreement are recorded in the Register of Shareholder of Beijing eLong and registered with the competent Administration for Industry and Commerce. The term of the Pledge is the same with the term of Service Agreement.

3.2.2    During the period, the Pledgor shall be entitled to dispose the Pledge in accordance with this Agreement in the event that Beijing eLong fails to pay exclusive technical Consulting and service fee or software license in accordance with the Service Agreement or fails to perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”.

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4.    Physical Possession Of Documents

4.1    During the term of Pledge under this Agreement, the Pledgor shall deliver the physical possession of the certificate of distribution and the name list of shareholder of Beijing eLong to the Pledgee within one week as of the date of conclusion of this Agreement.

4.2    The Pledgee shall be entitled to collect the dividends from the equity interests.

4.3    The pledge in this Agreement shall be record in the shareholder’s register.

5.    Representation of the Pledgor

5.1    The Pledgor is the legal owner of the equity interests.

5.2    The Pledgor does not pledge or encumber the equity interests to any other person except for the Pledgee.

6.    Warranties and Guarantee of the Pledgor

6.1    During the effective term of this Agreement, the Pledgor covenants to the Pledgee that the Pledgor shall:

6.1.1    Not transfer or assign the equity interests, create or permit to create any pledges which may have an adverse effect on the rights or benefits of the Pledgee without prior written consent from the Pledgee; unless the two parties have agreed otherwise.

6.1.2    Comply with and implement laws and regulations with respect to the pledge of rights, present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within five days upon receiving such notices, orders or suggestions and comply with such notices, orders or suggestions, or object to the foregoing matters at the reasonable request of the Pledgee or with consent from the Pledgee.

6.1.3    Timely notify the Pledgee of any events or any received notices which may affect the Pledgor’s equity interest or any part of its right, and any events or any received notices which may change the Pledgor’s any covenant and obligation under this Agreement or which may affect the Pledgor’s performance of its obligations under this Agreement.

6.2    The Pledgor agrees that the Pledgee’s right of exercising the Pledge obtained from this Agreement shall not be suspended or hampered through legal procedure by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other person.

6.3    The Pledgor warrants to the Pledgee that in order to protect or perfect the security over the payment of the technical consulting and service fees under the Service Agreement, the Pledgor shall execute in good faith and cause other parties who have interests in the pledge to execute all the title certificates, agreements, and or perform and cause other parties who have interests to take action as required by the Pledgee and make access to exercise the rights and authorization vested in the Pledgee under this Agreement.

6.4    Execute all the documents with respect to the changes of certificate of equity interests with the Pledgee or the person (natural person or legal entity) designed by the Pledgee, and provides all the notices, orders and decisions regarded as necessary by the Pledgee with the Pledgee within the reasonable time.

6.5    The Pledgor warrants to the Pledgee that the Pledgor will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate all the losses suffered by the Pledgee for the reasons that the Pledgor does not perform or fully perform their guarantees, covenants, agreements, representations and conditions.

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7.    Event Of Default

7.1    The following events shall be regarded as the event of default:

7.1.1    Beijing eLong fails to make full payment of the exclusive technical consulting and service fees and software license fees as scheduled under the Service Agreement; or fails to perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”.

7.1.2    The Pledgor makes any material misleading or fraudulent representations or warranties under Article 5 herein, and/or the Pledgor is in violation of any warranties under Article 6 herein;

7.1.3    The Pledgor violates the covenants under any of the Articles herein;

7.1.4    The Pledgor waives the pledged equity interests or transfers or assigns the pledged equity interests without prior written consent from the Pledgee;

7.1.5    The Pledgor’s any external loan, security, compensation, covenants or any other compensation liabilities (1) are required to be repaid or performed prior to the scheduled date; or (2) are due but can not be repaid or performed as scheduled and thereby cause the Pledgee to deem that the Pledgor’s capacity to perform the obligations herein is affected;

7.1.6    This Agreement is illegal for the reason of the promulgation of the related laws or the Pledgor’s incapability of continuing to perform the obligations herein;

7.1.7    Any approval, permits, licenses or authorization from the competent authority of the government needed to perform this Agreement or validate this Agreement are withdrawn, suspended, invalidated or materially amended;

7.1.8    The property of the Pledgor is adversely changed and cause the Pledgee deem that the capability of the Pledgor to perform the obligations herein is affected;

7.1.9    The successors or assignees of the Beijing eLong are only entitled to perform a portion of or refuse to perform the payment liability under the Service Agreement;

7.1.10    The default resulted in the action or inaction of Pledgor’s breaching the other Articles of this Agreement;

7.1.11    Other circumstances whereby the Pledgee is incapable of exercising the right to dispose the Pledge in accordance with the related laws.

7.2    The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware of or find that any event under Article 7.1 herein or any events that may result in the foregoing events have happened or is going on.

7.3    Unless the event of default under Article 7.1 herein has been solved to the Pledgee’s satisfaction, the Pledgee, at any time when the event of default happens or thereafter, may give a written notice of default to the Pledgor and require the Pledgor to immediately make full payment of the overdue service fees and software license under the Service Agreement and other payables or perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”, or dispose the Pledge in accordance with Article 8 herein.

8.    Exercise Of The Right Of The Pledge

8.1    In case Beijing eLong does not fully repay the aforesaid technical service fees and software license fees of the Service Agreement, and does fully perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business

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Operation Agreement“ or “Cooperation Agreement”, the Pledgor shall not transfer or assign the pledge without prior written approval from the Pledgee prior to the full repayment of the consulting and service fee under the Service Agreement. Unless the two parties have agreed otherwise.

8.2    Subject to Article 7, the Pledgee may exercise the right to dispose the Pledge when the Pledgee gives a notice of default.

8.3    The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the equity interests pledged herein in accordance with legal procedure until the outstanding consulting and service fees and all other payables under the Service Agreement are repaid.

8.4    The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that the Pledgee could realize his Pledge.

9.    Transfers Or Assignment

9.1    The Pledgor shall not donate or transfer his rights and obligations herein without prior consent from the Pledgee.

9.2    This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each successor and assignee.

9.3    The Pledgee may transfer or assign his all or any rights and obligations under the Service Agreement to any individual (natural person or legal entity) at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the rights and obligations under the Service Agreement, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

9.4    After the Pledgee’s change resulting from the transfer or assignment, the new parties to the pledge shall enter into a pledge agreement.

10.    Termination

10.1    This Agreement shall not be terminated until the following conditions are met:

(1)    All the consulting and service fees and software license fees under the Service Agreement are paid off (2) Beijing eLong has fully perform all the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, or the aforesaid obligations are terminated. And (3) Beijing eLong does not perform the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”.

In case the agreement is terminated, the Pledgee shall cancel or terminate this Agreement within reasonable time as soon as practicable.

11.    Formalities Fees And Other Charges

11.1    The Pledgor shall be responsible for all the fees and actual expenditures in relation to this Agreement including but not limited to legal fees, cost of production, stamp tax and any other taxes and charges. If the Pledgee pays the relevant taxes in accordance with the laws, the Pledgor shall fully indemnify such taxes paid by the Pledgee.

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11.2    The Pledgor shall be responsible for all the fees (including but not limited to any taxes, formalities fees, management fees, litigation fees, attorney’s fees, and various insurance premiums in connection with disposition of Pledge) incurred by the Pledgor for the reason that the Pledgor fails to pay any payable taxes, fees or charges in accordance with this Agreement; or the Pledgee has recourse to any foregoing taxes, charges or fees by any means for other reasons.

12.    Force Majeure

12.1    Force majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Pledge affected by force majeure shall notify the other party of exemption promptly;

12.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

13.    Dispute Resolution

13.1    This Agreement shall be governed by and construed in accordance with the PRC law.

13.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

13.3    Arbitration place shall be in Beijing, PRC.

13.4    Arbitration language shall be English.

13.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

13.6    both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Agreement of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

13.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver

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is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

14.    Notice

14.1    Any notice, which is given by the parties hereto for the purpose of performing the rights, duties and obligations hereunder, shall be in writing form (including fax and telex). Where such notice is delivered personally, the time of notice is the time when such notice actually reaches the addressee; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice does not reach the addressee on business date or reaches the addressee after the business time, the next business day following such day is the date of notice. The delivery place is the address first written above of the parties hereto or the address advised in writing including facsimile and telex from time to time.

15.    Appendices

15.1    The appendices to this Agreement are entire and integral part of this Agreement.

16.    Effectiveness

16.1    This agreement and any amendments, modification, supplements, additions or changes hereto shall be in writing and come into effect upon being executed and sealed by the parties hereto.

(1)    This Agreement is executed by Chinese in duplicate, and each party holds one copy and each copy and the copies shall have the same legal effect.

In witness whereof the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Effective Date first written above.

The Pledgee:    ElongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    Tang Yue

Official Seal:    /s/

The Pledgor:    Tang Yue

Signature:    /s/

Appendices

1.    Register of Shareholders of Beijing eLong Information Technology Co., Ltd;

2.    Certificate of Capital Contribution of Beijing eLong Information Technology Co., Ltd;

3.    Services Agreement;

4.    Trademark License Agreement;

5.    Domain Name License Agreement;

6.    Business Operation Agreement; and

7.    Cooperation Agreement.

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EX-10.9

Exhibit 10.9

Amended and Restated Equity Interests Pledge Agreement

This Amended and Restated Equity Interests Pledge Agreement (the “Agreement”) is entered into on the day of July 20, 2004 by and between the following parties:

Pledgee:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue
Pledgor:	Qu Zhi
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing
ID No.:	11010897307116344

WHEREAS,

(1).    The Pledgor owns 25% of the equity interest in Beijing eLong Information Technology Co., Ltd. (hereinafter “Beijing eLong”). Beijing elong is a wholly domestic-owned company registered under the People’s Republic of China (hereinafter “China”) laws and regulations and qualified to engage in Internet information service business and operate the website of www.elong.com (Hereinafter “eLongNet”);

(2).    The Pledgee and Beijing eLong entered into Exclusive Technical Consulting and Services Agreement on the date of February 1, 2001 and entered into the Supplementary Agreement of Exclusive Technical Consulting and Services Agreement on the date of August 22, 2003 (the Exclusive Technical Consulting and Services Agreement and the relevant Supplementary Agreement hereinafter “Service Agreement”). Both parties amend and restate the Service Agreement in further on July 20, 2004, in which the Pledgee agreed that Pledgee has the exclusive right to provide Beijing Information with technical services relating to its website operations;

(3).    The Pledgee and Beijing elong signed a Amended and Restated Trademark License Agreement (“Trademark License Agreement”) on July 20, 2004, the Pledgee agrees that Beijing eLong shall use some trademarks in accordance with the agreement;

(4).    The Pledgee and Beijing elong signed a Amended and Restated Domain Name License Agreement (“Domain Name License Agreement”) on July 20, 2004, the Pledgee agrees that Beijing eLong shall use some domain names in accordance with the agreement;

(5).    The Pledgee, the Pledgor and Beijing eLong sign an Amended and Restated Business Operation Agreement (“Business Operation Agreement“) on July 20, 2004. According to the agreement, Beijing eLong agrees not to conduct any business probably taking great effect on the capital, debt or right of the Pledgee, without the prior written consent of the Pledgee;

(6)    The Pledgee and Beijing eLong signed a Amended and Restated Cooperation Agreement (“Cooperation Agreement”) on July 20, 2004. According to the agreement, Beijing eLong agrees to cooperate with the Pledgee, and make joint efforts to engage the online hotel reservation through www.elong.com and the relevant business;

(7)    In order to make sure that Beijing eLong performs the obligations of payment for the technical service and software license of ElongNet’s operation, and performs the obligations

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related with the Pledgee in “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, the Pledgee collect technical consulting service fees as normal from Pledgor, the Pledgor is willing to pledge all of its equity interest in Beijing eLong to the Pledgee.

Therefore the Pledgee and the Pledgor through mutual negotiations hereby enter into this Agreement based upon the following terms:

1.    Definitions And Interpretation

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1    Pledge means the full content of Article 2 hereunder

1.2    Equity Interest means all equity interests in Beijing eLong legally held by the Pledgor.

1.3    Rate of Pledge means the ratio between the value of the pledge under this Agreement and the exclusive technical consulting and service fees under the Service Agreement.

1.4    Term of Pledge means the period provided for under Article 3.2 hereunder.

1.5    Service Agreement means the Exclusive Technical Consulting and Service Agreement entered into by and between Beijing eLong and the Pledgee on the date of February 1, 2001 and the Supplementary Agreement of Exclusive Technical Consulting and Service Agreement entered into on the date of August 22, 2003, and the further amendment and restatement of the aforesaid agreement on the date of July 20, 2004.

1.6    Event of Default means any event in accordance with Article 7.1 hereunder.

1.7    Notice of Default means the notice of default issued by the Pledgee in accordance with this Agreement.

2.    Assignments And Pledge

2.1    The Pledgor agrees to pledge all its equity interest in Beijing eLong to the Pledgee. Pledge under this Agreement refers to the rights owned by the Pledgee who shall be entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of the equity interests pledged by the Pledgor to the Pledgee.

3.    Rate Of Pledge And Term Of Pledge

3.1    The rate of Pledge

3.1.1    The rate of pledge shall be 100%

3.2    The term of Pledge

3.2.1    This Agreement shall take effect as of the date when the equity interests under this Agreement are recorded in the Register of Shareholder of Beijing eLong and registered with the competent Administration for Industry and Commerce. The term of the Pledge is the same with the term of Service Agreement.

3.2.2    During the period, the Pledgor shall be entitled to dispose the Pledge in accordance with this Agreement in the event that Beijing eLong fails to pay exclusive technical Consulting and service fee or software license in accordance with the Service Agreement or fails to perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”.

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4.    Physical Possession Of Documents

4.1    During the term of Pledge under this Agreement, the Pledgor shall deliver the physical possession of the Certificate of Distribution and the Name List of Shareholder of Beijing eLong to the Pledgee within one week as of the date of conclusion of this Agreement.

4.2    The Pledgee shall be entitled to collect the dividends from the equity interests.

4.3    The pledge in this agreement shall be record in the shareholder’s register.

5.    Representation of the Pledgor

5.1    The Pledgor is the legal owner of the equity interests.

5.2    The Pledgor does not pledge or encumber the equity interests to any other person except for the Pledgee.

6.    Warranties and Guarantee of the Pledgor

6.1    During the effective term of this Agreement, the Pledgor covenants to the Pledgee that the Pledgor shall:

6.1.1    Not transfer or assign the equity interests, create or permit to create any pledges which may have an adverse effect on the rights or benefits of the Pledgee without prior written consent from the Pledgee; unless the two parties have agreed otherwise.

6.1.2    Comply with and implement laws and regulations with respect to the pledge of rights, present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within five days upon receiving such notices, orders or suggestions and comply with such notices, orders or suggestions, or object to the foregoing matters at the reasonable request of the Pledgee or with consent from the Pledgee.

6.1.3    Timely notify the Pledgee of any events or any received notices which may affect the Pledgor’s equity interest or any part of its right, and any events or any received notices which may change the Pledgor’s any covenant and obligation under this Agreement or which may affect the Pledgor’s performance of its obligations under this Agreement.

6.2    The Pledgor agrees that the Pledgee’s right of exercising the Pledge obtained from this Agreement shall not be suspended or hampered through legal procedure by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other person.

6.3    The Pledgor warrants to the Pledgee that in order to protect or perfect the security over the payment of the technical consulting and service fees under the Service Agreement, the Pledgor shall execute in good faith and cause other parties who have interests in the pledge to execute all the title certificates, agreements, and or perform and cause other parties who have interests to take action as required by the Pledgee and make access to exercise the rights and authorization vested in the Pledgee under this Agreement.

6.4    Execute all the documents with respect to the changes of certificate of equity interests with the Pledgee or the person (natural person or legal entity) designed by the Pledgee, and provides all the notices, orders and decisions regarded as necessary by the Pledgee with the Pledgee within the reasonable time.

6.5    The Pledgor warrants to the Pledgee that the Pledgor will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the

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benefits of the Pledgee. The Pledgor shall compensate all the losses suffered by the Pledgee for the reasons that the Pledgor does not perform or fully perform their guarantees, covenants, agreements, representations and conditions.

7.    Event Of Default

7.1    The following events shall be regarded as the event of default:

7.1.1    Beijing elong fails to make full payment of the exclusive technical consulting and service fees and software license fees as scheduled under the Service Agreement; or fails to perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”.

7.1.2    The Pledgor makes any material misleading or fraudulent representations or warranties under Article 5 herein, and/or the Pledgor is in violation of any warranties under Article 6 herein;

7.1.3    The Pledgor violates the covenants under any of the Articles herein;

7.1.4    The Pledgor waives the pledged equity interests or transfers or assigns the pledged equity interests without prior written consent from the Pledgee;

7.1.5    The Pledgor’s any external loan, security, compensation, covenants or any other compensation liabilities (1) are required to be repaid or performed prior to the scheduled date; or (2) are due but can not be repaid or performed as scheduled and thereby cause the Pledgee to deem that the Pledgor’s capacity to perform the obligations herein is affected;

7.1.6    This Agreement is illegal for the reason of the promulgation of the related laws or the Pledgor’s incapability of continuing to perform the obligations herein;

7.1.7    Any approval, permits, licenses or authorization from the competent authority of the government needed to perform this Agreement or validate this Agreement are withdrawn, suspended, invalidated or materially amended;

7.1.8    The property of the Pledgor is adversely changed and cause the Pledgee deem that the capability of the Pledgor to perform the obligations herein is affected;

7.1.9    The successors or assignees of the Beijing eLong are only entitled to perform a portion of or refuse to perform the payment liability under the Service Agreement;

7.1.10    The default resulted in the action or inaction of Pledgor’s breaching the other Articles of this Agreement;

7.1.11    Other circumstances whereby the Pledgee is incapable of exercising the right to dispose the Pledge in accordance with the related laws.

7.2    The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware of or find that any event under Article 7.1 herein or any events that may result in the foregoing events have happened or is going on.

7.3    Unless the event of default under Article 7.1 herein has been solved to the Pledgee’s satisfaction, the Pledgee, at any time when the event of default happens or thereafter, may give a written notice of default to the Pledgor and require the Pledgor to immediately make full payment of the overdue service fees and software license under the Service Agreement and other payables or perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”, or dispose the Pledge in accordance with Article 8 herein.

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8.    Exercise Of The Right Of The Pledge

8.1    In case Beijing eLong does not fully repay the aforesaid technical service fees and software license fees of the Service Agreement, and does fully perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”, the Pledgor shall not transfer or assign the pledge without prior written approval from the Pledgee prior to the full repayment of the consulting and service fee under the Service Agreement. Unless the two parties have agreed otherwise.

8.2    Subject to Article 7, the Pledgee may exercise the right to dispose the Pledge when the Pledgee gives a notice of default.

8.3    The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the equity interests pledged herein in accordance with legal procedure until the outstanding consulting and service fees and all other payables under the Service Agreement are repaid.

8.4    The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that the Pledgee could realize his Pledge.

9.    Transfers Or Assignment

9.1    The Pledgor shall not donate or transfer his rights and obligations herein without prior consent from the Pledgee.

9.2    This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each successor and assignee.

9.3    The Pledgee may transfer or assign his all or any rights and obligations under the Service Agreement to any individual (natural person or legal entity) at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the rights and obligations under the Service Agreement, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

9.4    After the Pledgee’s change resulting from the transfer or assignment, the new parties to the pledge shall enter into a pledge agreement.

10.    Termination

10.1    This Agreement shall not be terminated until the following conditions are met:

(1)    All the consulting and service fees and software license fees under the Service Agreement are paid off, (2) Beijing eLong has fully perform all the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, or the aforesaid obligations are terminated, and (3) Beijing eLong does not perform the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”.

In case the agreement is terminated, the Pledgee shall cancel or terminate this Agreement within reasonable time as soon as practicable.

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11.    Formalities Fees And Other Charges

11.1    The Pledgor shall be responsible for all the fees and actual expenditures in relation to this Agreement including but not limited to legal fees, cost of production, stamp tax and any other taxes and charges. If the Pledgee pays the relevant taxes in accordance with the laws, the Pledgor shall fully indemnify such taxes paid by the Pledgee.

11.2    The Pledgor shall be responsible for all the fees (including but not limited to any taxes, formalities fees, management fees, litigation fees, attorney’s fees, and various insurance premiums in connection with disposition of Pledge) incurred by the Pledgor for the reason that the Pledgor fails to pay any payable taxes, fees or charges in accordance with this Agreement; or the Pledgee has recourse to any foregoing taxes, charges or fees by any means for other reasons.

12.    Force Majeure

12.1    Force majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Pledge affected by Force Majeure shall notify the other party of exemption promptly;

12.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

13.    Dispute Resolution

13.1    This Agreement shall be governed by and construed in accordance with the PRC law.

13.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

13.3    Arbitration place shall be in Beijing, PRC.

13.4    Arbitration language shall be English.

13.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

13.6    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation

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according with PRC Law (including but not being limited to Law of Agreement of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

13.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

14.    Notice

14.1    Any notice, which is given by the parties hereto for the purpose of performing the rights, duties and obligations hereunder, shall be in writing form (including fax and telex). Where such notice is delivered personally, the time of notice is the time when such notice actually reaches the addressee; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice does not reach the addressee on business date or reaches the addressee after the business time, the next business day following such day is the date of notice. The delivery place is the address first written above of the parties hereto or the address advised in writing including facsimile and telex from time to time.

15.    Appendices

15.1    The appendices to this Agreement are entire and integral part of this Agreement.

16.    Effectiveness

16.1    This agreement and any amendments, modification, supplements, additions or changes hereto shall be in writing and come into effect upon being executed and sealed by the parties hereto.

(1) This Agreement is executed by Chinese in duplicate, and each party holds one copy and each copy and the copies shall have the same legal effect.

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In witness whereof the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Effective Date first written above.

The Pledgee:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

The Pledgor:    Qu Zhi

Signature:    /s/

Appendices

1.    Register of Shareholders of Beijing eLong Information Technology Co., Ltd;

2.    Certificate of Capital Contribution of Beijing eLong Information Technology Co., Ltd;

3.    Services Agreement;

4.    Trademark License Agreement;

5.    Domain Name License Agreement;

6.    Business Operation Agreement; and

7.     Cooperation Agreement.

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EX-10.10

Exhibit 10.10

Amended and Restated Trademark License Agreement

This Amended and Restated Trademark License Agreement (hereinafter the “Agreement”) is entered into as of July 20, 2004 in the People’s Republic of China (hereinafter the “PRC”) between the following two parties in Beijing:

(1)    eLongNet Information Technology(Beijing) Co., Ltd. (hereinafter the “Licensor”), an wholly owned foreign enterprise under the laws of PRC, Legal Address: 10 Jiuxianqiao Street, Chaoyang District Beijing; and

(2)    Beijing eLong Information Technology Co., Ltd. (hereinafter the “Licensee”), a wholly domestic invested limited liability company under the laws of PRC, Legal Address: Room 109 F1, Ji An Plaza, No.68, Xue Yuan South Road, Hai Dian District, Beijing (hereinafter, one party will be called “one party”, two parties will be called “both parties”).

WHEREAS:

A.    The “Licensor” is the owner of the registered trademarks in Appendix 1, and it is in the process of application formalities, in order to become the owner of the trademarks in Appendix 2 and the trademarks in applying

B.    The “Licensee” desires to acquire non- exclusive license of the trademarks listed in Appendix 1 and Appendix 2 in accordance with the terms and conditions of “this agreement”, and the “Licensor” agree to grant the “Licensee” such license.

C.    “Both parties” signed a Trademark License Agreement on August 22, 2003, and now decide to amend and restate the agreement in accordance with the declaration of the agreement.

NOW THEREFORE, the parties agree as follows:

1.    Definition

Unless otherwise provided for herein, the following words are specified as:

“Affiliated Enterprise” the entity with at least 10% ballot held by any “one party” directly or indirectly.

“Force Majeure” any earthquake, typhoon, fire, flood, war, and other calamity caused by nature or human which is unpredictable, unavoidable and overwhelming happened after the signing of “this agreement”, this event beyond any party’s control and impedes the performance of all or part of this agreement.

“PRC Law” any promulgated and valid laws and regulations of PRC from the date stipulated on the head of this agreement.

“Term” the period stipulated in 3.1 of this agreement

“Territory” the territory of PRC, which does not include Hong Kong, Macao and Taiwan.

“Trademark Office” the trademark office of State Administration for Industry and Commerce.

“Licensed Trademark” the trademark registered in the “Trademark Office” by the “Licensor”, listed in Appendix 1.

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“Trademark to be licensed” the registered trademark under the process of assignment in the “Trademark Office” which will be assigned to the “Licensor” and the trademark in the application for registration, listed in Appendix 2

“RMB” the legal currency of the “PRC”.

2.    License

2.1.    Trademark License

The “Licensor” will grant the “Licensee” a non-exclusive license to use the “Licensed Trademark” and “Trademark to be licensed” under the terms and conditions of this Agreement in its term, except that the “Licensor” shall give the “Licensed Trademark” and “Trademark to be licensed” to Beijing eLong Airline Services Co., Ltd, Beijing Asia Media Interactive Advertising Co., Ltd and General Chinese Reservation Network Ltd.

2.2.    Scope of Use

In the term of this agreement, the “Licensee” can use the “Licensed Trademark” and “Trademark to be licensed” in the “Territory” under the circumstances set force as follows:

2.2.1.    Use in the authorized commodities or services in accordance with the content in each certificate of registration.

2.2.2.    Use in the documents of commercial transactions, advertising, exhibitions or other commercial actions related to Item 2.2.1

2.3.    Sublicense

2.3.1.    The “Licensee” shall not grant the license of the “Licensed Trademark” and “Trademark to be licensed” to any third party without the written consent of the “Licensor” in advance. Any sublicense without authorization is invalid.

2.4.    Forbidden Action

The “Licensee” promises that in the term of this Agreement and any time after the expiration of this Agreement, it shall not:

2.4.1.    Undertake any action, which will affect the Licensor’s right on the “Licensed Trademark” and “Trademark to be licensed”; or

2.4.2.    Apply for the registration of the “Licensed Trademark” and “Trademark to be licensed” or any similar trademark in any country or region.

2.5.    Providing of Signs

The “Licensor” shall provide the authorized signs of the “Licensed Trademark” and “Trademark to be licensed” to the “Licensee” with digital format stored in the floppy disk and printed format. The “Licensee” has right to copy the “Licensed Trademark” and “Trademark to be licensed” in accordance with the relevant designs.

2.6.    Use Supervision

The “Licensor” has the right to dispatch personnel at any time to the sites of the “Licensee” for the supervision on the use of the “Licensed Trademark” and “Trademark to be licensed” after its notice in written.

2.7.    No Hindrance

The “Licensee” acknowledges the right owned by the “Licensor” to the “Licensed Trademark” and “Trademark to be licensed”, besides the warranty listed in 2.4, the

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“Licensee” shall not undertake or promote any action that will hinder the right of the “Licensed Trademark” and “Trademark to be licensed”. The “licensee” shall not state to third party that it has any right on the “Licensed Trademark” and “Trademark to be licensed”. The “licensee” acknowledges that the anticipated use of the “Licensed Trademark” and “Trademark to be licensed” will not create any ownership related to the goodwill of the “Licensed Trademark” and “Trademark to be licensed” for the “licensee”. All the use of this kind shall benefit the exclusive right of the “Licensor” as the owner of the “Licensed Trademark” and “Trademark to be licensed”.

2.8.    Quality

Both parties of this Agreement acknowledge that the quality and goodwill of commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” is important to the operation of the “Licensor”. Any commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” shall reach the top standards and qualities, and it shall under the control, and accord with PRC law and other quality standards requested by any “Licensor” from time to time, and accept supervision and approval of the “Licensor”. The “licensee” shall obey all the standards about the commodities and service of the “Licensor”.

3.    Term

3.1.    Period

This Agreement will be effective from the date of signing the contract, until termination pursuant to Article 9.1. But the license of every “Trademark to be licensed” shall be effective from the date that the “Trademark Office” authorizes the assignment to the “Licensor” and the “Licensor” becomes the owner of the trademark. Except the circumstances stipulated in Article 9.1, the period of this agreement shall be equal to the expiration period (including any extended period) of the “Licensor”.            .

4.    Record

4.1.    Application for Record

Within three (3) months after the effectiveness of this Agreement, both parties shall file this Agreement to the “Trademark Office” for record for the licensing of the “Licensed Trademark” according to the PRC laws. For the “Trademark to be licensed”, within three (3) months after the effectiveness set forth in Item 3.1, both parties shall file this Agreement to the “Trademark Office” for record.

4.2.    Fees

The “Licensee” shall assume the fees about the application and renewal set forth in Article 4.1.

5.    License Fee

The “Licensee” agrees to pay the “Licensor” the license fee, and both parties will decide its amount in accordance to the market price.

6.    Statement and Warranties

6.1.    Statement and Warranties of Both Parties

Every “one party” states and warrants, form the date of signing this Agreement:

6.1.1.    It is an independent company duly registered in the place of establishment, and has gotten all the government’s authorization and registration, which are

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continuously valid for its existence, and it has sufficient rights to operate according to its business license, business certificate of registration, articles of association or similar documents of company;

6.1.2.    It has absolute authorization to sign this Agreement and perform the obligations under this agreement;

6.1.3.    The representative has gotten absolute authorization to sign this Agreement (the signature of representative is in the place for signing);

6.1.4.    The signing of this Agreement or the performance of the obligations under this agreement will not violate:

6.1.4.1.    The business license, business certificate of registration, articles of association or similar documents of company;

6.1.4.2.    Any law, regulation or the authorization or approval of government; and

6.1.4.3.    Any binding agreement.

6.1.5.    There is not any pending case of lawsuit, arbitration, other legal or governmental procedure that will has material adverse effects on this Agreement to its knowledge;

6.1.6.    It has disclosed all the documents to the other party, which will probably have material adverse effects on the obligations under this agreement issued by any branch of government;

6.1.7.    It has not been the subject of liquidation or dissolution; and

6.1.8.    It has not been declared bankruptcy by the court with jurisdiction.

6.2.    Statement and Warranties of the “Licensee”

The “Licensee” further states and warrants to the “Licensor”:

6.2.1.    It will use the “Licensed Trademark” and “Trademark to be licensed” only according to the purpose stipulated in 2.2;

6.2.2.    It shall not use the “Licensed Trademark” and “Trademark to be licensed” beyond the method stipulated in this agreement;

6.2.3.    It shall not change any appearance, text, content or their combination of the “Licensed Trademark” and “Trademark to be licensed” in any way.

6.2.4.    It shall sign the name and origin of the “Licensee” on the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

6.2.5.    It shall obey all the PRC laws and regulations related with the products’ sign, packing and sale;

6.2.6.    It shall allow any employee or agent of the “Licensor” access the site of the “Licensee” in business hour for the supervision on the quality of the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

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7.    Claims and Tort

7.1.    Tort to Third Party

If the use of any “Licensed Trademark” and “Trademark to be licensed” according to the stipulations in this Agreement by the “Licensee” cause the claim (the “claim”) for the tort of any intellectual property right of third party:

7.1.1.    The “Licensee” shall notify the “Licensor” about such claim in written at once;

7.1.2.    Without the written consent of the “Licensor”, the “Licensee” shall not make any promise or compromise with third party;

7.1.3.    The “Licensee” shall let the “Licensor” take part in any negotiation and suit for the settlement of the claim;

7.1.4.    According the reasonable require of the “Licensor”, the “Licensee” shall provide any acquired information to the “Licensor” and give every reasonable assistance.

7.1.5.    If the “Licensee” violates the stipulations in this Agreement to use the “Licensed Trademark” and “Trademark to be licensed”, the “Licensor” won’t bear any liability for the “Licensee”; the “Licensee” shall bear the liability by itself.

7.2.    Tort of Third Party

If any third party takes the act of tort to the “Licensed Trademark” and “Trademark to be licensed” of this Agreement:

7.2.1.    The “Licensee” shall notify the “Licensor” after it get to know the tort to the “Licensed Trademark” and “Trademark to be licensed” of the “Licensor” in any territory;

7.2.2.    Both parties shall make joint consultations on juridical action to the torts or menacing actions. In order to avoid the doubtful point, the “Licensee” agrees that before the prior written consent of the “Licensor”, it shall not make any compromise with any third party by itself;

7.2.3.    If both parties agree to take juridical action to the torts of the “Licensed Trademark” and “Trademark to be licensed”, the fees and the damages acquirable shall be divided equally. If the “Licensee” does not decide to take lawsuit to the event stipulated in the “Licensor” can decide to take the lawsuit by itself or through the affiliated enterprise, and bear the fees; the “Licensee” shall render assistance to the “Licensor” for such juridical action with its effort; and

7.2.4.    All the damages acquired by the juridical action taken by the “Licensor” shall be owned by the “Licensor”.

8.    Breaches and Compensation

8.1.    Breach

8.1.1.    Any party violates any stipulation, fails to perform the obligations or its performance does not accord with the stipulations of this Agreement (the “Party in Breach”), and it will be taken as the breach of the obligations of this agreement. The party who obey this Agreement (the “Observant Party”) has the right to notify the Party in Breach in written to correct its action within 10 days from the date it get the notice.

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8.1.2.    If any party breaches this Agreement, both parties shall keep on the performance of this agreement; the party in breach shall take sufficient, efficient and timely measures to eliminate the result of breach, and compensate to the Observant Party all the damages caused by the breach.

8.2.    Compensation

The Party in Breach shall compensate the Observant Party according to 8.1.2, the compensation is the damages caused by the Party in Breach, including the benefits acquirable by the performance of this Agreement, but it shall not exceed the damages reasonably foreseeable by the Party in Breach.

9.    Cancellations, Termination and Renewal of Agreement

9.1.    Termination

This Agreement will be terminated in the circumstances as follows:

9.1.1.    By the written consultation of both parties;

9.1.2.    By the notice of termination sent by the “Licensor” thirty (30) days in advance;

9.1.3.    The Observant Party has the right to terminate this Agreement at once if the Party in Breach materially breaches the Agreement and does not correct its actions within 10 days from the date it get the notice from the Observant Party;

9.1.4.    Any party in liquidation, and its assets is in the takeover of assigned party;

9.1.5.    Any party accesses to the bankrupt procedure, or stops business materially;

9.1.6.    If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, and at the same time, both parties cannot find a reasonable settlement according to 11.

9.2.    The result of Termination

9.2.1.    If the Agreement terminated by any reason, the license under this Agreement will be terminated at once. The “Licensee” shall;

9.2.1.1.    Stop using the “Licensed Trademark” and “Trademark to be licensed” in the actions related to its business;

9.2.1.2.    Remove the “Licensed Trademark” and “Trademark to be licensed” form all the disseminating datum, handbooks, sign and other assets of the “Licensee” at its own expenses within 90 days from the termination of this Agreement; and

9.2.1.3.    Stop using any license even with the prior approval of the “Licensor”, and take any necessary steps to stop the using of the “Licensed Trademark” and “Trademark to be licensed” by any relicensee.

9.2.2.    No matter what reason cause the termination of this Agreement, it will not affect the rights or obligations still held by each one party.

10.    Applicable Law and Settlement of Disputes

10.1.    Applicable Law

The conclusion, validity, interpretation and implementation of this Agreement shall be governed by the laws of the PRC, and excludes the conflict rules, if there is no regulation prescribed in the laws of the PRC for the specific event, the international business practice shall be referred to.

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10.2.    Arbitration

10.2.1    Any dispute, tangle or claim arising from the Agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

10.2.2    Arbitration place shall be in Beijing, PRC.

10.2.3    Arbitration language shall be English.

10.2.4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

10.2.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC law (including but not being limited to Law of Contract of the PRC). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

10.2.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

10.3.    Continuous Performance

In the period of arbitration, parties shall try to perform the part of this Agreement that is not in arbitration.

11.    Force Majeure

11.1.    Suspension of obligations

On the occurrence of force majeure, both parties shall negotiate at once in order to get consistent settlements. Both parties shall suspend their obligations in the range affected by force majeure.

11.2.    Written Certificate

The party stating the influence by force majeure shall notify the other party within 15 days after the occurrence of force majeure, and render the written certificate issued by relevant authorities, and reduce the effect of such force majeure by its effort.

11.3.    Termination

If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, any party can terminate this Agreement according to 9.1.6.

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12.    Supplement

12.1.    Notice

Any notice of both parties shall be written in English, and send by fax, specific sending (including courier) or registered airpost. Without the notice of address changing, all the notices and communications shall be sent to the address as follows:

The “Licensor”:
eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chao Yang District, Beijing
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue
The “Licensee”:
Beijing eLong Information Technology Co., Ltd
Address:	109, 1st Floor, Jian Tower, 68 South Xueyuan Road, Haidian District, Beijing.
Phone Number:	58602288
Fax Number:	64315872
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue

12.2.    Reference

The chapters, articles or appendixes are the chapters, articles or appendixes under this Agreement. The titles of this Agreement are just for reference; they do not have binding force on this Agreement and do not affect its interpretation.

12.3.    Waiver

If any party cannot perform or delay in performance of any right, power or preferential right of this Agreement or other related agreement, it will not be treat as waiver. The separate or partly performance of any right, power or preferential right will not affect the latter performance of such right, power or preferential right.

12.4.    Transfer

Without the prior consent of the other party, any party shall not transfer all or part of the rights (obligations) under this Agreement to any third party.

12.5.    Divisibility

The invalidity of any stipulations under this Agreement does not affect the validity of other irrelevant stipulations. Both parties shall modify any invalid or unenforceable stipulations in order to make these stipulations valid or enforceable.

12.6.    Integrity

The appendixes of this Agreement are the undividable part of this Agreement and shall have the same legal effect as this agreement. This Agreement and its appendixes constitute an integral agreement about the events between both parties, and it will replace all the prior discussions, negotiations and agreements.

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12.7.    Language

This agreement is executed in quadruplicate originals in Chinese. The “Licensor” holds one, and the “Licensee” holds two, the one remained will be filed to the “Trademark Office” for record.

12.8.    Modification

This Agreement could only be modified by the written amendment signed by both parties.

12.9.    Successor

This Agreement is signed for the rights of both parties and their legal successors and assignee, and will be binding on both parties and their legal successors and assignee with the same binding force.

12.10.    Singular and Plurality

The singular and plurality can be used mutually.

12.11.    Unstipulated events

The unstipulated events shall be disposed according to the agreements of both parties and relevant regulations of PRC laws.

The official authorized representative shall sign this Agreement at the date stipulated at the head of the Agreement for good faith.

The “Licensor”

eLongNet Information Technology (Beijing) Co., Ltd.

Authorized Representative:    Tang Yue

Signature of Representative:    /s/

Official Seal:    /s/

The “Licensee”

Beijing eLong Information Technology Co., Ltd

Authorized Representative:    Tang Yue

Signature of Representative:    /s/

Official Seal:    /s/

9

Appendix One

Details of Licensed Trademark

	Trademark	Type	Registration Number	Validity Period
1	eLong.com+ “e”logo+ dragon	9	1570359	14 May 2001 - 13 May 2011
2	eLong.com	35	1607616	21 Jul 2001 - 20 Jul 2011
3	eLong.com	36	1739999	28 Mar 2002 - 27 Mar 2012
4	eLong.com+ “e”logo+ dragon	41	1535930	7 Mar 2001 - 6 Mar 2011
5	Xi Ci	35	1587892	14 Jun 2001 - 13 Jun 2011
6	Xi CiHu Tong	35	1587891	14 Jun 2001 - 13 Jun 2011
7	Xi Ci	38	1623768	21 Aug 2001 - 20 Aug 2011
8	Xi CiHu Tong	38	1623767	21 Aug 2001 - 20 Aug 2011
9	eLong.com+e	42	1599959	7 Jul 2001 - 6 Jul 2011
10	“A” logo	38	1623841	21 Aug 2001 - 20 Aug 2011
11	The world circles for you +eLong.com	35	1695505	7 Jan 2002 - 6 Jan 2012
12	Lohoo+logo+ “Business Travel Net”	9	1642574	28 Sep 2001 - 27 Sep 2011
13	Lohoo+logo	35	1719860	21 Feb 2002 - 20 Feb 2012
14	Lohoo+logo	36	1711506	7 Feb 2002 - 6 Feb 2012
15	Lohoo+logo	38	1711492	7 Feb 2002 - 6 Feb 2012
16	Lohoo+logo	39	1764897	7 May 2002 - 6 May 2012
17	Lohoo+logo	41	1749624	14 Apr 2002 - 13 Apr 2012
18	Lohoo+logo	42	1719681	21 Feb 2002 - 20 Feb 2012
19	e+ dragon +logo	41	1983708	7 Apr 2003 - 6 Apr 2013
20	e+ dragon +logo	42	2016041	14 Jan.2003 - 13 Jan 2013
21	e+ dragon + Travel care+ Travel Care Plan	39	3279761	21 Mar 2004 - 20 Mar 2014
22	e+ dragon + Travel care+ Travel Care Plan	43	3279762	14 Feb 2004 - 13 Feb 2014

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Appendix Two

Details of Trademark to be licensed

1.    Registered Trademark

		Registrant	Type	Register Number	Validity Period
1	“A” logo	eLong.com,Inc	35	1631670	7 Sep 2001 - 6 Sep 2011
2	“A” logo	eLong.com,Inc	36	1749484	14 Apr 2002 - 13 Apr 2012
3	“A” logo	eLong.com,Inc	41	1731794	14 Mar 2002 - 13 Mar 2012

2.    Trademark to be Licensed

	Trademark	Type	Register Number	DATE OF APPLICATION
1.	eLong.com+ “e”logo+ dragon	45	3679722	19.Aug.2003
2.	eLong.com+ “e”logo+ dragon	16	3683714	21.Aug.2003
3.	eLong.com+ “e”logo+ dragon	35	3683713	21.Aug.2003
4.	eLong	36	3679721	19.Aug.2003
5.	eLong	39	3679719	19.Aug.2003
6.	eLong	45	3279720	19.Aug.2003
7.	eLong	16	3683505	21.Aug.2003
8.	eLong	35	3683504	21.Aug.2003
9.	eLong	41	3683503	21.Aug.2003
10.	eLong	42	3683743	21.Aug.2003
11.	eLong	43	3683715	21.Aug.2003
12.	eLong Travel Net +eLong.com	35	3953009	11.Mar.2004
13.	eLong Travel Net+eLong.com	39	3953008	11.Mar.2004
14.	eLong Travel Net +eLong.com	41	3953010	11.Mar.2004
15.	eLong Travel Net +eLong.com	43	3953011	11.Mar.2004
16.	e+ dragon +logo	39	1994192	10.Sep.2001

11

EX-10.11

Exhibit 10.11

Amended and Restated Domain Name License Agreement

This Amended and Restated Domain Name License Agreement (hereinafter the “Agreement”) is entered into as of July 20, 2004 between the following two parties in Beijing.

(1)    eLongNet Information Technology (Beijing) Co., Ltd. (Hereinafter the “Party A”)
Legal Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Legal Representative:	Tang Yue
(2)    Beijing eLong Information Technology Co., Ltd. (Hereinafter the “Party B”) Legal
Address:	Room 109 F1, Ji An Plaza, No.68, Xue Yuan South Road, Hai Dian District, Beijing
Legal Representative:	Tang Yue

WHEREAS:

1.    Party A, a wholly foreign-owned enterprise registered under the laws of the People’s Republic of PRC (the “PRC”), Party A is the owner of the registered domain names listed in the Appendix 1 of this Agreement and conduct the relevant procedure to become the owner of the registered domain names listed in the Appendix 2 (the domain names listed in the Appendix 1 and Appendix 2 are hereinafter called the “Domain Names”);

2.    Party B, a limited liability company registered under the laws of the PRC;

3.    Party A desires to license the Domain Names to Party B in accordance with the terms and conditions set forth herein and Party B wishes to accept the license on the terms and conditions set forth herein.

4.    Both parties agreed to sign a Domain Name License Agreement on August 22^nd 2003, and decide to amend and restate the agreement in accordance with the declaration of the agreement.

NOW THEREFORE, the parties agree as follows:

Chapter One    Grant of Registered Domain Name

1.    In the period of validity of this Agreement (hereinafter the “Period of Validity”) , Party A hereby grants a general license to Party B the Domain Names, and Party B hereby accepts the general license to use the Domain Names.

2.    Party B understands and accepts that Party A has the Domain Names’ ownership; and under this agreement, Party A only license Party B the Domain Names for use, but not transfers it to Party B.

3.    Party A shall be responsible for carrying out related formalities in the connected Domain Names registration service organization and paying related fees for registered Domain Names on time, ensure that the Domain Names can be normally and lawfully used.

4.    If Party A has something happened such as alteration or cancellation of the Domain Names or any other things which will affect the lawful and normal use of the Domain Names, Party A should at least notify Party B in written ten (10) days in advance.

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5.    Party B should not intervene Party A’s related rights as the owner of the registered Domain Names, includes but not limited to:

(1)    Party A has the right to choose and change the Domain Names registration service organization; and

(2)    Party A has the right to license other third Party the Domain Names for use.

6.    Party B shall ensure that the use of Domain Names will not violate others’ lawful rights, and be responsible for any damages cause by the violation by itself.

7.    Party B shall pay license fees to Party A according to the terms stipulated in 2.

Chapter Two    Terms of Payment

1.    Party B agrees to pay the license fees to Party A, the amount of the aforesaid fees shall be set down by two parties according to the relevant market price.

2.    Party B shall pay the license fees to Party A quarterly according to the form of payment stipulated by two parties.

Chapter Three.    Representations and Warranties

1.    Party A represents and warrants as follows, within any time of the signing day and period of this Agreement:

(1).    Party A is a limited liability company duly registered and validly existing under the company laws of the PRC and with good operation record, Party A has wholly lawful rights and necessary power and authorization to sign and deliver this agreement, and wholly perform the obligations under this agreement and accomplish the transaction stipulated in this Agreement.

(2).    Party A has finished all necessary company conducts and gotten all proper and validly authorization to sign and perform this Agreement. The obligations in this agreement will become lawful, validly and binding after the signing by Party A, and they are also enforceable against Party A.

(3).    The signing and delivery of this Agreement by Party A does not need to apply to any competent authority of government or to get any approval.

(4).    The signing and delivery of this Agreement, the performance of the obligations under this agreement and the accomplishment of the transaction stipulated in this agreement by Party A will not: 1) Cause the violation of any clause of its article of association or other organization documents; 2) Cause the violation of any stipulation in the contracts or agreements which are binding upon Party A or take Party A as one of its party; 3) Cause the violation of any judgment, decision and instruction of any court or government department which are binding upon Party A or take Party A as one of its party; or 4) Need the consent of any others.

(5).    Party A does not have any agreement, contract or other arrangement, which will have adverse effect on the signing and performance of this Agreement, and does not have any undisclosed debts or contingent debts which will have adverse effect on the signing and performance of this Agreement either.

2.    Party B represents and warrants as follows, within any time of the signing day and period of this Agreement:

(1).    Party B is a limited liability company duly registered and validly existing under the company laws of the PRC and with good operation record, Party B has wholly lawful rights

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and necessary power and authorization to sign and deliver this Agreement, and wholly perform the obligations under this Agreement and accomplish the transaction stipulated in this Agreement.

(2).    Party B has finished all necessary company conducts and gotten all proper and validly authorization to sign and perform this Agreement. The obligations in this agreement will become lawful, validly and binding after the signing by Party B, and they are also enforceable against Party B.

(3).    The signing and delivery of this Agreement by Party B does not need to apply to any competent authority of government or to get any approval.

(4).    The signing and delivery of this Agreement, the performance of the obligations under this Agreement and the accomplishment of the transaction stipulated in this Agreement by Party B will not: 1) cause the violation of any clause of its article of association or other organization documents; 2) cause the violation of any stipulation in the contracts or agreements which are binding upon Party B or take Party B as one of its party; 3) cause the violation of any judgment, decision and instruction of any court or government department which are binding upon Party B or take Party B as one of its party; or 4) need the consent of any others.

(5).    Party B does not have any agreement, contract or other arrangement, which will have adverse effect on the signing and performance of this Agreement, and does not have any undisclosed debts or contingent debts which will have adverse effect on the signing and performance of this Agreement either.

(6).    Party B will not register any similar Domain Names with the registered Domain Names in any Domain Names registration service organization.

(7).    Without the written consent of Party A in advance, Party B shall not grants a license to any third party the Domain Names.

Chapter Four.    Confidentiality

1.    Any party of this Agreement shall protect the confidentiality of any confidential data and information (Herein after the “Confidential Information”) acquired from the other party by signing and performing this Agreement. Unless with the written consent of the other party in advance, or the disclosure is required by the law or enforceable directions of courts and related government departments, any party shall not disclose any Confidential Information to third parties. The party who is required to disclose the Confidential Information shall notify the other party immediately, and take all possible measures to perform the disclosure in the scope as small as possible, and tell the disclosed party the obligation of confidentiality.

2.    Upon termination of this Agreement, any party shall, at the other party’s option, return any document, material, database, equipment or software to the other party; if the return becomes impossible for any reason, the party shall destroy all the Confidential Information or delete the Confidential Information from any electronic devices. No party can use any Confidential Information in any way after the termination of this agreement.

3.    There is no time limit to the confidentiality stipulated by Chapter Four, and it will survive after the termination of this Agreement, unless the Confidential Information is open to the public, and the open of the Confidential Information is not due to the breach of contract by any party.

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Chapter Five    Date and Term

1.    This Agreement shall be effective from the date it is signed, until it is terminated by Article 5.2. Except the situation regulated in Article 5.2, the Period of Validity is equal to the existence period of Party A (including any extended period).

2.    Termination

The agreement shall be terminated on the following conditions:

(1)    Be terminated by written agreement of both parties;

(2)    Party A gives a thirty (30) days notice of terminating this Agreement;

(3)    In case the delinquent party materially breaks this Agreement, or does not correct its delinquent activity within 10 days, from the date of the opposite party’s delivering requirement for correcting the delinquent activity, the opposite party has right to terminate this Agreement immediately;

(4)    In case any party of this Agreement is liquidated, and any property of the liquidated party is taken over by the appointed personnel;

(5)    In case any party of this Agreement enters into the bankrupt procedure, or actually stops business operation; and

(6)    In case the force majeure lasts for more than 30 days, and make material affects on the performance of any party of the agreement, and both parties do not find a fair reasonable resolution.

The termination of this Agreement shall not affect any right or obligation of any party of the agreement.

Chapter Six.    Others

1.    All notices or other communications under this Agreement are required to be given in written (include faxes) and shall be delivered to the address set forth below or the address specified by one party in written by EMS or fax. If the notices and communications are delivered by EMS, they will become effective seventy two (72) hours after the delivery to the EMS company; if the notices and communications are delivered by fax, they will become effective twenty four (24) hours after sending.

Party A:	eLongNet Information Technology (Beijing) Co., Ltd.
Addressee:	Tang Yue
Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872
Party B:	Beijing eLong Information Technology Co., Ltd.
Addressee:	Tang Yue
Address:	Room 109 F1, Ji An Plaza, No.68, Xue Yuan South Road
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872

2.    This Agreement will be binding on both parties of this agreement and their respective inheritors and the licensee, and this Agreement is signed for the rights of these person only.

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3.    Arbitration

(1)    Any dispute, tangle or claim arising from this Agreement or relating to this Agreement (including any issue relating to the existence, validity or termination of this Agreement) should be submitted to PRC International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

(2)    Arbitration Place shall be Beijing.

(3)    Arbitration language shall be English.

(4)    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

(5)    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC’s Law (including but not being limited to Law of Contract of the People’s Republic of PRC). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC’s Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

(6)    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforementioned waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

4.    Unless with the written consent by both parties, this Agreement cannot be modified or altered; if there is anything not concluded in this Agreement, two parties can amend the agreement with written supplement; Any above modification, alteration, supplement and other appendix of this Agreement shall be the indiscerptible part of this agreement and shall have the same legal effect as this Agreement.

5.    This Agreement is separable, the invalidation or unenforceability of any stipulation will not affect the validity and enforceability of other stipulations.

6.    When one party does not exercise or delays exercising any right or remedy for breach of contract under this Agreement, it does not mean to waive such right or remedy; when one party exercises once or exercises part of any right or remedy for breach of contract under this Agreement, it does not mean to prevent the party to exercise again or exercise further such right or remedy. One party’s waiver of right according to this Agreement may add any term it thinks appropriate. Any waiver is effective only once and for the special item.

7.    All topics in this Agreement are set only for convenience, and they should not be deemed part of this Agreement.

8.    This Agreement is executed in duplicate originals, each party holds one, and each copy has the same legal effect.

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Chapter Seven    Claim of the Third Party

1.    Infringe on the third party

In case Party B uses any registered domain name in accordance with the regulations of this Agreement, and is accused or charged by the third party for any registered domain name’s invalidation or any domain name usage’s violating the right of the third party;

(1)    Party B shall immediately inform Party A the relevant lawsuit in written form;

(2)    Party B shall not make any promise or compromise with the third party, without the prior written approval of Party A;

(3)    Party B shall immediately request Party A to conduct any negotiation and lawsuit, and resolve the relevant lawsuit.

(4)    According to the reasonable requirement of Party A, Party B shall provide Party A with any information and reasonable assistant; and

(5)    In case Party B violates any regulation of the agreement, Party A need not to burden any responsibility of compensation, Party B shall take the responsibility of compensate the relevant damage all by itself.

2.    Infringe by the third party

In case any third party use registered domain name without authorization or use any other domain name same or similar with the registered domain name.

(1)    In case Party B hears of any unauthorized usage, Party B shall immediately inform Party A;

(2)    Both parties should jointly discuss whether adopt legal action on the unauthorized usage of registered or not. For the avoidance of doubt, Party B agrees not to compromise with any third party without the prior written approval of Party A.

(3)    In case both parties agree to take joint legal actions on the usage of unregistered domain name, the relevant expenses and damage compensation should be shared in equal amount. In case Party B decides not to submit lawsuit on the matters regulated in Article 7.2, Party A shall decide for itself to submit the lawsuit by itself or the relevant enterprises, and pay the relevant expenses, Party B shall try its best to associate Party A to conduct the aforementioned legal actions; and

(4)    Any compensation gained by the legal action aroused by Party A’s infringe, shall be fully paid by Party A.

IN WITNESS THEREOF the parties hereto have caused this Agreement to be signed by a duly authorized representative as of the date first set forth above.

eLongNet Information Technologies (Beijing) Co., Ltd

Signature of Authorized representative:    /s/

Official Seal:    /s/

Beijing eLong Information Technology Co., Ltd

Signature of Authorized representative:    /s/

Official Seal:    /s/

6

APPENDIX 1:    DETAILS OF REGISTERED DMAIN NAME

Registered Domain Name	Registration Date	Due date	Register
eLong.com	25-Apr-99	25-Apr-06	Party A
eLong.net	25-Apr-99	25-Apr-06	Party A
lohoo.com	25-Dec-98	25-Dec-07	Party A
lohoo.net	09-Apr-00	09-Apr-05	Party A
xici.net	05-Nov-98	04-Nov-06	Party A
xici.org	10-Aug-01	10-Aug-04	Party A
eLong.com.cn	16-Jun-01	16-Jun-05	Party A
eLong.net.cn	16-Jun-01	16-Jun-05	Party A
lohoo.com.cn	13-Apr-00	13-Apr-05	Party A
lohoo.net.cn	13-Apr-00	12-Apr-05	Party A
xici.com.cn	13-Apr-00	13-Apr-05	Party A
xici.net.cn	13-Jul-00	13-Jul-04	Party A
asiamedia.com.cn	22-Sept-00	22-Sep-04	Party A
xici.cn	17-Mar-03	17-Mar-05	Party A
lohoo.cn	17-Mar-03	17-Mar-05	Party A
asiamedia.cn	23-May-03	23-May-05	Party A
1949.com.cn	20-Jun-03	20-Jun-05	Party A
1949.net.cn	20-Jun-03	20-Jun-05	Party A
eLong.cn	17-Mar-03	17-Mar-05	Party A
eLong.com.cn	08-Jan-03	08-Jan-05	Party A
10101818.com	05-Dec-03	5-Dec-04	Party A
eLong.com (Simplified and Traditional Chinese character)	06-Nov-00	15-May-05	Party A
eLong.net (Simplified and Traditional Chinese character)	06-Nov-00	15-May-05	Party A
eLong.com (Simplified and Traditional Chinese character)	06-Nov-00	15-May-05	Party A
eLong.net (Simplified and Traditional Chinese character)	06-Nov-00	15-May-05	Party A
eLong.PRC/.cn (Simplified and Traditional Chinese character)	06-Nov-00	23-Jul-04	Party A
eLong.com.PRC/.cn (Simplified and Traditional Chinese character)	06-Nov-00	23-Jul-04	Party A
eLongcom.PRC/.cn (Simplified and Traditional Chinese character)	06-Nov-00	23-Jul-04	Party A
xici.com (Simplified and Traditional Chinese characters are same)	15-Nov-00	15-May-05	Party A
xici.net (Simplified and Traditional Chinese characters are same)	15-Nov-00	15-May-05	Party A

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Registered Domain Name	Registration Date	Due date	Register
xicihutong.net (Simplified and Traditional Chinese character)	13-Jun-03	15-May-05	Party A
eLong .PRC/.cn (Simplified and Traditional Chinese character)	13-Jun-03	12-Jun-05	Party A
eLongnet.PRC/.cn (Simplified and Traditional Chinese character)	28-Aug-03	28-Aug-04	Party A
eLongnet.PRC/.cn (Simplified and Traditional Chinese character)	28-Aug-03	28-Aug-04	Party A

APPENDIX 2:    DETAILS OF REGISTERED DMAIN NAME TO BE TRANSFERRED

Registered Domain Name	Registration Date	Due date	Register
eLong.com (Simplified and Traditional Chinese character)	09-Nov-00	09-Mar-05	eLong.com, Inc.
xici.com (Simplified and Traditional Chinese characters are same)	09-Nov-00	09-Mar-05	eLong.com, Inc.
xici.net (Simplified and Traditional Chinese characters are same)	09-Nov-00	09-Mar-05	eLong.com, Inc.
Xicihutong.com (Simplified and Traditional Chinese characters are same)	09-Nov-00	09-Mar-05	eLong.com, Inc.
Xicihutong.net (Simplified and Traditional Chinese characters are same)	09-Nov-00	09-Mar-05	eLong.com, Inc.
eLong.net Traditional Chinese characters	09-Nov-00	09-Mar-05	eLong.com, Inc.
eLong.com Traditional Chinese characters	09-Nov-00	09-Mar-05	eLong.com, Inc.
eLong.net Traditional Chinese characters	09-Nov-00	09-Mar-05	eLong.com, Inc.
Asia Media.com Traditional Chinese characters	09-Nov-00	09-Mar-05	eLong.com, Inc.

8

EX-10.12

Exhibit 10.12

Amended and Restated Cooperative Agreement

This Amended and Restated Cooperation Agreement (the “Agreement”) is entered into on the day of July 20, 2004 (the “Effective Date”) in Beijing among the following parties:

eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Legal Representative:	Tang Yue
Beijing eLong Information Technology Co., Ltd (hereinafter Party B)
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing
Legal Representative:	Tang Yue

Whereas:

1.    Party A is a wholly foreign-owned enterprise with valid existence registered under PRC laws and regulations, which specialized in Internet technology, e-commerce technology exploration and technology services. Taking the advantages in the field of technology, HR and information etc., Party A established the long term cooperative relationship with the hotels, guesthouses, stores.

2.    Party B is a wholly domestic-owned company with valid existence registered under PRC laws and regulations, approved by Beijing Communication Administration, may engage in Internet information service business (license No: Jing ICP Certification No. 010011), and possess and operate the website of www.elong.com (hereinafter “elong.com”) and the calling center.

3.    Party A and Party B agree to jointly undertake the hotel-booking services by the media of elong.com together and currently two Parties signed the Service Agreements with hotels, guesthouses, stores (hereinafter “Cooperative Partners”) and built up the good and stable cooperative relationships between two Parties and the Cooperative Partners.

4.    Both parties agree to amend and restate the cooperative agreement signed between them on March 5, 2004.

Therefore, Party A and Party B achieve the following Cooperative Agreement (hereinafter the “Agreement”) after friendly negotiation based on the principle of equity and voluntary.

Article 1:    Two Parties’ liabilities and obligations

Party A and Party B agree to jointly undertake the hotel-booking services based on elong.com and other relevant businesses. Party A’s rights and obligations

Party A shall:

(1)    Develop the hotel-booking market by negotiating with the relevant Cooperative Partners and elong members on behalf of Party B;

(2)    Provide accurate information about the relevant market and Cooperative Partners to Party B;

(3)    Send booking orders to and accept confirmation responses from the Cooperative Partners for Party B;

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(4)    Be liable for the elong.com’s customers services, including but not limited to handling the customers’ complains relating to the hotel-booking services;

(5)    Accept commissions and service fees from Cooperative Partners according to the Article 2 of this Agreement on behalf of Party B and elong.com;

(6)    Provide the technical consultation, technical training and technical supply; and

(7)    Deal with the other affairs relating to the hotel booking, but except which shall be liable by Party B, e.g. Internet service, calling center and data management.

Party B’s rights and obligations

(1)    Publish prices, market information and other relevant information on elong.com and process the hotel booking orders through the call center; process the Internet data and information inquiry.

(2)    Be liable for other matters related to Internet information service and call center.

Article 2:    Payment and settlement

Two Parties agreed, in considering of convenience, that Party A shall accept commissions and service fees from the relevant Cooperative Partners on behalf. Party A and Party B shall determine the amount of the service charge by negotiation in accordance with the market price of the aforesaid Internet Network space and information service. The service charge shall be paid by the quarter.

Article 3:    Notice and Guarantee

3.1    Party A states and guarantees herein as following:

3.1.1    Party A is a wholly foreign-owned enterprise with valid existence registered under PRC laws and regulations.

3.1.2    Party A signs and performs this Agreement within the corporate franchise and business scope; Party A has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.1.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

3.2    Party B states and guarantees herein as following:

3.2.1    Party B is a wholly domestic-owned limited company with valid existence registered under PRC laws and regulations, qualified to operate Internet information service business.

3.2.2    Party B signs and performs this Agreement within the corporate franchise and business scope; Party B has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.2.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

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Article 4:    Confidentiality

Parties admit that any exchanged oral or written information about this Agreement is confidential information and parties shall protect and maintain the confidentiality of any and all confidential information. One of the parties can not exposure any relevant information to the third party without the prior written consent from the other party, excepting the following circumstances: (a) the information has be known or will be known by public (not exposed to public by the information received party); (b) information disclosed by the requirement of application of laws and the regulations stipulated by stock exchange; or (c) any party discloses the confidential information to its legal or financial consultant for the reason of the transaction’s requirement under this Agreement, the legal or financial consultant is liable for complying with the confidential liability which is similar to this clause. The party will be regard as exposure if any of its employees or its employed organizations disclose the confidential information and liable for the exposure according to this Agreement.

Article 5:    Force Majeure

5.1    Force majeure, which includes but not limited to acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event is beyond one party’s reasonable control and unavoidable with reasonable care of the affected party. However, any shortage of credit, capital or finance shall not be regarded as an event of force majeure. To dissolute the performing obligations under this agreement the party affected by Force Majeure shall notify the other party without delay.

5.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

Article 6:    Settlement of Disputes

6.1    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

6.2    Arbitration place shall be in Beijing, PRC.

6.3    Arbitration language shall be English.

6.4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

6.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with

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China’s Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including China’s Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

Article 7:    Compensation for Damage

All the parties agree that any party violating any obligation of the agreement shall compensate any or all loss, responsibility, expense, claim or expenditure (including legal expense and expenditure), to any other party (hereinafter “Party Accepting Compensation”), and guarantee that the Party Accepting Compensation shall not receive any damage.

Article 8.    Notices and delivery

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant party or parties set forth below.

Party A:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Addressee:	Tang Yue
Fax:	64312801
Tel:	58602288
Party B:	Beijing eLong Information Technology Co., Ltd
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing,
Addressee:	Tang Yue
Fax:	64312801
Tel:	58602288

Article 9:    Agreement Transfer

Party B shall not transfer the rights and obligations of this Agreement to any third party without the prior written consent of Party A.

Article 10:    Amendment and Supplement

Any amendment and supplement of this Agreement shall come into force only after both parties sign a written agreement. The amendment and supplement duly executed by both parties shall be an integral part this Agreement and shall have the same legal effect as this Agreement.

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Article 11:    Effective Date and Term

11.1    This Agreement has been duly executed as of the date first set forth above and shall be effective simultaneously and parties confirm the term of the Agreement shall be counted from July 1^st, 2004. The term of this Agreement is ten (10) years or the date of the expiration of period of validity of Party A (including any extended period of Party A). However, both parties should review this Agreement every three (3) months to determine whether any amendment to the Agreement is necessary after considering the circumstances.

11.2    This Agreement may be extended if Party A gives the written consent of the extension of this Agreement before the expiration of this Agreement. Parties shall negotiate the term of the extension.

11.3    This Agreement is executed in duplication and each Party holds one copy.

Whereas, both parties’ authorized representatives sign this Agreement as of the date first set forth above in Beijing.

Party A:    ElongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:     /s/

Official Seal:     /s/

Party B:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:     /s/

Official Seal:     /s/

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EX-10.13

Exhibit 10.13

Amended and Restated Business Operation Agreement

This Amended and Restated Business Operation Agreement (hereinafter the “Agreement”) is entered into on the day of July 20, 2004 (hereinafter the “Effective Date”) among the following parties:

eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter “Party A”)
Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Legal Representative:	Tang Yue
Beijing eLong Information Technology Co., Ltd. (hereinafter “Party B”)
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing
Legal Representative:	Tang Yue
Tang Yue. (hereinafter “Party C”)
Address:	Room 23A No. 1 Building, Yujing Garden, No.5 Shoutudong Street, Chaoyang District, Beijing
ID No.:	3201061971032121236
Qu Zhi. (hereinafter “Party D”)
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing
ID No.:	11010897307116344

WHEREAS:

(1)    Party A is a wholly foreign-owned enterprise with valid existence registered in the People’s Republic of China (hereinafter the “PRC”);

(2)    Party B is a wholly domestic-owned company registered in the PRC and is approved by Beijing Communication Administration to engage in Internet information service business;

(3)    Party A and Party B established the business relationship by entering into the Exclusive Technical Services Agreement (hereinafter the “Services Agreement”) on the date of February 1, 2001 in Beijing;

(4)    Pursuant to Services Agreement between Party A and Party B, Party B shall pay a certain amount of money to Party A. However, Party B’s business operation will substantially affect Party A’s payment capability;

(5)    Party C is a shareholder of Party B who owns 75% equity in Party B;

(6)    Party D is a shareholder of Party B who owns 25% equity in Party B;

(7)    All the parties agree to further clarify matters relating to the operation of Party B pursuant to provisions herein;

(8)    All the parties agree to amend and restate the operative agreement signed on March 5, 2004 among them.

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NOW THEREFORE, Party A, Party B, Party C and Party D through mutual negotiations hereby agree as follows:

1.    In order to ensure Party B’s normal operation, Party A agrees, subject to Party B’s satisfaction of the relevant provisions herein, to act as the guarantor for Party B in the contracts, agreements or transactions in association with Party B’s operation between Party B and any other third party and to provide full guarantee for Party B in performing such contracts, agreements or transactions. Party B agrees to mortgage the receivables of its operation and the company’s whole asset to Party A as a counter guarantee. Pursuant to the above guarantee arrangement, Party A, as the guarantor for Party B, shall respectively enter into written guarantee contracts with Party B’s counter parties to assume the guarantee liability.

2.    In consideration of the requirement of Article 1 herein and to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree that Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or the company’s operation unless the obtainment of a prior written consent from Party A or Party A’s affiliates, including without limitations to the following contents:

2.1    To borrow money from any third party or assume any debt;

2.2    To sell to any third party or acquire from any third party any assets or rights, including without limitations to any intellectual property rights;

2.3    To provide real guarantee for any third party with its assets or intellectual property rights; and

2.4    To assign to any third party the agreements entered into by it.

3.    Appointment of the Company’s Employees

3.1    In order to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree to accept the provision of the corporate policies and guidance by Party A at no time in respects of appointment and dismissal of the company’s employees, the company’s daily operation administration and the company’s financial administrative system.

3.2    Party B together with its shareholders Party C and Party D hereby jointly agree that Party B, Party C and Party D shall only appoint the personnel recommended by Party A as the directors of Party B, and Party B shall engage Party A’s high ranking officers or any other candidate recommended by Party A as Party B’s general manager, chief financial officer, and other high ranking officers. If any of the above officers leaves or is fired by Party A, he or she will lose the qualification to undertake any positions in Party B and Party B, Party C and Party C shall appoint other high officers of Party A recommended by Party A to undertake such position.

4.    Guarantees for Working Capital

The guarantee for the loan of working capital Party B together with its shareholders Party C and Party D hereby jointly agree and confirm that except the stipulation set forth in Article 1 herein, Party B shall seek a guarantee from Party A first if Party B needs any guarantee for its performance of any contract or loan of working capital in the course of operation. In this case, Party A shall have the right but not the obligation to provide appropriate guarantee to Party B on its own discretion. If Party A decides not to provide such guarantee, Party A shall issue a written notice to Party B immediately and Party B shall seek a guarantee from other third party.

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5.    Termination

5.1    In the event that any of the agreements between Party A and Party B terminates or expires, Party A shall have the right but not the obligation to terminate all agreements between Party A and Party B including without limitation to Services Agreement.

5.2    Party A has right to terminate the agreement by delivering 30 days’ written notice to Party B at any time. During the validity period of the agreement, Party B and Party C and Party D should not terminate the agreement in advance, except the regulations in the applicable law.

6.    Compensation for Damage

All the parties agree that any party violating any obligation of the agreement shall compensate any or all loss, responsibility, expense, claim or expenditure (including legal expense and expenditure), to any other party (Hereinafter “Party Accepting Compensation”), and guarantee that the Party Accepting Compensation shall not receive any damage.

7.    Settlement of Distribution

7.1    The agreement shall be under the jurisdiction of the law of PRC, and be explained in accordance with the law of PRC.

7.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

7.3    Arbitration place shall be in Beijing, PRC.

7.4    Arbitration language shall be English.

7.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

7.6    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

7.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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8.    Effectiveness of the Agreement

8.1    This Agreement shall be executed as of the date first set forth above and both parties agree that the Agreement become effective since January 1, 2004. The Agreement shall be effective during the expiration period of Party A (including any extended period of Party A)

8.2    Any amendment and supplement of this Agreement shall be in a written form. The amendment and supplement after being duly executed by each Party shall be part of this Agreement and shall have the same legal effect as this Agreement.

8.3    This Agreement is executed by Chinese in quadruplicate and each party holds one copy, which shall have the same legal effect.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Date first written above.

Party A:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party B:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party C:    Tang Yue

Signature:    /s/

Party D:    Qu Zhi

Signature:    /s/

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EX-10.14

Exhibit 10.14

Amended and Restated Loan Agreement

The Amended and Restated Loan Agreement is executed on July 20, 2004 by the following three parties.

eLong, Inc (Hereinafter “Party A”)
Legal Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Tang Yue (Hereinafter “Party B”)
Address:	Room 23A No. 1 Building, Yujing Garden, No.5 Shoutudong Street, Chaoyang District, Beijing, P. R. China
ID No.:	3201061971032121236
Qu Zhi (Hereinafter “Party C”)
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing, P. R. China
ID No.:	11010897307116344

Whereas:

1.    Party A is a company registered in British Virgin Islands; Party B and Party C are the citizens of the People’s Republic of China. Party B holds 75% equity interest in Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter the “Beijing Interactive”) and Party C holds 25% equity interest of Beijing Interactive. The eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter the “eLongNet Technology”) is a wholly foreign owned enterprise registered and validly existing under the laws of PRC.

2.    The eLongNet Technology has provided RMB 500,000 to Party B and Party C for the investment in Beijing Interactive.

3.    Party B, Party C and the eLongNet Technology decide to terminate the mutual relation of financing arising from setting up the Beijing Interactive, and Party B as well as Party C have to refund RMB 500,000 to the eLongNet Technology. So Party B and Party C need the financial help from Party A, and Party A agrees to provide the help.

4.    The three parties signed a loan agreement on March 5, 2004. The three parties agree to amend and restate the agreement according to the declaration of the agreement.

NOW THEREFORE, after the negotiation all the parties come to an agreement (the “Agreement”) as follows:

1.    Party A agree to provide a loan to Party B and Party C with the total as RMB 500,000 in accordance with the terms and conditions under the Agreement, of which there is RMB375,000 to Party B and RMB125,000 to party C. Party B and Party C accept such loan.

2.    Party B and Party C agree such loan shall be used only to invest in Beijing Interactive. That is, when they receive the loan aforesaid they shall pay the loan to eLongNet Technology for the refund of the debt arising from the investment in Beijing Interactive by Party B and Party C. The debt equal to RMB500,000. Party B and Party C shall use such loan in accordance with this term only. Without the prior written consent of Party A and eLongNet Technology, Party B and Party C shall not use such loan for any other purpose.

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3.    The preconditions of the Loan provided by Party A to Party B and Party C:

(1).    Party B and Party C as well as eLongNet Technology have formally executed a Equity Interest pledge contract (the “Equity Interest Pledge Contract”), by virtue of which Party B and Party C agrees to pledge all their equity interest in Beijing Interactive to eLongNet Technology.

(2).    Party B, Party C and Party A have executed an exclusive purchase contract (the “Exclusive Purchase Contract”) under the fifth term of The Agreement, as per which Party B and Party C grant Party A an option to purchase all or part of equity interest in Beijing Interactive, provided that it is permitted by laws of PRC.

(3).    The above-mentioned Equity Interest Pledge Contract and Exclusive Purchase Contract are in full effectiveness, of which there is none of default event and all relevant filing procedures, approval, authorization, registration and governmental proceedings have been obtained or completed (if needed).

(4).    The representation and warranties of Party B and Party C under Section 10 are true, integrate, correct and un-misleading.

(5).    Party B and Party C breaches none of its commitments under Section 11, Section 12 and no event which will affect their performance of the obligations hereunder, happens or threatens to happen.

4.    Party A agrees to remit the amount of such loan in a lump sum or in installments to the account designated by the Borrower, provided that all of the preconditions set forth in Section 3 of the Agreement are satisfied or are waived by Party A in writing. Party B and Party C shall issue confirmation notification to Party A on the day receiving the amount of the loan. Each party agree and confirm the commitments of loan under the Agreement by Party A are effective only to Party B and Party C themselves, but not their inheritor or transferee.

5.    Each party agree and confirm that, subject to the permission of the law, Party A has the right to, but has no obligation to, at any time, purchase or designate the other (legal person or natural person) to purchase all or part of Party B and Party C’s equity interest in Beijing Interactive (the “Option to Purchase”). Party A shall issue a written notification to Party B and Party C for the purchase. Once Party A issues the written notification, as per which Party B and Party C shall transfer their equity interest in Beijing Interactive to Party A or the person designated by Party A at purchase price equals to the original price of investment or be granted by Party A. All the parties jointly agree to sign an exclusive purchase contract according to the aforesaid item.

6.    Party B and Party C agree that, when they transfer their equity interest in Beijing Interactive to Party A or the person designated by Party A according to the exclusive purchase contract, any proceeds raised from the transfer shall be paid promptly to Party A as the refund of the loan under the Agreement.

7.    All the parties jointly agree and confirm that, the loan under the Agreement shall be deemed as the loan without interest, except there exists other stipulation hereunder. But when the equity interest transfer under Section 5 happens and if its necessary to appraise the equity interest according to the relevant laws and if the equity interest transfer price is higher than the principle of loan according to the appraisal result, the exceed part shall be paid back to Party A as the cost occupied by the interest of the loan or the capital burdened by Party A.

8.    Term for the loan hereunder will be ten (10) years and shall be extended upon the Agreement of all parties through negotiations. But during the term or extended term of such

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loan, Party B and Party C shall refund the loan ahead of the loan term or the extended loan term, if either of the following events occurs:

(1)    Party B quits from or dismissed by Party A or its affiliates;

(2)    Party B and Party C become dead or becomes a person without capacity or with limited capacity for civil acts;

(3)    Party B and Party C commit a crime or involve a crime;

(4)    Any other third party claim more than RMB100, 000 against Party B and Party C;

(5)     Party A or the person designated by Party A may invest in the telecommunications internet information service business or other business of Beijing Interactive, and according to the Exclusive Purchase Contract, Party A shall issue a written notification to the Party for the purchase of Beijing Interactive’s equity interest and perform the right of purchase.

When the loan is due, the corresponding borrower (or transferee) shall transfer its Equity Interest in Beijing Interactive to the person designated by Party A promptly (or to Party A, provided that it is permitted under the laws of PRC). Any proceeds raised from the transfer shall be paid to Party A as the refund of the loan and the right as well as the obligation under the Agreement shall terminate simultaneously.

9.    Party A represents and warrants to Party B and Party C that, on the execution date of the Agreement:

(1)    Party A is a company registered in Cayman Islands and validly existing under the laws of it.

(2)    Subject to its business scope, constitution and other organizational documents, Party A has full right, power and all necessary and appropriate approval and authorization to execute and perform this Agreement;

(3)    The execution and the performance of this Agreement shall not be against any enforceable and effective laws and regulations, governmental approval, authorization and notification, other government documents and any contracts executed with, or commitments made to, any third party; and

(4)    This Agreement shall constitute the legal, valid and binding obligations of Party A, which is enforceable against Party A in accordance with its terms upon its execution.

10.    Party B and Party C represents and warrants to Party A that, from the execution date of this Agreement until the date this Agreement terminates,

(1)    Beijing Interactive is a limited liability company registered and validly existing under the laws of PRC. Party B and Party C are the shareholder of the company.

(2)    Subject to its constitution and other organizational documents, Party B and Party C has full right, power and all necessary and appropriate approval and authorization to execute and perform this Agreement;

(3)    The execution and the performance of this Agreement shall not be against any enforceable and effective laws and regulations, governmental approval, authorization and notification, other government documents and any contracts executed with, or commitments made to, any third party;

(4)    This Agreement shall constitute the legal and valid obligations of Party B and Party C, which is enforceable against Party B and Party C in accordance with its terms upon its execution;

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(5)    Party B and Party C has paid contribution in full for its equity in Beijing Interactive in accordance with applicable laws and regulations and has acquired capital contribution verification report issued by the qualified accounting firm;

(6)    Party B and Party C neither create pledge or any other security, nor make third party any offer to transfer their equity, nor make acceptance for the offer of any third party to purchase their equity, nor execute agreement with any third party to transfer Borrower’s equity, except the terms of the Equity Pledge Contract;

(7)    There are no disputes and legal or other proceedings pending or threatened before any court, tribunal or other regulatory authority and involving Party B and Party C or involving the equity interest in Beijing Interactive held by Party B and Party C; and (8) Beijing Interactive has completed all governmental approval, authorization, license, and register, filing and otherwise necessary to carry out the business subject to its business license and to possess its assets.

11.    Party B and Party C agrees that it shall, during the term of this Agreement,

(1)    Not sell, transfer, mortgage, dispose of in any other way, or create other security interest on, any of its legal right of equity or equity interest in Beijing Interactive without Party A’s prior written consent, except the terms of the Agreement;

(2)    Without Party A’s prior written consent, not to consent, support or execute any resolution in the shareholders’ meeting of Beijing Interactive for the sale, transfer, mortgage, any other disposal of Beijing Interactive’s legal right of equity or equity interest or to create any other security interest of Beijing Interactive’s legal right of equity or equity interest, except that the counter party is Party A or those designated by Party A;

(3)    Without Party A’s prior written consent, not to consent, support or execute any resolution in the shareholders’ meeting of Beijing Interactive for the merge or combination with, buy or investment in, any person without Party A’s prior consent;

(4)    Promptly inform Party A of the pending or threatened suit, arbitration or regulatory procedure concerning the equity interest of Beijing Interactive.

(5)    Execute all necessary or appropriate documents, take all necessary or appropriate action and bring all necessary or appropriate lawsuit or make all necessary and appropriate defending against all claims, in order to maintain the ownership of Beijing Interactive for all its assets;

(6)    Do nothing that may materially affect the assets, business and liabilities of Beijing Interactive without Party A’s prior written consent;

(7)    Appoint any person to be the director of Beijing Interactive subject to Party A’s request;

(8)    Transfer promptly and unconditionally, at once, all of the Equity Interest of Party B and Party C in Beijing Interactive to Party A or representative designated by Party A and cause the other shareholder of Beijing Interactive to waive its option to purchase such equity hereof, subject to the requesting of the then holding company of Party A, provided that such transfer is permitted under the laws of PRC;

(9)    Not require Beijing Interactive to issue dividends or allocate its allocable profits to Party B and Party C;

(10)    Cause the other shareholder of Beijing Interactive to transfer promptly and unconditionally, at once, all equity interest of the other shareholder in Beijing Interactive to Party A or the representative designated by Party A and Party B and Party C hereby waive

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its option to purchase such equity interest hereof, subject to the requesting of the then holding company of Party A, provided that such transfer is permitted under the laws of PRC;

(11)    Once Party B and Party C transfer the equity interest in Beijing Interactive to Party A or the representative designated by Party A, Any proceeds raised from the transfer shall be refund to Party A promptly.

(12)    Comply strictly with the terms of this Agreement, Equity Pledge Contract and Exclusive Purchase Contract, fully perform all obligations under such contracts and do nothing affecting the validity and enforceability of such contracts.

12.    Party B and Party C, as major shareholder of Beijing Interactive, agrees that it shall cause Beijing Interactive, during the term of this Agreement,

(1)    Not to supply, amend or modify its articles of constitution, to increase or decrease its registered capital, or to change its capital structure in any way without Party A’s prior written consent;

(2)    Subject to good financial and business rules and practices, to maintain and operate its business and handle matters prudently and effectively;

(3)    Not to sell, transfer, mortgage, dispose of in any other way, or to create other security interest on, any of its assets, business or legal right to collect interests without Party A’s prior written consent;

(4)    Without Party A’s prior written consent, not to create, succeed to, guarantee or permit any debt, except (i) the debt arising in the course of the ordinary or daily business operation, but not arising from the loan, and (ii) the debt being reported to Party A or having approved Party A in writing;

(5)    To operate persistently all the business of Beijing Interactive and to maintain the value of its assets;

(6)    Without Party A’s prior written consent, not to execute any material contracts (during this stage, a contract will be deemed material if the value of it exceeds RMB100,000) except those executed during the ordinary operation;

(7)    To provide information concerning all of its operation and financial affairs subject to Party A’s request;

(8)    Not to merger or combine with, buy or invest in, any other person without Party A’s prior written consent;

(9)    Without Party A’s prior written consent, not to issue dividends to each shareholder in any form, however, Beijing Interactive shall promptly allocate all its allocable profits to each of its shareholders upon Party A’s request;

(10)    To inform promptly Party A of the pending or threatened suit, arbitration or regulatory procedure concerning the assets, business or income of Beijing Interactive;

(11)    To execute all necessary or appropriate documents, to take all necessary or appropriate action and to bring all necessary or appropriate lawsuit or to make all necessary and appropriate defending against all claims, in order to maintain the ownership of Beijing Interactive for all its assets;

(12)    To comply strictly with the terms under the technical service Contract and other contracts, fully perform all obligations under such contracts and do nothing affecting the validity and enforceability of such contracts.

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13.    Party B and Party C further agree that, they shall pledge all their equity interest in Beijing Interactive to eLongNet Technologies for the warrant of the payment obligation of Beijing Interactive under the technical service Contract. Party B and Party C shall handle procedures for the registration of the pledge at the company registration authority promptly after executes the Agreement.

14.    The Agreement are effective to all the parties and their inheritor or transferee, and executed only for the interest of them. Without the other party’s prior written consent, any party shall not transfer, pledge or transfer in any other way the right, interest or obligation under the Agreement.

15.    The execution, validity, interpretation, performance, implementation, termination and settlement of disputes of this Agreement shall be governed by the laws of PRC.

16.    Arbitration

1. Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

2.    Arbitration place shall be in Beijing, PRC.

3.    Arbitration language shall be English.

4.    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

5.    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6.    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

17.    This Agreement shall be executed as of the date first set forth above and both parties agree that the Agreement become effective since January 1, 2004 and expire when all the parties has fully performed their obligations under this Agreement.

18.    Party B and Party C will not cancel or terminate this agreement under any circumstance, except (1) Party A has gross negligence, commits fraud or other serious illegal act, or (2) Party A becomes bankrupt or insolvent;

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19.    Any amendment and supplement of this Agreement shall come into force only after all the parties execute a written agreement. The amendment, supplement executed by all the parties and any appendix of this Agreement shall be the indispensable part of this Agreement.

20.    This Agreement is the integral agreement of the transaction stipulated in this agreement and it will replaced all the oral negotiation or written opinion for this transaction heretofore.

21.    This Agreement is divisible and any invalid or unenforceable clause of this Agreement will not affect the effectiveness and enforceability of other clause of this Agreement.

22.    The business, operation, financial affairs and other confidential documents concerning any party of the Agreement are confidential data. All the parties shall strictly protect and maintain the confidentiality of all such confidential data acquired from the Agreement or from the performance of the Agreement.

23.    This Agreement is executed in triplicate and each Party shall hold one copy. Each original has the same legal effect.

IN WITNESS WHEREOF, Parties to this Agreement or through their duly authorized representatives have executed this Agreement as of the date first written above in Beijing.

Party A:    eLong,Inc.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party B:    Tang Yue

Signature:    /s/

Party C:    Qu Zhi

Signature:    /s/

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EX-10.15

Exhibit 10.15

Amended and Restated Exclusive Purchase Right Agreement

eLong.Inc (hereinafter “Party A”)
Registered Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Tang Yue (hereinafter “Party B”)
Residence:	23A, No.1 Building, Yu Jing Yuan, 5 East Road of the Capital Library, Chaoyang District, Beijing.
Identity No.:	320106197103121236
Beijing eLong Information Technology Co., Ltd (hereinafter “Party C”)
Registered Address:	109, 1st Floor, Ji An Mansion, 68 South Xue Yuan Road, Haidian District, Beijing.
Legal Representative:	Tang Yue
eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter “Party D”)
Registered Address:	10 Jiu Xian Qiao Road, Chaoyang District, Beijing.
Legal Representative:	Tang Yue

WHEREAS:

1.    Party A is a company registered and established in Cayman Islands; Party B is a PRC resident; Party C is a limited liability company established and validly existing in accordance with PRC laws, and of which 75% equity interest is held by Party B; Party D is a wholly foreign owned enterprise established and validly existing in accordance with PRC laws, and is a wholly owned company of Party A.

2.    “Agreement” was entered into by and between Party B and Party D dated as of August 22^nd 2003, and according to which Party D provided to Party B funds for Party B to invest in Party C; “Subscribing Agreement” (hereinafter the “Original Subscribing Agreement”) was entered into by and between Party B and Party D dated as of August 23^rd 2003, and according to which Party B offered Party D the right to exclusively purchase Party C’s equity interest held by Party B at a price of RMB750,000, and Party D paid RMB1 to Party A as a consideration.

3.    “Loan Agreement” (hereinafter the “Loan Agreement”) was entered into by and between Party A and Party B dated as of March 5^th 2004, and according to which Party A provided a loan to Party B to refund to Party D for the funds and investment made by Party D.

4.    Party B is willing to grant to Party A the subscribing right of Party C’s equity interest held by Party B, and in the meantime, Party D and Party B agree to unconditionally terminate the terms and conditions under the Original Subscribing Agreement in order for Party A to enjoy the subscribing right of the equity interest held by Party B under the terms and conditions hereof. The parties agree to sign this agreement on March 5^th 2004 and make it substitute the Original Subscribing Agreement.

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5.    The parties agree to conduct the following amendment and restatement on the agreement

NOW, THEREFORE, the parties to this agreement hereby agree on July 20, 2004 as follows:

Chapter One.    Purchases and Sale of Equity Interest

1.1    Authorizations

Party B hereby irrevocably delivers to Party A, under the laws of the PRC, an irrevocable sole authority (“Purchase Right of Equity Interest”) of, following the steps decided by Party A, and the price specified in 1.3 of this agreement, purchasing by Party A or by one or more persons designated by Party A (the “Designated Persons”) at any time from Party B of its all or part of the equity interest of Party C. Besides Party A and the Designated Persons, any third party does not have such Purchase Right of Equity Interest. Party C hereby agrees the delivery of Purchase Right of Equity Interest from Party B to Party A. As specified in this and this agreement, the “person” has the meaning of a person, corporation, joint venture, partnership, enterprise, trust or non-corporation organization.

1.2    Steps

Upon and subject to the laws and regulations of PRC, Party A may send a written notice (the “Notice of Purchase of Equity Interest”) to Party B upon its performance of purchase to explain in detail the way of purchase.

1.3    Purchase Price

Except as requested by law to evaluate, the price of the Purchased Equity Interest (“Purchase Price”) shall be an equivalent of the actual amount of the Purchased Equity Interest contributed by Party B.

1.4    Transfer of the Purchased Equity Interest

Every time upon Party A’s performance of the Purchase Right of Equity Interest:

(a)    Party B shall supervise and urge Party C to convene the shareholders meeting, and during the meeting, to pass the decision or resolution to transfer the equity interest from Party B to Party A and/or the Designated Persons;

(b)    Party B shall, upon the terms and conditions of this agreement and the Notice of Purchase of Equity Interest, enter into Equity Interest Transfer Agreement with Party A (or, in applicable situation, the Designated Persons); and

(c)    The related parties shall execute all other requisite contracts, agreements or documents, acquire all requisite approval and consent of the government, and, without any security interest, perform all requisite action to transfer the valid ownership of the Purchased Equity Interest to Party A and/or the Designated Person, and to cause Party A and/or the Designated Person to be the registered owner of the Purchased Equity Interest. For this and this agreement, “Security Interest” has the meaning of security, mortgage, right or interest of the third party, any purchase right of equity interest, right of acquisition, prior purchase right, right of set-off, ownership detainment or other security arrangements. To further define the meaning, it does not include any security interest subject to this agreement or the equity interest pledge contract of Party B. As described in this and this agreement, “the Equity Interest Pledge Agreement of Party B” has the meaning of the Equity Interest Pledge Agreement entered into by Party D and Party B dated as of the execution date of this agreement. According to the said agreement, to secure Party C to perform the obligations subject to the Exclusive Technology Service Agreement entered into between Party C and Party D, Party B pledges all its equity interest in Party C to Party D.

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1.5    Payment

Whereas contemplated in the Loan Agreement, any proceeds gained by Party B from the transfer of its equity interest in Party C shall be used, according to the Loan Agreement, as the payment to its loan borrowed from Party A. Therefore, except otherwise other arrangement shall be applied according to the applicable law, upon the performance of the Purchase Right of Equity Interest by Party A, the Purchase Price shall be used as the payment for the principal as well as the interests from Party B to Party A subject to the loan. Party A does not need pay the Purchase Price to Party B anymore.

Chapter Two.    Promises Relating Equity Interest

2.1    Promises Relating Party C

Party B and Party C hereby promise:

(a)    Without prior written consent by Party A, not, in any form, to complement, change or renew the articles of the association of Party C, to increase or decrease registered capital of the corporation, or to change the structure of the registered capital in any other forms;

(b)    Following kind finance and business standard and tradition, to maintain the exist of the corporation, prudently and effectively operate business and process affairs;

(c)    Without prior written consent by Party A, not, dated from the execution date of this agreement, to sale, transfer, mortgage or dispose in any other form any assets, legitimate or beneficial interest of business or income of Party C, or to approve any other security interest set on it;

(d)    Without prior written notice by Party A, no debt shall take place, be inherited, be guaranteed, or be allowed to exist, with the exception of: (i) debt from normal or daily business but not from borrowing; and (ii) debt having been disclosed to Party A or having gained written consent from Party A;

(e)    To normally operate all business to maintain the asset value of Party C, without doing or otherwise any action that sufficiently affects the operation and asset value;

(f)    Without prior written consent by Party A, not to enter into any material contract, with the exception of the contract entered into during the normal business (as in this paragraph, a contract with a value more than a hundred thousand Yuan (RMB100,000) shall be deemed as a material contract);

(g)    Without prior written consent by Party A, not to provide loan or credit loan to anyone;

(h)    Upon the request of Party A, to provide all operation and finance materials relevant to Party C;

(i)    Without prior written consent by Party A, Party C shall not to merger or associate with any person, or purchase any Person or invest in any Person;

(j)    To notify Party A immediately the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the assets, business and income of Party C;

(k)    In order to keep the ownership of Party C to all its assets, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

(l)    Without prior written notice by Party A, not to assign stock interests to shareholders in any form, but upon the request of Party A, to assign all its assignable profits to their own shareholders;

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2.2    Promises Relating Party B

Party B promises:

(a)    Without prior written consent by Party A, dated from the execution date of this agreement, not to sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of the pledge set on the equity interest of Party B subject to Equity Interest Pledge Agreement of Party B;

(b)    Without prior written notice by Party A, not to cause the Board of Shareholders commissioned by Party C not to approve or execute any approving document to, sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of such actions made to Party A or the designated person of Party A;

(c)    To cause the Board of Shareholders commissioned by it not to approve or execute any approving document for Party C to, with no prior written notice by Party A, merger or associate with any person, or purchase any person or invest in any person;

(d)    To notify Party A the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the equity interest owned by it;

(e)    To cause the Board of Shareholders commissioned by it to vote to approve the transfer of the Purchased Equity Interest subject to this agreement;

(f)    In order to keep its ownership of the equity interest, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

(g)    Upon the request of Party A, to commission any person designated Party D to be the member of the board of directors of Party C;

(h)    Upon the request of Party A at any time, to immediately transfer its equity interest to the representatives designated by Party A unconditionally and at any time, and abandon its prior purchase right of such equity interest transferring to another available shareholder;

(i)    To prudently comply with the terms and conditions of this agreement and other agreements entered into totally or respectively by Party B, Party C and Party A., to actually perform all obligations under these agreements, without doing or otherwise any action that sufficiently affects the validity and enforceability of these agreements;

2.3    Promises Relating Party D

Considering Party B has impawned the stockholder’s right of Party C, hold by Party B, to Party D. Party D agrees that in case Party A exercises the right of purchasing stockholder’s right during the validity period of Equity Interest Pledge Agreement, Party B shall transfer the stockholder’s right to Party A or other appointed personnel in accordance with the agreement, the aforesaid transformation shall not be bound by the regulation that the transformation of Party B’s stockholder’s right shall be limited, in the Equity Interest Pledge Agreement.

3.    Representations and Warranties

Representations and Warranties of Party B and Party C

Dated as of the execution date of this agreement and every transferring date, Party B and Party C hereby represents and warrants together and respectively to Party A as follows:

(a)    It has the power and ability to enter into and deliver this agreement, and any equity interest-transferring agreement (“Transferring Agreement”, respectively) having it as

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a party, for every single transfer of the purchased equity interest according to this Agreement, and to perform its obligations under this agreement and any Transferring Agreement. upon execution, this agreement and the Transferring Agreements having it as a party constitute a legal, valid and binding obligation of it enforceable against it in accordance with its terms;

(b)    The execution, delivery of this agreement and any Transferring Agreement and performance of the obligations under this agreement and any Transferring Agreement do not: (i) cause to violate any relevant laws of PRC; (ii) constitute a conflict with its articles of association or other organizational documents; (iii) cause to breach any contract or instruments to which it is a party or having binding obligation on it, or cause to breach any contract or instruments to which it is a party or having binding obligation on it; (iv) cause to violate relevant authorization of any consent or approval to it and/or any continuing valid condition; or (v) cause any consent or approval authorized to it to be suspended, removed, or into which other requests be added;

(c)    Party C bears the kind and sellable ownership of all assets. Party C does not set any security interest on the said assets;

(d)    Party C does not have any undischarged debt, with the exception of (i) debt from its normal business; and (ii) debt having been disclosed to Party A and having gained written consent from Party A;

(e)    Party C abides by all laws and regulations applicable to the purchase of assets;

(f)    No litigation, arbitration or administrative procedure relating to equity interest, assets of Party C or the corporation is underway or to be decided or to probably take place; and

(g)    It bears the kind and sellable ownership of its equity interest, it does not set any security interest on the said assets.

4.    Effective Date

This agreement shall be effectively dated from the execution date, and come into effect from January 1, 2004 as the parties confirmed, with the term of effect as 20 years. Since the effective date, the Original Subscribing Agreement between Party B and Party D shall terminate, the rights and obligations under the Original Subscribing Agreement shall be released and in the meantime, neither party shall be responsible for the termination of the Original Subscribing Agreement.

5.    Applicable Law and Dispute Resolution

5.1    Applicable Law

The execution, validity, construing and performance of this agreement, and resolution of the disputes under this agreement, shall be in accordance with officially published and publicly attainable laws of PRC (“PRC laws”). Issues not regulated by the PRC laws shall apply international legal rules and conventions.

5.2    Dispute Resolution

(a)    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

(b)    Arbitration place shall be Beijing, PRC.

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(c)    Arbitration language shall be English.

(d)    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator. The chief arbitrator shall not be Chinese citizen or United State citizen.

(e)    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

(f)    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

6.    Taxes and Expenses

Every party shall, according to laws of PRC, bear any and all transferring and registering taxes, costs and expenses for the preparation and execution of this Agreement and all Transferring Agreements, and those arising from or imposed on the party, to complete the transactions of this Agreement and all Transferring Agreements.

7.    Notices

This agreement requests that notices or other communications sent by any party or corporation shall be written in Chinese, and be delivered in person, by mail or telecopy to other parties at the following addresses or other specified addresses noticed by other parties to the party. The date deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices delivered by mail, the tenth day of the delivery date of air certified mail with postage prepaid (as shown on stamp) or the fourth day of the delivery date to an internationally certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly given or made.

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Party A:	eLong.Inc
Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Party B:	Tang Yue
Address:	23A, No.1 Building, Yu Jing Yuan, 5 East Road of the Capital Library, Chaoyang District, Beijing.
Fax:	64312801
Tel:	58602288
Party C:	Beijing eLong Information Technology Co., Ltd
Address:	10 Jiu Xian Qiao Road, Chaoyang District, Beijing
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue
Party D:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiu Xian Qiao Road, Chaoyang District, Beijing
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue

8.    Confidentiality

Both the parties admit and confirm any oral or written materials exchanged by the parties relating to this agreement are confidential. Both parties shall maintain the secrecy and confidentiality of all such materials. Without written approval by the other party, the party shall not disclose to ay third party any relevant materials, but with the exception of the following: (a) the public know or may know such materials (but not disclosed by the party accepting the materials); (b) materials needed to be disclosed subject to ordinance or listing rules or precedents of stock exchange; or (c) any party necessarily discloses materials to its legal or financial consultant relating the transaction of this agreement, and this legal or financial consultant shall have the obligation of confidentiality similar to that set forth in this. The breach of the obligation of confidentiality by staff or employed institution of any party shall be deemed as the breach of such obligation by that party, and by whom the liabilities for breach shall be bored. No matter this agreement may terminate by any reason, this shall continue in force and effect.

9.    Further Warranties

The Parties to the agreement agree to promptly execute documents reasonably requisite to the performance of the provisions and the aim of this agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the provisions and the aim of this agreement or actions beneficial to it.

10.    Miscellaneous

10.1    Amendment, Modification and Supplement

Upon amendment, modification and supplement of this agreement shall be subject to the written agreement executed by each party.

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10.2    Observance of Laws and Regulations

The parties of the contract shall observe and make sure the operation of each party fully observe all laws and regulations of PRC officially published and publicly gainable.

10.3    Entire Contract

Except the written amendment, supplement and modification of this agreement following the date of execution, this agreement and attachments 1 constitute the entire contract of the parties hereto with respect to the object hereof and supersedes all prior oral or written agreements, representation and contracts with respect to the object hereof.

10.4    Headings

The headings contained in this agreement are for convenience of reference only and shall not affect the interpretation, explanation or in any other way the meaning of the provisions of this agreement.

10.5    Language

This agreement is executed in Chinese in four copies.

10.6    Severability

If any one or more provisions of this agreement are judged as invalid, illegal or nonenforceable in any way according to any laws or regulations, the validity, legality and enforceability of other provisions hereof shall not be affected or impaired in any way. All parties shall, through sincere consultation, urge to replace those invalid, illegal or non-enforceable provisions with valid ones, and from such valid provisions, similar economic effects shall be tried to reach as from those invalid, illegal or non-enforceable provisions.

10.7    Successor

This Contract shall bind and benefit the successor of each party and the transferee allowed by each party.

10.8    Survival

(a)    Any obligation taking place or at term hereof prior to the end or termination ahead of the end of this agreement shall continue in force and effect notwithstanding the occurrence of the end or termination ahead of the end of the agreement.

(b)    Item 5, Item 7 and Item 10.8 hereof shall continue in force and effect after the termination of this agreement.

10.9    Waiver

Any party to this agreement may waive the terms and conditions of this agreement. Such waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby. Any waiver by a party to the breach hereof by other parties in certain situation shall not be construed as a waiver to any similar breach by other parties in other situation.

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IN WITNESS THEREFORE, the parties hereof have caused this agreement to be executed by their duly authorized representatives as of the date first written above.

Party A:    eLong, Inc.

Signature of Authorized Representative:    /s/

Party B:    Tang Yue

Signature:    /s/

Party C:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:

Official Seal:    /s/                                                         /s/

Party D:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:

Official Seal:    /s/                                                         /s/

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EX-10.16

Exhibit 10.16

Amended and Restated Exclusive Purchase Right Agreement

eLong.Inc (hereinafter “Party A”)
Registered Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Qu Zhi (hereinafter “Party B”)
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing
ID No.:	11010897307116344
Beijing eLong Information Technology Co., Ltd (hereinafter “Party C”)
Registered Address:	109, 1st Floor, Ji An Mansion, 68 South Xue Yuan Road, Haidian District, Beijing.
Legal Representative:	Tang Yue
eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter “Party D”)
Registered Address:	10 Jiu Xian Qiao Road, Chaoyang District, Beijing.
Legal Representative:	Tang Yue

WHEREAS:

1.    Party A is a company registered and established in Cayman Islands; Party B is a PRC resident; Party C is a limited liability company established and validly existing in accordance with PRC laws, and of which 25% equity interest is held by Party B; Party D is a wholly foreign owned enterprise established and validly existing in accordance with PRC laws, and is a wholly owned company of Party A.

2.    “Agreement” was entered into by and between Party B and Party D dated as of August 22, 2003, and according to which Party D provided to Party B funds for Party B to invest in Party C; “Subscribing Agreement” (hereinafter the “Original Subscribing Agreement”) was entered into by and between Party B and Party D dated as of August 23, 2003, and according to which Party B offered Party D the right to exclusively purchase Party C’s equity interest held by Party B at a price of RMB250,000, and Party D paid RMB1 to Party A as consideration.

3.    “Loan Agreement” (hereinafter the “Loan Agreement”) was entered into by and between Party A and Party B dated as of March 5, 2004, and according to which Party A provided a loan to Party B to refund to Party D for the funds and investment made by Party D.

4.    Party B is willing to grant to Party A the subscribing right of Party C’s equity interest held by Party B, and in the meantime, Party D and Party B agree to unconditionally terminate the terms and conditions under the Original Subscribing Agreement in order for Party A to enjoy the subscribing right of the equity interest held by Party B under the terms and conditions hereof. The parties agree to sign the agreement on March 5, 2004 and make it substitute the Original Subscribing Agreement.

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5.    The parties agree to conduct the following amendment and restatement on the agreement

NOW, THEREFORE, the parties hereby agree on July 20, 2004 as follows:

Chapter One.    Purchases and Sale of Equity Interest

1.1    Authorizations

Party B hereby irrevocably delivers to Party A, under the laws of the PRC, an irrevocable sole authority (“Purchase Right of Equity Interest”) of, following the steps decided by Party A, and the price specified in Item 1.3 of this Agreement, purchasing by Party A or by one or more persons designated by Party A (the “Designated Persons”) at any time from Party B of its all or part of the equity interest of Party C. Besides Party A and the Designated Persons, any third party does not have such Purchase Right of Equity Interest. Party C hereby agrees the delivery of Purchase Right of Equity Interest from Party B to Party A. As specified in this and this agreement, the “person” has the meaning of a person, corporation, joint venture, partnership, enterprise, trust or non-corporation organization.

1.2    Steps

Upon and subject to the laws and regulations of PRC, Party A may send a written notice (the “Notice of Purchase of Equity Interest”) to Party B upon its performance of purchase to explain in detail the way of purchase.

1.3    Purchase Price

Except as requested by law to evaluate, the price of the purchased equity interest (“Purchase Price”) shall be an equivalent of the actual amount of the purchased equity interest contributed by Party B.

1.4    Transfer of the Purchased Equity Interest

Every time upon Party A’s performance of the Purchase Right of Equity Interest:

(a)    Party B shall supervise and urge Party C to convene the shareholders meeting, and during the meeting, to pass the decision or resolution to transfer the equity interest from Party B to Party A and/or the Designated Persons;

(b)    Party B shall, upon the terms and conditions of this agreement and the Notice of Purchase of Equity Interest, enter into a equity interest transfer agreement with Party A (or, in applicable situation, the Designated Persons); and

(c)    The related parties shall execute all other requisite contracts, agreements or documents, acquire all requisite approval and consent of the government, and, without any security interest, perform all requisite action to transfer the valid ownership of the purchased equity interest to Party A and/or the Designated Person, and to cause Party A and/or the Designated Person to be the registered owner of the purchased equity interest. For this and this agreement, “Security Interest” has the meaning of security, mortgage, right or interest of the third party, any purchase right of equity interest, right of acquisition, prior purchase right, right of set-off, ownership detainment or other security arrangements. To further define the meaning, it does not include any security interest subject to this agreement or the equity interest pledge contract of Party B. As described in this and this agreement, “the Equity Interest Pledge Agreement of Party B” has the meaning of the Equity Interest Pledge Agreement entered into by Party D and Party B dated as of the execution date of this agreement. According to the said agreement, to secure Party C to perform the obligations subject to the Exclusive Technology Service Agreement entered into between Party C and Party D, Party B pledges all its equity interest in Party C to Party D.

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1.5    Payment

Whereas contemplated in the Loan Agreement, any proceeds gained by Party B from the transfer of its equity interest in Party C shall be used, according to the Loan Agreement, as the payment to its loan borrowed from Party A. Therefore, except otherwise other arrangement shall be applied according to the applicable law, upon the performance of the Purchase Right of Equity Interest by Party A, the Purchase Price shall be used as the payment for the principal as well as the interests from Party B to Party A subject to the loan. Party A does not need pay the Purchase Price to Party B anymore.

Chapter Two.    Promises Relating Equity Interest

2.1    Promises Relating Party C

Party B and Party C hereby promise:

(a)    Without prior written consent by Party A, not, in any form, to complement, change or renew the Articles of the Association of Party C, to increase or decrease registered capital of the corporation, or to change the structure of the registered capital in any other forms;

(b)    Following kind finance and business standard and tradition, to maintain the exist of the corporation, prudently and effectively operate business and process affairs;

(c)    Without prior written consent by Party A, not, dated from the execution date of this Agreement, to sale, transfer, mortgage or dispose in any other form any assets, legitimate or beneficial interest of business or income of Party C, or to approve any other security interest set on it;

(d)    Without prior written notice by Party A, no debt shall take place, be inherited, be guaranteed, or be allowed to exist, with the exception of: (i) debt from normal or daily business but not from borrowing; and (ii) debt having been disclosed to Party A or having gained written consent from Party A;

(e)    To normally operate all business to maintain the asset value of Party C, without doing or otherwise any action that sufficiently affects the operation and asset value;

(f)    Without prior written consent by Party A, not to enter into any material contract, with the exception of the contract entered into during the normal business (as in this paragraph, a contract with a value more than a hundred thousand Yuan (RMB 100,000) shall be deemed as a material contract);

(g)    Without prior written consent by Party A, not to provide loan or credit loan to anyone;

(h)    Upon the request of Party A, to provide all operation and finance materials relevant to Party C;

(i)    Without prior written consent by Party A, Party C shall not to merger or associate with any person, or purchase any Person or invest in any Person;

(j)    To notify Party A immediately the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the assets, business and income of Party C;

(k)    In order to keep the ownership of Party C to all its assets, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

(l)    Without prior written notice by Party A, not to assign stock interests to shareholders in any form, but upon the request of Party A, to assign all its assignable profits to their own shareholders;

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2.2    Promises Relating Party B

Party B promises:

(a)    Without prior written consent by Party A, dated from the execution date of this Agreement, not to sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of the pledge set on the equity interest of Party B subject to Equity Interest Pledge Contract of Party B;

(b)    Without prior written notice by Party A, not to cause the Board of Shareholders commissioned by Party C not to approve or execute any approving document to, sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of such actions made to Party A or the designated person of Party A;

(c)    To cause the Board of Shareholders commissioned by it not to approve or execute any approving document for Party C to, with no prior written notice by Party A, merger or associate with any person, or purchase any person or invest in any person;

(d)    To notify Party A the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the equity interest owned by it;

(e)    To cause the Board of Shareholders commissioned by it to vote to approve the transfer of the Purchased Equity Interest subject to this Agreement;

(f)    In order to keep its ownership of the equity interest, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

(g)    Upon the request of Party A, to commission any person designated Party D to be the member of the board of directors of Party C;

(h)    Upon the request of Party A at any time, to immediately transfer its equity interest to the representatives designated by Party A unconditionally and at any time, and abandon its prior purchase right of such equity interest transferring to another available shareholder;

(i)    To prudently comply with the terms and conditions of this Agreement and other contracts entered into totally or respectively by Party B, Party C and Party A., to actually perform all obligations under these contracts, without doing or otherwise any action that sufficiently affects the validity and enforceability of these contracts;

2.3    Promises Relating Party D

Considering Party B has impawned the stockholder’s right of Party C, hold by Party B, to Party D. Party D agrees that in case Party A exercises the right of purchasing stockholder’s right during the validity period of Equity Interest Pledge Agreement, Party B shall transfer the stockholder’s right to Party A or other appointed personnel in accordance with the agreement, the aforesaid transformation shall not be bound by the regulation that the transformation of Party B’s stockholder’s right shall be limited, in the Equity Interest Pledge Agreement.

3.    Representations and Warranties

Representations and Warranties of Party B and Party C

Dated as of the execution date of this agreement and every transferring date, Party B and Party C hereby represents and warrants together and respectively to Party A as follows:

(a)    It has the power and ability to enter into and deliver this agreement, and any equity interest-transferring agreement (“Transferring Agreement”, respectively) having it as

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a party, for every single transfer of the purchased equity interest according to this agreement, and to perform its obligations under this agreement and any Transferring Agreement. upon execution, this agreement and the Transferring Agreement having it as a party constitute a legal, valid and binding obligation of it enforceable against it in accordance with its terms;

(b)    The execution, delivery of this agreement and any Transferring Agreement and performance of the obligations under this agreement and any Transferring Agreement do not: (i) cause to violate any relevant laws of PRC; (ii) constitute a conflict with its articles of association or other organizational documents; (iii) cause to breach any contract or instruments to which it is a party or having binding obligation on it, or cause to breach any contract or instruments to which it is a party or having binding obligation on it; (iv) cause to violate relevant authorization of any consent or approval to it and/or any continuing valid condition; or (v) cause any consent or approval authorized to it to be suspended, removed, or into which other requests be added;

(c)    Party C bears the kind and sellable ownership of all assets. Party C does not set any security interest on the said assets;

(d)    Party C does not have any undischarged debt, with the exception of (i) debt from its normal business; and (ii) debt having been disclosed to Party A and having gained written consent from Party A;

(e)    Party C abides by all laws and regulations applicable to the purchase of assets;

(f)    No litigation, arbitration or administrative procedure relating to equity interest, assets of Party C or the corporation is underway or to be decided or to probably take place;

(g)    It bears the kind and sellable ownership of its equity interest, it does not set any security interest on the said assets

4.    Effective Date

This Agreement shall be effectively dated from the execution date, and come into effect from January 1, 2004 as the parties confirmed, with the term of effect as 20 years. Since the effective date, the Original Subscribing Agreement between Party B and Party D shall terminate, the rights and obligations under the Original Subscribing Agreement shall be released and in the meantime, neither party shall be responsible for the termination of the Original Subscribing Agreement.

5.    Applicable Law and Dispute Resolution

5.1    Applicable Law

The execution, validity, the construing and performance of this agreement, and resolution of the disputes under this agreement, shall be in accordance with officially published and publicly attainable laws of PRC (“PRC laws”). Issues not regulated by the PRC laws shall apply international legal rules and conventions.

5.2    Dispute Resolution

(a)    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

(b)    Arbitration place shall be in Beijing, PRC.

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(c)    Arbitration language shall be English.

(d)    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator. The chief arbitrator shall not be Chinese citizen or United State citizen.

(e)    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

(f)    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

6.    Taxes and Expenses

Every party shall, according to laws of PRC, bear any and all transferring and registering taxes, costs and expenses for the preparation and execution of this agreement and all Transferring Agreements, and those arising from or imposed on the party, to complete the transactions of this agreement and all Transferring Agreements.

7.    Notices

This agreement requests that notices or other communications sent by any party or corporation shall be written in Chinese, and be delivered in person, by mail or telecopy to other parties at the following addresses or other specified addresses noticed by other parties to the party. The date deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices delivered by mail, the tenth day of the delivery date of air certified mail with postage prepaid (as shown on stamp) or the fourth day of the delivery date to an internationally certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly given or made.

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Party A:	eLong.Inc
Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Party B:	Qu Zhi
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing, P. R. China
Fax:
Tel:	13901087129
Party C:	Beijing eLong Information Technology Co., Ltd
Address:	10 Jiu Xian Qiao Road, Chaoyang District, Beijing
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue
Party D:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiu Xian Qiao Road, Chaoyang District, Beijing
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue

8.    Confidentiality

Both the parties admit and confirm any oral or written materials exchanged by the parties relating to this agreement are confidential. Both parties shall maintain the secrecy and confidentiality of all such materials. Without written approval by the other party, the party shall not disclose to ay third party any relevant materials, but with the exception of the following: (a) the public know or may know such materials (but not disclosed by the party accepting the materials); (b) materials needed to be disclosed subject to ordinance or listing rules or precedents of stock exchange; or (c) any party necessarily discloses materials to its legal or financial consultant relating the transaction of this agreement, and this legal or financial consultant shall have the obligation of confidentiality similar to that set forth in this. The breach of the obligation of confidentiality by staff or employed institution of any party shall be deemed as the breach of such obligation by that party, and by whom the liabilities for breach shall be bored. No matter this agreement may terminate by any reason, this shall continue in force and effect.

9.    Further Warranties

The Parties agree to promptly execute documents reasonably requisite to the performance of the provisions and the aim of this agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the provisions and the aim of this agreement or actions beneficial to it.

10.    Miscellaneous

10.1    Amendment, Modification and Supplement

Upon amendment, modification and supplement of this agreement shall be subject to the written agreement executed by each party.

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10.2    Observance of Laws and Regulations

The parties of the contract shall observe and make sure the operation of each party fully observe all laws and regulations of PRC officially published and publicly gainable.

10.3    Entire Contract

Except the written amendment, supplement and modification of this agreement following the date of execution, this agreement and attachments 1 constitute the entire contract of the parties hereto with respect to the object hereof and supersedes all prior oral or written agreements, representation and contracts with respect to the object hereof.

10.4    Headings

The headings contained in this agreement are for convenience of reference only and shall not affect the interpretation, explanation or in any other way the meaning of the provisions of this agreement.

10.5    Language

This agreement is executed by Chinese in four copies.

10.6    Severability

If any one or more provisions of this agreement are judged as invalid, illegal or nonenforceable in any way according to any laws or regulations, the validity, legality and enforceability of other provisions hereof shall not be affected or impaired in any way. All parties shall, through sincere consultation, urge to replace those invalid, illegal or non-enforceable provisions with valid ones, and from such valid provisions, similar economic effects shall be tried to reach as from those invalid, illegal or non-enforceable provisions.

10.7    Successor

This Contract shall bind and benefit the successor of each party and the transferee allowed by each party.

10.8    Survival

(a)    Any obligation taking place or at term hereof prior to the end or termination ahead of the end of this agreement shall continue in force and effect notwithstanding the occurrence of the end or termination ahead of the end of the agreement.

(b)    Item 5, Item 7 and Item 10.8 hereof shall continue in force and effect after the termination of this agreement.

10.9    Waiver

Any party to this agreement may waive the terms and conditions of this agreement. Such waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby. Any waiver by a party to the breach hereof by other parties in certain situation shall not be construed as a waiver to any similar breach by other parties in other situation.

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IN WITNESS THEREFORE, the parties hereof have caused this agreement to be executed by their duly authorized representatives as of the date first written above.

Party A:    eLong.Inc

Signature of Authorized Representative:    /s/

Party B:    Qu Zhi

Signature:    /s/

Party C:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party D:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

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EX-10.17

Exhibit 10.17

Cooperative Agreement

This Cooperation Agreement is entered into on the day of July 20, 2004 in Beijing among the following parties:

Party A:	Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter “Party A”)
Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue
Party B:	Beijing eLong Information Technology Co., Ltd (hereinafter “Party B”)
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing
Legal Representative:	Tang Yue

Whereas:

1.    Party A is a wholly domestic-owned enterprise with valid existence registered under PRC laws and regulations, approved by Chao Yan Branch, Beijing Administrative Bureau of Industry and Commence, Party A may engage in advertising design, production, distribution and agency service (advertising business license number: Jing Chao Business Certification No. 625).

2.    Party B is a wholly domestic-owned company with valid existence registered under PRC laws and regulations, approved by Beijing Communication Administration, may engage in Internet information service business (license number: Jing ICP Certification No.010011), and possess and operate the website of www.elong.com (hereinafter elong.com) and the calling center.

3.    Party B agreed to supply Internet Network space and information service to Party A, and help Party A to develop advertising operation; Party A agreed to accept the aforesaid Network space and information service provided by Party B. Party A and Party B have signed “WebPages Space Tenancy Agreement” on November 1^st 2002, now both parties agree to amend and restate the agreement, come to the cooperation agreement, and replace the aforesaid “WebPages Space Tenancy Agreement” with the cooperation agreement.

Therefore, Party A and Party B achieve the following Cooperative Agreement (the “Agreement”) after friendly negotiation.

Article 1:    Two Parties’ Liabilities and Obligations

Party A agreed that Party B shall take responsibility for the Internet network space and information service necessary for Party A’s performing it’s operation, Part B agreed to provide the aforesaid Network space and information service to Party A.

Article 2:    Payment and Settlement

In full consideration for Party B’s providing the aforesaid Internet network space and information service, Party A agreed to pay service charge to Party B. The amount of the service charge shall be determined by Party A and Party B by negotiation in accordance with the market price of the aforesaid Internet network space and information service. The service charge shall be paid by the quarter.

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Article 3:    Notice and Guarantee

3.1    Party A states and guarantees herein as follows:

3.1.1    Party A is a wholly domestic-owned enterprise with valid existence registered under PRC laws and regulations.

3.1.2    Party A signs and performs this Agreement within the corporate franchise and business scope; Party A has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.1.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

3.2    Party B states and guarantees herein as following:

3.2.1    Party B is a wholly domestic-owned Co., Ltd. with valid existence registered under PRC laws and regulations, qualified to operate Internet information service business.

3.2.2    Party B signs and performs this agreement within the corporate franchise and business scope; Party B has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.2.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

Article 4:    Confidentiality

Parties admit that any exchanged oral or written information about this Agreement is confidential information and parties shall protect and maintain the confidentiality of any and all confidential information. One of the parties can not exposure any relevant information to the third party without the prior written consent from the other party, excepting the following circumstances:

(a)    The information has be known or will be known by public (not exposed to public by the information received party);

(b)    Information disclosed by application of applicable laws and regulations;

(c)    Any party discloses the confidential information to its legal or financial consultant for the reason of the transaction’s requirement under this Agreement, the legal or financial consultant is liable for complying with the confidential liability which is similar to this clause.

The party will be regard as exposure if any of its employees or its employed organizations disclose the confidential information and liable for the exposure according to this Agreement.

Article 5:    Force Majeure

5.1    “Force majeure” means any event beyond the reasonable controlling scope of one party, or any event can not be avoided in the event that the affected party pays proper attention, force majeure, which includes but not limited to acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event is beyond one party’s reasonable control and unavoidable with reasonable care of the affected party. However,

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any shortage of credit, capital or finance shall not be regarded as an event of force majeure. To dissolute the performing obligations under this agreement the party affected by force majeure shall notify the other party without delay.

5.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

Article 6:    Settlement of Disputes

6.1    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

6.2    Arbitration place shall be in Beijing, PRC.

6.3    Arbitration language shall be English.

6.4    the court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

6.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with China’s Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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Article 7:    Notices and Delivery

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant party or parties set forth below.

Party A:	Beijing Asia Media Interactive Advertising Co., Ltd.
Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chao Yang District, Beijing.
Fax:	8610 64315872
Tel:	8610 58602288
Party B:	Beijing eLong Information Technology Co., Ltd
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing,
Fax:	8610 64315872
Tel:	8610 58602288

Article 8:    Agreement Transfer

Party B shall not transfer the rights and obligations of this Agreement to any third party without the prior written consent of Party A.

Article 9:    Amendment and Supplement

Any amendment and supplement of this Agreement shall come into force only after both parties sign a written agreement. The amendment and supplement duly executed by both parties shall be an integral part this Agreement and shall have the same legal effect as this Agreement.

Article 10:    Effective Date and Term

10.1    This Agreement has been duly executed as of the date first set forth above and shall be effective simultaneously and parties confirm the term of the Agreement shall be counted from January 1, 2004. The term of this Agreement is ten (10) years or the date of the expiration of period of validity of the Domain Names (which ever is the shorter) unless earlier terminated as set forth below. However, the Licensor and the Licensee shall review this Agreement every three (3) months to determine whether any amendment to the Agreement is necessary after considering the circumstances.

10.2    This Agreement may be extended if Party A gives the written consent of the extension of this Agreement before the expiration of this Agreement. The term of the extension shall be negotiated by parties

10.3    This Agreement is executed in duplicate and each Party shall hold one copy

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Whereas, both parties’ authorized representatives sign this Agreement as of the date first set forth above in Beijing.

Party A:    Beijing Asia Media Interactive Advertising Co., Ltd.

Signature of Authorized Representative:

Official Seal:    /s/                                                         /s/

Party B:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:

Official Seal:    /s/                                                         /s/

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EX-10.18

Exhibit 10.18

Trademark License Agreement

This Trademark License Agreement (hereinafter the “Agreement”) is entered into as of July July 20, 2004 in the People’s Republic of China (hereinafter the “PRC”) between the following two parties in Beijing:

(1)    eLongNet Information Technology(Beijing) Co., Ltd.( hereinafter the “Licensor”), an wholly owned foreign enterprise under the laws of PRC, Legal Address: 10 Jiuxianqiao Street, Chaoyang District, Beijing;

And

(2)    Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter the “Licensee”), a wholly domestic invested limited liability company under the laws of PRC, Legal Address: 203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing (hereinafter, one party will be called “one party”, two parties will be called “both parties”).

WHEREAS:

A.    The “Licensor” is the owner of the registered trademarks (hereinafter the “trademark”) in Appendix 1, and it is in the process of application formalities, in order to become the owner of the trademarks in Appendix 2 and the trademarks in applying.

B.    The “Licensee” desires to acquire non- exclusive license of the trademarks listed in Appendix 1 and Appendix 2 in accordance with the terms and conditions of “this agreement”, and the “Licensor” agree to grant the “Licensee” such license.

NOW THEREFORE, the parties agree as follows:

1.    Definition

Unless otherwise provided for herein, the following words are specified as:

“Affiliated Enterprise” the entity with at least 10% ballot held by any “one party” directly or indirectly.

“Force Majeure” any earthquake, typhoon, fire, flood, war, and other calamity caused by nature or human which is unpredictable, unavoidable and overwhelming happened after the signing of “this agreement”, this event beyond any party’s control and impedes the performance of all or part of this agreement.

“PRC Law” any promulgated and valid laws and regulations of PRC from the date stipulated on the head of this agreement.

“Term” the period stipulated in 3.1 of this agreement

“Territory” the territory of PRC, which does not include Hong Kong, Macao and Taiwan.

“Trademark Office” the trademark office of State Administration for Industry and Commerce.

“Licensed Trademark” the trademark registered in the “Trademark Office” by the “Trademark to be licensed” the registered trademark under the process of assignment in the “Trademark Office” which will be assigned to the “Licensor” and the trademark in the application for registration, listed in Appendix 2

“RMB” the legal currency of the “PRC”.

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2.    License

2.1.    Trademark License

The “Licensor” will grant the “Licensee” a license to use the “Licensed Trademark” and “Trademark to be licensed” in the territory under the terms and conditions of this Agreement in its term, except that the “Licensor” can authorize [to be filled by elong] to use the “Licensed Trademark” and “Trademark to be licensed”.

2.2.    Scope of Use

In the term of this agreement, the “Licensee” can use the “Licensed Trademark” and “Trademark to be licensed” in the “Territory” under the circumstances set force as follows:

2.2.1.    Use in the authorized commodities or services in accordance with the content in each certificate of registration.

2.2.2.    Use in the documents of commercial transactions, advertising, exhibitions or other commercial actions related to Item 2.2.1

2.3.    Sublicense

2.3.1.    The “Licensee” shall not grant the license of the “Licensed Trademark” and “Trademark to be licensed” to any third party without the written consent of the “Licensor” in advance. Any sublicense without authorization is invalid.

2.4.    Forbidden Action

The “Licensee” promises that in the term of this Agreement and any time after the expiration of this Agreement, it shall not:

2.4.1.    Undertake any action, which will affect the Licensor’s right on the “Licensed Trademark” and “Trademark to be licensed”; or

2.4.2.    Apply for the registration of the “Licensed Trademark” and “Trademark to be licensed” or any similar trademark in any country or region.

2.5.    Providing of Signs

The “Licensor” shall provide the authorized signs of the “Licensed Trademark” and “Trademark to be licensed” to the “Licensee” with digital format stored in the floppy disk and printed format. The “Licensee” has right to copy the “Licensed Trademark” and “Trademark to be licensed” in accordance with the relevant designs.

2.6.    Use Supervision

The “Licensor” has the right to dispatch personnel at any time to the sites of the “Licensee” for the supervision on the use of the “Licensed Trademark” and “Trademark to be licensed” after its notice in written.

2.7.    No Hindrance

The “Licensee” acknowledges the right owned by the “Licensor” to the “Licensed Trademark” and “Trademark to be licensed”, besides the warranty listed in 2.4, the “licensee” shall not undertake or promote any action that will hinder the right of the “Licensed Trademark” and “Trademark to be licensed”. The “licensee” shall not state to third party that it has any right on the “Licensed Trademark” and “Trademark to be licensed”. The “Licensee” acknowledges that the anticipated use of the “Licensed

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Trademark” and “Trademark to be licensed” will not create any ownership related to the goodwill of the “Licensed Trademark” and “Trademark to be licensed” for the “licensee”. All the use of this kind shall benefit the exclusive right of the “Licensor” as the owner of the “Licensed Trademark” and “Trademark to be licensed”.

2.8.    Quality

Both parties of this Agreement acknowledge that the quality and goodwill of commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” is important to the operation of the “Licensor”. Any commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” shall reach the top standards and qualities, and it shall under the control, and accord with PRC law and other quality standards requested by any “Licensor” from time to time, and accept supervision and approval of the “Licensor”. The “licensee” shall obey all the standards about the commodities and service of the “Licensor”.

3.    Term

3.1.    Period

This Agreement will be effective from the date of signing the contract, until termination pursuant to Article 9.1. But the license of every “Trademark to be licensed” shall be effective from the date that the “Trademark Office” authorizes the assignment to the “Licensor” and the “Licensor” becomes the owner of the trademark. Except the circumstances stipulated in Article 9.1, the period of this agreement shall be equal to the expiration period (including any extended period) of the “Licensor”.

4.    Record

4.1.    Application for Record

Within three (3) months after the effectiveness of this Agreement, both parties shall file this Agreement to the “Trademark Office” for record for the licensing of the “Licensed Trademark” according to the PRC laws. For the “Trademark to be licensed”, within three (3) months after the effectiveness set forth in Item 3.1, both parties shall file this Agreement to the “Trademark Office” for record.

4.2.    Fees

The “Licensee” shall assume the fees about the application and renewal set forth in Article 4.1.

5.    License Fee

The “Licensee” agrees to pay the “Licensor” the license fee, and both parties will decide its amount in accordance to the market price.

6.    Statement and Warranties

6.1.    Statement and Warranties of Both Parties

Every “one party” states and warrants, form the date of signing this Agreement:

6.1.1.    It is an independent company duly registered in the place of establishment, and has gotten all the government’s authorization and registration, which are continuously valid for its existence, and it has sufficient rights to operate according to its business license, business certificate of registration, articles of association or similar documents of company;

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6.1.2.    It has absolute authorization to sign this Agreement and perform the obligations under this agreement;

6.1.3.    The representative has gotten absolute authorization to sign this Agreement (the signature of representative is in the place for signing);

6.1.4.    The signing of this Agreement or the performance of the obligations under this Agreement will not violate:

6.1.4.1.    The business license, business certificate of registration, articles of association or similar documents of company;

6.1.4.2.    Any law, regulation or the authorization or approval of government; and

6.1.4.3.    Any binding agreement.

6.1.5.    There is not any pending case of lawsuit, arbitration, other legal or governmental procedure that will has material adverse effects on this agreement to its knowledge;

6.1.6.    It has disclosed all the documents to the other party, which will probably have material adverse effects on the obligations under this Agreement issued by any branch of government;

6.1.7.    It has not been the subject of liquidation or dissolution; and

6.1.8.    It has not been declared bankruptcy by the court with jurisdiction.

6.2.    Statement and Warranties of the “Licensee”

The “Licensee” further states and warrants to the “Licensor”:

6.2.1.    It will use the “Licensed Trademark” and “Trademark to be licensed” only according to the purpose stipulated in 2.2;

6.2.2.    It shall not use the “Licensed Trademark” and “Trademark to be licensed” beyond the method stipulated in this agreement;

6.2.3.    It shall not change any appearance, text, content or their combination of the “Licensed Trademark” and “Trademark to be licensed” in any way.

6.2.4.    It shall sign the name and origin of the “Licensee” on the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

6.2.5.    It shall obey all the PRC laws and regulations related with the products’ sign, packing and sale;

6.2.6.    It shall allow any employee or agent of the “Licensor” access the site of the “Licensee” in business hour for the supervision on the quality of the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

7.    Claims and Tort

7.1.    Tort to Third Party

If the use of any “Licensed Trademark” and “Trademark to be licensed” according to the stipulations in this Agreement by the “Licensee” cause the claim (the “claim”) for the tort of any intellectual property right of third party:

7.1.1.    The “Licensee” shall notify the “Licensor” about such claim in written at once;

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7.1.2.    Without the written consent of the “Licensor”, the “Licensee” shall not make any promise or compromise with third party;

7.1.3.    The “Licensee” shall let the “Licensor” take part in any negotiation and suit for the settlement of the claim;

7.1.4.    According the reasonable require of the “Licensor”, the “Licensee” shall provide any acquired information to the “Licensor” and give every reasonable assistance.

7.1.5.    If the “Licensee” violates the stipulations in this Agreement to use the “Licensed Trademark” and “Trademark to be licensed”, the “Licensor” won’t bear any liability for the “Licensee”; the “Licensee” shall bear the liability by itself.

7.2.    Tort of Third Party

If any third party takes the act of tort to the “Licensed Trademark” and “Trademark to be licensed” of this Agreement:

7.2.1.    The “Licensee” shall notify the “Licensor” after it get to know the tort to the “Licensed Trademark” and “Trademark to be licensed” of the “Licensor” in any territory;

7.2.2.    Both parties shall make joint consultations on juridical action to the torts or menacing actions. In order to avoid the doubtful point, the “Licensee” agrees that before the prior written consent of the “Licensor”, it shall not make any compromise with any third party by itself;

7.2.3.    If both parties agree to take juridical action to the torts of the “Licensed Trademark” and “Trademark to be licensed”, the fees and the damages acquirable shall be divided equally. If the “Licensee” does not decide to take lawsuit to the event stipulated in the “Licensor” can decide to take the lawsuit by itself or through the affiliated enterprise, and bear the fees; the “Licensee” shall render assistance to the “Licensor” for such juridical action with its effort; and

7.2.4.    All the damages acquired by the juridical action taken by the “Licensor” shall be owned by the “Licensor”.

8.    Breaches and Compensation

8.1.    Breach

8.1.1.    Any party violates any stipulation, fails to perform the obligations or its performance does not accord with the stipulations of this Agreement (the “Party in Breach”), and it will be taken as the breach of the obligations of this Agreement. The party who obey this Agreement (the “Observant Party”) has the right to notify the Party in Breach in written to correct its action within 10 days from the date it get the notice.

8.1.2.    If any party breaches this Agreement, both parties shall keep on the performance of this Agreement; the Party in Breach shall take sufficient, efficient and timely measures to eliminate the result of breach, and compensate to the Observant Party all the damages caused by the breach.

8.2.    Compensation

The Party in Breach shall compensate the Observant Party according to 8.1.2, the compensation is the damages caused by the party in breach, including the benefits acquirable by the performance of this Agreement, but it shall not exceed the damages reasonably foreseeable by the Party in Breach.

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9.    Cancellations, Termination and Renewal of Agreement

9.1.    Termination

This Agreement will be terminated in the circumstances as follows:

9.1.1.    By the written consultation of both parties;

9.1.2.    By the notice of termination sent by the “Licensor” ten (10) days in advance;

9.1.3.    The Observant Party has the right to terminate this Agreement at once if the Party in Breach materially breaches the Agreement and does not correct its actions within 30 days from the date it get the notice from the Observant Party;

9.1.4.    Any party in liquidation, and its assets is in the takeover of assigned party;

9.1.5.    Any party accesses to the bankrupt procedure, or stops business materially;

9.1.6.    If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, and at the same time, both parties cannot find a reasonable settlement according to 11.

9.2.    The result of Termination

9.2.1.    If the agreement terminated by any reason, the license under this Agreement will be terminated at once. The “Licensee” shall;

9.2.1.1.    Stop using the “Licensed Trademark” and “Trademark to be licensed” in the actions related to its business;

9.2.1.2.    Remove the “Licensed Trademark” and “Trademark to be licensed” form all the disseminating datum, handbooks, sign and other assets of the “Licensee” at its own expenses within 90 days from the termination of this Agreement; and

9.2.1.3.    Stop using any license even with the prior approval of the “Licensor”, and take any necessary steps to stop the using of the “Licensed Trademark” and “Trademark to be licensed” by any reliecnsee.

9.2.2.    No matter what reason cause the termination of this Agreement, it will not affect the rights or obligations still held by each one party.

10.    Applicable Law and Settlement of Disputes

10.1.    Applicable Law

The conclusion, validity, interpretation and implementation of this Agreement shall be governed by the laws of the PRC, and excludes the conflict rules, if there is no regulation prescribed in the laws of the PRC for the specific event, the international business practice shall be referred to.

10.2.    Arbitration

10.2.1    Any dispute, tangle or claim arising from the Agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

10.2.2    Arbitration place shall be in Beijing, PRC.

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10.2.3    Arbitration language shall be English.

10.2.4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

10.2.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

10.2.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

10.3.    Continuous Performance

In the period of arbitration, parties shall try to perform the part of this Agreement that is not in arbitration.

11.    Force Majeure

11.1.    Suspension of obligations

On the occurrence of force majeure, both parties shall negotiate at once in order to get consistent settlements. Both parties shall suspend their obligations in the range affected by force majeure.

11.2.    Written Certificate

The party stating the influence by force majeure shall notify the other party within 15 days after the occurrence of force majeure, and render the written certificate issued by relevant authorities, and reduce the effect of such force majeure by its effort.

11.3.    Termination

If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, any party can terminate this Agreement according to 9.1.6.

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12.    Supplement

12.1.    Notice

Any notice of both parties shall be written in English, and send by fax, specific sending (including courier) or registered air post. Without the notice of address changing, all the notices and communications shall be sent to the address as follows:

The “Licensor”:
eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue
The “Licensee”:
Beijing Asia Media Interactive Advertising Co., Ltd.
Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue

12.2.    Reference

The chapters, articles or appendixes are the chapters, articles or appendixes under this Agreement. The titles of this Agreement are just for reference; they do not have binding force on this Agreement and do not affect its interpretation.

12.3.    Waiver

If any party cannot perform or delay in performance of any right, power or preferential right of this Agreement or other related agreement, it will not be treat as waiver. The separate or partly performance of any right, power or preferential right will not affect the latter performance of such right, power or preferential right.

12.4.    Transfer

Without the prior consent of the other party, any party shall not transfer all or part of the rights (obligations) under this Agreement to any third party.

12.5.    Divisibility

The invalidity of any stipulations under this Agreement does not affect the validity of other irrelevant stipulations. Both parties shall modify any invalid or unenforceable stipulations in order to make these stipulations valid or enforceable.

12.6.    Integrity

The appendixes of this Agreement are the undividable part of this Agreement and shall have the same legal effect as this Agreement. This Agreement and its appendixes constitute an integral agreement about the events between both parties, and it will replace all the prior discussions, negotiations and agreements.

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12.7.    Language

This Agreement is executed in quadruplicate originals in Chinese. The “Licensor” holds one, and the “Licensee” holds two, the one remained will be filed to the “Trademark Office” for record.

12.8.    Modification

This Agreement could only be modified by the written amendments signed by both parties.

12.9.    Successor

This Agreement is signed for the rights of both parties and their legal successors and assignee, and will be binding on both parties and their legal successors and assignee with the same binding force.

12.10.    Singular and Plurality

The singular and plurality can be used mutually.

12.11.    Unstipulated events

The unstipulated events shall be disposed according to the agreements of both parties and relevant regulations of PRC laws.

The official authorized representative shall sign this Agreement at the date stipulated at the head of the Agreement for good faith.

The “Licensor”

eLongNet Information Technology (Beijing) Co., Ltd.

Authorized Representative:    Tang Yue

Signature of Representative:     /s/

Official Seal:     /s/

The “Licensee”

Beijing Asia Media Interactive Advertising Co., Ltd.

Authorized Representative:    Tang Yue

Signature of Representative:     /s/

Official Seal:     /s/

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Appendix One

Details of Licensed Trademark

	Trademark	Type	Registration Number	Validity Period
1	eLong.com+ “e”logo+ dragon	9	1570359	14 May 2001 - 13 May 2011
2	eLong.com	35	1607616	21 Jul 2001 - 20 Jul 2011
3	eLong.com	36	1739999	28 Mar 2002 - 27 Mar 2012
4	eLong.com+ “e”logo+ dragon	41	1535930	7 Mar 2001 - 6 Mar 2011
5	Xi Ci	35	1587892	14 Jun 2001 - 13 Jun 2011
6	Xi CiHu Tong	35	1587891	14 Jun 2001 - 13 Jun 2011
7	Xi Ci	38	1623768	21 Aug 2001 - 20 Aug 2011
8	Xi CiHu Tong	38	1623767	21 Aug 2001 - 20 Aug 2011
9	eLong.com+e	42	1599959	7 Jul 2001 - 6 Jul 2011
10	“A” logo	38	1623841	21 Aug 2001 - 20 Aug 2011
11	The world circles for you +eLong.com	35	1695505	7 Jan 2002 - 6 Jan 2012
12	Lohoo+logo+ “Business Travel Net”	9	1642574	28 Sep 2001 - 27 Sep 2011
13	Lohoo+logo	35	1719860	21 Feb 2002 - 20 Feb 2012
14	Lohoo+logo	36	1711506	7 Feb 2002 - 6 Feb 2012
15	Lohoo+logo	38	1711492	7 Feb 2002 - 6 Feb 2012
16	Lohoo+logo	39	1764897	7 May 2002 - 6 May 2012
17	Lohoo+logo	41	1749624	14 Apr 2002 - 13 Apr 2012
18	Lohoo+logo	42	1719681	21 Feb 2002 - 20 Feb 2012
19	e+ dragon +logo	41	1983708	7 Apr 2003 - 6 Apr 2013
20	e+ dragon +logo	42	2016041	14 Jan.2003 - 13 Jan 2013
21	e+ dragon + Travel care+ Travel Care Plan	39	3279761	21 Mar 2004 - 20 Mar 2014
22	e+ dragon + Travel care+ Travel Care Plan	43	3279762	14 Feb 2004 - 13 Feb 2014

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Appendix Two

Details of Trademark to be licensed

1.    Registered Trademark

		Registrant	Type	Register Number	Validity Period
1	“A” logo	eLong.com, Inc	35	1631670	7 Sep 2001 - 6 Sep 2011
2	“A” logo	eLong.com, Inc	36	1749484	14 Apr 2002 - 13 Apr 2012
3	“A” logo	eLong.com, Inc	41	1731794	14 Mar 2002 - 13 Mar 2012

2.    Trademark to be Licensed

	Trademark	Type	Register Number	Date of Application
1.	eLong.com+ “e”logo+ dragon	45	3679722	19.Aug.2003
2.	eLong.com+ “e”logo+ dragon	16	3683714	21.Aug.2003
3.	eLong.com+ “e”logo+ dragon	35	3683713	21.Aug.2003
4.	eLong	36	3679721	19.Aug.2003
5.	eLong	39	3679719	19.Aug.2003
6.	eLong	45	3279720	19.Aug.2003
7.	eLong	16	3683505	21.Aug.2003
8.	eLong	35	3683504	21.Aug.2003
9.	eLong	41	3683503	21.Aug.2003
10.	eLong	42	3683743	21.Aug.2003
11.	eLong	43	3683715	21.Aug.2003
12.	eLong Travel Net +eLong.com	35	3953009	11.Mar.2004
13.	eLong Travel Net +eLong.com	39	3953008	11.Mar.2004
14.	eLong Travel Net +eLong.com	41	3953010	11.Mar.2004
15.	eLong Travel Net +eLong.com	43	3953011	11.Mar.2004
16.	e+ dragon +logo	39	1994192	10. Sep. 2001

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EX-10.19

Exhibit 10.19

Amended and Restated Technical Consulting and Services Agreement

This Amended and Restated Technical Consulting and Services Agreement (the “Agreement”) is entered into as of July 20, 2004 in Beijing between the following two parties:

eLongNet Information Technologies (Beijing) Co., Ltd. (hereinafter “Party A”)
Legal Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal  Representative:	Tang Yue
Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter “Party B”)
Legal Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue

WHEREAS:

1.    Party A is a wholly foreign-owned enterprise registered in People’s Republic of China (hereinafter “PRC”) under the laws of PRC;

2.    Party B is a limited company registered in PRC under the laws of the PRC;

3.    Party A and Party B signed a Technical Services Agreement on February 1^st 2001, and amended the aforesaid agreement on August 22^nd 2003. Both parties now decide to conduct further amendment and restatement in accordance with the relevant declaration of the agreement.

4.    Party A agrees to provide the Internet technical consulting and the relevant services to Party B in accordance with the articles and terms of the Agreement, Party B agrees to accept the Internet technical consulting and the relevant services provided by Party A in accordance with the articles and terms of the Agreement.

NOW THEREFORE, the parties through mutual negotiation agree as follows:

Article One    WebPages Space Lease

1.    Party A agrees to, as the exclusive internet technical consulting and services provider of Party B according to the Agreement, provide the exclusive technical consulting and services concerning all businesses of reservation Party B makes at www.elong.com(elong.com) to Party B.

2.    Party B agrees that, during the term of this Agreement, it shall not accept the technical consulting and services for such above-mentioned business any third party provides without the prior written consent of Party A.

3.    Party B promises that the content Party B demands Party A to provide technical consulting and services will not violate any rules of laws and regulations adaptable.

Article Two    Price of Technical Services and Software Licenses, Way of Payment

1.    The fee for technical services and software provided by Party A according to the agreement will be determined in accordance with the particular service items and software provided by Party A upon the market price of the aforesaid services and licenses by both parties through negotiations.

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2.    As for every item of business at www.elong.com, Party B shall pay the fee for technical consulting and services and software licenses determined by both parties to Party A according to the time and method both parties agreed after Party B starts to operate the business.

Article Three    Intellectual Property

1.    Any invention, modification, creation and designation accomplished by Party A during the performance of the obligations under this Agreement, and the copyright, trademark, sign (whether all these mentioned is or can be registered) of the works Party A produces, shall be Party A’s absolute belongings, and Party A owns exclusive and monopoly rights and interests to them.

2.    All the intellectual property rights transferred, created, developed or created for entrust by Party B, related with the business of Party B, not including any loan or expense of the third party, or liabilities of the third party. Party B shall sign the further documents and adopt the further actions in accordance with the reasonable requirements advanced by Party B from time to time, and guarantee the rights transferred in accordance with Item 2 of the agreement in further.

3.    Party A authorizes Party B to use the application program of its website and the registered application programs or unregistered application programs in possession of Party B. the aforesaid license should be non-exclusive and not be transferred.

Article Four    Representations and Warranties

1.    Party A represents and warrants to Party B as follows, within any time of the signing day and the period of this Agreement:

(1)    Party A is a wholly foreign-owned enterprise duly registered under the laws of the PRC, validly existing and with good operation record. Party A has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party A has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party A’s lawful, valid and binding obligations after the signature, and it can be enforced to Party A according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party A does not need to apply to any government department or acquire any approval.

(4)    Party A’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party A’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party A enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party A is one party or is restricted by; or (4) need any permission of other persons.

(5)    As for Party A, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party A does not disclose to Party B and that will interfere the signature and performance of this Agreement adversely.

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2.    Party B represents and warrants to Party A as follows, within any time of the signing day and the period of this Agreement:

(1)    Party B is a limited company duly registered under the company laws of the PRC, validly existing and with good operation record. Party B has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party B has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party B’s lawful, valid and binding obligations after the signature, and it can be enforced to Party A according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party B does not need to apply to any government department or acquire any approval.

(4)    Party B’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party B’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party B enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party B is one party or is restricted by; or (4) need any permission of other persons. (5) As for Party B, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party B does not disclose to Party A and that will interfere the signature and performance of this Agreement adversely.

Article Five    Confidentiality

1.    Any party of this Agreement shall protect and maintain the confidentiality of any confidential data and information (“Confidential Information”) acquired from the other party through signing and performing this Agreement. Unless with the written consent of the other party in advance, any party should not disclose any Confidential Information to any third party, unless the disclosure is required by law, or by enforceable orders of court and related government department. In the situation, the party required to disclose the Confidential Information shall notify the other party immediately, and take all possible measures to keep the disclosure in the scope as small as possible, and proclaim the disclosed persons the obligation of confidentiality.

2.    Upon the termination of this Agreement, any party shall, at the other party’s option, return any document, material, database, equipment or software containing the Confidential Information to the other party; if the return becomes impossible for any reason, the party shall destroy all the Confidential Information or delete the Confidential Information from any memory devices. No party can keep using any Confidential Information in any way after the termination of this Agreement.

3.    There is no time limit to the Confidentiality stipulated in Article Five, and it will survive after the termination of this Agreement, unless the Confidential Information is open to the public, and the open of the Confidential Information is not due to the breach of contract by any party.

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Article Six    Effectiveness and Term

1.    This Agreement is entered into with the “Transfer Agreement”, and takes effect as of the date of signature.

2.    This Agreement shall keep effective during the exist period (and any extended period of validity), except if the Agreement is terminated in advance according to Article 6 Item3.

3.    Party A shall terminate the Agreement at any time by delivering written notice to Party A. except the conditions regulated by the applicable law, Party B has no right to terminate the Agreement in any other event.

Article Seven    Settlement of Disputes

1    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

6.2    Arbitration place shall be in Beijing, PRC.

6.3    Arbitration language shall be English.

6.4    the court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

6.5    both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6.6    both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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Article Eight    Other Clauses

1.    All notices and other communications under this Agreement should be made in written form (including fax) and be sent by courier or fax to the following address, or any other address one party designated to the other party in written form. If the notices and communications mentioned above are sent by courier, they take effect 72 hours after the mail is delivered to the courier company; if they are sent through fax, they take effect 24 hours after being sent.

Party  A:	eLongNet Information Technologies (Beijing) Co., Ltd
Recipients:	Tang Yue
Address:	R10 Jiuxianqiao Road, Chaoyang District, Beijing
Telephone:	(010) 5860 2288
Fax:	(010) 6431 2801
Party  B:	Beijing Asia Media Interactive Advertising Co., Ltd.
Recipients:	Tang Yue
Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Telephone:	(010) 58602288
Fax:	(010) 64315872

2.    This Agreement is binding on both parties and their successors and approved assignees respectively, and is entered into only for the benefit of the persons mentioned above. Without the prior written consent of the other party, any party should not transfer, pledge or transfer in other ways the rights, benefits or obligations under this Agreement.

3.    Unless with both parties’ written consent, this Agreement should not be amended or modified; for those not included, both parties shall make a supplement to this Agreement through signing written agreements; any amendment, modification, supplement and appendix to this Agreement shall be part of this Agreement, and shall have the same legal effect as this Agreement.

4.    This Agreement is separable, the invalidity or unenforceability of any clause in this Agreement will not interfere the effect and enforceability of other clauses.

5.    When one party does not exercise or delays exercising any right or remedy for breach of contract under this Agreement, it does not mean to waive such right or remedy; when one party exercises once or exercises part of any right or remedy for breach of contract under this Agreement, it does not mean to prevent the party to exercise again or exercise further such right or remedy. One party’s waiver of right according to this Agreement may add any term it thinks appropriate. Any waiver is effective only once and for the special item.

6.    All topic headings in this Agreement are set only for convenience, and they should not be deemed part of this Agreement.

7.    This Agreement is executed duplicate, with each party holding one, and each copy has the same legal effect.

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IN WITNESS THEREOF the parties hereto have caused this Agreement to be signed by a duly authorized representative as of the date first set forth above.

eLongNet Information Technologies (Beijing) Co., Ltd

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Beijing Asia Media Interactive Advertising Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

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EX-10.20

Exhibit 10.20

Amended and Restated Equity Interests Pledge Agreement

This Amended and Restated Equity Interests Pledge Agreement (the “Agreement”) is entered into on the day of July 20, 2004 by and between the following parties:

Pledgee:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue
Pledgor:	Tang Yue
Address:	23A, No.1 Building, Yujingyuan, 5 East Road of the Capital Library, Chaoyang District, Beijing.
ID No.:	320106197103121236

WHEREAS,

(1).    The Pledgor owns 25% of the equity interest in Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter “Asia Media”). Asia Media is a wholly domestic-owned company registered under the People’s Republic of China (hereinafter “China”) laws and regulations. The registered office is at 203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing. Asia Media is qualified to engage in advertising business and cultural consultation (approved by administrative bureau for industry and commence);

(2).    The Pledgee and Asia Media entered into Exclusive Technical Consulting and Services Agreement on the date of February 1, 2001 and entered into the Supplementary Agreement of Exclusive Technical Consulting and Services Agreement on the date of August 22, 2003 (the Exclusive Technical Consulting and Services Agreement and the relevant Supplementary Agreement Hereinafter “Service Agreement”). Both parties amend and restate the Service Agreement in further on July 20, 2004, in which the Pledgee agreed that Pledgee has the exclusive right to provide Asia Media with technical services for the advertisements published in www.elong.com (hereinafter “eLong.com“);

(3).    The Pledgee and Asia Media signed a Amended and Restated Trademark License Agreement (“Trademark License Agreement”) on July 20, 2004, the Pledgee agrees that Asia Media shall use some trademarks in accordance with the agreement;

(4).    The Pledgee, the Pledgor and Asia Media sign a Amended and Restated Business Operation Agreement (“Business Operation Agreement“) on July 20, 2004. According to the agreement, Asia Media agrees not to conduct any business probably taking great effect on the capital, debt or right of the Pledgee, without the prior written consent of the Pledgee;

(5)    In order to make sure that Asia Media performs the obligations of payment for the technical service and software license of Elong.com‘s operation, and performs the obligations related with the Pledgee in “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, the Pledgee collect technical consulting service fees as normal from Pledgor, the Pledgor is willing to pledge all of its equity interest in Asia Media to the Pledgee.

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Therefore the Pledgee and the Pledgor through mutual negotiations hereby enter into this Agreement based upon the following terms:

1.    Definitions And Interpretation

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1    Pledge means the full content of Article 2 hereunder

1.2    Equity Interest means all equity interests in Asia Media legally held by the Pledgor.

1.3    Rate of Pledge means the ratio between the value of the pledge under this Agreement and the exclusive technical consulting and service fees under the Service Agreement.

1.4    Term of Pledge means the period provided for under Article 3.2 hereunder.

1.5    Service Agreement means the Exclusive Technical Consulting and Service Agreement entered into by and between Asia Media and the Pledgee on the date of February 1, 2001 and the Supplementary Agreement of Exclusive Technical Consulting and Service Agreement entered into on the date of August 22, 2003, and the further amendment and restatement of the aforesaid agreement on the date of July 20, 2004.

1.6    Event of Default means any event in accordance with Article 7.1 hereunder.

1.7    Notice of Default means the notice of default issued by the Pledgee in accordance with this Agreement.

2.    Assignments And Pledge

2.1    The Pledgor agrees to pledge all its equity interest in Asia Media to the Pledgee. Pledge under this Agreement refers to the rights owned by the Pledgee who shall be entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of the equity interests pledged by the Pledgor to the Pledgee.

3.    Rate Of Pledge And Term Of Pledge

3.1    The rate of Pledge

3.1.1    The rate of pledge shall be 100%

3.2    The term of Pledge

3.2.1    This Agreement shall take effect as of the date when the equity interests under this Agreement are recorded in the Register of Shareholder of Asia Media and registered with the competent Administration for Industry and Commerce. The term of the Pledge is the same with the term of Service Agreement.

3.2.2    During the period, the Pledgor shall be entitled to dispose the Pledge in accordance with this Agreement in the event that Asia Media fails to pay exclusive technical Consulting and service fee or software license in accordance with the Service Agreement or fails to perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”.

4.    Physical Possession Of Documents

4.1    During the term of Pledge under this Agreement, the Pledgor shall deliver the physical possession of the Certificate of Distribution and the Name List of Shareholder of Asia Media to the Pledgee within one week as of the date of conclusion of this Agreement.

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4.2    The Pledgee shall be entitled to collect the dividends from the equity interests.

4.3    The pledge of in this Agreement shall be record in the shareholder’s register.

5.    Representation of the Pledgor

5.1    The Pledgor is the legal owner of the equity interests.

5.2    The Pledgor does not pledge or encumber the equity interests to any other person except for the Pledgee.

6.    Warranties and Guarantee of the Pledgor

6.1    During the effective term of this Agreement, the Pledgor covenants to the Pledgee that the Pledgor shall:

6.1.1    Not transfer or assign the equity interests, create or permit to create any pledges, which may have an adverse effect on the rights or benefits of the Pledgee without prior written consent from the Pledgee; unless the two parties have agreed otherwise.

6.1.2    Comply with and implement laws and regulations with respect to the pledge of rights, present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within five days upon receiving such notices, orders or suggestions and comply with such notices, orders or suggestions, or object to the foregoing matters at the reasonable request of the Pledgee or with consent from the Pledgee.

6.1.3    Timely notify the Pledgee of any events or any received notices which may affect the Pledgor’s equity interest or any part of its right, and any events or any received notices which may change the Pledgor’s any covenant and obligation under this Agreement or which may affect the Pledgor’s performance of its obligations under this Agreement.

6.2    The Pledgor agrees that the Pledgee’s right of exercising the Pledge obtained from this Agreement shall not be suspended or hampered through legal procedure by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other person.

6.3    The Pledgor warrants to the Pledgee that in order to protect or perfect the security over the payment of the technical consulting and service fees under the Service Agreement, the Pledgor shall execute in good faith and cause other parties who have interests in the pledge to execute all the title certificates, agreements, and or perform and cause other parties who have interests to take action as required by the Pledgee and make access to exercise the rights and authorization vested in the Pledgee under this Agreement.

6.4    Execute all the documents with respect to the changes of certificate of equity interests with the Pledgee or the person (natural person or legal entity) designed by the Pledgee, and provides all the notices, orders and decisions regarded as necessary by the Pledgee with the Pledgee within the reasonable time.

6.5    The Pledgor warrants to the Pledgee that the Pledgor will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate all the losses suffered by the Pledgee for the reasons that the Pledgor does not perform or fully perform their guarantees, covenants, agreements, representations and conditions.

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7.    Event Of Default

7.1    The following events shall be regarded as the event of default:

7.1.1    Asia Media fails to make full payment of the exclusive technical consulting and service fees and software license fees as scheduled under the Service Agreement; or fails to perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”.

7.1.2    The Pledgor makes any material misleading or fraudulent representations or warranties under Article 5 herein, and/or the Pledgor is in violation of any warranties under Article 6 herein;

7.1.3    The Pledgor violates the covenants under any of the Articles herein;

7.1.4    The Pledgor waives the pledged equity interests or transfers or assigns the pledged equity interests without prior written consent from the Pledgee;

7.1.5    The Pledgor’s any external loan, security, compensation, covenants or any other compensation liabilities (1) are required to be repaid or performed prior to the scheduled date; or (2) are due but can not be repaid or performed as scheduled and thereby cause the Pledgee to deem that the Pledgor’s capacity to perform the obligations herein is affected;

7.1.6    This Agreement is illegal for the reason of the promulgation of the related laws or the Pledgor’s incapability of continuing to perform the obligations herein;

7.1.7    Any approval, permits, licenses or authorization from the competent authority of the government needed to perform this Agreement or validate this Agreement are withdrawn, suspended, invalidated or materially amended;

7.1.8    The property of the Pledgor is adversely changed and cause the Pledgee deem that the capability of the Pledgor to perform the obligations herein is affected;

7.1.9    The successors or assignees of the Asia Media are only entitled to perform a portion of or refuse to perform the payment liability under the Service Agreement;

7.1.10    The default resulted in the action or inaction of Pledgor’s breaching the other Articles of this Agreement;

7.1.11    Other circumstances whereby the Pledgee is incapable of exercising the right to dispose the Pledge in accordance with the related laws.

7.2    The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware of or find that any event under Article 7.1 herein or any events that may result in the foregoing events have happened or is going on.

7.3    Unless the event of default under Article 7.1 herein has been solved to the Pledgee’s satisfaction, the Pledgee, at any time when the event of default happens or thereafter, may give a written notice of default to the Pledgor and require the Pledgor to immediately make full payment of the overdue service fees and software license under the Service Agreement and other payables or perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”, or dispose the Pledge in accordance with Article 8 herein.

8.    Exercise Of The Right Of The Pledge

8.1    In case Asia Media does not fully repay the aforesaid technical service fees and software license fees of the Service Agreement, and does fully perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business

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Operation Agreement“ or “Cooperation Agreement”, the Pledgor shall not transfer or assign the pledge without prior written approval from the Pledgee prior to the full repayment of the consulting and service fee under the Service Agreement. Unless the two parties have agreed otherwise.

8.2    Subject to Article 7, the Pledgee may exercise the right to dispose the Pledge when the Pledgee gives a notice of default.

8.3    The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the equity interests pledged herein in accordance with legal procedure until the outstanding consulting and service fees and all other payables under the Service Agreement are repaid.

8.4    The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that the Pledgee could realize his Pledge.

9.    Transfers Or Assignment

9.1    The Pledgor shall not donate or transfer his rights and obligations herein without prior consent from the Pledgee.

9.2    This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each successor and assignee.

9.3    The Pledgee may transfer or assign his all or any rights and obligations under the Service Agreement to any individual (natural person or legal entity) at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the rights and obligations under the Service Agreement, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

9.4    After the Pledgee’s change resulting from the transfer or assignment, the new parties to the pledge shall enter into a pledge agreement.

10.    Termination

10.1    This Agreement shall not be terminated until the following conditions are met.

(1) All the consulting and service fees and software license fees under the Service Agreement are paid off, (2) Asia Media has fully perform all the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, or the aforesaid obligations are terminated, and (3) Asia Media does not perform the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”.

In case the agreement is terminated, the Pledgee shall cancel or terminate this Agreement within reasonable time as soon as practicable.

11.    Formalities Fees And Other Charges

11.1    The Pledgor shall be responsible for all the fees and actual expenditures in relation to this Agreement including but not limited to legal fees, cost of production, stamp tax and any other taxes and charges. If the Pledgee pays the relevant taxes in accordance with the laws, the Pledgor shall fully indemnify such taxes paid by the Pledgee.

11.2    The Pledgor shall be responsible for all the fees (including but not limited to any taxes, formalities fees, management fees, litigation fees, attorney’s fees, and various insurance premiums in connection with disposition of Pledge) incurred by the Pledgor for

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the reason that the Pledgor fails to pay any payable taxes, fees or charges in accordance with this Agreement; or the Pledgee has recourse to any foregoing taxes, charges or fees by any means for other reasons.

12.    Force Majeure

12.1    Force majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Pledge affected by force majeure shall notify the other party of exemption promptly;

12.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

13.    Dispute Resolution

13.1    This Agreement shall be governed by and construed in accordance with the PRC law.

13.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

13.3    Arbitration place shall be in Beijing, PRC.

13.4    Arbitration language shall be English.

13.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

13.6    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Agreement of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

13.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration

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injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

14.    Notice

14.1    Any notice, which is given by the parties hereto for the purpose of performing the rights, duties and obligations hereunder, shall be in writing form (including fax and telex). Where such notice is delivered personally, the time of notice is the time when such notice actually reaches the addressee; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice does not reach the addressee on business date or reaches the addressee after the business time, the next business day following such day is the date of notice. The delivery place is the address first written above of the parties hereto or the address advised in writing including facsimile and telex from time to time.

15.    Appendices

15.1    The appendices to this Agreement are entire and integral part of this Agreement.

16.    Effectiveness

16.1    This agreement and any amendments, modification, supplements, additions or changes hereto shall be in writing and come into effect upon being executed and sealed by the parties hereto.

(1)    This Agreement is executed by Chinese in duplicate, and each party holds one copy and each copy and the copies shall have the same legal effect.

In witness whereof the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Effective Date first written above.

The Pledgee:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature Authorized Representative:    /s/

Official Seal:    /s/

The Pledgor:    Tang Yue

Signature:    /s/

Appendices

1.    Register of Shareholders of Beijing Asia Media Interactive Advertising Co., Ltd.

2.    Certificate of Capital Contribution of Beijing Asia Media Interactive Advertising Co., Ltd.

3.    Services Agreement;

4.    Trademark License Agreement; and

5.    Business Operation Agreement;

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EX-10.21

Exhibit 10.21

Amended and Restated Equity Interests Pledge Agreement

This Amended and Restated Equity Interests Pledge Agreement (the “Agreement”) is entered into on the day of July 20, 2004 by and between the following parties:

Pledgee:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue
Pledgor:	Qu Zhi
ID No.:	11010897307116344
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing, P. R. China

WHEREAS,

(1).    The Pledgor owns 25% of the equity interest in Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter “Asia Media”). Asia Media is a wholly domestic-owned company registered under the People’s Republic of China (hereinafter “China”) laws and regulations. The registered office is at 203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing. Asia Media is qualified to engage in advertising business and cultural consultation (approved by administrative bureau for industry and commence);

(2).    The Pledgee and Asia Media entered into Exclusive Technical Consulting and Services Agreement on the date of February 1, 2001 and entered into the Supplementary Agreement of Exclusive Technical Consulting and Services Agreement on the date of August 22, 2003 (the Exclusive Technical Consulting and Services Agreement and the relevant Supplementary Agreement Hereinafter “Service Agreement”). Both parties amend and restate the Service Agreement in further on July 20, 2004, in which the Pledgee agreed that Pledgee has the exclusive right to provide Asia Media with technical services for the advertisements published in www.elong.com (hereinafter “Elong.com“);

(3).    The Pledgee and Asia Media signed a Amended and Restated Trademark License Agreement (“Trademark License Agreement”) on July 20, 2004, the Pledgee agrees that Asia Media shall use some trademarks in accordance with the agreement;

(4).    The Pledgee, the Pledgor and Asia Media sign a Amended and Restated Business Operation Agreement (“Business Operation Agreement“) on July 20, 2004. According to the agreement, Asia Media agrees not to conduct any business probably taking great effect on the capital, debt or right of the Pledgee, without the prior written consent of the Pledgee;

(5).    In order to make sure that Asia Media performs the obligations of payment for the technical service and software license of Elong.com ‘s operation, and performs the obligations related with the Pledgee in “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, the Pledgee collect technical consulting service fees as normal from Pledgor, the Pledgor is willing to pledge all of its equity interest in Asia Media to the Pledgee.

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Therefore the Pledgee and the Pledgor through mutual negotiations hereby enter into this Agreement based upon the following terms:

1.    Definitions And Interpretation

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1    Pledge means the full content of Article 2 hereunder

1.2    Equity Interest means all equity interests in Asia Media legally held by the Pledgor.

1.3    Rate of Pledge means the ratio between the value of the pledge under this Agreement and the exclusive technical consulting and service fees under the Service Agreement.

1.4    Term of Pledge means the period provided for under Article 3.2 hereunder.

1.5    Service Agreement means the Exclusive Technical Consulting and Service Agreement entered into by and between Asia Media and the Pledgee on the date of February 1, 2001 and the Supplementary Agreement of Exclusive Technical Consulting and Service Agreement entered into on the date of August 22, 2003, and the further amendment and restatement of the aforesaid agreement on the date of July 20, 2004.

1.6    Event of Default means any event in accordance with Article 7.1 hereunder.

1.7    Notice of Default means the notice of default issued by the Pledgee in accordance with this Agreement.

2.    Assignments And Pledge

2.1    The Pledgor agrees to pledge all its equity interest in Asia Media to the Pledgee. Pledge under this Agreement refers to the rights owned by the Pledgee who shall be entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of the equity interests pledged by the Pledgor to the Pledgee.

3.    Rate Of Pledge And Term Of Pledge

3.1    The rate of Pledge

3.1.1    The rate of pledge shall be 100%

3.2    The term of Pledge

3.2.1    This Agreement shall take effect as of the date when the equity interests under this Agreement are recorded in the Register of Shareholder of Asia Media and registered with the competent Administration for Industry and Commerce. The term of the Pledge is the same with the term of Service Agreement.

3.2.2    During the period, the Pledgor shall be entitled to dispose the Pledge in accordance with this Agreement in the event that Asia Media fails to pay exclusive technical Consulting and service fee or software license in accordance with the Service Agreement or fails to perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”.

4.    Physical Possession Of Documents

4.1    During the term of Pledge under this Agreement, the Pledgor shall deliver the physical possession of the Certificate of Distribution and the Name List of Shareholder of Asia Media to the Pledgee within one week as of the date of conclusion of this Agreement.

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4.2    The Pledgee shall be entitled to collect the dividends from the equity interests.

4.3    The pledge of in this Agreement shall be record in the shareholder’s register.

5.    Representation of the Pledgor

5.1    The Pledgor is the legal owner of the equity interests.

5.2    The Pledgor does not pledge or encumber the equity interests to any other person except for the Pledgee.

6.    Warranties and Guarantee of the Pledgor

6.1    During the effective term of this Agreement, the Pledgor covenants to the Pledgee that the Pledgor shall:

6.1.1    Not transfer or assign the equity interests, create or permit to create any pledges, which may have an adverse effect on the rights or benefits of the Pledgee without prior written consent from the Pledgee; unless the two parties have agreed otherwise.

6.1.2    Comply with and implement laws and regulations with respect to the pledge of rights, present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within five days upon receiving such notices, orders or suggestions and comply with such notices, orders or suggestions, or object to the foregoing matters at the reasonable request of the Pledgee or with consent from the Pledgee.

6.1.3    Timely notify the Pledgee of any events or any received notices which may affect the Pledgor’s equity interest or any part of its right, and any events or any received notices which may change the Pledgor’s any covenant and obligation under this Agreement or which may affect the Pledgor’s performance of its obligations under this Agreement.

6.2    The Pledgor agrees that the Pledgee’s right of exercising the Pledge obtained from this Agreement shall not be suspended or hampered through legal procedure by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any other person.

6.3    The Pledgor warrants to the Pledgee that in order to protect or perfect the security over the payment of the technical consulting and service fees under the Service Agreement, the Pledgor shall execute in good faith and cause other parties who have interests in the pledge to execute all the title certificates, agreements, and or perform and cause other parties who have interests to take action as required by the Pledgee and make access to exercise the rights and authorization vested in the Pledgee under this Agreement.

6.4    Execute all the documents with respect to the changes of certificate of equity interests with the Pledgee or the person (natural person or legal entity) designed by the Pledgee, and provides all the notices, orders and decisions regarded as necessary by the Pledgee with the Pledgee within the reasonable time.

6.5    The Pledgor warrants to the Pledgee that the Pledgor will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate all the losses suffered by the Pledgee for the reasons that the Pledgor does not perform or fully perform their guarantees, covenants, agreements, representations and conditions.

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7.    Event Of Default

7.1    The following events shall be regarded as the event of default:

7.1.1    Asia Media fails to make full payment of the exclusive technical consulting and service fees and software license fees as scheduled under the Service Agreement; or fails to perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement “ or “Cooperation Agreement”.

7.1.2    The Pledgor makes any material misleading or fraudulent representations or warranties under Article 5 herein, and/or the Pledgor is in violation of any warranties under Article 6 herein;

7.1.3    The Pledgor violates the covenants under any of the Articles herein;

7.1.4    The Pledgor waives the pledged equity interests or transfers or assigns the pledged equity interests without prior written consent from the Pledgee;

7.1.5    The Pledgor’s any external loan, security, compensation, covenants or any other compensation liabilities (1) are required to be repaid or performed prior to the scheduled date; or (2) are due but can not be repaid or performed as scheduled and thereby cause the Pledgee to deem that the Pledgor’s capacity to perform the obligations herein is affected;

7.1.6    This Agreement is illegal for the reason of the promulgation of the related laws or the Pledgor’s incapability of continuing to perform the obligations herein;

7.1.7    Any approval, permits, licenses or authorization from the competent authority of the government needed to perform this Agreement or validate this Agreement are withdrawn, suspended, invalidated or materially amended;

7.1.8    The property of the Pledgor is adversely changed and cause the Pledgee deem that the capability of the Pledgor to perform the obligations herein is affected;

7.1.9    The successors or assignees of the Asia Media are only entitled to perform a portion of or refuse to perform the payment liability under the Service Agreement;

7.1.10    The default resulted in the action or inaction of Pledgor’s breaching the other Articles of this Agreement;

7.1.11    Other circumstances whereby the Pledgee is incapable of exercising the right to dispose the Pledge in accordance with the related laws.

7.2    The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware of or find that any event under Article 7.1 herein or any events that may result in the foregoing events have happened or is going on.

7.3    Unless the event of default under Article 7.1 herein has been solved to the Pledgee’s satisfaction, the Pledgee, at any time when the event of default happens or thereafter, may give a written notice of default to the Pledgor and require the Pledgor to immediately make full payment of the overdue service fees and software license under the Service Agreement and other payables or perform the obligation of “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ or “Cooperation Agreement”, or dispose the Pledge in accordance with Article 8 herein.

8.    Exercise Of The Right Of The Pledge

8.1    In case Asia Media does not fully repay the aforesaid technical service fees and software license fees of the Service Agreement, and does fully perform the obligations of “Trademark License Agreement”, “Domain Name License Agreement”, “Business

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Operation Agreement“ or “Cooperation Agreement”, the Pledgor shall not transfer or assign the pledge without prior written approval from the Pledgee prior to the full repayment of the consulting and service fee under the Service Agreement. Unless the two parties have agreed otherwise.

8.2    Subject to Article 7, the Pledgee may exercise the right to dispose the Pledge when the Pledgee gives a notice of default.

8.3    The Pledgee is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the equity interests pledged herein in accordance with legal procedure until the outstanding consulting and service fees and all other payables under the Service Agreement are repaid.

8.4    The Pledgor shall not hinder the Pledgee from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that the Pledgee could realize his Pledge.

9.    Transfers Or Assignment

9.1    The Pledgor shall not donate or transfer his rights and obligations herein without prior consent from the Pledgee.

9.2    This Agreement shall be binding upon the Pledgor and his successors and be effective to the Pledgee and his each successor and assignee.

9.3    The Pledgee may transfer or assign his all or any rights and obligations under the Service Agreement to any individual (natural person or legal entity) at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of the Pledgee as if the assignee is a party hereto. When the Pledgee transfers or assigns the rights and obligations under the Service Agreement, at the request of the Pledgee, the Pledgor shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

9.4    After the Pledgee’s change resulting from the transfer or assignment, the new parties to the pledge shall enter into a pledge agreement.

10.    Termination

10.1    This Agreement shall not be terminated until the following conditions are met

(1) All the consulting and service fees and software license fees under the Service Agreement are paid off, (2) Asia Media has fully perform all the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”, or the aforesaid obligations are terminated, and (3) Asia Media does not perform the obligations under “Trademark License Agreement”, “Domain Name License Agreement”, “Business Operation Agreement“ and “Cooperation Agreement”.

In case the agreement is terminated, the Pledgee shall cancel or terminate this Agreement within reasonable time as soon as practicable.

11.    Formalities Fees And Other Charges

11.1    The Pledgor shall be responsible for all the fees and actual expenditures in relation to this Agreement including but not limited to legal fees, cost of production, stamp tax and any other taxes and charges. If the Pledgee pays the relevant taxes in accordance with the laws, the Pledgor shall fully indemnify such taxes paid by the Pledgee.

11.2    The Pledgor shall be responsible for all the fees (including but not limited to any taxes, formalities fees, management fees, litigation fees, attorney’s fees, and various insurance premiums in connection with disposition of Pledge) incurred by the Pledgor for

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the reason that the Pledgor fails to pay any payable taxes, fees or charges in accordance with this Agreement; or the Pledgee has recourse to any foregoing taxes, charges or fees by any means for other reasons.

12.    Force Majeure

12.1    Force majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Pledge affected by force majeure shall notify the other party of exemption promptly;

12.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

13.    Dispute Resolution

13.1    This Agreement shall be governed by and construed in accordance with the PRC law.

13.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

13.3    Arbitration place shall be in Beijing, PRC.

13.4    Arbitration language shall be English.

13.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

13.6    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Agreement of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

13.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration

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injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

14.    Notice

14.1    Any notice, which is given by the parties hereto for the purpose of performing the rights, duties and obligations hereunder, shall be in writing form (including fax and telex). Where such notice is delivered personally, the time of notice is the time when such notice actually reaches the addressee; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice does not reach the addressee on business date or reaches the addressee after the business time, the next business day following such day is the date of notice. The delivery place is the address first written above of the parties hereto or the address advised in writing including facsimile and telex from time to time.

15.    Appendices

15.1    The appendices to this Agreement are entire and integral part of this Agreement.

16.    Effectiveness

16.1    This agreement and any amendments, modification, supplements, additions or changes hereto shall be in writing and come into effect upon being executed and sealed by the parties hereto.

(1)    This Agreement is executed by Chinese in duplicate, and each party holds one copy and each copy and the copies shall have the same legal effect.

In witness whereof the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Effective Date first written above.

The Pledgee:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

The Pledgor:    Qu Zhi

Signature:    /s/

Appendices

1.    Register of Shareholders of Beijing Asia Media Interactive Advertising Co., Ltd.

2.    Certificate of Capital Contribution of Beijing Asia Media Interactive Advertising Co., Ltd.

3.    Services Agreement;

4.    Trademark License Agreement; and

5.    Business Operation Agreement;

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EX-10.22

Exhibit 10.22

Amended and Restated Business Operation Agreement

This Amended and Restated Business Operation Agreement (hereinafter the “Agreement”) is entered into on the day of July 20, 2004 (hereinafter the “Effective Date”) among the following parties:

eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter “Party A”)
Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Legal Representative:	Tang Yue
Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter “Party B”)
Legal Address:	203, B Xingke Mansion, 10 Jiu Xian Qiao Road, Chao Yang District, Beijing.
Legal Representative:	Tang Yue
Tang Yue (hereinafter “Party C”)
Address:	Room 23A No. 1 Building, Yujing Garden, No.5 Shoutudong Street, Chaoyang District, Beijing
ID No.:	3201061971032121236
Qu Zhi (hereinafter “Party D”)
Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing
ID No.:	11010897307116344

WHEREAS:

(1)    Party A is a wholly foreign-owned enterprise with valid existence registered in the People’s Republic of China (hereinafter the “PRC”);

(2)    Party B is a wholly domestic-owned company registered in the PRC and is approved by Beijing Communication Administration to engage in Internet information service business;

(3)    Party A and Party B established the business relationship by entering into the Exclusive Technical Services Agreement (hereinafter the “Services Agreement”) on the date of February 1, 2001 in Beijing;

(4)    Pursuant to Services Agreement between Party A and Party B, Party B shall pay a certain amount of money to Party A. However, Party B’s business operation will substantially affect Party A’s payment capability;

(5)    Party C is a shareholder of Party B who owns 75% equity in Party B;

(6)    Party D is a shareholder of Party B who owns 25% equity in Party B;

(7)    All the parties agree to further clarify matters relating to the operation of Party B pursuant to provisions herein.

(8)    All the parties agree to amend and restate the operative agreement signed on March 5, 2004 among them.

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NOW THEREFORE, Party A, Party B, Party C and Party D through mutual negotiations hereby agree as follows:

1.    In order to ensure Party B’s normal operation, Party A agrees, subject to Party B’s satisfaction of the relevant provisions herein, to act as the guarantor for Party B in the contracts, agreements or transactions in association with Party B’s operation between Party B and any other third party and to provide full guarantee for Party B in performing such contracts, agreements or transactions. Party B agrees to mortgage the receivables of its operation and the company’s whole asset to Party A as a counter guarantee. Pursuant to the above guarantee arrangement, Party A, as the guarantor for Party B, shall respectively enter into written guarantee contracts with Party B’s counter parties to assume the guarantee liability.

2.    In consideration of the requirement of Article 1 herein and to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree that Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or the company’s operation unless the obtainment of a prior written consent from Party A or Party A’s affiliates, including without limitations to the following contents:

2.1    To borrow money from any third party or assume any debt;

2.2    To sell to any third party or acquire from any third party any assets or rights, including without limitations to any intellectual property rights;

2.3    To provide real guarantee for any third party with its assets or intellectual property rights; and

2.4    To assign to any third party the agreements entered into by it.

3.    Appointment of the Company’s Employees

3.1    In order to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree to accept the provision of the corporate policies and guidance by Party A at no time in respects of appointment and dismissal of the company’s employees, the company’s daily operation administration and the company’s financial administrative system.

3.2    Party B together with its shareholders Party C and Party D hereby jointly agree that Party B, Party C and Party D shall only appoint the personnel recommended by Party A as the directors of Party B, and Party B shall engage Party A’s high ranking officers or any other candidate recommended by Party A as Party B’s general manager, chief financial officer, and other high ranking officers. If any of the above officers leaves or is fired by Party A, he or she will lose the qualification to undertake any positions in Party B and Party B, Party C and Party C shall appoint other high officers of Party A recommended by Party A to undertake such position.

4.    Guarantees for Working Capital

The guarantee for the loan of working capital Party B together with its shareholders Party C and Party D hereby jointly agree and confirm that except the stipulation set forth in Article 1 herein, Party B shall seek a guarantee from Party A first if Party B needs any guarantee for its performance of any contract or loan of working capital in the course of operation. In this case, Party A shall have the right but not the obligation to provide appropriate guarantee to Party B on its own discretion. If Party A decides not to provide such guarantee, Party A shall issue a written notice to Party B immediately and Party B shall seek a guarantee from other third party.

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5.    Termination

5.1    In the event that any of the agreements between Party A and Party B terminates or expires, Party A shall have the right but not the obligation to terminate all agreements between Party A and Party B including without limitation to Services Agreement.

5.2    Party A has right to terminate the agreement by delivering 30 days’ written notice to Party B at any time. During the validity period of the agreement, Party B and Party C and Party D should not terminate the agreement in advance, except the regulations in the applicable law.

6.    Compensation for Damage

All the parties agree that any party violating any obligation of the agreement shall compensate any or all loss, responsibility, expense, claim or expenditure (including legal expense and expenditure), to any other party (Hereinafter “Party Accepting Compensation”), and guarantee that the Party Accepting Compensation shall not receive any damage.

7.    Settlement of Distribution

7.1    The agreement shall be under the jurisdiction of the law of PRC, and be explained in accordance with the law of PRC.

7.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

7.3    Arbitration place shall be in Beijing, PRC.

7.4    Arbitration language shall be English.

7.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

7.6    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

7.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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8.    Effectiveness of the Agreement

8.1    This Agreement shall be executed as of the date first set forth above and both parties agree that the Agreement become effective since January 1, 2004. The Agreement shall be effective during the expiration period of Party A (including any extended period of Party A)

8.2    Any amendment and supplement of this Agreement shall be in a written form. The amendment and supplement after being duly executed by each Party shall be part of this Agreement and shall have the same legal effect as this Agreement.

8.3    This Agreement is executed by Chinese in quadruplicate and each party holds one copy, which shall have the same legal effect.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Date first written above.

Party A:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party B:    Beijing Asia Media Interactive Advertising Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:

Party C:    Tang Yue

Signature:    /s/

Party D:    Qu Zhi

Signature:    /s/

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EX-10.23

Exhibit 10.23

Amended and Restated Exclusive Purchase Right Agreement

eLong.Inc (hereinafter “Party A”)
Registered Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Tang Yue (hereinafter “Party B”)
Registered Address:	23A, No.1 Building, Yujingyuan, 5 East Road of the Capital Library, Chaoyang District, Beijing.
Identity No.:	320106197103121236
Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter “Party C”)
Registered Address:	203, B Xing Ke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing.
Legal representative:	Tang Yue
eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter “Party D”)
Registered Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing.
Legal Representative:	Tang Yue

WHEREAS:

1.    Party A is a company registered and established in Cayman Islands; Party B is a PRC resident; Party C is a limited liability company established and validly existing in accordance with PRC laws, and of which 75% equity interest is held by Party B; Party D is a wholly foreign owned enterprise established and validly existing in accordance with PRC laws, and is a wholly owned company of Party A.

2.    “Agreement” was entered into by and between Party B and Party D dated as of August 22^nd 2003, and according to which Party D provided to Party B funds for Party B to invest in Party C; “Subscribing Agreement” (hereinafter “the Original Subscribing Agreement”) was entered into by and between Party B and Party D dated as of August 23, 2003, and according to which Party B offered Party D the right to exclusively purchase Party C’s equity interest held by Party B at a price of RMB350,000, and Party D paid RMB1 to Party A as a consideration.

3.    “Loan Agreement” (hereinafter “Loan Agreement”) was entered into by and between Party A and Party B dated as of March 5, 2004, and according to which Party A provided a loan to Party B to refund to Party D for the funds and investment made by Party D.

4.    Party B is willing to grant to Party A the subscribing right of Party C’s equity interest held by Party B, and in the meantime, Party D and Party B agree to unconditionally terminate the terms and conditions under the Original Subscribing Agreement in order for Party A to enjoy the subscribing right of the equity interest held by Party B under the terms and conditions hereof. The parties agree to sign this agreement on March 5, 2004 and make it substitute the Original Subscribing Agreement.

5.    The parties agree to conduct the following amendment and restatement on the agreement

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NOW, THEREFORE, the parties to this agreement hereby agree on July 20, 2004 as follows:

Chapter One.    Purchases and Sale of Equity Interest

1.1    Authorizations

Party B hereby irrevocably delivers to Party A, under the laws of the PRC, an irrevocable sole authority (“Purchase Right of Equity Interest”) of, following the steps decided by Party A, and the price specified in 1.3 of this agreement, purchasing by Party A or by one or more persons designated by Party A (the “Designated Persons”) at any time from Party B of its all or part of the equity interest of Party C. Besides Party A and the Designated Persons, any third party does not have such Purchase Right of Equity Interest. Party C hereby agrees the delivery of Purchase Right of Equity Interest from Party B to Party A. As specified in this and this agreement, the “person” has the meaning of a person, corporation, joint venture, partnership, enterprise, trust or non-corporation organization.

1.2    Steps

Upon and subject to the laws and regulations of PRC, Party A may send a written notice (the “Notice of Purchase of Equity Interest”) to Party B upon its performance of purchase to explain in detail the way of purchase.

1.3    Purchase Price

Except as requested by law to evaluate, the price of the Purchased Equity Interest (“Purchase Price”) shall be an equivalent of the actual amount of the Purchased Equity Interest contributed by Party B.

1.4    Transfer of the Purchased Equity Interest

Every time upon Party A’s performance of the Purchase Right of Equity Interest:

(a)    Party B shall supervise and urge Party C to convene the shareholders meeting, and during the meeting, to pass the decision or resolution to transfer the equity interest from Party B to Party A and/or the Designated Persons;

(b)    Party B shall, upon the terms and conditions of this agreement and the Notice of Purchase of Equity Interest, enter into Equity Interest Transfer Agreement with Party A (or, in applicable situation, the Designated Persons); and

(c)    The related parties shall execute all other requisite contracts, agreements or documents, acquire all requisite approval and consent of the government, and, without any security interest, perform all requisite action to transfer the valid ownership of the Purchased Equity Interest to Party A and/or the Designated Person, and to cause Party A and/or the Designated Person to be the registered owner of the Purchased Equity Interest. For this and this agreement, “Security Interest” has the meaning of security, mortgage, right or interest of the third party, any purchase right of equity interest, right of acquisition, prior purchase right, right of set-off, ownership detainment or other security arrangements. To further define the meaning, it does not include any security interest subject to this Agreement or the equity interest pledge contract of Party B. As described in this and this agreement, “the Equity Interest Pledge Agreement of Party B” has the meaning of the Equity Interest Pledge Agreement entered into by Party D and Party B dated as of the execution date of this Agreement. According to the said agreement, to secure Party C to perform the obligations subject to the Exclusive Technology Service Agreement entered into between Party C and Party D, Party B pledges all its equity interest in Party C to Party D.

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1.5    Payment

Whereas contemplated in the Loan Agreement, any proceeds gained by Party B from the transfer of its equity interest in Party C shall be used, according to the Loan Agreement, as the payment to its loan borrowed from Party A. Therefore, except otherwise other arrangement shall be applied according to the applicable law, upon the performance of the Purchase Right of Equity Interest by Party A, the Purchase Price shall be used as the payment for the principal as well as the interests from Party B to Party A subject to the loan. Party A does not need pay the Purchase Price to Party B anymore.

Chapter Two.    Promises Relating Equity Interest

2.1    Promises Relating Party C

Party B and Party C hereby promise:

(a)    Without prior written consent by Party A, not, in any form, to complement, change or renew the articles of the association of Party C, to increase or decrease registered capital of the corporation, or to change the structure of the registered capital in any other forms;

(b)    Following kind finance and business standard and tradition, to maintain the exist of the corporation, prudently and effectively operate business and process affairs;

(c)    Without prior written consent by Party A, not, dated from the execution date of this agreement, to sale, transfer, mortgage or dispose in any other form any assets, legitimate or beneficial interest of business or income of Party C, or to approve any other security interest set on it;

(d)    Without prior written notice by Party A, no debt shall take place, be inherited, be guaranteed, or be allowed to exist, with the exception of: (i) debt from normal or daily business but not from borrowing; and (ii) debt having been disclosed to Party A or having gained written consent from Party A;

(e)    To normally operate all business to maintain the asset value of Party C, without doing or otherwise any action that sufficiently affects the operation and asset value;

(f)    Without prior written consent by Party A, not to enter into any material contract, with the exception of the contract entered into during the normal business ( as in this paragraph, a contract with a value more than a hundred thousand Yuan (RMB100,000) shall be deemed as a material contract);

(g)    Without prior written consent by Party A, not to provide loan or credit loan to anyone;

(h)    Upon the request of Party A, to provide all operation and finance materials relevant to Party C;

(i)    Without prior written consent by Party A, Party C shall not to merger or associate with any person, or purchase any Person or invest in any Person;

(j)    To notify Party A immediately the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the assets, business and income of Party C;

(k)    In order to keep the ownership of Party C to all its assets, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

(l)    Without prior written notice by Party A, not to assign stock interests to shareholders in any form, but upon the request of Party A, to assign all its assignable profits to their own shareholders;

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2.2    Promises Relating Party B

Party B promises:

(a)    Without prior written consent by Party A, dated from the execution date of this agreement, not to sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of the pledge set on the equity interest of Party B subject to Equity Interest Pledge Agreement of Party B;

(b)    Without prior written notice by Party A, not to cause the Board of Shareholders commissioned by Party C not to approve or execute any approving document to, sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of such actions made to Party A or the designated person of Party A;

(c)    To cause the Board of Shareholders commissioned by it not to approve or execute any approving document for Party C to, with no prior written notice by Party A, merger or associate with any person, or purchase any person or invest in any person;

(d)    To notify Party A the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the equity interest owned by it;

(e)    To cause the Board of Shareholders commissioned by it to vote to approve the transfer of the Purchased Equity Interest subject to this agreement;

(f)    In order to keep its ownership of the equity interest, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

(g)    Upon the request of Party A, to commission any person designated Party D to be the member of the board of directors of Party C;

(h)    Upon the request of Party A at any time, to immediately transfer its equity interest to the representatives designated by Party A unconditionally and at any time, and abandon its prior purchase right of such equity interest transferring to another available shareholder;

(i)    To prudently comply with the terms and conditions of this agreement and other agreements entered into totally or respectively by Party B, Party C and Party A, to actually perform all obligations under these agreements, without doing or otherwise any action that sufficiently affects the validity and enforceability of these agreements;

2.3    Promises Relating Party D

Considering Party B has impawned the stockholder’s right of Party C, hold by Party B, to Party D. Party D agrees that in case Party A exercises the right of purchasing stockholder’s right during the validity period of Equity Interest Pledge Agreement, Party B shall transfer the stockholder’s right to Party A or other appointed personnel in accordance with the agreement, the aforesaid transformation shall not be bound by the regulation that the transformation of Party B’s stockholder’s right shall be limited, in the Equity Interest Pledge Agreement.

3.    Representations and Warranties

Representations and Warranties of Party B and Party C

Dated as of the execution date of this agreement and every transferring date, Party B and Party C hereby represents and warrants together and respectively to Party A as follows:

(a)    It has the power and ability to enter into and deliver this agreement, and any equity interest-transferring agreement (“Transferring Agreement”, respectively) having it as a party, for every single transfer of the purchased equity interest according to this

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agreement, and to perform its obligations under this Agreement and any Transferring Agreement. upon execution, this agreement and the Transferring Agreement having it as a party constitute a legal, valid and binding obligation of it enforceable against it in accordance with its terms;

(b)    The execution, delivery of this agreement and any Transferring Agreement and performance of the obligations under this agreement and any Transferring Agreement do not: (i) cause to violate any relevant laws of PRC; (ii) constitute a conflict with its articles of association or other organizational documents; (iii) cause to breach any contract or instruments to which it is a party or having binding obligation on it, or cause to breach any contract or instruments to which it is a party or having binding obligation on it; (iv) cause to violate relevant authorization of any consent or approval to it and/or any continuing valid condition; or (v) cause any consent or approval authorized to it to be suspended, removed, or into which other requests be added;

(c)    Party C bears the kind and sellable ownership of all assets. Party C does not set any security interest on the said assets;

(d)    Party C does not have any undischarged debt, with the exception of (i) debt from its normal business; and (ii) debt having been disclosed to Party A and having gained written consent from Party A;

(e)    Party C abides by all laws and regulations applicable to the purchase of assets;

(f)    No litigation, arbitration or administrative procedure relating to equity interest, assets of Party C or the corporation is underway or to be decided or to probably take place; and

(g)    It bears the kind and sellable ownership of its equity interest; it does not set any security interest on the said assets.

4.    Effective Date

This Agreement shall be effectively dated from the execution date, and come into effect from January 1, 2004 as the parties confirmed, with the term of effect as 20 years. Since the effective date, the Original Subscribing Agreement between Party B and Party D shall terminate, the rights and obligations under the Original Subscribing Agreement shall be released and in the meantime, neither party shall be responsible for the termination of the Original Subscribing Agreement.

5.    Applicable Law and Dispute Resolution

5.1    Applicable Law

The execution, validity, construing and performance of this agreement, and resolution of the disputes under this agreement, shall be in accordance with officially published and publicly attainable laws of PRC (“PRC laws”). Issues not regulated by the PRC laws shall apply international legal rules and conventions.

5.2    Dispute Resolution

(a)    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

(b)    Arbitration place shall be in Beijing, PRC.

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(c)    Arbitration language shall be English.

(d)    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator. The chief arbitrator shall not be Chinese citizen or United State citizen.

(e)    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

(f)    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

6.    Taxes and Expenses

Every party shall, according to laws of PRC, bear any and all transferring and registering taxes, costs and expenses for the preparation and execution of this Agreement and all Transferring Agreements, and those arising from or imposed on the party, to complete the transactions of this Agreement and all Transferring Agreements.

7.    Notices

This agreement requests that notices or other communications sent by any party or corporation shall be written in Chinese, and be delivered in person, by mail or telecopy to other parties at the following addresses or other specified addresses noticed by other parties to the party. The date deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices delivered by mail, the tenth day of the delivery date of air certified mail with postage prepaid (as shown on stamp) or the fourth day of the delivery date to an internationally certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly given or made.

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Party A:	eLong.Inc
Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Party B:	Tang Yue
Address:	23A, No.1 Building, Yu Jing Yuan, 5 East Road of the Capital Library, Chaoyang District, Beijing.
Fax:	64312801
Tel:	58602288
Party C:	Beijing Asia Media Interactive Advertising Co., Ltd.
Address:	203, B Xing Ke Mansion, 10 Jiu Xian Qiao Road, Chaoyang District, Beijing.
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue
Party D:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiu Xian Qiao Road, Chaoyang District, Beijing
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue

8.    Confidentiality

Both the parties admit and confirm any oral or written materials exchanged by the parties relating to this agreement are confidential. Both parties shall maintain the secrecy and confidentiality of all such materials. Without written approval by the other party, the party shall not disclose to ay third party any relevant materials, but with the exception of the following: (a) the public know or may know such materials (but not disclosed by the party accepting the materials); (b) materials needed to be disclosed subject to ordinance or listing rules or precedents of stock exchange; or (c) any party necessarily discloses materials to its legal or financial consultant relating the transaction of this agreement, and this legal or financial consultant shall have the obligation of confidentiality similar to that set forth in this. The breach of the obligation of confidentiality by staff or employed institution of any party shall be deemed as the breach of such obligation by that party, and by whom the liabilities for breach shall be bored. No matter this agreement may terminate by any reason, this shall continue in force and effect.

9.    Further Warranties

The Parties to the agreement agree to promptly execute documents reasonably requisite to the performance of the provisions and the aim of this agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the provisions and the aim of this agreement or actions beneficial to it.

10.    Miscellaneous

10.1    Amendment, Modification and Supplement

Upon amendment, modification and supplement of this agreement shall be subject to the written agreement executed by each party.

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10.2    Observance of Laws and Regulations

The parties of the contract shall observe and make sure the operation of each party fully observe all laws and regulations of PRC officially published and publicly gainable.

10.3    Entire Contract

Except the written amendment, supplement and modification of this agreement following the date of execution, this agreement and attachments 1 constitute the entire contract of the parties hereto with respect to the object hereof and supersedes all prior oral or written agreements, representation and contracts with respect to the object hereof.

10.4    Headings

The headings contained in this agreement are for convenience of reference only and shall not affect the interpretation, explanation or in any other way the meaning of the provisions of this agreement.

10.5    Language

This agreement is executed in Chinese in four copies.

10.6    Severability

If any one or more provisions of this agreement are judged as invalid, illegal or nonenforceable in any way according to any laws or regulations, the validity, legality and enforceability of other provisions hereof shall not be affected or impaired in any way. All parties shall, through sincere consultation, urge to replace those invalid, illegal or non-enforceable provisions with valid ones, and from such valid provisions, similar economic effects shall be tried to reach as from those invalid, illegal or non-enforceable provisions.

10.7    Successor

This Contract shall bind and benefit the successor of each party and the transferee allowed by each party.

10.8    Survival

(a)    Any obligation taking place or at term hereof prior to the end or termination ahead of the end of this agreement shall continue in force and effect notwithstanding the occurrence of the end or termination ahead of the end of the agreement.

(b)    Item 5, Item 7 and Item 10.8 of the agreement hereof shall continue in force and effect after the termination of this agreement.

10.9    Waiver

Any party to this agreement may waive the terms and conditions of this agreement. Such waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby. Any waiver by a party to the breach hereof by other parties in certain situation shall not be construed as a waiver to any similar breach by other parties in other situation.

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IN WITNESS THEREFORE, the parties hereof have caused this agreement to be executed by their duly authorized representatives as of the date first written above.

Party A:    eLong, Inc.

Signature of Authorized Representative:     /s/

Party B:    Tang Yue

Signature of Authorized Representative:    /s/

Party C:    Beijing Asia Media Interactive Advertising Co., Ltd.

Signature of Authorized Representative:    /s/

Party D:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

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EX-10.24

Exhibit 10.24

Amended and Restated Exclusive Purchase Right Agreement

eLong.Inc (hereinafter “Party A”)
Registered  Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Qu Zhi (hereinafter “Party B”)
Registered  Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chaoyang District, Beijing
Identity No.:	11010897307116344
Beijing Asia Media Interactive Advertising Co., Ltd. (hereinafter “Party C”)
Registered  Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chao Yang District, Beijing.
Legal  representative:	Tang Yue
eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter “Party D”)
Registered  Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing.
Legal  Representative:	Tang Yue

WHEREAS:

1.    Party A is a company registered and established in Cayman Islands; Party B is a PRC resident; Party C is a limited liability company established and validly existing in accordance with PRC laws, and of which 25% equity interest is held by Party B; Party D is a wholly foreign owned enterprise established and validly existing in accordance with PRC laws, and is a wholly owned company of Party A.

2.    “Agreement” was entered into by and between Party B and Party D dated as of August 22, 2003, and according to which Party D provided to Party B funds for Party B to invest in Party C; “Subscribing Agreement” (hereinafter “the Original Subscribing Agreement”) was entered into by and between Party B and Party D dated as of August 23, 2003, and according to which Party B offered Party D the right to exclusively purchase Party C’s equity interest held by Party B at a price of RMB125,000, and Party D paid RMB1 to Party A as a consideration.

3.    “Loan Agreement” (hereinafter “Loan Agreement”) was entered into by and between Party A and Party B dated as of March 5, 2004, and according to which Party A provided a loan to Party B to refund to Party D for the funds and investment made by Party D.

4.    Party B is willing to grant to Party A the subscribing right of Party C’s equity interest held by Party B, and in the meantime, Party D and Party B agree to unconditionally terminate the terms and conditions under the Original Subscribing Agreement in order for Party A to enjoy the subscribing right of the equity interest held by Party B under the terms and conditions hereof. The parties agree to sign agreement on March 5, 2004 and make it substitute the Original Subscribing Agreement.

5.    The parties agree to conduct the following amendment and restatement on the agreement

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NOW, THEREFORE, the parties hereby agree on July 20, 2004 as follows:

Chapter One.    Purchases and Sale of Equity Interest

1.1    Authorizations

Party B hereby irrevocably delivers to Party A, under the laws of the PRC, an irrevocable sole authority (“Purchase Right of Equity Interest”) of, following the steps decided by Party A, and the price specified in Item 1.3 of this Agreement, purchasing by Party A or by one or more persons designated by Party A (the “Designated Persons”) at any time from Party B of its all or part of the equity interest of Party C. Besides Party A and the Designated Persons, any third party does not have such Purchase Right of Equity Interest. Party C hereby agrees the delivery of Purchase Right of Equity Interest from Party B to Party A. As specified in this and this agreement, the “person” has the meaning of a person, corporation, joint venture, partnership, enterprise, trust or non-corporation organization.

1.2    Steps

Upon and subject to the laws and regulations of PRC, Party A may send a written notice (the “Notice of Purchase of Equity Interest”) to Party B upon its performance of purchase to explain in detail the way of purchase.

1.3    Purchase Price

Except as requested by law to evaluate, the price of the purchased equity interest (“Purchase Price”) shall be an equivalent of the actual amount of the purchased equity interest contributed by Party B.

1.4    Transfer of the Purchased Equity Interest

Every time upon Party A’s performance of the Purchase Right of Equity Interest:

(a)    Party B shall supervise and urge Party C to convene the shareholders meeting, and during the meeting, to pass the decision or resolution to transfer the equity interest from Party B to Party A and/or the Designated Persons;

(b)    Party B shall, upon the terms and conditions of this Agreement and the Notice of Purchase of Equity Interest, enter into a equity interest transfer agreement with Party A (or, in applicable situation, the Designated Persons); and

(c)    The related parties shall execute all other requisite contracts, agreements or documents, acquire all requisite approval and consent of the government, and, without any security interest, perform all requisite action to transfer the valid ownership of the purchased equity interest to Party A and/or the Designated Person, and to cause Party A and/or the Designated Person to be the registered owner of the purchased equity interest. For this and this agreement, “Security Interest” has the meaning of security, mortgage, right or interest of the third party, any purchase right of equity interest, right of acquisition, prior purchase right, right of set-off, ownership detainment or other security arrangements. To further define the meaning, it does not include any security interest subject to this Agreement or the equity interest pledge contract of Party B. As described in this and this agreement, “the Equity Interest Pledge Agreement of Party B” has the meaning of the Equity Interest Pledge Agreement entered into by Party D and Party B dated as of the execution date of this Agreement. According to the said agreement, to secure Party C to perform the obligations subject to the Exclusive Technology Service Agreement entered into between Party C and Party D, Party B pledges all its equity interest in Party C to Party D.

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1.5    Payment

Whereas contemplated in the Loan Agreement, any proceeds gained by Party B from the transfer of its equity interest in Party C shall be used, according to the Loan Agreement, as the payment to its loan borrowed from Party A. Therefore, except otherwise other arrangement shall be applied according to the applicable law, upon the performance of the Purchase Right of Equity Interest by Party A, the Purchase Price shall be used as the payment for the principal as well as the interests from Party B to Party A subject to the loan. Party A does not need pay the Purchase Price to Party B anymore.

Chapter Two.    Promises Relating Equity Interest

2.1    Promises Relating Party C

Party B and Party C hereby promise:

(a)    Without prior written consent by Party A, not, in any form, to complement, change or renew the Articles of the Association of Party C, to increase or decrease registered capital of the corporation, or to change the structure of the registered capital in any other forms;

(b)    Following kind finance and business standard and tradition, to maintain the exist of the corporation, prudently and effectively operate business and process affairs;

(c)    Without prior written consent by Party A, not, dated from the execution date of this Agreement, to sale, transfer, mortgage or dispose in any other form any assets, legitimate or beneficial interest of business or income of Party C, or to approve any other security interest set on it;

(d)    Without prior written notice by Party A, no debt shall take place, be inherited, be guaranteed, or be allowed to exist, with the exception of: (i) debt from normal or daily business but not from borrowing; and (ii) debt having been disclosed to Party A or having gained written consent from Party A;

(e)    To normally operate all business to maintain the asset value of Party C, without doing or otherwise any action that sufficiently affects the operation and asset value;

(f)    Without prior written consent by Party A, not to enter into any material contract, with the exception of the contract entered into during the normal business (as in this paragraph, a contract with a value more than a hundred thousand Yuan (RMB 100,000) shall be deemed as a material contract);

(g)    Without prior written consent by Party A, not to provide loan or credit loan to anyone;

(h)    Upon the request of Party A, to provide all operation and finance materials relevant to Party C;

(i)    Without prior written consent by Party A, Party C shall not to merger or associate with any person, or purchase any Person or invest in any Person;

(j)    To notify Party A immediately the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the assets, business and income of Party C;

(k)    In order to keep the ownership of Party C to all its assets, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

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(l)    Without prior written notice by Party A, not to assign stock interests to shareholders in any form, but upon the request of Party A, to assign all its assignable profits to their own shareholders;

2.2    Promises Relating Party B

Party B promises:

(a)    Without prior written consent by Party A, dated from the execution date of this Agreement, not to sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of the pledge set on the equity interest of Party B subject to Equity Interest Pledge Contract of Party B;

(b)    Without prior written notice by Party A, not to cause the Board of Shareholders commissioned by Party C not to approve or execute any approving document to, sale, transfer, mortgage or dispose in any other form any legitimate or beneficial interest of equity interest, or to approve any other security interest set on it, with the exception of such actions made to Party A or the designated person of Party A;

(c)    To cause the Board of Shareholders commissioned by it not to approve or execute any approving document for Party C to, with no prior written notice by Party A, merger or associate with any person, or purchase any person or invest in any person;

(d)    To notify Party A the occurrence or the probable occurrence of the litigation, arbitration or administrative procedure related to the equity interest owned by it;

(e)    To cause the Board of Shareholders commissioned by it to vote to approve the transfer of the Purchased Equity Interest subject to this Agreement;

(f)    In order to keep its ownership of the equity interest, to execute all requisite or appropriate documents, do all requisite or appropriate action, and advance all requisite or appropriate accusation, or make requisite or appropriate plea for all claims;

(g)    Upon the request of Party A, to commission any person designated Party D to be the member of the board of directors of Party C;

(h)    Upon the request of Party A at any time, to immediately transfer its equity interest to the representatives designated by Party A unconditionally and at any time, and abandon its prior purchase right of such equity interest transferring to another available shareholder;

(i)    To prudently comply with the terms and conditions of this Agreement and other contracts entered into totally or respectively by Party B, Party C and Party A., to actually perform all obligations under these contracts, without doing or otherwise any action that sufficiently affects the validity and enforceability of these contracts;

2.3    Promises Relating Party D

Considering Party B has impawned the stockholder’s right of Party C, hold by Party B, to Party D. Party D agrees that in case Party A exercises the right of purchasing stockholder’s right during the validity period of Equity Interest Pledge Agreement, Party B shall transfer the stockholder’s right to Party A or other appointed personnel in accordance with the agreement, the aforesaid transformation shall not be bound by the regulation that the transformation of Party B’s stockholder’s right shall be limited, in the Equity Interest Pledge Agreement.

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3.    Representations and Warranties

Representations and Warranties of Party B and Party C

Dated as of the execution date of this agreement and every transferring date, Party B and Party C hereby represents and warrants together and respectively to Party A as follows:

(a)    It has the power and ability to enter into and deliver this agreement, and any equity Interest-transferring agreement (“Transferring Agreement”, respectively) having it as a party, for every single transfer of the purchased equity interest according to this Agreement, and to perform its obligations under this agreement and any Transferring Agreement. upon execution, this agreement and the Transferring Agreement having it as a party constitute a legal, valid and binding obligation of it enforceable against it in accordance with its terms;

(b)    The execution, delivery of this agreement and any Transferring Agreement and performance of the obligations under this agreement and any Transferring Agreement do not: (i) cause to violate any relevant laws of PRC; (ii) constitute a conflict with its articles of association or other organizational documents; (iii) cause to breach any contract or instruments to which it is a party or having binding obligation on it, or cause to breach any contract or instruments to which it is a party or having binding obligation on it; (iv) cause to violate relevant authorization of any consent or approval to it and/or any continuing valid condition; or (v) cause any consent or approval authorized to it to be suspended, removed, or into which other requests be added;

(c)    Party C bears the kind and sellable ownership of all assets. Party C does not set any security interest on the said assets;

(d)    Party C does not have any undischarged debt, with the exception of (i) debt from its normal business; and (ii) debt having been disclosed to Party A and having gained written consent from Party A;

(e)    Party C abides by all laws and regulations applicable to the purchase of assets;

(f)    No litigation, arbitration or administrative procedure relating to equity interest, assets of Party C or the corporation is underway or to be decided or to probably take place;

(g)    It bears the kind and sellable ownership of its equity interest; it does not set any security interest on the said assets

4.    Effective Date

This Agreement shall be effectively dated from the execution date, and come into effect from January 1, 2004 as the parties confirmed, with the term of effect as 20 years. Since the effective date, the Original Subscribing Agreement between Party B and Party D shall terminate, the rights and obligations under the Original Subscribing Agreement shall be released and in the meantime, neither party shall be responsible for the termination of the Original Subscribing Agreement.

5.    Applicable Law and Dispute Resolution

5.1    Applicable Law

The execution, validity, construing and performance of this Agreement, and resolution of the disputes under this agreement, shall be in accordance with officially published and publicly attainable laws of the PRC (“PRC laws”). Issues not regulated by the PRC laws shall apply international legal rules and conventions.

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5.2    Dispute Resolution

(a)    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

(b)    Arbitration place shall be in Beijing, PRC.

(c)    Arbitration language shall be English.

(d)    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator. The chief arbitrator shall not be Chinese citizen or United State citizen.

(e)    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

(f)    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

6.    Taxes and Expenses

Every party shall, according to laws of PRC, bear any and all transferring and registering taxes, costs and expenses for the preparation and execution of this agreement and all Transferring Agreements, and those arising from or imposed on the party, to complete the transactions of this agreement and all Transferring Agreements.

7.    Notices

This Agreement requests that notices or other communications sent by any party or corporation shall be written in Chinese, and be delivered in person, by mail or telecopy to other parties at the following addresses or other specified addresses noticed by other parties to the party. The date deemed to be duly given or made shall be confirmed as follows: (a) for notices delivered in person, the date of delivery shall be deemed as having been duly given or made; (b) for notices delivered by mail, the tenth day of the delivery date of air certified mail with postage prepaid (as shown on stamp) or the fourth day of the delivery date to an internationally certified delivery institution shall be deemed as having been duly given or made; and (c) for notices by telecopy, the receipt date showed on the delivery confirming paper of the relevant document shall be deemed as having been duly given or made.

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Party A:	eLong.Inc
Address:	4th Floor, Hutchence David Century Garden, George Town, Grand Cayman, Cayman Islands.
Fax:
Tel:
Addressee:
Party B:	Qu Zhi
Registered Address:	Room 2004 No.3 Building, Dushijingdian Garden, Gaobeidianbei Street, Chao Yang District, Beijing
Fax:
Tel:	13901087129
Party C:	Beijing Asia Media Interactive Advertising Co., Ltd.
Address:	203, B Xing Ke Mansion, 10 Jiu Xian Qiao Road, Chao Yang District, Beijing.
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue
Party D:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiu Xian Qiao Road, Chao Yang District, Beijing
Fax:	64312801
Tel:	58602288
Addressee:	Tang Yue

8.    Confidentiality

Both the parties admit and confirm any oral or written materials exchanged by the parties relating to this Agreement are confidential. Both parties shall maintain the secrecy and confidentiality of all such materials. Without written approval by the other party, the party shall not disclose to ay third party any relevant materials, but with the exception of the following: (a) the public know or may know such materials (but not disclosed by the party accepting the materials); (b) materials needed to be disclosed subject to ordinance or listing rules or precedents of stock exchange; or (c) any party necessarily discloses materials to its legal or financial consultant relating the transaction of this Agreement, and this legal or financial consultant shall have the obligation of confidentiality similar to that set forth in this. The breach of the obligation of confidentiality by staff or employed institution of any party shall be deemed as the breach of such obligation by that party, and by whom the liabilities for breach shall be bored. No matter this Agreement may terminate by any reason, this shall continue in force and effect.

9.    Further Warranties

The Parties to the Agreement agree to promptly execute documents reasonably requisite to the performance of the provisions and the aim of this Agreement or documents beneficial to it, and to take actions reasonably requisite to the performance of the provisions and the aim of this Agreement or actions beneficial to it.

10.    Miscellaneous

10.1    Amendment, Modification and Supplement

Upon amendment, modification and supplement of this Contract shall be subject to the written agreement executed by each party.

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10.2    Observance of Laws and Regulations

The parties of the contract shall observe and make sure the operation of each party fully observe all laws and regulations of PRC officially published and publicly gainable.

10.3    Entire Contract

Except the written amendment, supplement and modification of this Agreement following the date of execution, this Agreement and attachments 1 constitute the entire contract of the parties hereto with respect to the object hereof and supersedes all prior oral or written agreements, representation and contracts with respect to the object hereof.

10.4    Headings

The headings contained in this Agreement are for convenience of reference only and shall not affect the interpretation, explanation or in any other way the meaning of the provisions of this Agreement.

10.5    Language

This Agreement is executed by Chinese in four copies.

10.6    Severability

If any one or more provisions of this Agreement are judged as invalid, illegal or unenforceable in any way according to any laws or regulations, the validity, legality and enforceability of other provisions hereof shall not be affected or impaired in any way. All parties shall, through sincere consultation, urge to replace those invalid, illegal or non-enforceable provisions with valid ones, and from such valid provisions, similar economic effects shall be tried to reach as from those invalid, illegal or non-enforceable provisions.

10.7    Successor

This Contract shall bind and benefit the successor of each party and the transferee allowed by each party.

10.8    Survival

(a)    Any obligation taking place or at term hereof prior to the end or termination ahead of the end of this Agreement shall continue in force and effect notwithstanding the occurrence of the end or termination ahead of the end of the Agreement.

(b)    Item 5, Item 7 and Item 10.8 of the agreement hereof shall continue in force and effect after the termination of this Agreement.

10.9    Waiver

Any party to this Agreement may waive the terms and conditions of this Agreement. Such waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby. Any waiver by a party to the breach hereof by other parties in certain situation shall not be construed as a waiver to any similar breach by other parties in other situation.

(No text on this page)

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IN WITNESS THEREFORE, the parties hereof have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

Party A:    ELong.Inc

Signature of Authorized Representative:    /s/

Party B:    Qu Zhi

Signature of Authorized Representative:    /s/

Party C:    Beijing Asia Media Interactive Advertising Co., Ltd.

Signature of Authorized Representative:    /s/

Party D:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

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EX-10.25

Exhibit 10.25

Amended and Restated Technical Consulting and Services Agreement

This Amended and Restated Technical Consulting and Services Agreement (the “Agreement”) is entered into the date of July 20, 2004 in Beijing between the following two parties:

eLongNet Information Technologies (Beijing) Co., Ltd. (hereinafter “Party A”)
Legal  Address:	10 Jiuxianqiao Road, Chao Yang District Beijing
Legal  Representative	Tang Yue
Beijing eLong Airline Services Co., Ltd (hereinafter “Party B”)
Legal Address:	202, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative	Tang Yue

WHEREAS,

1.    Party A is a wholly foreign-owned enterprise registered in People’s Republic of PRC (hereinafter “PRC”) under the laws of PRC;

2.    Party B is a limited company registered in PRC under the laws of PRC;

3.    Party A and Party B signed a Technical Services Agreement on August 22, 2003, and amended the aforesaid agreement on August 5, 2004. Both parties now decide to conduct further amendment and restatement in accordance with the relevant declaration of the agreement.

4.    Party A agrees to provide the Internet technical consulting and the relevant services to Party B in accordance with the articles and terms of the agreement, Party B agrees to accept the Internet technical consulting and the relevant services provided by Party A in accordance with the articles and terms of the agreement.

NOW THEREFORE, the parties through mutual negotiation agree as follows:

Article One    Technical Consulting and Services

1.    Party A agrees to, as the exclusive Internet technical consulting and services provider of Party B according to the Agreement, provide the exclusive technical consulting and services concerning all businesses of reservation made by Party B at www.elong.com (hereinafter “elong.com”) to Party B;

2.    Party B agrees that, during the term of this Agreement, it shall not utilize any third party to provide such technical consulting and services for such above-mentioned business without the prior written consent of Party A;

3.    Party B promises that the content Party B demands Party A to provide technical consulting and services will not violate any rules of laws and regulations adaptable.

Article Two    Price of Technical Services and Software Licenses, Way of Payment

1.    The fee for technical services and software provided by Party A according to the agreement will be determined in accordance with the particular service items and software provided by Party A upon the market price of the aforesaid services and licenses by both parties through negotiations.

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2.    As for every item of business at www.elong.com, Party B shall pay the fee for technical consulting and services and software licenses determined by both parties to Party A according to the time and method both parties agreed after Party B starts to operate the business.

3.    Whereas Party A has provided Party B with the internet technical consulting and services and software licenses for a long time, the shareholders of Party B agree to pledge their equity interest of Party B to Party A (See the attached “Equity Interests Pledge Agreement”), as a security for collecting the consulting and service fees and software licenses fees mentioned above in Section 2.

Article Three    Intellectual Property

1.    Any invention, modification, creation and designation accomplished by Party A during the performance of the obligations under this Agreement, and the copyright, trademark, sign (whether all these mentioned is or can be registered) of the works Party A produces, shall be Party A’s absolute belongings, and Party A owns exclusive and monopoly rights and interests to them.

2.    All the intellectual property rights transferred, created, developed or created for entrust by Party B, related with the business of Party B, not including any loan or expense of the third party, or liabilities of the third party. Party B shall sign the further documents and adopt the further actions in accordance with the reasonable requirements advanced by Party B from time to time, and guarantee the rights transferred in accordance with Article 1 Item 2 in further.

3.    Party A authorizes Party B to use the application program of elongNet’ website and the registered application programs or unregistered application programs in possession of Party B. the aforesaid license should be non-exclusive and not be transferred.

Article Four    Representations and Warranties

1.    Party A represents and warrants to Party B as follows, within any time of the signing day and the period of this Agreement:

(1)    Party A is a wholly foreign-owned enterprise duly registered under the laws of the PRC, validly existing and with good operation record. Party A has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party A has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party A’s lawful, valid and binding obligations after the signature, and it can be enforced to Party A according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party A does not need to apply to any government department or acquire any approval.

(4)    Party A’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party A’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party A enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party A is one party or is restricted by; or (4) need any permission of other persons.

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(5)    As for Party A, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party A does not disclose to Party B and that will interfere the signature and performance of this Agreement adversely.

2.    Party B represents and warrants to Party A as follows, within any time of the signing day and the period of this Agreement:

(1)    Party B is a limited company duly registered under the company laws of the PRC, validly existing and with good operation record. Party B has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party B has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party B’s lawful, valid and binding obligations after the signature, and it can be enforced to Party A according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party B does not need to apply to any government department or acquire any approval.

(4)    Party B’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party B’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party B enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party B is one party or is restricted by; or (4) need any permission of other persons. (5) As for Party B, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party B does not disclose to Party A and that will interfere the signature and performance of this Agreement adversely.

Article Five    Confidentiality

1.    Any party of this Agreement shall protect and maintain the confidentiality of any confidential data and information (“Confidential Information”) acquired from the other party through signing and performing this Agreement. Unless with the written consent of the other party in advance, any party should not disclose any Confidential Information to any third party, unless the disclosure is required by law, or by enforceable orders of court and related government department. In the situation, the party required to disclose the Confidential Information shall notify the other party immediately, and take all possible measures to keep the disclosure in the scope as small as possible, and proclaim the disclosed persons the obligation of confidentiality.

2.    Upon the termination of this Agreement, any party shall, at the other party’s option, return any document, material, database, equipment or software containing the Confidential Information to the other party; if the return becomes impossible for any reason, the party shall destroy all the Confidential Information or delete the Confidential Information from any memory devices. No party can keep using any Confidential Information in any way after the termination of this Agreement.

3.    There is no time limit to the Confidentiality stipulated in Article Five, and it will survive after the termination of this Agreement, unless the Confidential Information is open to the public, and the open of the Confidential Information is not due to the breach of contract by any party.

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Article Six    Effectiveness and Term

1.    This Agreement is entered into with the “Transfer Agreement”, and takes effect as of the date of signature.

2.    This Agreement shall keep effective during the exist period (and any extended period of validity), except that the agreement is terminated in advance according to Article 6 Item 3.

3.    Party A shall terminate this Agreement at any time by delivering written notice to Party A. except the conditions regulated by the applicable law, Party B has no right to terminate this Agreement in any other event.

Article Seven    Settlement of Disputes

1    Any dispute, tangle or claim arising from this Agreement or relating to this Agreement (including any issue relating to the existence, validity or termination of this Agreement) should be submitted to PRC International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

2    Arbitration place shall be in Beijing, PRC.

3    Arbitration language shall be English.

4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of PRC). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

Article Eight    Other Clauses

1.    All notices and other communications under this Agreement should be made in written form (including fax) and be sent by courier or fax to the following address, or any other address one party designated to the other party in written form. If the notices and communications mentioned above are sent by courier, they take effect 72 hours after the mail is delivered to the courier company; if they are sent through fax, they take effect 24 hours after being sent.

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Party A:	eLongNet Information Technologies (Beijing) Co., Ltd
Recipients:	Tang Yue
Address:	R10 Jiuxianqiao Road, Chaoyang District, Beijing
Telephone:	8610 5860 2288
Fax:	8610 6431 5872
Party B:	Beijing Asia Media Interactive Advertising Co., Ltd.
Recipients:	Tang Yue
Address:	202, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Telephone:	8610 58602288
Fax:	8610 64315872

2.    This Agreement is binding on both parties and their successors and approved assignees respectively, and is entered into only for the benefit of the persons mentioned above. Without the prior written consent of the other party, any party should not transfer, pledge or transfer in other ways the rights, benefits or obligations under this Agreement.

3.    Unless with both parties’ written consent, this Agreement should not be amended or modified; for those not included, both parties shall make a supplement to this Agreement through signing written agreements. Any amendment, modification, supplement and appendix to this Agreement shall be part of this Agreement, and shall have the same legal effect as this Agreement.

4.    This Agreement is separable, the invalidity or unenforceability of any clause in this Agreement will not interfere the effect and enforceability of other clauses.

5.    When one party does not exercise or delays exercising any right or remedy for breach of contract under this Agreement, it does not mean to waive such right or remedy; when one party exercises once or exercises part of any right or remedy for breach of contract under this Agreement, it does not mean to prevent the party to exercise again or exercise further such right or remedy. One party’s waiver of right according to this Agreement may add any term it thinks appropriate. Any waiver is effective only once and for the special item.

6.    All topics in this Agreement are set only for convenience, and they should not be deemed part of this Agreement.

7.    This Agreement is executed duplicates, each party holds one, and each copy has the same legal effect.

IN WITNESS THEREOF the parties hereto have caused this Agreement to be signed by a duly authorized representative as of the date first set forth above.

eLongNet Information Technologies (Beijing) Co., Ltd(Seal)

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Beijing eLong Airline Services Co., Ltd

Signature of Authorized Representative:    /s/

Official Seal:    /s/

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EX-10.26

Exhibit 10.26

Amended and Restated Equity Interests Pledge Agreement

This Amended and Restated Equity Interests Pledge Agreement (the “Agreement”) is entered into on the day of July 20, 2004 by and among the following parties:

Party A:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Legal Representative:	Tang Yue
Party B:	Beijing eLong Information Technology Co., Ltd
Address:	Room 109, Jian Tower, No. 68 Xue Yuannan Street Haidian District Beijing
Legal Representative:	Tang Yue
Party C:	Beijing Asia Interactive Advertising Co., Ltd.
Address:	203, B Xingke Tower, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue

WHEREAS,

(1).    Party B owns 80% of the equity interest in Beijing eLong Airline Services Co., Ltd. (Hereinafter “eLong Airline”). Party C owns 20% of the equity interest in Beijing eLong Airline Services Co., Ltd. eLong Airline is a wholly domestic-owned company registered under the People’s Republic of PRC (Hereinafter “PRC”) laws and regulations.

(2).    Party A and eLong Airline entered into Exclusive Technical Consulting and Services Agreement on the date of August 22, 2003 and entered into the Supplementary Agreement of Exclusive Technical Consulting and Services Agreement on the date of March 5, 2004 (the Exclusive Technical Consulting and Services Agreement and the relevant Supplementary Agreement Hereinafter “Service Agreement”). Both parties amend and restate the Service Agreement in further on July 20, 2004, in which the Party A has the exclusive right to provide Elong Airline with technical services related with air transport and selling agency.

(3).    Party A and eLong Airline sign a Amended and Restated Trademark License Agreement (“Trademark License Agreement”) on July 20, 2004, Party A agrees that Elong Airline shall use some trademarks in accordance with the agreement;

(4).    The three parties and eLong Airline sign a Amended and Restated Business Operation Agreement (“Business Operation Agreement”) on July 20, 2004. According to the agreement, Elong Airline agrees not to conduct any business probably taking great effect on the capital, debt or right of Party A, without the prior written consent of Party A;

(5).    In order to make sure that eLong Airline performs the obligations of payment for the technical service and software license provided by Party A, and performs the obligations related with Party A in “Trademark License Agreement” and “Business Operation Agreement“, the three parties agree to amend and restate the Equity Interests Pledge Agreement in accordance with the declaration of the agreement, Party B and Party C are willing to pledge all of its equity interest in eLong Airline to Party A .

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Therefore Party A, Party B and Party C through mutual negotiations hereby enter into this Agreement based upon the following terms:

1.    Definitions And Interpretation

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1    Pledge means the full content of Article 2 hereunder

1.2    Equity Interest means all equity interests in Elong Airline legally held by Party B and Party C.

1.3    Rate of Pledge means the ratio between the value of the pledge under this Agreement and the exclusive technical consulting and service fees under the technical Service Agreement and the relevant supplement agreement.

1.4    Term of Pledge means the period provided for under Article 3.2 hereunder.

1.5    Service Agreement means the Exclusive Technical Consulting and Service Agreement entered into by and between eLong Airline, of which Party B and Party C have equity interests, and Party A on the date of August 22, 2003 and the Supplementary Agreement of Exclusive Technical Consulting and Service Agreement entered into on the date of March 5, 2004, and the further amendment and restatement of the aforesaid agreement on the date of July 20, 2004.

1.6    Event of Default means any event in accordance with Article 7.1 hereunder.

1.7    Notice of Default means the notice of default issued by Party A in accordance with this Agreement.

2.    Assignments And Pledge

2.1    Party B and Party C agree to pledge all its equity interest in Elong Airline to Party A. Pledge under this Agreement refers to the rights owned by Party A who shall be entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of the equity interests pledged by Party B and Party C to Party A.

3.    Rate Of Pledge And Term Of Pledge

3.1    The Rate of Pledge

3.1.1    The rate of pledge shall be 100%

3.2    The Term of Pledge

3.2.1    This Agreement shall take effect as of the date when the equity interests under this Agreement are recorded in the Register of Shareholder of eLong Airline and registered with the competent Administration for Industry and Commerce. The term of the Pledge is the same with the term of Service Agreement.

3.2.2    During the period, Party A shall be entitled to dispose the Pledge in accordance with this Agreement in the event that eLong Airline fails to pay exclusive technical Consulting and service fee or software license in accordance with the Service Agreement or fails to perform the obligations of “Trademark License Agreement” or “Business Operation Agreement“.

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4.    Physical Possession Of Documents

4.1    During the term of Pledge under this Agreement, Party B and Party C should deliver the physical possession of the Certificate of Distribution and the Name List of Shareholder of Elong Airline to Party A within one week as of the date of conclusion of this Agreement.

4.2    Party A shall be entitled to collect the dividends from the equity interests.

4.3    The pledge in this Agreement shall be record in the shareholder’s register of Elong Airline.

5.    Representation of Party B and Party C

5.1    Party B and Party C is the legal owner of the equity interests.

5.2    Party B and Party C does not pledge or encumber the equity interests to any other person except for Party A.

6.    Warranties and Guarantee of Party B and Party C

6.1    During the effective term of this Agreement, Party B and Party C covenants to Party A that Party B and Party C shall:

6.1.1    Not transfer or assign the equity interests, create or permit to create any pledges which may have an adverse effect on the rights or benefits of Party A without prior written consent from Party A; publication unless the two parties have agreed otherwise.

6.1.2    Comply with and implement laws and regulations with respect to the pledge of rights, present to Party A the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within five days upon receiving such notices, orders or suggestions and comply with such notices, orders or suggestions, or object to the foregoing matters at the reasonable request of Party A or with consent from Party A.

6.1.3    Timely notify Party A of any events or any received notices which may affect Party B and Party C’s equity interest or any part of its right, and any events or any received notices which may change Party B and Party C’s any covenant and obligation under this Agreement or which may affect Party B and Party C’s performance of its obligations under this Agreement.

6.2    Party B and Party C agrees that Party A ‘s right of exercising the Pledge obtained from this Agreement shall not be suspended or hampered through legal procedure by Party B and Party C or any successors of Party B and Party C or any person authorized by Party B and Party C or any other person.

6.3    Party B and Party C warrants to Party A that in order to protect or perfect the security over the payment of the technical consulting and service fees under the Service Agreement, Party B and Party C shall execute in good faith and cause other parties who have interests in the pledge to execute all the title certificates, contracts, and or perform and cause other parties who have interests to take action as required by Party A and make access to exercise the rights and authorization vested in Party A under this Agreement.

6.4    Execute all the documents with respect to the changes of certificate of equity interests with Party A or the person (natural person or legal entity) designed by Party A, and provides all the notices, orders and decisions regarded as necessary by Party A with Party A within the reasonable time.

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6.5    Party B and Party C warrants to Party A that Party B and Party C will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of Party A. Party B and Party C shall compensate all the losses suffered by Party A for the reasons that Party B and Party C does not perform or fully perform their guarantees, covenants, agreements, representations and conditions.

7.    Event Of Default

7.1    The following events shall be regarded as the event of default:

7.1.1    Elong Airline fails to make full payment of the exclusive technical consulting and service fees and software license fees as scheduled under the Service Agreement; or fails to perform the obligation of “Trademark License Agreement” or “Business Operation Agreement“;

7.1.2    Party B and Party C makes any material misleading or fraudulent representations or warranties under Article 5 herein, and/or Party B and Party C is in violation of any warranties under Article 6 herein;

7.1.3    Party B and Party C violate the covenants under any of the Articles herein;

7.1.4    Party B and Party C waives the pledged equity interests or transfers or assigns the pledged equity interests without prior written consent from Party A;

7.1.5    Party B and Party C’s any external loan, security, compensation, covenants or any other compensation liabilities (1) are required to be repaid or performed prior to the scheduled date; or (2) are due but can not be repaid or performed as scheduled and thereby cause Party A to deem that Party B and Party C’s capacity to perform the obligations herein is affected;

7.1.6    This Agreement is illegal for the reason of the promulgation of the related laws or Party B and Party C’s incapability of continuing to perform the obligations herein;

7.1.7    Any approval, permits, licenses or authorization from the competent authority of the government needed to perform this Agreement or validate this Agreement are withdrawn, suspended, invalidated or materially amended;

7.1.8    The property of Party B and Party C is adversely changed and cause Party A deem that the capability of Party B and Party C to perform the obligations herein is affected;

7.1.9    The successors or assignees of the Elong Airline are only entitled to perform a portion of or refuse to perform the payment liability under the Service Agreement;

7.1.10    The default resulted in the action or inaction of Pledgor’s breaching the other Articles of this Agreement;

7.1.11    Other circumstances whereby Party A is incapable of exercising the right to dispose the Pledge in accordance with the related laws.

7.2    Party B and Party C shall immediately give a written notice to Party A if Party B and Party C is aware of or find that any event under Article 7.1 herein or any events that may result in the foregoing events have happened or is going on.

7.3    Unless the event of default under Article 7.1 herein has been solved to Party A ‘s satisfaction, Party A, at any time when the event of default happens or thereafter, may give a written notice of default to Party B and Party C and require Party B and Party C to immediately make full payment of the overdue service fees and software license under the

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Service Agreement and other payables or perform the obligation of “Trademark License Agreement” or “Business Operation Agreement“, or dispose the Pledge in accordance with Article 8 herein.

8.    Exercise Of The Right Of The Pledge

8.1    In case eLong Airline does not fully repay the aforesaid technical service fees and software license fees of the Service Agreement, and does fully perform the obligations of “Trademark License Agreement” and “Business Operation Agreement“, Party B and Party C shall not transfer or assign the pledge without prior written approval from Party A prior to the full repayment of the consulting and service fee under the Service Agreement. Unless the two parties have agreed otherwise.

8.2    Subject to Article 7, Party A may exercise the right to dispose the Pledge when Party A gives a notice of default.

8.3    Party A is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the equity interests pledged herein in accordance with legal procedure until the outstanding consulting and service fees and all other payables under the Service Agreement are repaid.

8.4    Party B and Party C shall not hinder Party A from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that Party A could realize his Pledge.

9.    Transfers Or Assignment

9.1    Party B and Party C shall not donate or transfer his rights and obligations herein without prior consent from Party A.

9.2    This Agreement shall be binding upon Party B and Party C and his successors and be effective to Party A and his each successor and assignee.

9.3    Party A may transfer or assign his all or any rights and obligations under the Service Agreement to any individual (natural person or legal entity) at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of Party A as if the assignee is a party hereto. When Party A transfers or assigns the rights and obligations under the Service Agreement, at the request of Party A, Party B and Party C shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

9.4    After Party A ‘s change resulting from the transfer or assignment, the new parties to the pledge shall enter into a pledge agreement.

10.    Termination

10.1    This Agreement shall not be terminated until the following conditions are met:

(1)    All the consulting and service fees and software license fees under the Service Agreement are paid off (2) eLong Airline has fully perform all the obligations under “Trademark License Agreement” and “Business Operation Agreement“, or the aforesaid obligations are terminated. And (3) eLong Airline does not perform the obligations under “Trademark License Agreement” and “Business Operation Agreement“.

In case the agreement is terminated, Party A shall cancel or terminate this Agreement within reasonable time as soon as practicable.

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11.    Formalities Fees And Other Charges

11.1    Party B and Party C shall be responsible for all the fees and actual expenditures in relation to this Agreement including but not limited to legal fees, cost of production, stamp tax and any other taxes and charges. If Party A pays the relevant taxes in accordance with the laws, Party B and Party C shall fully indemnify such taxes paid by Party A.

11.2    Party B and Party C shall be responsible for all the fees (including but not limited to any taxes, formalities fees, management fees, litigation fees, attorney’s fees, and various insurance premiums in connection with disposition of Pledge) incurred by Party B and Party C for the reason that Party B and Party C fails to pay any payable taxes, fees or charges in accordance with this Agreement; or Party A has recourse to any foregoing taxes, charges or fees by any means for other reasons.

12.    Force Majeure

12.1    Force majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Pledge affected by force majeure shall notify the other party of exemption promptly;

12.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

13.    Dispute Resolution

13.1    This Agreement shall be governed by and construed in accordance with the PRC law.

13.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to PRC International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

13.3    Arbitration place shall be in Beijing, PRC.

13.4    Arbitration language shall be English.

13.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

13.6    both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation

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according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of PRC). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

13.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

14.    Notice

14.1    Any notice, which is given by the parties hereto for the purpose of performing the rights, duties and obligations hereunder, shall be in writing form (including fax and telex). Where such notice is delivered personally, the time of notice is the time when such notice actually reaches the addressee; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice does not reach the addressee on business date or reaches the addressee after the business time, the next business day following such day is the date of notice. The delivery place is the address first written above of the parties hereto or the address advised in writing including facsimile and telex from time to time.

15.    Appendices

15.1    The appendices to this Agreement are entire and integral part of this Agreement.

16.    Effectiveness

16.1    This agreement and any amendments, modification, supplements, additions or changes hereto shall be in writing and come into effect upon being executed and sealed by the parties hereto.

16.2    This Agreement is executed by Chinese in duplicate, and each party holds one copy and each copy and the copies shall have the same legal effect.

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In witness whereof the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Effective Date first written above.

Party A:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Legal Representative:    /s/

Official Seal:    /s/

Party B:    Beijing eLong Information Technology Co., Ltd

Signature of Legal Representative:    /s/

Official Seal:    /s/

Party C:    Beijing Asia Interactive Advertising Co., Ltd.

Signature of Legal Representative:    /s/

Official Seal:    /s/

Appendices

1.    Register of Shareholders of Beijing eLong Airline Service Co., Ltd.

2.    Certificate of Capital Contribution of Beijing eLong Airline Service Co., Ltd.

3.    Services Agreement

4.    Trademark License Agreement

5.    Business Operation Agreement

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EX-10.27

Exhibit 10.27

Amended and Restated Business Operation Agreement

This Amended and Restated Business Operation Agreement (hereinafter the “Agreement”) is entered into on the day of July 20, 2004 (hereinafter the “Effective Date”) among the following parties:

Party A:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Street, Chaoyang District Beijing
Legal Representative:	Tang Yue
Party B:	Beijing eLong Airline Services Co., Ltd. (Hereinafter “Party B”)
Address:	202, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue
Party C:	Beijing eLong Information Technology Co., Ltd
Legal Address:	109, 1st Floor, Jian Tower, 68 South Xueyuan Road, Haidian District, Beijing.
Legal Representative:	Tang Yue
Party D:	Beijing Asia media Interactive Advertising Co., Ltd.
Legal Address:	203, B Xingke Tower, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue

WHEREAS:

(1)    Party A is a wholly foreign-owned enterprise with valid existence registered in the People’s Republic of China (hereinafter the “PRC”);

(2)    Party B is a wholly domestic-owned company registered in the PRC and is approved by Beijing Communication Administration to engage in domestic air passenger transport agency service business (approved by the Administration Bureau of Industry and Commerce);

(3)    Party C is a wholly domestic-owned enterprise established according to the law of PRC, and is a shareholder of Party B who owns 80% equity in Party B;

(4)    Party D is a wholly domestic-owned enterprise established according to the law of PRC, and is a shareholder of Party B who owns 20% equity in Party B;

(5)    Party A and Party B established the business relationship by entering into the Exclusive Technical Services Agreement on August 22, 2003 (hereinafter the “Services Agreement”);

(6)    Pursuant to Services Agreement between Party A and Party B, Party B shall pay a certain amount of money to Party A. However, Party B’s business operation will substantially affect Party A’s payment capability;

(7)    All the parties agree to further clarify matters relating to the operation of Party B pursuant to provisions herein;

(8)    All the parties agree to amend and restate the operative agreement signed on March 5, 2004 among them.

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NOW THEREFORE, Party A, Party B, Party C and Party D through mutual negotiations hereby agree as follows:

1.    In order to ensure Party B’s normal operation, Party A agrees, subject to Party B’s satisfaction of the relevant provisions herein, to act as the guarantor for Party B in the contracts, agreements or transactions in association with Party B’s operation between Party B and any other third party and to provide full guarantee for Party B in performing such contracts, agreements or transactions. Party B agrees to mortgage the receivables of its operation and the company’s whole asset to Party A as a counter guarantee. Pursuant to the above guarantee arrangement, Party A, as the guarantor for Party B, shall respectively enter into written guarantee contracts with Party B’s counter parties to assume the guarantee liability.

2.    In consideration of the requirement of Article 1 herein and to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree that Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or the company’s operation unless the obtainment of a prior written consent from Party A or Party A’s affiliates, including without limitations to the following contents:

2.1    To borrow money from any third party or assume any debt;

2.2    To sell to any third party or acquire from any third party any assets or rights, including without limitations to any intellectual property rights;

2.3    To provide real guarantee for any third party with its assets or intellectual property rights; and

2.4    To assign to any third party the agreements entered into by it.

3.    Appointment of the Company’s Employees

3.1    In order to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree to accept the provision of the corporate policies and guidance by Party A at no time in respects of appointment and dismissal of the company’s employees, the company’s daily operation administration and the company’s financial administrative system.

3.2    Party B together with its shareholders Party C and Party D hereby jointly agree that Party B, Party C and Party D shall only appoint the personnel recommended by Party A as the directors of Party B, and Party B shall engage Party A’s high ranking officers or any other candidate recommended by Party A as Party B’s general manager, chief financial officer, and other high ranking officers. If any of the above officers leaves or is fired by Party A, he or she will lose the qualification to undertake any positions in Party B and Party B, Party C and Party C shall appoint other high officers of Party A recommended by Party A to undertake such position.

4.    Guarantees for Working Capital

The guarantee for the loan of working capital Party B together with its shareholders Party C and Party D hereby jointly agree and confirm that except the stipulation set forth in Article 1 herein, Party B shall seek a guarantee from Party A first if Party B needs any guarantee for its performance of any contract or loan of working capital in the course of operation. In this case, Party A shall have the right but not the obligation to provide appropriate guarantee to Party B on its own discretion. If Party A decides not to provide such guarantee, Party A shall issue a written notice to Party B immediately and Party B shall seek a guarantee from other third party.

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5.    Termination

5.1    In the event that any of the agreements between Party A and Party B terminates or expires, Party A shall have the right but not the obligation to terminate all agreements between Party A and Party B including without limitation to Services Agreement.

5.2    Party A has right to terminate the agreement by delivering 30 days’ written notice to Party B at any time. During the validity period of the agreement, Party B and Party C and Party D should not terminate the agreement in advance, except the regulations in the applicable law.

6.    Compensation for Damage

All the parties agree that any party violating any obligation of the agreement shall compensate any or all loss, responsibility, expense, claim or expenditure (including legal expense and expenditure), to any other party (Hereinafter “Party Accepting Compensation”), and guarantee that the Party Accepting Compensation shall not receive any damage.

7.    Settlement of Distribution

7.1    The agreement shall be under the jurisdiction of the law of PRC, and be explained in accordance with the law of PRC.

7.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

7.3    Arbitration place shall be in Beijing, PRC.

7.4    Arbitration language shall be English.

7.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

7.6    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

7.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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8.    Effectiveness of the Agreement

8.1    This Agreement shall be executed as of the date first set forth above and both parties agree that the Agreement become effective since January 1, 2004. The Agreement shall be effective during the expiration period of Party A (including any extended period of Party A)

8.2    Any amendment and supplement of this Agreement shall be in a written form. The amendment and supplement after being duly executed by each Party shall be part of this Agreement and shall have the same legal effect as this Agreement.

8.3    This Agreement is executed by Chinese in quadruplicating and each party holds one copy, which shall have the same legal effect.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Date first written above.

Party  A:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized  Representative:    /s/

Official  Seal:    /s/

Party  B:    Beijing eLong Airline Services Co., Ltd.

Signature of Authorized  Representative:    /s/

Official  Seal:    /s/

Party  C:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized  Representative:    /s/

Official  Seal:    /s/

Party  D:    Beijing Asia Media Interactive Advertising Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

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EX-10.28

Exhibit 10.28

Amended and Restated Cooperative Agreement

This Amended and Restated Cooperation Agreement is entered into on the day of July 20, 2004 (the “Effective Date”) in Beijing among the following parties:

Beijing eLong Airline Services Co., Ltd. (hereinafter “Party A”)
Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue
Beijing eLong Information Technology Co., Ltd (hereinafter “Party B”)
Address:	Room 109, Jian Tower, No. 68 Xue Yuannan Street Haidian District Beijing
Legal Representative:	Tang Yue

Whereas:

1.    Party A is a wholly foreign-owned enterprise with valid existence registered under PRC laws and regulations, which specialized in Internet technology, e-commerce technology exploration and technology services. Taking the advantages in the field of technology, HR and information etc., Party A established the long term cooperative relationship with the hotels, guesthouses, stores.

2.    Party B is a wholly domestic-owned company with valid existence registered under PRC laws and regulations, approved by Beijing Communication Administration, may engage in Internet information service business (license No: Jing ICP Certification No.010011), and possess and operate the website of www.elong.com (hereinafter “elong.com”) and the calling center.

3.    Party B has agreed to provide website hosting services and call center services to Party A and Party A has agreed to accept the aforesaid services provided by Party B. Parties entered into The Web Hosting Agreement on the date of November 1, 2002 and now agreed to amend and supply the Web Hosting Agreement and this Agreement herein has been achieved to substitute the Web Hosting Agreement.

4.    Both parties agree to amend and restate the cooperative agreement signed between them on March 5^th 2004.

Therefore, Party A and Party B achieve the following cooperative agreement (hereinafter the “Agreement”) after friendly negotiation.

Article 1:    Two Parties’ liabilities and obligations

Party A agreed that Party A shall perform the Internet information services (including Internet booking and online information consultation) and Party B provides call center services. Party B agreed to provide the value-added communication services, including but not limited to:

(1)    Provide the reasonable web space to publish the fly tickets and air-transportation information supported by Party A.

(2)    Process the hotel-booking orders through the call center; process the Internet data and information inquiry.

(3)    Be liable for other matters related to Internet information service and call center.

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Article 2:    Payment and settlement

Party A agreed to pay the information services fee to Party B for the aforesaid internet information service and call center services provided by Party B. Party A and Party B shall determine the amount of the service charge by negotiation in accordance with the service price provided by Party B and the market price of the aforesaid service. The service charge shall be paid by the quarter.

Article 3:    Notice and Guarantee

3.1    Party A states and guarantees herein as following:

3.1.1    Party A is a wholly foreign-owned enterprise with valid existence registered under PRC laws and regulations.

3.1.2    Party A signs and performs this Agreement within the corporate franchise and business scope; Party A has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.1.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

3.2    Party B states and guarantees herein as following:

3.2.1    Party B is a wholly domestic-owned Co., Ltd. with valid existence registered under PRC laws and regulations, qualified to operate Internet information service business.

3.2.2    Party B signs and performs this Agreement within the corporate franchise and business scope; Party B has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.2.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

Article 4:    Confidentiality

Parties admit that any exchanged oral or written information about this Agreement is confidential information and parties shall protect and maintain the confidentiality of any and all confidential information. One of the parties can not exposure any relevant information to the third party without the prior written consent from the other party, excepting the following circumstances: (a) the information has be known or will be known by public (not exposed to public by the information received party); (b) information disclosed by the requirement of application of laws and the regulations stipulated by stock exchange; or (c) any party discloses the confidential information to its legal or financial consultant for the reason of the transaction’s requirement under this agreement, the legal or financial consultant is liable for complying with the confidential liability which is similar to this clause. The party will be regard as exposure if any of its employees or its employed organizations disclose the confidential information and liable for the exposure according to this Agreement.

Article 5:    Force Majeure

5.1    Force majeure, which includes but not limited to acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event is beyond one party’s reasonable control and unavoidable with reasonable care of the affected party. However,

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any shortage of credit, capital or finance shall not be regarded as an event of force majeure. To dissolute the performing obligations under this agreement the party affected by force majeure shall notify the other party without delay.

5.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

Article 6    Settlements of Disputes

6.1    Any dispute, tangle or claim arising from this Agreement or relating to this Agreement (including any issue relating to the existence, validity or termination of the Agreement) should be submitted to PRC International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

6.2    Arbitration place shall be in Beijing, PRC.

6.3    Arbitration language shall be English.

6.4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

6.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC’s Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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Article 7:    Notices and delivery

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant party or parties set forth below.

Party A:	Beijing Airline Services Co., Ltd.
Address:	203, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Addressee:	Tang Yue
Fax:	64312801
Tel:	58602288
Party B:	Beijing eLong Information Technology Co., Ltd
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing,
Addressee:	Tang Yue
Fax:	64315872
Tel:	58602288

Article 8:    Agreement Transfer

Party B shall not transfer the rights and obligations of this Agreement to any third party without the prior written consent of Party A.

Article 9:    Amendment and Supplement

Any amendment and supplement of this Agreement shall come into force only after both parties sign a written agreement. The amendment and supplement duly executed by both parties shall be an integral part this Agreement and shall have the same legal effect as this Agreement.

Article 10:    Effective Date and Term

10.1    This Agreement has been duly executed as of the date first set forth above and shall be effective simultaneously and parties confirm the term of the Agreement shall be counted from July 1, 2004. The term of this Agreement is ten (10) years or the date of the expiration of period of validity of Party A (including any extended period of Party A). However, both parties should review this Agreement every three (3) months to determine whether any amendment to the Agreement is necessary after considering the circumstances.

10.2    This Agreement may be extended if Party A gives the written consent of the extension of this Agreement before the expiration of this Agreement. Parties shall negotiate the term of the extension

10.3    This Agreement is executed in duplicate and each Party holds one copy

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Whereas, both parties’ authorized representatives sign this Agreement as of the date first set forth above in Beijing.

Party A:    Beijing Airline Services Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party B:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:    /s/

Official Seal:    /s/

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EX-10.29

Exhibit 10.29

Trademark License Agreement

This Trademark License Agreement (hereinafter the “Agreement”) is entered into as of July 20, 2004 in the People’s Republic of China (Hereinafter the “PRC”) between the following two parties in Beijing:

(1)    eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter the “Licensor”), an wholly owned foreign enterprise under the laws of PRC, Legal Address: 10 Jiu Xianqiao Street, Chao Yang District, Beijing;

And

(2)    Beijing eLong Airline Services Co., Ltd. (hereinafter the “Licensee”), a wholly domestic invested limited liability company under the laws of PRC, Legal Address: 202, B Xing Ke Mansion, 10 Jiu Xian Qiao Road, Chaoyang District, Beijing (hereinafter, one party will be called “one party”, two parties will be called “both parties”).

WHEREAS:

A.    The “Licensor” is the owner of the registered trademarks (hereinafter the “trademark”) in Appendix 1, and it is in the process of application formalities, in order to become the owner of the trademarks in Appendix 2 and the trademarks in applying.

B.    The “Licensee” desires to acquire non- exclusive license of the trademarks listed in Appendix 1 and Appendix 2 in accordance with the terms and conditions of this agreement, and the “Licensor” agree to grant the “Licensee” such license.

NOW THEREFORE, the parties agree as follows:

1.    Definition

Unless otherwise provided for herein, the following words are specified as:

“Affiliated Enterprise” the entity with at least 10% ballot held by any “one party” directly or indirectly.

“Force Majeure” any earthquake, typhoon, fire, flood, war, and other calamity caused by nature or human which is unpredictable, unavoidable and overwhelming happened after the signing of “this agreement”, this event beyond any party’s control and impedes the performance of all or part of this agreement.

“PRC Law” any promulgated and valid laws and regulations of PRC from the date stipulated on the head of this agreement.

“Term” the period stipulated in 3.1 of this agreement

“Territory” the territory of PRC which does not include Hong Kong, Macao and Taiwan.

“Trademark Office” the trademark office of State Administration for Industry and Commerce.

“Licensed Trademark” the trademark registered in the “Trademark Office” by the “Trademark to be licensed” the registered trademark under the process of assignment in the “Trademark Office” which will be assigned to the “Licensor” and the trademark in the application for registration, listed in Appendix 2

“RMB” the legal currency of the “PRC”.

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2.    License

2.1.    Trademark License

The “Licensor” will grant the “Licensee” a license to use the “Licensed Trademark” and “Trademark to be licensed” in the Territory under the terms and conditions of this agreement, except that the “Licensor” shall give the “Licensed Trademark” and “Trademark to be licensed” to Beijing elong Airline Services Co., Ltd, Beijing Asia Media Interactive Advertising Co., Ltd. and General Chinese Reservation Network Ltd.

2.2.    Scope of Use

In the term of this Agreement, the “Licensee” can use the “Licensed Trademark” and “Trademark to be licensed” in the “Territory” under the circumstances set force as follows:

2.2.1.    Use in the authorized commodities or services in accordance with the content in each certificate of registration.

2.2.2.    Use in the documents of commercial transactions, advertising, exhibitions or other commercial actions related to Item 2.2.1

2.3.    Sublicense

2.3.1.    The “Licensee” shall not grant the license of the “Licensed Trademark” and “Trademark to be licensed” to any third party without the written consent of the “Licensor” in advance. Any sublicense without authorization is invalid.

2.4.    Forbidden Action

The “Licensee” promises that in the term of this Agreement and any time after the expiration of this Agreement, it shall not:

2.4.1.    Undertake any action, which will affect the Licensor’s right on the “Licensed Trademark” and “Trademark to be licensed”; or

2.4.2.    Apply for the registration of the “Licensed Trademark” and “Trademark to be licensed” or any similar trademark in any country or region.

2.5.    Providing of Signs

The “Licensor” shall provide the authorized signs of the “Licensed Trademark” and

“Trademark to be licensed” to the “Licensee” with digital format stored in the floppy disk and printed format. The “Licensee” has right to copy the “Licensed Trademark” and

“Trademark to be licensed” in accordance with the relevant designs.

2.6.    Use Supervision

The “Licensor” has the right to dispatch personnel at any time to the sites of the “Licensee” for the supervision on the use of the “Licensed Trademark” and “Trademark to be licensed” after its notice in written.

2.7.    No Hindrance

The “licensee” acknowledges the right owned by the “Licensor” to the “Licensed Trademark” and “Trademark to be licensed”, besides the warranty listed in 2.4, the “licensee” shall not undertake or promote any action that will hinder the right of the “Licensed Trademark” and “Trademark to be licensed”. The “licensee” shall not state to third party that it has any right on the “Licensed Trademark” and “Trademark to be

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licensed”. The “licensee” acknowledges that the anticipated use of the “Licensed Trademark” and “Trademark to be licensed” will not create any ownership related to the goodwill of the “Licensed Trademark” and “Trademark to be licensed” for the “licensee”. All the use of this kind shall benefit the exclusive right of the “Licensor” as the owner of the “Licensed Trademark” and “Trademark to be licensed”.

2.8.    Quality

Both parties of this Agreement acknowledge that the quality and goodwill of commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” is important to the operation of the “Licensor”. Any commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” shall reach the top standards and qualities, and it shall under the control, and accord with PRC law and other quality standards requested by any “Licensor” from time to time, and accept supervision and approval of the “Licensor”. The “licensee” shall obey all the standards about the commodities and service of the “Licensor”.

3.    Term

3.1.    Period

This Agreement will be effective from the date of signing the contract, until termination pursuant to Article 9.1. But the license of every “Trademark to be licensed” shall be effective from the date that the “Trademark Office” authorizes the assignment to the “Licensor” and the “Licensor” becomes the owner of the trademark. Except the circumstances stipulated in Article 9.1, the period of this agreement shall be equal to the expiration period (including any extended period) of the “Licensor”.

4.    Record

4.1.    Application for Record

Within three (3) months after the effectiveness of this Agreement, both parties shall file this Agreement to the “Trademark Office” for record for the licensing of the “Licensed Trademark” according to the PRC laws. For the “Trademark to be licensed”, within three (3) months after the effectiveness set forth in Item 3.1, both parties shall file this Agreement to the “Trademark Office” for record.

4.2.    Fees

The “Licensee” shall assume the fees about the application and renewal set forth in Article 4.1.

5.    License Fee

The “Licensee” agrees to pay the “Licensor” the license fee, and both parties will decide its amount in accordance to the market price.

6.    Statement and Warranties

6.1.    Statement and Warranties of Both Parties

Every “one party” states and warrants, form the date of signing this Agreement:

6.1.1.    It is an independent company duly registered in the place of establishment, and has gotten all the government’s authorization and registration, which are continuously valid for its existence, and it has sufficient rights to operate according to its business license, business certificate of registration, articles of association or similar documents of company;

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6.1.2.    It has absolute authorization to sign this Agreement and perform the obligations under this agreement;

6.1.3.    The representative has gotten absolute authorization to sign this Agreement (the signature of representative is in the place for signing);

6.1.4.    The signing of this Agreement or the performance of the obligations under this agreement will not violate:

6.1.4.1.    The business license, business certificate of registration, articles of association or similar documents of company;

6.1.4.2.    Any law, regulation or the authorization or approval of government; and

6.1.4.3.    Any binding agreement;

6.1.5.    There is not any pending case of lawsuit, arbitration, other legal or governmental procedure that will has material adverse effects on this agreement to its knowledge;

6.1.6.    It has disclosed all the documents to the other party, which will probably have material adverse effects on the obligations under this agreement issued by any branch of government;

6.1.7.    It has not been the subject of liquidation or dissolution; and

6.1.8.    It has not been declared bankruptcy by the court with jurisdiction.

6.2.    Statement and Warranties of the “Licensee”

The “Licensee” further states and warrants to the “Licensor”:

6.2.1.    It will use the “Licensed Trademark” and “Trademark to be licensed” only according to the purpose stipulated in 2.2;

6.2.2.    It shall not use the “Licensed Trademark” and “Trademark to be licensed” beyond the method stipulated in this agreement;

6.2.3.    It shall not change any appearance, text, content or their combination of the “Licensed Trademark” and “Trademark to be licensed” in any way.

6.2.4.    It shall sign the name and origin of the “Licensee” on the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

6.2.5.    It shall obey all the PRC laws and regulations related with the products’ sign, packing and sale;

6.2.6.    It shall allow any employee or agent of the “Licensor” access the site of the “Licensee” in business hour for the supervision on the quality of the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

7.    Claims and Tort

7.1.    Tort to Third Party

If the use of any “Licensed Trademark” and “Trademark to be licensed” according to the stipulations in this Agreement by the “Licensee” cause the claim (the “claim”) for the tort of any intellectual property right of third party:

7.1.1.    The “Licensee” shall notify the “Licensor” about such claim in written at once;

7.1.2.    Without the written consent of the “Licensor”, the “Licensee” shall not make any promise or compromise with third party;

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7.1.3.    The “Licensee” shall let the “Licensor” take part in any negotiation and suit for the settlement of the claim;

7.1.4.    According the reasonable require of the “Licensor”, the “Licensee” shall provide any acquired information to the “Licensor” and give every reasonable assistance.

7.1.5.    If the “Licensee” violates the stipulations in this Agreement to use the “Licensed Trademark” and “Trademark to be licensed”, the “Licensor” won’t bear any liability for the “Licensee”; the “Licensee” shall bear the liability by itself.

7.2.    Tort of Third Party

If any third party takes the act of tort to the “Licensed Trademark” and “Trademark to be licensed” of this Agreement:

7.2.1.    The “Licensee” shall notify the “Licensor” after it get to know the tort to the “Licensed Trademark” and “Trademark to be licensed” of the “Licensor” in any territory;

7.2.2.    Both parties shall make joint consultations on juridical action to the torts or menacing actions. In order to avoid the doubtful point, the “Licensee” agrees that before the prior written consent of the “Licensor”, it shall not make any compromise with any third party by itself;

7.2.3.    If both parties agree to take juridical action to the torts of the “Licensed Trademark” and “Trademark to be licensed”, the fees and the damages acquirable shall be divided equally. If the “Licensee” does not decide to take lawsuit to the event stipulated in the “Licensor” can decide to take the lawsuit by itself or through the affiliated enterprise, and bear the fees; the “Licensee” shall render assistance to the “Licensor” for such juridical action with its effort; and

7.2.4.    All the damages acquired by the juridical action taken by the “Licensor” shall be owned by the “Licensor”.

8.    Breaches and Compensation

8.1.    Breach

8.1.1.    Any party violates any stipulation, fails to perform the obligations or its performance does not accord with the stipulations of this Agreement (the “Party in Breach”), and it will be taken as the breach of the obligations of this Agreement. The party who obey this Agreement (the “Observant Party”) has the right to notify the Party in Breach in written to correct its action within 10 days from the date it get the notice.

8.1.2.    If any party breaches this Agreement, both parties shall keep on the performance of this Agreement; the Party in Breach shall take sufficient, efficient and timely measures to eliminate the result of breach, and compensate to the Observant Party all the damages caused by the breach.

8.2.    Compensation

The Party in Breach shall compensate the Observant Party according to 8.1.2, the compensation is the damages caused by the Party in Breach, including the benefits acquirable by the performance of this agreement, but it shall not exceed the damages reasonably foreseeable by the Party in Breach.

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9.    Cancellations, Termination and Renewal of Agreement

9.1.    Termination

This Agreement will be terminated in the circumstances as follows:

9.1.1.    By the written consultation of both parties;

9.1.2.    By the notice of termination sent by the “Licensor” ten (10) days in advance;

9.1.3.    The Observant Party has the right to terminate this Agreement at once if the party in breach materially breaches the Agreement and does not correct its actions within 30 days from the date it get the notice from the Observant Party;

9.1.4.    Any party in liquidation, and its assets is in the takeover of assigned party;

9.1.5.    Any party accesses to the bankrupt procedure, or stops business materially;

9.1.6.    If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, and at the same time, both parties cannot find a reasonable settlement according to 11.

9.2.    The result of Termination

9.2.1.    If the Agreement terminated by any reason, the license under this Agreement will be terminated at once. The “Licensee” shall;

9.2.1.1.    Stop using the “Licensed Trademark” and “Trademark to be licensed” in the actions related to its business;

9.2.1.2.    Remove the “Licensed Trademark” and “Trademark to be licensed” form all the disseminating datum, handbooks, sign and other assets of the “Licensee” at its own expenses within 90 days from the termination of this Agreement; and

9.2.1.3.    Stop using any license even with the prior approval of the “Licensor”, and take any necessary steps to stop the using of the “Licensed Trademark” and “Trademark to be licensed” by any relicensee.

9.2.2.    No matter what reason cause the termination of this Agreement, it will not affect the rights or obligations still held by each one party.

10.    Applicable Law and Settlement of Disputes

10.1.    Applicable Law

The conclusion, validity, interpretation and implementation of this Agreement shall be governed by the laws of the PRC, and excludes the conflict rules, if there is no regulation prescribed in the laws of the PRC for the specific event, the international business practice shall be referred to.

10.2.    Arbitration

10.2.1    Any dispute, tangle or claim arising from the Agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

10.2.2    Arbitration place shall be in Beijing, PRC.

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10.2.3    Arbitration language shall be English.

10.2.4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

10.2.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

10.2.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

10.3.    Continuous Performance

In the period of arbitration, parties shall try to perform the part of this Agreement that is not in arbitration.

11.    Force Majeure

11.1.    Suspension of obligations

On the occurrence of force majeure, both parties shall negotiate at once in order to get consistent settlements. Both parties shall suspend their obligations in the range affected by force majeure.

11.2.    Written Certificate

The party stating the influence by force majeure shall notify the other party within 15 days after the occurrence of force majeure, and render the written certificate issued by relevant authorities, and reduce the effect of such force majeure by its effort.

11.3.    Termination

If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, any party can terminate this Agreement according to 9.1.6.

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12.    Supplement

12.1.    Notice

Any notice of both parties shall be written in English, and send by fax, specific sending (including courier) or registered air post. Without the notice of address changing, all the notices and communications shall be sent to the address as follows:

The “Licensor”:
eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue
The “Licensee”:
Beijing eLong Airline Services Co., Ltd.
Address:	202, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue

12.2.    Reference

The chapters, articles or appendixes are the chapters, articles or appendixes under this Agreement. The titles of this Agreement are just for reference; they do not have binding force on this Agreement and do not affect its interpretation.

12.3.    Waiver

If any party cannot perform or delay in performance of any right, power or preferential right of this Agreement or other related agreement, it will not be treat as waiver. The separate or partly performance of any right, power or preferential right will not affect the latter performance of such right, power or preferential right.

12.4.    Transfer

Without the prior consent of the other party, any party shall not transfer all or part of the rights (obligations) under this Agreement to any third party.

12.5.    Divisibility

The invalidity of any stipulations under this Agreement does not affect the validity of other irrelevant stipulations. Both parties shall modify any invalid or unenforceable stipulations in order to make these stipulations valid or enforceable.

12.6.    Integrity

The appendixes of this Agreement are the undividable part of this Agreement and shall have the same legal effect as this agreement. This Agreement and its appendixes constitute an integral agreement about the events between both parties, and it will replace all the prior discussions, negotiations and agreements.

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12.7.    Language

This Agreement is executed in quadruplicate originals in Chinese. The “Licensor” holds one, and the “Licensee” holds two, the one remained will be filed to the “Trademark Office” for record.

12.8.    Modification

This Agreement could only be modified by the written amendment signed by both parties.

12.9.    Successor

This Agreement is signed for the rights of both parties and their legal successors and assignee, and will be binding on both parties and their legal successors and assignee with the same binding force.

12.10.    Singular and Plurality

The singular and plurality can be used mutually.

12.11.    Unstipulated events

The unstipulated events shall be disposed according to the agreements of both parties and relevant regulations of PRC laws.

The official authorized representative shall sign this Agreement at the date stipulated at the head of the Agreement for good faith.

The “Licensor”

eLongNet Information Technology (Beijing) Co., Ltd.

Authorized Representative:    Tang Yue

Signature of Representative:    /s/

Official Seal:    /s/

The “Licensee”

Beijing eLong Airline Services Co., Ltd.

Authorized Representative:    Tang Yue

Signature of Representative:    /s/

Official Seal:    /s/

9

Appendix One

Details of Licensed Trademark

	Trademark	Type	Registration Number	Validity Period
1	eLong.com+ “e”logo+ dragon	9	1570359	14 May 2001 - 13 May 2011
2	eLong.com	35	1607616	21 Jul 2001 - 20 Jul 2011
3	eLong.com	36	1739999	28 Mar 2002 - 27 Mar 2012
4	eLong.com+ “e”logo+ dragon	41	1535930	7 Mar 2001 - 6 Mar 2011
5	Xi Ci	35	1587892	14 Jun 2001 - 13 Jun 2011
6	Xi CiHu Tong	35	1587891	14 Jun 2001 - 13 Jun 2011
7	Xi Ci	38	1623768	21 Aug 2001 - 20 Aug 2011
8	Xi CiHu Tong	38	1623767	21 Aug 2001 - 20 Aug 2011
9	eLong.com+e	42	1599959	7 Jul 2001 - 6 Jul 2011
10	“A” logo	38	1623841	21 Aug 2001 - 20 Aug 2011
11	The world circles for you +eLong.com	35	1695505	7 Jan 2002 - 6 Jan 2012
12	Lohoo+logo+ “Business Travel Net”	9	1642574	28 Sep 2001 - 27 Sep 2011
13	Lohoo+logo	35	1719860	21 Feb 2002 - 20 Feb 2012
14	Lohoo+logo	36	1711506	7 Feb 2002 - 6 Feb 2012
15	Lohoo+logo	38	1711492	7 Feb 2002 - 6 Feb 2012
16	Lohoo+logo	39	1764897	7 May 2002 - 6 May 2012
17	Lohoo+logo	41	1749624	14 Apr 2002 - 13 Apr 2012
18	Lohoo+logo	42	1719681	21 Feb 2002 - 20 Feb 2012
19	e+ dragon +logo	41	1983708	7 Apr 2003 - 6 Apr 2013
20	e+ dragon +logo	42	2016041	14 Jan.2003 - 13 Jan 2013
21	e+ dragon + Travel care+ Travel Care Plan	39	3279761	21 Mar 2004 - 20 Mar 2014
22	e+ dragon + Travel care+ Travel Care Plan	43	3279762	14 Feb 2004 - 13 Feb 2014

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Appendix Two

Details of Trademark to be licensed

1.    Registered Trademark

		Registrant	Type	Register Number	Validity Period
1	“A” logo	eLong.com, Inc	35	1631670	7 Sep 2001 - 6 Sep 2011
2	“A” logo	eLong.com, Inc	36	1749484	14 Apr 2002 - 13 Apr 2012
3	“A” logo	eLong.com, Inc	41	1731794	14 Mar 2002 - 13 Mar 2012

2.    Trademark to be Licensed

	Trademark	Type	Register Number	DATE OF APPLICATION
1.	eLong.com+ “e”logo+ dragon	45	3679722	19.Aug.2003
2.	eLong.com+ “e”logo+ dragon	16	3683714	21.Aug.2003
3.	eLong.com+ “e”logo+ dragon	35	3683713	21.Aug.2003
4.	eLong	36	3679721	19.Aug.2003
5.	eLong	39	3679719	19.Aug.2003
6.	eLong	45	3279720	19.Aug.2003
7.	eLong	16	3683505	21.Aug.2003
8.	eLong	35	3683504	21.Aug.2003
9.	eLong	41	3683503	21.Aug.2003
10.	eLong	42	3683743	21.Aug.2003
11.	eLong	43	3683715	21.Aug.2003
12.	eLong Travel Net +eLong.com	35	3953009	11.Mar.2004
13.	eLong Travel Net+eLong.com	39	3953008	11.Mar.2004
14.	eLong Travel Net +eLong.com	41	3953010	11.Mar.2004
15.	eLong Travel Net +eLong.com	43	3953011	11.Mar.2004
16.	e+ dragon +logo	39	1994192	10.Sep.2001

11

EX-10.30

Exhibit 10.30

Amended and Restated Technical Consulting and Services Agreement

This Amended and Restated Technical Consulting and Services Agreement (the “Agreement”) is entered into as of July 20, 2003 in Beijing between the following two parties:

eLongNet Information Technologies (Beijing) Co., Ltd. (hereinafter “Party A”)
Legal Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Yue Tang
Party B:	General Chinese Reservation Network Ltd. (hereinafter “Party B”)
Legal Address:	Room 1005, 81 Zhongshan Road, Nanjing, Jiangsu Province
Legal Representative:	Yue Tang

WHEREAS:

1.    Party A is a wholly foreign-owned enterprise registered in People’s Republic of PRC (hereinafter “PRC”) under the laws of PRC;

2.    Party B is a limited company registered in PRC under the laws of PRC;

3.    Party A and Party B signed a Technical Services Agreement on November 25, 2003, and both parties now decide to conduct further amendment and restatement in accordance with the relevant declaration of the agreement; and

4.    Party A agrees to provide the Internet technical consulting and the relevant services to Party B in accordance with the articles and terms of the agreement, Party B agrees to accept the Internet technical consulting and the relevant services provided by Party A in accordance with the articles and terms of the agreement.

NOW THEREFORE, the parties through mutual negotiation agree as follows:

Article One    Technical Consulting and Services

1.    Party A agrees to, as the exclusive internet technical consulting and services provider of Party B according to the Agreement, provide the exclusive technical consulting and services concerning all businesses of reservation Party B makes at www.elong.com (hereinafter “Elong.com “) to Party B.

2.    Party B agrees that, during the term of this Agreement, it shall not accept the technical consulting and services for such above-mentioned business any third party provides without the prior written consent of Party A.

3.    Party B promises that the content Party B demands Party A to provide technical consulting and services will not violate any rules of laws and regulations adaptable.

Article Two    Price of Technical Services and Software Licenses, Way of Payment

1.    The fee for technical services and software license provided by Party A according to the agreement will be determined in accordance with the particular service items and software actually provided by Party A upon the market price of the aforesaid services and licenses by both parties through negotiations.

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2.    As for every item of business at www.elong.com, Party B shall pay the fee for technical consulting and services and software licenses determined by both parties to Party A according to the time and method both parties agreed after Party B starts to operate the business.

3.    Whereas Party A has provided Party B with the internet technical consulting and services and software licenses for a long time, the shareholders of Party B agree to pledge their equity interest of Party B to Party A (See the attached “Equity Interests Pledge Agreement”), as a security for collecting the consulting and service fees and software licenses fees mentioned above in Section 2.

Article Three    Intellectual Property

1.    Any invention, modification, creation and designation accomplished by Party A during the performance of the obligations under this Agreement, and the copyright, trademark, sign (whether all these mentioned can be registered or not) of the works Party A produces, shall be Party A’s absolute belongings, and Party A owns exclusive and monopoly rights and interests to them.

2.    All the intellectual property rights transferred, created, developed or created for entrust by Party B, related with the business of Party B, not including any loan or expense of the third party, or liabilities of the third party. Party B shall sign the further documents and adopt the further actions in accordance with the reasonable requirements advanced by Party B from time to time, and guarantee the rights transferred in accordance with Article 1 Item 2 in further.

3.    Party A authorizes Party B to use the application program of the website of elong.com and the registered application programs or unregistered application programs in possession of Party B. the aforesaid license should be non-exclusive and not be transferred.

Article Four    Representations and Warranties

1.    Party A represents and warrants to Party B as follows, within any time of the signing day and the period of this Agreement:

(1)    Party A is a wholly foreign-owned enterprise duly registered under the laws of the PRC, validly existing and with good operation record. Party A has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party A has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party A’s lawful, valid and binding obligations after the signature, and it can be enforced to Party A according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party A does not need to apply to any government department or acquire any approval.

(4)    Party A’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party A’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party A enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party A is one party or is restricted by; or (4) need any permission of other persons.

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(5)    As for Party A, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party A does not disclose to Party B and that will interfere the signature and performance of this Agreement adversely.

2.    Party B represents and warrants to Party A as follows, within any time of the signing day and the period of this Agreement:

(1)    Party B is a limited company duly registered under the company laws of the PRC, validly existing and with good operation record. Party B has wholly lawful rights and necessary power and authorization to sign and deliver this Agreement, and to wholly perform the obligations under this Agreement and to accomplish the transaction stipulated in this Agreement.

(2)    Party B has finished all necessary company conducts and acquired all proper and valid authorization to sign and perform this Agreement. This Agreement shall constitute Party B’s lawful, valid and binding obligations after the signature, and it can be enforced to Party A according to its clauses.

(3)    To sign and deliver this Agreement, to perform the obligations under this Agreement, and to accomplish the transaction stipulated in this Agreement, Party B does not need to apply to any government department or acquire any approval.

(4)    Party B’s signature and delivery of this Agreement, performance of the obligations under this Agreement and accomplishment of the transaction stipulated in this Agreement, will not: (1) cause the violation of Party B’s articles of association or other organization papers; (2) cause the violation of any agreement, contract or charter Party B enters into or is restricted by; (3) cause the violation of any judgment, verdict or order made by court or government Party B is one party or is restricted by; or (4) need any permission of other persons. (5) As for Party B, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party B does not disclose to Party A and that will interfere the signature and performance of this Agreement adversely.

(5)    As for Party B, there does not exist any agreement, contract or arrangement that will interfere the signature and performance of this Agreement adversely, or any debt or potential debt Party B does not disclose to Party A and that will interfere the signature and performance of this Agreement adversely.

Article Five    Confidentiality

1.    Any party of this Agreement shall protect and maintain the confidentiality of any confidential data and information (“Confidential Information”) acquired from the other party through signing and performing this Agreement. Unless with the written consent of the other party in advance, any party should not disclose any Confidential Information to any third party, unless the disclosure is required by law, or by enforceable orders of court and related government department. In the situation, the party required to disclose the Confidential Information shall notify the other party immediately, and take all possible measures to keep the disclosure in the scope as small as possible, and proclaim the disclosed persons the obligation of confidentiality.

2.    Upon the termination of this Agreement, any party shall, at the other party’s option, return any document, material, database, equipment or software containing the Confidential Information to the other party; if the return becomes impossible for any reason, the party shall destroy all the Confidential Information or delete the Confidential Information from any memory devices. No party can keep using any Confidential Information in any way after the termination of this Agreement.

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3.    There is no time limit to the Confidentiality stipulated in Article Five, and it will survive after the termination of this Agreement, unless the Confidential Information is open to the public, and the open of the Confidential Information is not due to the breach of contract by any party.

Article Six    Effectiveness and Term

1.    This Agreement is entered into with the “Transfer Agreement”, and takes effect as of the date of signature.

2.    This Agreement shall keep effective during the expiration period (and any extended period of validity), except that the agreement is terminated in advance according to Article 6 Item3.

3.    Party A shall terminate this Agreement at any time by delivering written notice to Party A. except the conditions regulated by the applicable law, Party B has no right to terminate this Agreement in any other event.

Article 7:    Settlement of Disputes

1.    Any dispute, tangle or claim arising from this Agreement or relating to this Agreement (including any issue relating with the existence, validity or termination of this Agreement) should be submitted to PRC International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

2.    Arbitration place shall be in Beijing, PRC.

3.    Arbitration language shall be English.

4.    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

5.    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of PRC). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6.    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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Article Eight    Other Clauses

1.    All notices and other communications under this Agreement should be made in written form (including fax) and be sent by courier or fax to the following address, or any other address one party designated to the other party in written form. If the notices and communications mentioned above are sent by courier, they take effect 72 hours after the mail is delivered to the courier company; if they are sent through fax, they take effect 24 hours after being sent.

Party A:	eLongNet Information Technologies (Beijing) Co., Ltd
Recipients:	Yue Tang
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Telephone:	(86-10) 5860 2288
Fax:	(86-10) 6431 2801
Party B:	General Chinese Reservation Network Ltd.
Recipients:	Yue Tang
Address:	Room 1005, 81 Zhongshan Road, Nanjing, Jiangsu Province
Telephone:	(86-25) 8472 3434
Fax:	(86-25) 8471 7777

2.    This Agreement is binding on both parties and their successors and approved assignees respectively, and is entered into only for the benefit of the persons mentioned above. Without the prior written consent of the other party, any party should not transfer, pledge or transfer in other ways the rights, benefits or obligations under this Agreement.

3.    Unless with both parties’ written consent, this Agreement should not be amended or modified; for those not included, both parties shall make a supplement to this Agreement through signing written agreements. Any amendment, modification, supplement and appendix to this Agreement shall be part of this Agreement, and shall have the same legal effect as this Agreement.

4.    This Agreement is separable, the invalidity or unenforceability of any clause in this Agreement will not interfere the effect and enforceability of other clauses.

5.    When one party does not exercise or delays exercising any right or remedy for breach of contract under this Agreement, it does not mean to waive such right or remedy; when one party exercises once or exercises part of any right or remedy for breach of contract under this Agreement, it does not mean to prevent the party to exercise again or exercise further such right or remedy. One party’s waiver of right according to this Agreement may add any term it thinks appropriate. Any waiver is effective only once and for the special item.

6.    All topics in this Agreement are set only for convenience, and they should not be deemed part of this Agreement.

7.    This Agreement is executed duplicates, each party holds one, and each copy has the same legal effect.

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IN WITNESS THEREOF the parties hereto have caused this Agreement to be signed by a duly authorized representative as of the date first set forth above.

eLongNet Information Technologies (Beijing) Co., Ltd

Signature of Authorized Representative:    /s/

Official Seal:    /s/

General Chinese Reservation Network Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

6

EX-10.31

Exhibit 10.31

Amended and Restated Equity Interests Pledge Agreement

This Amended and Restated Equity Interests Pledge Agreement (hereinafter the “Agreement”) is entered into on the day of July 20, 2004 by and among the following parties:

Party A:	eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District Beijing
Legal Representative:	Tang Yue
Party B:	Beijing eLong Information Technology Co., Ltd
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street, Haidian District Beijing
Legal Representative:	Tang Yue
Party C:	Beijing eLong Airline Services Co., Ltd.
Address:	202, B Xingke Mansion, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue

WHEREAS,

(1).    Party B owns 20% of the equity interest in General Chinese Reservation Network Ltd. (Hereinafter “GCH”). Party C owns 80% of the equity interest in General Chinese Reservation Network Ltd. GCH is a wholly domestic-owned company registered under the People’s Republic of PRC (Hereinafter “PRC”) laws and regulations;

(2).    Party A and GCH entered into “Technical Consulting and Services Agreement” (Hereinafter “Service Agreement”) on the date of November 25, 2003 and both parties amend and restate the Service Agreement in further on July 20, 2004, in which the Party A has the exclusive right to provide GCH with technical services related with hotel reservation business;

(3).    Party A and GCH sign a Trademark License Agreement (“Trademark License Agreement”) on July 20, 2004, Party A agrees that GCH shall use some trademarks in accordance with the agreement;

(4).    The three parties and GCH sign a Amended and Restated Business Operation Agreement (“Business Operation Agreement”) on July 20, 2004. According to the agreement, GCH agrees not to conduct any business probably taking great effect on the capital, debt or right of Party A, without the prior written consent of Party A;

(5).    In order to make sure that GCH performs the obligations of payment for the technical service and software license provided by Party A, and performs the obligations related with Party A in “Trademark License Agreement” and “Business Operation Agreement“, the three parties agree to amend and restate the Equity Interests Pledge Agreement in accordance with the declaration of the agreement, Party B and Party C are willing to pledge all of its equity interest in GCH to Party A.

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Therefore Party A, Party B and Party C through mutual negotiations hereby enter into this Agreement based upon the following terms:

1.    Definitions and Interpretation

Unless otherwise provided in this Agreement, the following terms shall have the following meanings:

1.1    Pledge means the full content of Article 2 hereunder

1.2    Equity Interest means all equity interests in GCH legally held by Party B and Party C.

1.3    Rate of Pledge means the ratio between the value of the pledge under this Agreement and the exclusive technical consulting and service fees under the technical Service Agreement and the relevant supplement agreement.

1.4    Term of Pledge means the period provided for under Article 3.2 hereunder.

1.5    Service Agreement means the Exclusive Technical Consulting and Service Agreement entered into by and between GCH, of which Party B and Party C have equity interests, and Party A on the date of August 22, 2003 and the Supplementary Agreement of Exclusive Technical Consulting and Service Agreement entered into on the date of March 5, 2004, and the further amendment and restatement of the aforesaid agreement on the date of July 20, 2004.

1.6    Event of Default means any event in accordance with Article 7.1 hereunder.

1.7    Notice of Default means the notice of default issued by Party A in accordance with this Agreement.

2.    Assignments and Pledge

2.1    Party B and Party C agree to pledge all its equity interest in GCH to Party A. Pledge under this Agreement refers to the rights owned by Party A who shall be entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of the equity interests pledged by Party B and Party C to Party A.

3.    Rate Of Pledge and Term Of Pledge

3.1    The Rate of Pledge

3.1.1    The rate of pledge shall be 100%

3.2    The Term of Pledge

3.2.1    This Agreement shall take effect as of the date when the equity interests under this Agreement are recorded in the Register of Shareholder of GCH and registered with the competent Administration for Industry and Commerce. The term of the Pledge is the same with the term of Service Agreement.

3.2.2    During the period, Party A shall be entitled to dispose the Pledge in accordance with this Agreement in the event that GCH fails to pay exclusive technical consulting and service fee or software license in accordance with the Service Agreement or fails to perform the obligations of “Trademark License Agreement” or “Business Operation Agreement“.

4.    Physical Possession Of Documents

4.1    During the term of Pledge under this Agreement, Party B and Party C should deliver the physical possession of the certificate of distribution and the name list of shareholder of GCH to Party A within one week as of the date of conclusion of this Agreement.

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4.2    Party A shall be entitled to collect the dividends from the equity interests.

4.3    The pledge of in this Agreement shall be record in the shareholder’s register.

5.    Representation of Party B and Party C

5.1    Party B and Party C is the legal owner of the equity interests.

5.2    Party B and Party C does not pledge or encumber the equity interests to any other person except for Party A.

6.    Warranties and Guarantee of Party B and Party C

6.1    During the effective term of this Agreement, Party B and Party C covenants to Party A that Party B and Party C shall:

6.1.1    Not transfer or assign the equity interests, create or permit to create any pledges which may have an adverse effect on the rights or benefits of Party A without prior written consent from Party A; publication unless the two parties have agreed otherwise;

6.1.2    Comply with and implement laws and regulations with respect to the pledge of rights, present to Party A the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within five days upon receiving such notices, orders or suggestions and comply with such notices, orders or suggestions, or object to the foregoing matters at the reasonable request of Party A or with consent from Party A;

6.1.3    Timely notify Party A of any events or any received notices which may affect Party B and Party C’s equity interest or any part of its right, and any events or any received notices which may change Party B and Party C’s any covenant and obligation under this Agreement or which may affect Party B and Party C’s performance of its obligations under this Agreement.

6.2    Party B and Party C agrees that Party A‘s right of exercising the Pledge obtained from this Agreement shall not be suspended or hampered through legal procedure by Party B and Party C or any successors of Party B and Party C or any person authorized by Party B and Party C or any other person.

6.3    Party B and Party C warrants to Party A that in order to protect or perfect the security over the payment of the technical consulting and service fees under the Service Agreement, Party B and Party C shall execute in good faith and cause other parties who have interests in the pledge to execute all the title certificates, contracts, and or perform and cause other parties who have interests to take action as required by Party A and make access to exercise the rights and authorization vested in Party A under this Agreement.

6.4    Execute all the documents with respect to the changes of certificate of equity interests with Party A or the person (natural person or legal entity) designed by Party A, and provides all the notices, orders and decisions regarded as necessary by Party A with Party A within the reasonable time.

6.5    Party B and Party C warrants to Party A that Party B and Party C will comply with and perform all the guarantees, covenants, agreements, representations and conditions for the benefits of Party A. Party B and Party C shall compensate all the losses suffered by Party A for the reasons that Party B and Party C does not perform or fully perform their guarantees, covenants, agreements, representations and conditions.

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7.    Event Of Default

7.1    The following events shall be regarded as the event of default:

7.1.1    GCH fails to make full payment of the exclusive technical consulting and service fees and software license fees as scheduled under the Service Agreement; or fails to perform the obligation of “Trademark License Agreement” or “Business Operation Agreement“.

7.1.2    Party B and Party C makes any material misleading or fraudulent representations or warranties under Article 5 herein, and/or Party B and Party C is in violation of any warranties under Article 6 herein;

7.1.3    Party B and Party C violate the covenants under any of the Articles herein;

7.1.4    Party B and Party C waives the pledged equity interests or transfers or assigns the pledged equity interests without prior written consent from Party A;

7.1.5    Party B and Party C’s any external loan, security, compensation, covenants or any other compensation liabilities (1) are required to be repaid or performed prior to the scheduled date; or (2) are due but can not be repaid or performed as scheduled and thereby cause Party A to deem that Party B and Party C’s capacity to perform the obligations herein is affected;

7.1.6    This Agreement is illegal for the reason of the promulgation of the related laws or Party B and Party C’s incapability of continuing to perform the obligations herein;

7.1.7    Any approval, permits, licenses or authorization from the competent authority of the government needed to perform this Agreement or validate this Agreement are withdrawn, suspended, invalidated or materially amended;

7.1.8    The property of Party B and Party C is adversely changed and cause Party A deem that the capability of Party B and Party C to perform the obligations herein is affected;

7.1.9    The successors or assignees of the GCH are only entitled to perform a portion of or refuse to perform the payment liability under the Service Agreement;

7.1.10    The default resulted in the action or inaction of Pledgor’s breaching the other Articles of this Agreement;

7.1.11    Other circumstances whereby Party A is incapable of exercising the right to dispose the Pledge in accordance with the related laws.

7.2    Party B and Party C shall immediately give a written notice to Party A if Party B and Party C is aware of or find that any event under Article 7.1 herein or any events that may result in the foregoing events have happened or is going on.

7.3    Unless the event of default under Article 7.1 herein has been solved to Party A‘s satisfaction, Party A, at any time when the event of default happens or thereafter, may give a written notice of default to Party B and Party C and require Party B and Party C to immediately make full payment of the overdue service fees and software license under the Service Agreement and other payables or perform the obligation of “Trademark License Agreement” or “Business Operation Agreement“, or dispose the Pledge in accordance with Article 8 herein.

8.    Exercise Of The Right Of The Pledge

8.1    In case GCH does not fully repay the aforesaid technical service fees and software license fees of the Service Agreement, and does fully perform the obligations of

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“Trademark License Agreement” and “Business Operation Agreement“, Party B and Party C shall not transfer or assign the pledge without prior written approval from Party A prior to the full repayment of the consulting and service fee under the Service Agreement. Unless the two parties have agreed otherwise.

8.2    Subject to Article 7, Party A may exercise the right to dispose the Pledge when Party A gives a notice of default.

8.3    Party A is entitled to have priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the equity interests pledged herein in accordance with legal procedure until the outstanding consulting and service fees and all other payables under the Service Agreement are repaid.

8.4    Party B and Party C shall not hinder Party A from disposing the Pledge in accordance with this Agreement and shall give necessary assistance so that Party A could realize his Pledge.

9.    Transfers Or Assignment

9.1    Party B and Party C shall not donate or transfer his rights and obligations herein without prior consent from Party A.

9.2    This Agreement shall be binding upon Party B and Party C and his successors and be effective to Party A and his each successor and assignee.

9.3    Party A may transfer or assign his all or any rights and obligations under the Service Agreement to any individual (natural person or legal entity) at any time. In this case, the assignee shall enjoy and undertake the same rights and obligations herein of Party A as if the assignee is a party hereto. When Party A transfers or assigns the rights and obligations under the Service Agreement, at the request of Party A, Party B and Party C shall execute the relevant agreements and/or documents with respect to such transfer or assignment.

9.4    After Party A‘s change resulting from the transfer or assignment, the new parties to the pledge shall enter into a pledge agreement.

10.    Termination

10.1    This Agreement shall not be terminated until the following conditions are met:

(1)    All the consulting and service fees and software license fees under the Service Agreement are paid off (2) GCH has fully perform all the obligations under “Trademark License Agreement” and “Business Operation Agreement”, or the aforesaid obligations are terminated. And (3) GCH does not perform the obligations under “Trademark License Agreement” and “Business Operation Agreement “.

In case the agreement is terminated, Party A shall cancel or terminate this Agreement within reasonable time as soon as practicable.

11.    Formalities Fees And Other Charges

11.1    Party B and Party C shall be responsible for all the fees and actual expenditures in relation to this Agreement including but not limited to legal fees, cost of production, stamp tax and any other taxes and charges. If Party A pays the relevant taxes in accordance with the laws, Party B and Party C shall fully indemnify such taxes paid by Party A.

11.2    Party B and Party C shall be responsible for all the fees (including but not limited to any taxes, formalities fees, management fees, litigation fees, attorney’s fees, and various

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insurance premiums in connection with disposition of Pledge) incurred by Party B and Party C for the reason that Party B and Party C fails to pay any payable taxes, fees or charges in accordance with this Agreement; or Party A has recourse to any foregoing taxes, charges or fees by any means for other reasons.

12.    Force Majeure

12.1    force majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any unforeseen events beyond the prevented party’s reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event beyond a Party’s reasonable control. The Pledge affected by force majeure shall notify the other party of exemption promptly;

12.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

13.    Dispute Resolution

13.1    This Agreement shall be governed by and construed in accordance with the PRC law.

13.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to PRC International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

13.3    Arbitration place shall be in Beijing, PRC.

13.4    Arbitration language shall be English.

13.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

13.6    both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of PRC). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

13.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration

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injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

14.    Notice

14.1    Any notice, which is given by the parties hereto for the purpose of performing the rights, duties and obligations hereunder, shall be in writing form (including fax and telex). Where such notice is delivered personally, the time of notice is the time when such notice actually reaches the addressee; where such notice is transmitted by telex or facsimile, the notice time is the time when such notice is transmitted. If such notice does not reach the addressee on business date or reaches the addressee after the business time, the next business day following such day is the date of notice. The delivery place is the address first written above of the parties hereto or the address advised in writing including facsimile and telex from time to time.

15.    Appendices

15.1    The appendices to this Agreement are entire and integral part of this Agreement.

16.    Effectiveness

16.1    This agreement and any amendments, modification, supplements, additions or changes hereto shall be in writing and come into effect upon being executed and sealed by the parties hereto.

16.2    This Agreement is executed by Chinese in duplicate, and each party holds one copy and each copy and the copies shall have the same legal effect.

In witness whereof the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the Effective Date first written above.

Party A:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:

Official Seal:    /s/                                                         /s/

Party B:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:

Official Seal:    /s/                                                         /s/

Party C:    Beijing eLong Airline Services Co., Ltd.

Signature of Authorized Representative:

Official Seal:    /s/                                                         /s/

Appendices

1.    Register of Shareholders of General Chinese Reservation Network Ltd.

2.    Certificate of Capital Contribution of General Chinese Reservation Network Ltd.

3.    Services Agreement

4.    Trademark License Agreement

5.    Business Operation Agreement

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EX-10.32

Exhibit 10.32

Amended and Restated Business Operation Agreement

This Amended and Restated Business Operation Agreement (hereinafter the “Agreement”) is entered into on the day of July 20, 2004 (hereinafter the “Effective Date”) among the following parties:

Party A:	eLongNet Information Technology (Beijing) Co., Ltd. (hereinafter Party A)
Address:	10 Jiuxianqiao Street, Chao Yang District Beijing
Legal Representative:	Tang Yue
Party B:	General Chinese Reservation Network Ltd. (hereinafter Party B)
Legal Address:	Room 1005, 81 Zhongshan Road, Nanjing, Jiangsu Province
Legal Representative:	Tang Yue
Party C:	Beijing eLong Information Technology Co., Ltd (Hereinafter Party C)
Legal Address:	109, 1st Floor, Jian Tower, 68 South Xueyuan Road, Haidian District, Beijing.
Legal Representative:	Tang Yue
Party D:	Beijing eLong Airline Services Co., Ltd. (Hereinafter Party D)
Legal Address:	Room 202, 10 Jiuxianqiao Road, Chaoyang District, Beijing
Legal Representative:	Tang Yue

WHEREAS:

(1)    Party A is a wholly foreign-owned enterprise with valid existence registered in the People’s Republic of China (hereinafter the “PRC”);

(2)    Party B is a wholly domestic-owned company registered in the PRC in accordance with the law of PRC, and engages in hotel network reservation service business;

(3)    Party A and Party B established the business relationship by entering into the Exclusive Technical Services Agreement (hereinafter the “Services Agreement”);

(4)    Pursuant to Services Agreement between Party A and Party B, Party B shall pay a certain amount of money to Party A. However, Party B’s daily business operation will substantially affect Party A’s payment capability;

(5)    Party C is a wholly foreign-owned enterprise established according to the law of PRC, and is a shareholder of Party B who owns 20% equity in Party B;

(6)    Party D is a wholly foreign-owned enterprise established according to the law of PRC, and is a shareholder of Party B who owns 80% equity in Party B;

(7)    All the parties agree to further clarify matters relating to the operation of Party B pursuant to provisions herein;

(8)    All the parties agree to amend and restate the operative agreement signed on January 1, 2004 among them.

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NOW THEREFORE, Party A, Party B, Party C and Party D through mutual negotiations hereby agree as follows:

1.    In order to ensure Party B’s normal operation, Party A agrees, subject to Party B’s satisfaction of the relevant provisions herein, to act as the guarantor for Party B in the contracts, agreements or transactions in association with Party B’s operation between Party B and any other third party and to provide full guarantee for Party B in performing such contracts, agreements or transactions. Party B agrees to mortgage the receivables of its operation and the company’s whole asset to Party A as a counter guarantee. Pursuant to the above guarantee arrangement, Party A, as the guarantor for Party B, shall respectively enter into written guarantee contracts with Party B’s counter parties to assume the guarantee liability.

2.    In consideration of the requirement of Article 1 herein and to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree that Party B shall not conduct any transaction which may materially affect its assets, obligations, rights or the company’s operation unless the obtainment of a prior written consent from Party A or Party A’s affiliates, including without limitations to the following contents:

2.1    To borrow money from any third party or assume any debt (including or having debt);

2.2    To sell to any third party or acquire from any third party any assets or rights, including without limitations to any intellectual property rights;

2.3    To provide real guarantee for any third party with its assets or intellectual property rights; and

2.4    To assign to any third party the agreements entered into by it.

3.    Appointment of the Company’s Employees

3.1    In order to ensure the performance of the various operation agreements between Party A and Party B and to ensure the payment of the various payables by Party B to Party A, Party B together with its shareholders Party C and Party D hereby jointly agree to accept the provision of the corporate policies and guidance by Party A at no time in respects of appointment and dismissal of the company’s employees, the company’s daily operation administration and the company’s financial administrative system.

3.2    Party B together with its shareholders Party C and Party D hereby jointly agree that Party B, Party C and Party D shall only appoint the personnel recommended by Party A as the directors of Party B, and Party B shall engage Party A’s high ranking officers or any other candidate recommended by Party A as Party B’s general manager, chief financial officer, and other high ranking officers. If any of the above officers leaves or is fired by Party A, he or she will lose the qualification to undertake any positions in Party B and Party B, Party C and Party C shall appoint other high officers of Party A recommended by Party A to undertake such position.

4.    Guarantees for Working Capital

The guarantee for the loan of working capital Party B together with its shareholders Party C and Party D hereby jointly agree and confirm that except the stipulation set forth in Article 1 herein, Party B shall seek a guarantee from Party A first if Party B needs any guarantee for its performance of any contract or loan of working capital in the course of operation. In this case, Party A shall have the right but not the obligation to provide appropriate guarantee to Party B

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on its own discretion. If Party A decides not to provide such guarantee, Party A shall issue a written notice to Party B immediately and Party B shall seek a guarantee from other third party.

5.    Termination

5.1    In the event that any of the agreements between Party A and Party B terminates or expires, Party A shall have the right but not the obligation to terminate all agreements between Party A and Party B including without limitation to Services Agreement.

5.2    Party A has right to terminate the agreement by delivering 30 days’ written notice to Party B at any time. During the validity period of the agreement, Party B and Party C and Party D should not terminate the agreement in advance, except the regulations in the applicable law.

6.    Compensation for Damage

All the parties agree that any party violating any obligation of the agreement shall compensate any or all loss, responsibility, expense, claim or expenditure (including legal expense and expenditure), to any other party (Hereinafter “Party Accepting Compensation”), and guarantee that the Party Accepting Compensation shall not receive any damage.

7.    Settlement of Distribution

7.1    The agreement shall be under the jurisdiction of the law of PRC, and be explained in accordance with the law of PRC.

7.2    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

7.3    Arbitration place shall be in Beijing, PRC.

7.4    Arbitration language shall be English.

7.5    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

7.6    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

7.7    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post- arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

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8.    Effectiveness of the Agreement

8.1    This Agreement shall be executed as of the date first set forth above and both parties agree that the Agreement become effective since January 1, 2004. The Agreement shall be effective during the expiration period of Party A (including any extended period of Party A)

8.2    Any amendment and supplement of this Agreement shall be in a written form. The amendment and supplement after being duly executed by each Party shall be part of this Agreement and shall have the same legal effect as this Agreement.

8.3    This Agreement is executed by Chinese in quadruplicate and each party holds one copy, which shall have the same legal effect.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly executed on their behalf by a legal authorized representative as of the Date first written above.

Party A:    eLongNet Information Technology (Beijing) Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party B:    General Chinese Reservation Network Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party C:    Beijing eLong Information Technology Co., Ltd

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party D:    Beijing eLong Airline Services Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

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EX-10.33

Exhibit 10.33

Amended and Restated Cooperative Agreement

This Amended and Restated Cooperation Agreement is entered into on the day of July 20, 2004 in Beijing among the following parties:

General Chinese Reservation Network Ltd. (hereinafter “Party A”)

Address:	Room 1005, 81 Zhongshan Road, Nanjing, Jiangsu Province
Legal Representative:	Tang Yue
Beijing eLong Information Technology Co., Ltd (Hereinafter “Party B”)
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street, Haidian District Beijing
Legal Representative:	Tang Yue

Whereas:

1.    Party A is a wholly foreign-owned enterprise with valid existence registered under PRC laws and regulations.

2.    Party B is a wholly domestic-owned company with valid existence registered under PRC laws and regulations, approved by Beijing Communication Administration, may engage in Internet information service business (license No: Jing ICP Certification No.010011), and possess and operate the website of www.elong.com (hereinafter “elong.com”) and the calling center.

3.    Party B has agreed to provide website hosting services and call center services to Party A and Party A has agreed to accept the aforesaid services provided by Party B. Parties entered into The Web Hosting Agreement on the date of November 1, 2002 and now agreed to amend and supply The Web Hosting Agreement and this Agreement herein has been achieved to substitute the Web Hosting Agreement.

4.    Both parties agree to amend and restate the cooperative agreement signed between them on March 5^th 2004.

Therefore, Party A and Party B achieve the following cooperative agreement (hereinafter the “Agreement”) after friendly negotiation.

Article 1:    Two Parties’ Liabilities and Obligations

Party A agreed that Party A should perform the Internet information services (including Internet booking and online information consultation) and Party B provides call center services. Party B agreed to provide the value-added communication services.

Article 2:    Payment and settlement

Party A agreed to pay the information services fee to Party B for the aforesaid internet information service and call center services provided by Party B. Party A and Party B shall determine the amount of the service charge by negotiation in accordance with the service price provided by Party B and the market price of the aforesaid service. The service charge shall be paid by the quarter.

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Article 3:    Notice and Guarantee

3.1    Party A states and guarantees herein as following:

3.1.1    Party A is a wholly foreign-owned enterprise with valid existence registered under PRC laws and regulations.

3.1.2    Party A signs and performs this Agreement within the corporate franchise and business scope; Party A has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.1.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

3.2    Party B states and guarantees herein as following:

3.2.1    Party B is a wholly domestic-owned Co., Ltd. with valid existence registered under PRC laws and regulations, qualified to operate Internet information service business.

3.2.2    Party B signs and performs this Agreement within the corporate franchise and business scope; Party B has already made the authority by corporate behavior and possessed the approvals from the third party and government, which does not against the limitation of the binding laws and regulations.

3.2.3    This Agreement once signed by parties shall constitute the legal, effective, binding and forcible executed obligation to Party A.

Article 4:    Confidentiality

Parties admit that any exchanged oral or written information about this Agreement is confidential information and parties shall protect and maintain the confidentiality of any and all confidential information. One of the parties can not exposure any relevant information to the third party without the prior written consent from the other party, excepting the following circumstances: (a) the information has be known or will be known by public (not exposed to public by the information received party); (b) information disclosed by the requirement of application of laws and the regulations stipulated by stock exchange; or (c) any party discloses the confidential information to its legal or financial consultant for the reason of the transaction’s requirement under this agreement, the legal or financial consultant is liable for complying with the confidential liability which is similar to this clause. The party will be regard as exposure if any of its employees or its employed organizations disclose the confidential information and liable for the exposure according to this Agreement.

Article 5:    Force Majeure

5.1    Force majeure, which includes but not limited to acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event is beyond one party’s reasonable control and unavoidable with reasonable care of the affected party. However, any shortage of credit, capital or finance shall not be regarded as an event of force majeure. To dissolute the performing obligations under this agreement the party affected by force majeure shall notify the other party without delay.

5.2    In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by force majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize

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or remove the effects of force majeure and attempt to resume performance of the obligations delayed or prevented by the event of force majeure. After the event of force majeure is removed, both parties agree to resume the performance of this Agreement with their best efforts.

Article 6:    Settlement of Disputes

6.1    Any dispute, tangle or claim arising from the agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of arbitration application. The arbitration award shall be final and binding upon both parties.

6.2    Arbitration place shall be in Beijing, PRC.

6.3    Arbitration language shall be English.

6.4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint an arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

6.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

6.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post- arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

Article 7:    Notices and delivery

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant party or parties set forth below.

Party A:	General Chinese Reservation Network Ltd.
Address:	Room 1005, 81 Zhong Shan Road, Nanjing, Jiang Su Province
Addressee:	Tang Yue
Fax:	(86-25) 8471 7777
Tel:	(86-25) 8472 3434

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Party B:	Beijing eLong Information Technology Co., Ltd
Address:	Room 109, Jian Tower, No. 68 Xueyuannan Street Haidian District Beijing,
Addressee:	Tang Yue
Fax:	(86-10) 5860 2288
Tel:	(86-10) 6431 5872

Article 8:    Agreement Transfer

Party B shall not transfer the rights and obligations of this Agreement to any third party without the prior written consent of Party A.

Article 9:    Amendment and Supplement

Any amendment and supplement of this Agreement shall come into force only after both parties sign a written agreement. The amendment and supplement duly executed by both parties shall be an integral part this Agreement and shall have the same legal effect as this Agreement.

Article 10:    Effective Date and Term

10.1    This Agreement has been duly executed as of the date first set forth above and shall be effective simultaneously and parties confirm the term of the Agreement shall be counted from July 1, 2004. The term of this Agreement is ten (10) years or the date of the expiration of period of validity of Party A (including any extended period of Party A). However, both parties should review this Agreement every three (3) months to determine whether any amendment to the Agreement is necessary after considering the circumstances.

10.2    This Agreement may be extended if Party A gives the written consent of the extension of this Agreement before the expiration of this Agreement. Parties shall negotiate the term of the extension

10.3    This Agreement is executed in duplicate and each Party holds one copy (No text on this page)

Whereas, both parties’ authorized representatives sign this Agreement as of the date first set forth above in Beijing.

Party A:    General Chinese Reservation Network Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

Party B:    Beijing eLong Information Technology Co., Ltd.

Signature of Authorized Representative:    /s/

Official Seal:    /s/

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EX-10.34

Exhibit 10.34

Trademark License Agreement

This Trademark License Agreement (hereinafter the “Agreement”) is entered into as of July 20, 2004 in the People’s Republic of China (hereinafter the “PRC”) between the following two parties in Beijing:

(1)    eLongNet Information Technology (Beijing) Co., Ltd.( hereinafter the “Licensor”), an wholly owned foreign enterprise under the laws of PRC, Legal Address: 10 Jiuxianqiao Street, Chaoyang District, Beijing;

And

(2)    General Chinese Reservation Network Ltd. (Hereinafter the “Licensee”), a wholly domestic invested limited liability company under the laws of PRC, Legal Address: Room 1005, 81 Zhongshan Road, Nanjing, Jiangsu Province (hereinafter, one party will be called “one party”, two parties will be called “both parties”).

WHEREAS:

A.    The “Licensor” is the owner of the registered trademarks (hereinafter the “trademark”) in Appendix 1, and it is in the process of application formalities, in order to become the owner of the trademarks in Appendix 2 and the trademarks in applying.

B.    The “Licensee” desires to acquire non- exclusive license of the trademarks listed in Appendix 1 and Appendix 2 in accordance with the terms and conditions of this agreement, and the “Licensor” agree to grant the “Licensee” such license.

NOW THEREFORE, the parties agree as follows:

1.    Definition

Unless otherwise provided for herein, the following words are specified as:

“Affiliated Enterprise” the entity with at least 10% ballot held by any “one party” directly or indirectly.

“Force Majeure” any earthquake, typhoon, fire, flood, war, and other calamity caused by nature or human which is unpredictable, unavoidable and overwhelming happened after the signing of “this agreement”, this event beyond any party’s control and impedes the performance of all or part of this agreement.

“PRC Law” any promulgated and valid laws and regulations of PRC from the date stipulated on the head of this agreement.

“Term” the period stipulated in 3.1 of this agreement

“Territory” the territory of PRC, which does not include Hong Kong, Macao and Taiwan.

“Trademark Office” the trademark office of State Administration for Industry and Commerce.

“Licensed Trademark” the trademark registered in the “Trademark Office” by the

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“Trademark to be licensed” the registered trademark under the process of assignment in the “Trademark Office” which will be assigned to the “Licensor” and the trademark in the application for registration, listed in Appendix 2

“RMB” the legal currency of the “PRC”.

2.    License

2.1.    Trademark License

The “Licensor” will grant the “Licensee” a license to use the “Licensed Trademark” and “Trademark to be licensed” in the Territory under the terms and conditions of this agreement in its term, except that the “Licensor” shall give the “Licensed Trademark” and “Trademark to be licensed” to its designated party.

2.2.    Scope of Use

In the term of this Agreement, the “Licensee” can use the “Licensed Trademark” and “Trademark to be licensed” in the “Territory” under the circumstances set force as follows:

2.2.1    Use in the authorized commodities or services in accordance with the content in each certificate of registration.

2.2.2.    Use in the documents of commercial transactions, advertising, exhibitions or other commercial actions related to Item 2.2.1

2.3.    Sublicense

2.3.1.    The “Licensee” shall not grant the license of the “Licensed Trademark” and “Trademark to be licensed” to any third party without the written consent of the “Licensor” in advance. Any sublicense without authorization is invalid.

2.4.    Forbidden Action

The “Licensee” promises that in the term of this Agreement and any time after the expiration of this Agreement, it shall not:

2.4.1.    Undertake any action, which will affect the Licensor’s right on the “Licensed Trademark” and “Trademark to be licensed”; or

2.4.2.    Apply for the registration of the “Licensed Trademark” and “Trademark to be licensed” or any similar trademark in any country or region.

2.5.    Providing of Signs

The “Licensor” shall provide the authorized signs of the “Licensed Trademark” and “Trademark to be licensed” to the “Licensee” with digital format stored in the floppy disk and printed format. The “Licensee” has right to copy the “Licensed Trademark” and “Trademark to be licensed” in accordance with the relevant designs.

2.6.    Use Supervision

The “Licensor” has the right to dispatch personnel at any time to the sites of the “Licensee” for the supervision on the use of the “Licensed Trademark” and “Trademark to be licensed” after its notice in written.

2.7.    No Hindrance

The “licensee” acknowledges the right owned by the “Licensor” to the “Licensed Trademark” and “Trademark to be licensed”, besides the warranty listed in 2.4, the “licensee” shall not undertake or promote any action that will hinder the right of the “Licensed Trademark” and “Trademark to be licensed”. The “licensee” shall not state to third party that it has any right on the “Licensed Trademark” and “Trademark to be

2

licensed”. The “licensee” acknowledges that the anticipated use of the “Licensed Trademark” and “Trademark to be licensed” will not create any ownership related to the goodwill of the “Licensed Trademark” and “Trademark to be licensed” for the “licensee”. All the use of this kind shall benefit the exclusive right of the “Licensor” as the owner of the “Licensed Trademark” and “Trademark to be licensed”.

2.8.    Quality

Both parties of this Agreement acknowledge that the quality and goodwill of commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” is important to the operation of the “Licensor”. Any commodities and service signed with the “Licensed Trademark” and “Trademark to be licensed” shall reach the top standards and qualities, and it shall under the control, and accord with PRC law and other quality standards requested by any “Licensor” from time to time, and accept supervision and approval of the “Licensor”. The “licensee” shall obey all the standards about the commodities and service of the “Licensor”.

3.    Term

3.1.    Period

This Agreement will be effective from the date of signing the contract, until termination pursuant to Article 9.1. But the license of every “Trademark to be licensed” shall be effective from the date that the “Trademark Office” authorizes the assignment to the “Licensor” and the “Licensor” becomes the owner of the trademark. Except the circumstances stipulated in Article 9.1, the period of this agreement shall be equal to the expiration period (including any extended period) of the “Licensor”.

4.    Record

4.1.    Application for Record

Within three (3) months after the effectiveness of this Agreement, both parties shall file this Agreement to the “Trademark Office” for record for the licensing of the “Licensed Trademark” according to the PRC laws. For the “Trademark to be licensed”, within three (3) months after the effectiveness set forth in Item 3.1, both parties shall file this Agreement to the “Trademark Office” for record.

4.2.    Fees

The “Licensee” shall assume the fees about the application and renewal set forth in Article 4.1.

5.    License Fee

The “Licensee” agrees to pay the “Licensor” the license fee, and both parties will decide its amount in accordance to the market price.

6.    Statement and Warranties

6.1.    Statement and Warranties of Both Parties

Every “one party” states and warrants, form the date of signing this Agreement:

6.1.1.    It is an independent company duly registered in the place of establishment, and has gotten all the government’s authorization and registration, which are continuously valid for its existence, and it has sufficient rights to operate according to its business license, business certificate of registration, articles of association or similar documents of company;

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6.1.2.    It has absolute authorization to sign this Agreement and perform the obligations under this agreement;

6.1.3.    The representative has gotten absolute authorization to sign this Agreement (the signature of representative is in the place for signing);

6.1.4.    The signing of this Agreement or the performance of the obligations under this agreement will not violate:

6.1.4.1.    The business license, business certificate of registration, articles of association or similar documents of company;

6.1.4.2.    Any law, regulation or the authorization or approval of government; and

6.1.4.3.    Any binding agreement;

6.1.5.    There is not any pending case of lawsuit, arbitration, other legal or governmental procedure that will has material adverse effects on this agreement to its knowledge;

6.1.6.    It has disclosed all the documents to the other party, which will probably have material adverse effects on the obligations under this agreement issued by any branch of government;

6.1.7.    It has not been the subject of liquidation or dissolution; and

6.1.8.    It has not been declared bankruptcy by the court with jurisdiction.

6.2.    Statement and Warranties of the “Licensee”

The “Licensee” further states and warrants to the “Licensor”:

6.2.1.    It will use the “Licensed Trademark” and “Trademark to be licensed” only according to the purpose stipulated in 2.2;

6.2.2.    It shall not use the “Licensed Trademark” and “Trademark to be licensed” beyond the method stipulated in this agreement;

6.2.3.    It shall not change any appearance, text, content or their combination of the “Licensed Trademark” and “Trademark to be licensed” in any way.

6.2.4.    It shall sign the name and origin of the “Licensee” on the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

6.2.5.    It shall obey all the PRC laws and regulations related with the products’ sign, packing and sale;

6.2.6.    It shall allow any employee or agent of the “Licensor” access the site of the “Licensee” in business hour for the supervision on the quality of the commodities or services using the “Licensed Trademark” and “Trademark to be licensed”.

7.    Claims and Tort

7.1.    Tort to Third Party

If the use of any “Licensed Trademark” and “Trademark to be licensed” according to the stipulations in this Agreement by the “Licensee” cause the claim (the “claim”) for the tort of any intellectual property right of third party:

7.1.1.    The “Licensee” shall notify the “Licensor” about such claim in written at once;

4

7.1.2.    Without the written consent of the “Licensor”, the “Licensee” shall not make any promise or compromise with third party;

7.1.3.    The “Licensee” shall let the “Licensor” take part in any negotiation and suit for the settlement of the claim;

7.1.4.    According the reasonable require of the “Licensor”, the “Licensee” shall provide any acquired information to the “Licensor” and give every reasonable assistance.

7.1.5.    If the “Licensee” violates the stipulations in this Agreement to use the “Licensed Trademark” and “Trademark to be licensed”, the “Licensor” won’t bear any liability for the “Licensee”; the “Licensee” shall bear the liability by itself.

7.2.    Tort of Third Party

If any third party takes the act of tort to the “Licensed Trademark” and “Trademark to be licensed” of this Agreement:

7.2.1.    The “Licensee” shall notify the “Licensor” after it get to know the tort to the “Licensed Trademark” and “Trademark to be licensed” of the “Licensor” in any territory;

7.2.2.    Both parties shall make joint consultations on juridical action to the torts or menacing actions. In order to avoid the doubtful point, the “Licensee” agrees that before the prior written consent of the “Licensor”, it shall not make any compromise with any third party by itself;

7.2.3.    If both parties agree to take juridical action to the torts of the “Licensed Trademark” and “Trademark to be licensed”, the fees and the damages acquirable shall be divided equally. If the “Licensee” does not decide to take lawsuit to the event stipulated in the “Licensor” can decide to take the lawsuit by itself or through the affiliated enterprise, and bear the fees; the “Licensee” shall render assistance to the “Licensor” for such juridical action with its effort; and

7.2.4.    All the damages acquired by the juridical action taken by the “Licensor” shall be owned by the “Licensor”.

8.    Breaches and Compensation

8.1.    Breach

8.1.1.    Any party violates any stipulation, fails to perform the obligations or its performance does not accord with the stipulations of this agreement (the “Party in Breach”), and it will be taken as the breach of the obligations of this Agreement. The party who obey this Agreement (the “Observant Party”) has the right to notify the Party in Breach in written to correct its action within 10 days from the date it get the notice.

8.1.2.    If any party breaches this Agreement, both parties shall keep on the performance of this Agreement; the Party in Breach shall take sufficient, efficient and timely measures to eliminate the result of breach, and compensate to the Observant Party all the damages caused by the breach.

8.2.    Compensation

The Party in Breach shall compensate the Observant Party according to 8.1.2, the compensation is the damages caused by the party in breach, including the benefits acquirable by the performance of this agreement, but it shall not exceed the damages reasonably foreseeable by the Party in Breach.

5

9.    Cancellations, Termination and Renewal of Agreement

9.1.    Termination

This Agreement will be terminated in the circumstances as follows:

9.1.1.    By the written consultation of both parties;

9.1.2.    By the notice of termination sent by the “Licensor” ten (10) days in advance;

9.1.3.    The Observant Party has the right to terminate this Agreement at once if the party in breach materially breaches the Agreement and does not correct its actions within 30 days from the date it get the notice from the Observant Party;

9.1.4.    Any party in liquidation, and its assets is in the takeover of assigned party;

9.1.5.    Any party accesses to the bankrupt procedure, or stops business materially;

9.1.6.    If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, and at the same time, both parties cannot find a reasonable settlement according to 11.

9.2.    The result of Termination

9.2.1.    If the agreement terminated by any reason, the license under this Agreement will be terminated at once. The “Licensee” shall;

9.2.1.1.    Stop using the “Licensed Trademark” and “Trademark to be licensed” in the actions related to its business;

9.2.1.2.    Remove the “Licensed Trademark” and “Trademark to be licensed” form all the disseminating datum, handbooks, sign and other assets of the “Licensee” at its own expenses within 90 days from the termination of this Agreement; and

9.2.1.3.    Stop using any license even with the prior approval of the “Licensor”, and take any necessary steps to stop the using of the “Licensed Trademark” and “Trademark to be licensed” by any relicensee.

9.2.2.    No matter what reason cause the termination of this Agreement, it will not affect the rights or obligations still held by each one party.

10.    Applicable Law and Settlement of Disputes

10.1.    Applicable Law

The conclusion, validity, interpretation and implementation of this Agreement shall be governed by the laws of the PRC, and excludes the conflict rules, if there is no regulation prescribed in the laws of the PRC for the specific event, the international business practice shall be referred to.

10.2.    Arbitration

10.2.1    Any dispute, tangle or claim arising from the Agreement or relating with the agreement (including any issue relating with the existence, validity or termination of the agreement) should be submitted to China International Economic and Trade Arbitration Commission (the “Arbitration Commission”). Arbitration Commission shall conduct arbitration in accordance with the current effective rules of Arbitration application. The arbitration award shall be final and binding upon both parties.

10.2.2    Arbitration place shall be in Beijing, PRC.

10.2.3    Arbitration language shall be English.

6

10.2.4    The court of arbitration shall compose of three arbitrators. Both parties should respectively appoint a arbitrator, the chairman of the court of arbitration shall be appointed by both parties through consultation. In case both parties do not coincide in opinion of the person selected for the chief arbitrator within twenty days from the date of their respectively appoint a arbitrator, the director of Arbitration Commission shall have right to appoint the chief arbitrator.

10.2.5    Both parties agreed that the court of arbitration established according to the regulation shall have right to provide actually performed relief on the proper situation according with PRC Law (including but not being limited to Law of Contract of the People’s Republic of China). For the avoidance of doubt, both parties further that any court having jurisdiction (including PRC Court) shall carry out the arbitral award of actual performance issued by the court of arbitration.

10.2.6    Both parties agreed to conduct arbitration in accordance with this regulation, and irrepealably abstain the right to appeal, reexamine or prosecute to national court or other administration of justice in any form, and the precondition shall be that the aforesaid waiver is effective. However the waiver of both parties does not include any post-arbitration injunction, post-arbitration distress warrant or other command issued by any court having jurisdiction (including PRC Court) for terminating the arbitration procedure or carrying out any arbitral award.

10.3.    Continuous Performance

In the period of arbitration, parties shall try to perform the part of this Agreement that is not in arbitration.

11.    Force Majeure

11.1.    Suspension of obligations

On the occurrence of force majeure, both parties shall negotiate at once in order to get consistent settlements. Both parties shall suspend their obligations in the range affected by force majeure.

11.2.    Written Certificate

The party stating the influence by force majeure shall notify the other party within 15 days after the occurrence of force majeure, and render the written certificate issued by relevant authorities, and reduce the effect of such force majeure by its effort.

11.3.    Termination

If the existence of force majeure exceeds 30 days, and has material adverse effects on the performance of the obligations under this agreement by any party, any party can terminate this Agreement according to 9.1.6.

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12.    Supplement

12.1.    Notice

Any notice of both parties shall be written in English, and send by fax, specific sending (including courier) or registered airpost. Without the notice of address changing, all the notices and communications shall be sent to the address as follows:

The “Licensor”:
eLongNet Information Technology (Beijing) Co., Ltd.
Address:	10 Jiuxianqiao Road, Chaoyang District, Beijing
Phone Number:	(86-10) 58602288
Fax Number:	(86-10) 64315872
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue
The “Licensee”:
General Chinese Reservation Network Ltd.
Address:	Room 1005, 81 Zhongshan Road, Nanjing, Jiangsu Province
E-mail:	justin.tang@corp.elong.com
Addressee:	Tang Yue

12.2.    Reference

The chapters, articles or appendixes are the chapters, articles or appendixes under this Agreement. The titles of this Agreement are just for reference; they do not have binding force on this Agreement and do not affect its interpretation.

12.3.    Waiver

If any party cannot perform or delay in performance of any right, power or preferential right of this Agreement or other related agreement, it will not be treat as waiver. The separate or partly performance of any right, power or preferential right will not affect the latter performance of such right, power or preferential right.

12.4.    Transfer

Without the prior consent of the other party, any party shall not transfer all or part of the rights (obligations) under this Agreement to any third party.

12.5.    Divisibility

The invalidity of any stipulations under this Agreement does not affect the validity of other irrelevant stipulations. Both parties shall modify any invalid or unenforceable stipulations in order to make these stipulations valid or enforceable.

12.6.    Integrity

The appendixes of this Agreement are the undividable part of this Agreement and shall have the same legal effect as this agreement. This Agreement and its appendixes constitute an integral agreement about the events between both parties, and it will replace all the prior discussions, negotiations and agreements.

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12.7.    Language

This Agreement is executed in quadruplicate originals in Chinese. The “Licensor” holds one, and the “Licensee” holds two, the one remained will be filed to the “Trademark Office” for record.

12.8.    Modification

This Agreement could only be modified by the written amendment signed by both parties.

12.9.    Successor

This Agreement is signed for the rights of both parties and their legal successors and assignee, and will be binding on both parties and their legal successors and assignee with the same binding force.

12.10.    Singular and Plurality

The singular and plurality can be used mutually.

12.11.    Unstipulated events

The unstipulated events shall be disposed according to the agreements of both parties and relevant regulations of PRC laws.

The official authorized representative shall sign this Agreement at the date stipulated at the head of the Agreement for good faith.

The “Licensor”

eLongNet Information Technology (Beijing) Co., Ltd.

Authorized Representative:    Tang Yue

Signature of Representative:    /s/

Official Seal:    /s/

The “Licensee”

General Chinese Reservation Network Ltd.

Authorized Representative:    Tang Yue

Signature of Representative:    /s/

Official Seal:    /s/

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Appendix One

Details of Licensed Trademark

	Trademark	Type	Registration Number	Validity Period
1	eLong.com+ “e”logo+ dragon	9	1570359	14 May 2001 - 13 May 2011
2	eLong.com	35	1607616	21 Jul 2001 - 20 Jul 2011
3	eLong.com	36	1739999	28 Mar 2002 - 27 Mar 2012
4	eLong.com+ “e”logo+ dragon	41	1535930	7 Mar 2001 - 6 Mar 2011
5	Xi Ci	35	1587892	14 Jun 2001 - 13 Jun 2011
6	Xi CiHu Tong	35	1587891	14 Jun 2001 - 13 Jun 2011
7	Xi Ci	38	1623768	21 Aug 2001 - 20 Aug 2011
8	Xi CiHu Tong	38	1623767	21 Aug 2001 - 20 Aug 2011
9	eLong.com+e	42	1599959	7 Jul 2001 - 6 Jul 2011
10	“A” logo	38	1623841	21 Aug 2001 - 20 Aug 2011
11	The world circles for you +eLong.com	35	1695505	7 Jan 2002 - 6 Jan 2012
12	Lohoo+logo+ “Business Travel Net”	9	1642574	28 Sep 2001 - 27 Sep 2011
13	Lohoo+logo	35	1719860	21 Feb 2002 - 20 Feb 2012
14	Lohoo+logo	36	1711506	7 Feb 2002 - 6 Feb 2012
15	Lohoo+logo	38	1711492	7 Feb 2002 - 6 Feb 2012
16	Lohoo+logo	39	1764897	7 May 2002 - 6 May 2012
17	Lohoo+logo	41	1749624	14 Apr 2002 - 13 Apr 2012
18	Lohoo+logo	42	1719681	21 Feb 2002 - 20 Feb 2012
19	e+ dragon +logo	41	1983708	7 Apr 2003 - 6 Apr 2013
20	e+ dragon +logo	42	2016041	14 Jan.2003 - 13 Jan 2013
21	e+ dragon + Travel care+ Travel Care Plan	39	3279761	21 Mar 2004 - 20 Mar 2014
22	e+ dragon + Travel care+ Travel Care Plan	43	3279762	14 Feb 2004 - 13 Feb 2014

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Appendix Two

Details of Trademark to be licensed

1.    Registered Trademark

		Registrant	Type	Register Number	Validity Period
1	“A” logo	eLong.com, Inc	35	1631670	7 Sep 2001 - 6 Sep 2011
2	“A” logo	eLong.com, Inc	36	1749484	14 Apr 2002 - 13 Apr 2012
3	“A” logo	eLong.com, Inc	41	1731794	14 Mar 2002 - 13 Mar 2012

2.    Trademark to be Licensed

	Trademark	Type	Register Number	DATE OF APPLICATION
1.	eLong.com+ “e”logo+ dragon	45	3679722	19.Aug.2003
2.	eLong.com+ “e”logo+ dragon	16	3683714	21.Aug.2003
3.	eLong.com+ “e”logo+ dragon	35	3683713	21.Aug.2003
4.	eLong	36	3679721	19.Aug.2003
5.	eLong	39	3679719	19.Aug.2003
6.	eLong	45	3279720	19.Aug.2003
7.	eLong	16	3683505	21.Aug.2003
8.	eLong	35	3683504	21.Aug.2003
9.	eLong	41	3683503	21.Aug.2003
10.	eLong	42	3683743	21.Aug.2003
11.	eLong	43	3683715	21.Aug.2003
12.	eLong Travel Net +eLong.com	35	3953009	11.Mar.2004
13.	eLong Travel Net+eLong.com	39	3953008	11.Mar.2004
14.	eLong Travel Net +eLong.com	41	3953010	11.Mar.2004
15.	eLong Travel Net +eLong.com	43	3953011	11.Mar.2004
16.	e+ dragon +logo	39	1994192	10.Sep.2001

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EX-10.35

Exhibit 10.35

TRANSACTION AGREEMENT

BY AND AMONG

IACT ASIA PACIFIC LIMITED,

INTERACTIVECORP,

ELONGNET INFORMATION TECHNOLOGY (BEIJING) CO., LTD.

ELONGNET HI-TECH (BEIJING) CO., LTD.

AND

ELONG, INC.

July 23, 2004

TABLE OF CONTENTS

1.	Closing; Issuance; Purchase; Exchange; Warrants; Option		1
	1.1	Closing	1
	1.2	Sale and Issuance of Series B Preferred Shares from the Company	1
	1.3	Sale and Purchase of Ordinary Shares and/or Series A Preferred Shares from the Selling Shareholders	2
	1.4	Warrant	2
	1.5	Option Grant	2
	1.6	Additional Closing Obligations	2
	1.7	Cash Reconciliation	2
	1.8	Investor Share Transactions	3
	1.9	Escrow Agreement	3
2.	Representations and Warranties of the Company		4
	2.1	Organization, Good Standing and Qualification	4
	2.2	Capitalization and Voting Rights of the Company	5
	2.3	Capitalization and Voting Rights of the Subsidiary and the New Subsidiary	6
	2.4	Subsidiaries	7
	2.5	Organization of PRC Entities	7
	2.6	Authorization	9
	2.7	Valid Issuance of Warrants, Option, Preferred and Conversion Shares	10
	2.8	Governmental Consents	10
	2.9	Offering	11
	2.10	Litigation; Compliance with Law	11
	2.11	Employment Agreements; Key Employees	12
	2.12	Intellectual Property	12
	2.13	Compliance with Other Instruments	12
	2.14	Agreements and Actions	13
	2.15	Related-Party Transactions	14
	2.16	Permits	15
	2.17	Environmental and Safety Laws	15
	2.18	Title to Property and Assets	15
	2.19	Financial Statements; Payables/Receivables	16
	2.20	Changes	16
	2.21	Employee Benefit Plans and Employee Agreements	18
	2.22	Labor Agreements and Actions; Employee Compensation	19
	2.23	Tax Returns, Payments and Elections	19
	2.24	Insurance	20
	2.25	Minute Books	20
	2.26	Brokers/Finders	21
	2.27	Significant Customers and Suppliers	21
	2.28	No Undisclosed Liabilities	21
3.	No Implied Representations		21
4.	Representations and Warranties of the Investor and Investor Parent		22
	4.1	Organization, Good Standing and Qualification	22
	4.2	Existence; Authorization; Legal Proceedings	22
	4.3	Securities Representations	23
	4.4	Brokers/Finders	23

5.	Other Covenants and Agreements		23
	5.1	Related Party Transactions	23
	5.2	Use of Proceeds	23
	5.3	FCPA	24
	5.4	Insurance Policies	24
	5.5	Tax	25
	5.6	Maintenance and Conduct of Business	26
	5.7	Required Settlements	29
	5.8	Delivery of June Financial Statements	30
	5.9	Cooperation Regarding IPO	30
	5.10	Non-Competition Covenant	30
6.	Survival and Indemnification		33
	6.1	Survival	33
	6.2	Indemnification By Company and Investor	34
	6.3	edure for Indemnification for Third Party Claims	35
	6.4	Limitations; Offset; Remedies; etc	36
7.	Certain Covenants; Closing Conditions; Termination		37
	7.1	Covenants Regarding Closing	37
	7.2	Closing Conditions	37
	7.3	Termination	39
8.	Miscellaneous		39
	8.1	Successors and Assigns	39
	8.2	Governing Law; Arbitration	39
	8.3	Counterparts	40
	8.4	Titles and Subtitles	40
	8.5	Notices	40
	8.6	Expenses	40
	8.7	Amendments and Waivers	40
	8.8	Severability	40
	8.9	Entire Agreement	40
	8.10	Knowledge of the Company	41

Table of Defined Terms

Defined Term	Section Defined In
2004 Option Plan	2.2(d)
Act	4.3
Agreement	Preamble
Amended Company Agreements	2.6(a)
Arbiter	1.6(a)
Asia Interactive	2.5(a)(ii)
Benefit Plan	2.21(a)
BJCAB	2.16
Board of Directors	2.15
Business	2.10(b)
cash and cash equivalents	1.6(d)
Cash Deficit	1.6(b)
Cash Surplus	1.6(b)
Closing	1.1
Closing Cash Statement	1.6(a)
Closing Date	Preamble
Code	2.23
Company	Preamble
Company Indemnified Parties	6.2(b)
Company Losses	6.2(c)
Company’s Auditor	5.8
Conduct Code	5.6(d)
Contracts	2.14
Controlled Foreign Corporation	2.23
Conversion Shares	2.6(a)
Current Articles and Memorandum	2.1
Delaware Courts	7.2(a)
Disclosure Schedule	2
eLong Airline	2.5(a)(iii)
eLong Airline Pledge Agreement	2.5(c)(v)
Employment Agreement	2.21(e)
Employment Handbook	2.21(f)
Equity	2.3(a)
Escrow Agent	1.8
Escrow Agreement	1.8
Escrow Deposit	1.8
FCPA Rules	5.3
Final Closing Cash Statement	1.6(a)
Financial Statement Date	2.19
Financial Statements	2.19
Founder	2.5(c)(i)
Founder Share Pledge Agreement	2.5(c)(v)
FPHC	5.5(d)
GCH	2.5(iv)
High-Vote Ordinary Shares	2.2(a)(iii)
IAC Competitive Conduct	6.1(1)
ICP Entity	2.5(a)(i)
Indemnification Cap	2.5(a)(i)
Indemnification Threshold	6.4(a)(ii)
Indemnified Party	6.2(c)
Indemnifying Party	6.2(c)
Investor	Preamble
Investor Losses	6.2(c)
Investors Agreement	2.6(a)
Investor’s Auditor	5.8

Defined Term	Section Defined In
Investor Indemnified Parties	6.2(a)
Investor Share Transactions	1.7
Intellectual Property	2.12
June Financial Statements	5.8
Key Employees	2.11
Knowledge of the Company	7.10
Liens	2.18
Losses	6.2(c)
Major Representations	6.1
Management Agreements	2.6(a)
Material Adverse Change	2.20(b)
Material Adverse Effect	2.1(a)
Material Contracts	2.14(c)
Material Contracts	Preamble
New Subsidiary	2.1(c)
New Subsidiary Articles	2.3(e)
Option	1.5
Option Agreement	1.5
Option Plan	2.2(d)
Order	2.5(f)
Ordinary Shares	2.2(a)(ii)
Permitted Liens	2.18
Person	2.2(d)
PFIC	5.5(d)
Preferred Shares	2.2(a)(i)
PRC	2.1(b)
PRC Entities	2.5(iv)
Proceeds Account	5.2
Qualifying Withdrawal	5.2
Related Agreements	2.6(a)
Related Party	2.15
Restated Articles	1.2(a)
Restated Memorandum	1.2(a)
Selling Shareholders	1.3(a)
Series A Preferred Shares	2.2(a)(i)
Series B Payment	1.2(b)
Series B Preferred Shares	2.2(a)(i)
Share Pledge Agreements	2.5(v)
Shareholder Payment	1.3(a)
Shareholder Shares	1.3(a)
SOX Requirements	5.6(c)
Structure Contracts	5.6(e)
Subsidiary	Preamble
Subsidiary Articles	2.1(b)
Survival Date	6.1
Tax	2.23
Taxes	2.23
Taxable	2.23
Tax Authority	2.23
Tax Returns	2.23
Transfer Agreement	1.2(d)
Travel Agency License	2.16
Warrant Agreement	1.4
Warrants	1.4
Web Sites	2.16
Zhi Qu Share Pledge Agreement	2.5(c)(v)

THIS TRANSACTION AGREEMENT (the “Agreement”) is made as of the 22nd day of July, 2004 (the “Closing Date”), by and among eLong, Inc., an exempted limited liability company under the laws of the Cayman Islands (the “Company”), eLongNet Information Technology (Beijing) Co., Ltd., a company organized under the laws of the People’s Republic of China (the “Subsidiary”), eLongNet Hi-Tech (Beijing) Co., Ltd., a company organized under the laws of the People’s Republic of China (the “New Subsidiary”), IACT Asia Pacific Limited, an exempted limited liability company organized under the laws of the Cayman Islands (the “Investor”), and InterActiveCorp, a Delaware corporation (the “Investor Parent”).

WHEREAS, the Company wishes to sell to the Investor, and the Investor wishes to purchase from the Company, certain securities of the Company, upon the terms and subject to the conditions set forth herein; and

WHEREAS, as an inducement and condition to the Investor entering into this Agreement, certain executive officers of the Company are entering into employment and non-competition agreements, effective as of the Closing (as herein after defined);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby covenant and agree as follows:

1.    Closing; Issuance; Purchase; Exchange; Warrants; Option.

1.1    Closing.    The closing (the “Closing”) of the transactions contemplated by Sections 1.2 through 1.5 shall take place at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York, effective at 10:00 A.M. (local time), on the Closing Date. All matters at the Closing shall be considered to take place and have taken place simultaneously. As used herein the term “Closing Date” shall mean the date which is the business day following satisfaction of the conditions set forth in Section 7.2.

1.2    Sale and Issuance of Series B Preferred Shares from the Company.    In connection with the execution and delivery of this Agreement, and in anticipation of the Closing, the Company is filing with the Registrar of Companies in the Cayman Islands the Amended and Restated Memorandum of Association in the form attached hereto as Exhibit A (the “Restated Memorandum”) and the Amended and Restated Articles of Association in the form attached hereto as Exhibit B (the “Restated Articles”). At and as part of the Closing, subject to the terms and conditions set forth herein:

(a) The Company shall issue to the Investor, and the Investor shall purchase and accept from the Company, 11,188,570 Series B Preferred Shares (as defined in Section 2.2 hereof), for an aggregate purchase price of US$58,690,062 (the “Series B Payment”).

(b) The Company shall deliver to the Investor one or more stock certificates representing all of the Series B Preferred Shares purchased by the Investor pursuant to Section 1.2(b) hereof.

(c)    The Investor shall pay (x) US$51,353,804 of the Series B Payment by wire transfer of immediately available funds to the account of the Company set forth on Schedule 1.2 hereto; and (y) US$7,336,258 of the Series B Payment by wire transfer of immediately available funds to the account of the Escrow Agent set forth in the Escrow Agreement to be part of the Escrow Deposit pursuant to the terms of the Escrow Agreement and the Transfer and Escrow Contribution Agreement (the “Transfer Agreement”) executed and delivered by the Selling Shareholders, the Company and the Investor on the date hereof.

1

1.3    Sale and Purchase of Ordinary Shares and/or Series A Preferred Shares from the Selling Shareholders.    At and as part of the Closing:

(a)    Each of the individuals or entities which is a “Selling Shareholder” under and as defined in the Transfer Agreement (the “Selling Shareholders”) will sell and transfer to the Company, and the Company will redeem, purchase and accept from each of the Selling Shareholders, that number of Series A Preferred Shares and/or Ordinary Shares (each as defined in Section 2.2 hereof) of the Company, as the case may be, as set forth opposite such Selling Shareholder’s name on Exhibit A to the Transfer Agreement (the “Shareholder Shares”) for an aggregate purchase price of US$29,345,029 (the “Shareholder Payment”), all as set forth in and pursuant to the Transfer Agreement.

(b)    The Company will pay US$26,410,527 of the Shareholder Payment by wire transfer of immediately available funds to the respective accounts of the Selling Shareholders pursuant to the Transfer Agreement. The remaining $2,934,502 of the Shareholder Payment shall be paid from the Escrow Deposit subject to the terms and conditions of this Agreement, the Escrow Agreement and the Transfer Agreement.

1.4    Warrant.    At and as part of the Closing, (i) the Company will deliver to the Investor a warrant to purchase certain securities of the Company, as evidenced by a warrant certificate in the form attached hereto as Exhibit C-1 (the “Warrant”), pursuant to the Warrant Agreement described in the succeeding clause (ii), and (ii) the Company and the Investor will execute and deliver a Warrant Agreement, dated as of the Closing Date, in the form attached hereto as Exhibit C-2 (the “Warrant Agreement”).

1.5    Option Grant.    At and as part of the Closing, the Company and the Investor will execute and deliver an Option Agreement (the “Option Agreement”) in the form attached hereto as Exhibit D, granting the Investor rights to acquire 711,429 Ordinary Shares of the Company pursuant to the terms thereof (the “Option”).

1.6    Additional Closing Obligations.

(a)    At the Closing the Investor, the Investor Parent and the Company shall execute and deliver those documents, instruments and agreements to which such party is a signatory and are set forth on Schedule 1.6(a).

(b)    The Company shall execute and deliver to the Investor a closing certificate in the form of Exhibit E.

1.7    Cash Reconciliation.

(a)    Following the Closing, the Company shall determine the amount of the Company’s “cash and cash equivalents” (as defined below) as of the Closing Date (“Closing Cash Statement”), which shall be so determined in accordance with U.S. GAAP consistently applied. The Company shall deliver the Closing Cash Statement to the Investor as soon as practicable after the Closing Date but in any event within thirty (30) days after the Closing Date. The Investor shall notify the Company of any objections to the Company’s calculations within the Closing Balance Sheet within thirty (30) days after the Investor receives the Closing Balance Sheet. If the Investor does not notify the Company of any such objections by the end of that thirty-day period, then the Closing Cash Statement shall be considered final on the last day of that thirty-day period. If the Investor does notify the Company of any such objections by the end of that thirty-day period, and the Investor and the Company are unable to resolve their differences within fifteen (15) days thereafter, then the disputed items on the Closing Cash

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Statement shall be submitted to the Arbiter for resolution, and the Arbiter shall be instructed to deliver a final Closing Cash Statement, prepared in accordance with U.S. GAAP consistently applied, to the Investor and the Company as soon as possible (but in no event later than forty (40) days after the Closing Cash Statement was submitted to the Arbiter). As used above, the term “Arbiter” means a nationally (in the U.S.) recognized accounting firm mutually acceptable to the Company and the Investor; provided, however, that if the Company and the Investor are unable so to agree upon the Arbiter within thirty 30 days following the expiration of the fifteen (15) day period described above, then each of the Company and the Investor shall designate a nationally (in the U.S.) recognized accounting firm (provided neither party may designate the firm which serves as the primary audit firm for such party or its affiliates), and each of two such firms shall designate a third nationally (in the U.S.) recognized accounting firm (which third firm shall not be the firm which serves as the primary audit firm for such party or its affiliates), and such third firm shall constitute the Arbiter for purposes of this Section 1.7. The Investor shall pay 50% of the costs of the Arbiter, and the Company shall pay 50% of such costs. The final Closing Cash Statement as mutually agreed to by the Company and the Investor without submission thereof to the Arbiter or as finally determined by the Arbiter pursuant to this Section 1.7(a) shall be referred to herein as the “Final Closing Cash Statement.”

(b) If the “cash and cash equivalents” of the Company as of the Closing Date, as set forth on the Final Closing Cash Statement is (A) less than US$6,288,508 (the amount of such deficit being the “Cash Deficit”), then the Company shall pay the Investor (by wire transfer and in immediately available funds to the account of the Investor set forth on Schedule 1.2 hereto), 30% of the Cash Deficit, or (B) more than US$6,288,508 (the amount of such surplus being the “Cash Surplus”), then the Investor shall pay the Company (by wire transfer and in immediately available funds to the account of the Company set forth on Schedule 1.2 hereto), 30% of the Cash Surplus. In the case of each of the foregoing clauses (A) and (B), the required payment shall be made within ten (10) days of the date the Final Closing Cash Statement was agreed to or finalized pursuant to Section 1.7(a) hereof.

(c) For purposes of clarity, any payments due to the Company or the Investor pursuant to this Section 1.7: (i) shall be deemed an adjustment to the purchase price, (ii) shall be paid directly by the party from which payment is due and (iii) shall not be deemed to be indemnification payments nor in any way reduce or increase the aggregate amount of indemnification liability of the Company or the Investor under Section 6 hereof.

(d)    For purposes of this Section 1.7, “cash and cash equivalents” means (A) cash and (B) short-term, highly liquid investments (with original maturities (at time of purchase) of three months or less) that are both (x) readily convertible to known amounts of cash, and (y) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates, provided that such term shall not include any cash or cash equivalents to the extent resulting from the Company’s breach of Section 2.19(c).

1.8    Investor Share Transactions.    The transactions and matters set forth in the preceding Sections 1.1 through 1.5, inclusive, are referred to herein as the “Investor Share Transactions.”

1.9    Escrow Agreement.    At the Closing, the Company, the Investor and the Bank of New York (or such other bank or escrow agent reasonably satisfactory to the Company and the Investor) (the “Escrow Agent”) shall enter into an Escrow Agreement (the “Escrow Agreement”) with terms substantially consistent with those in the form on Exhibit F. As used herein, the term “Escrow Deposit” shall mean the payments to be made by the Investor into escrow pursuant to clause (y) of Section 1.2(c), along with any payments to be made by the Investor into escrow pursuant to Section 3.4 of the Warrant Agreement (and along with any interest payable thereon

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and included within the escrow amount pursuant to the Escrow Agreement). The Escrow Deposit shall be deposited with the Escrow Agent pursuant to said Section 1.2(c) and said Section 3.4 as security for certain of the indemnity rights of the Investor Indemnified Parties under Section 6 hereof and under the Transfer Agreement, and the Escrow Agent shall hold, invest, disburse and otherwise deal with the Escrow Deposit pursuant to the terms and conditions set forth in the Escrow Agreement. In addition to the Escrow Deposit, the Escrow Agent shall hold the Escrow Warrant Shares (as defined in the Transfer Agreement) and the Force Majeure Escrow Deposit (as defined in the Warrant Agreement) in Escrow pursuant to the Escrow Agreement.

The Company and the Investor agree that they shall jointly direct the Escrow Agent to release to the Company the Escrow Deposit as follows: (a) on the date which is the one-year anniversary of the Closing Date, twenty-five percent (25%) of the then-current amounts in the Escrow Deposit shall be released and paid to the Company, provided that such 25% release and payment shall only be made to the extent it is in excess of any then outstanding and unpaid claims for indemnification made by the Investor against the Company pursuant to Section 6 hereof or against any Selling Shareholder pursuant to the Transfer Agreement, and (b) on the Survival Date, all remaining amounts in the Escrow Deposit shall be released and paid to the Company; provided however that no such release and payment as described in this clause (b) shall be made to the extent that the Escrow Deposit would, following such release and payment, be insufficient to satisfy any then-outstanding and unpaid claims for indemnification made by an Investor Indemnified Party against the Company pursuant to Section 6 hereof or against any Selling Shareholder pursuant to the Transfer Agreement. Subject to the foregoing, the Company and the Investor agree that they shall jointly direct the Escrow Agent to release to the Investor amounts in the Escrow Deposit needed to satisfy claims by the Investor Indemnified Parties pursuant to Section 6 hereof or against any Selling Shareholder pursuant to the Transfer Agreement. In addition, the Company and the Investor shall jointly direct the Escrow Agent to release to the Company the Escrow Warrant Shares redeemed by the Company as part of the Warrant Closing under the Transfer Agreement. The Company and the Investor agree that they shall issue “joint instructions,” and take any other such actions, as may reasonably be required by the Escrow Agent or otherwise under the Escrow Agreement in order to effect the foregoing releases and payments.

2.    Representations and Warranties of the Company.    The Company, the Subsidiary and the New Subsidiary each hereby represents and warrants to the Investor and the Investor Parent that, except as set forth on the disclosure schedule of even date herewith (the “Disclosure Schedule”) furnished to the Investor (it being understood and agreed by the parties hereto that any disclosure in any section or subsection of the Disclosure Schedule shall qualify other sections and subsections in this Section 2 only to the extent that either (a) there is a cross-reference to such other sections or subsections accompanying such first disclosure, or (b) such disclosure’s applicability to such other sections or subsections is reasonably apparent on its face), effective upon the date of this Agreement:

2.1    Organization, Good Standing and Qualification.

(a)    The Company is an exempted limited liability company duly organized, validly existing and in good standing under the laws of the Cayman Islands and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on the condition (financial or otherwise), operations, results of operations, business, assets, liabilities (contingent or otherwise), capital or prospects of the Company, the Subsidiary, the New Subsidiary (as defined

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below) and the PRC Entities (as defined in Section 2.5 hereof), taken as a whole (a “Material Adverse Effect”). True and complete copies of the articles of association and memorandum of association of the Company prior to and without giving effect to the Restated Memorandum or the Restated Articles are attached to Schedule 2.1 of the Disclosure Schedule (the “Current Articles and Memorandum”).

(b)    The Subsidiary is a wholly-owned subsidiary of the Company and is duly established and validly existing under the laws of the People’s Republic of China (“PRC”) and has all requisite corporate power and authority to carry on its business as now conducted. The Subsidiary is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect. True and complete copies of the articles of association, as amended and restated, of the Subsidiary (the “Subsidiary Articles”) have been made available by the Company to the Investor. True and complete copies of all shareholder consents and board of directors resolutions of the Subsidiary have been made available by the Company to the Investor.

(c)    The New Subsidiary is a wholly-owned subsidiary of the Company and is duly established and validly existing under the laws of the PRC and has all requisite corporate power and authority to carry on its business as now conducted. The Subsidiary is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect. True and complete copies of the articles of association of the New Subsidiary (the “New Subsidiary Articles”) have been made available by the Company to the Investor. True and complete copies of all shareholder consents and board of directors resolutions of the New Subsidiary have been made available by the Company to the Investor.

2.2    Capitalization and Voting Rights of the Company.

(a)    The authorized capital of the Company will consist of, after giving effect to the Restated Articles and the Restated Memorandum:

(i)    Preferred Shares.    Sixty-Five Million (65,000,000) Preferred Shares, par value $0.01 (the “Preferred Shares”), (x) Ten Million (10,000,000) of which have been designated Series A Preferred Shares (the “Series A Preferred Shares”), of which Nine Million Seven Hundred Eighty-Seven Thousand Four Hundred Ninety-Four (9,787,494) are issued and outstanding upon the date hereof and (y) Fifty Million (50,000,000) of which have been designated Series B Preferred Shares (the “Series B Preferred Shares”), none of which are issued and outstanding upon the date hereof. The rights, privileges and preferences of the Series A Preferred Shares and Series B Preferred Shares will be, upon the Closing, as stated in the Restated Memorandum and the Restated Articles.

(ii)    Ordinary Shares.    One Hundred Fifty Million (150,000,000) Ordinary Shares, par value $0.01 (the “Ordinary Shares”), of which Sixteen Million Seven Hundred Eighty Seven 16,787,506 Twenty Million (20,000,000) shares are issued and outstanding upon the date hereof.

(iii)    High-Vote Ordinary Shares.    Fifty Million (50,000,000) High-Vote Ordinary Shares, par value $0.01 (the “High-Vote Ordinary Shares”), none of which are issued and outstanding upon the date hereof.

(b)    The record ownership of the outstanding securities of the Company is held by the security holders in the numbers specified in Schedule 2.2(b) of the Disclosure Schedule.

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(c)    Except as set forth on Schedule 2.2(c), the outstanding capital shares of the Company are all duly and validly authorized and issued, fully paid and nonassessable, and were issued in accordance with all applicable securities laws, rules and regulations, or pursuant to valid exemptions therefrom.

(d)    Except as set forth on Schedule 2.2(d): (1) except for (i) the conversion privileges of the Series A Preferred Shares, (ii) currently outstanding options to purchase Five Million Four Hundred Sixty Two Thousand Four Hundred Seventeen (5,462,417) Ordinary Shares granted to employees and other service providers pursuant to the Company’s Option Plan (the “Option Plan”), (iii) currently outstanding options to purchase One Million Six Hundred Sixty Thousand (1,660,000) Ordinary Shares granted to employees and other service providers pursuant to the Company’s Stock and Annual Incentive Plan (the “2004 Option Plan”), (iv) currently outstanding warrants to purchase Five Hundred Thousand Fifty (550,000) Ordinary Shares, and (iv) the Investor Share Transactions contemplated by this Agreement, there are not outstanding any options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of its capital shares, and (2) the Company is not a party or subject to any agreement, and to the Company’s knowledge there is no agreement or understanding between any Persons (as defined herein), which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company. “Person” means any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), firm, society, governmental body or entity, or other enterprise, association, organization or entity.

(e)    Schedule 2.2(e) sets forth a complete list of each security of the Company owned by any officer or director of the Company, the Subsidiary, the New Subsidiary, or any PRC Entity, or, to the Company’s knowledge by any affiliate or any member of the immediate family of any such individual, together with a description of the material terms of the vesting provisions and the rights of first refusal and rights of repurchase applicable to each such security. Except as set forth in Schedule 2.2(e), no share plan, share purchase, share option or other agreement between the Company and any holder of any securities or rights exercisable or convertible for securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement as the result of the occurrence of any event, other than the passage of time.

2.3    Capitalization and Voting Rights of the Subsidiary and the New Subsidiary.

(a)    The registered capital of the Subsidiary totals US$10,000,000 (the “Equity”). The rights and privileges of the Equity are as stated in the Subsidiary Articles, and as otherwise provided by applicable laws.

(b)    The Subsidiary is wholly owned by the Company. The Company is the sole legal and beneficial owner of the entire issued share capital of the Subsidiary, there being no other share or loan capital in the Subsidiary or any share or loan capital under option (actual, contingent or otherwise) to purchase or subscribe.

(c)    The Equity is all duly and validly authorized and issued and fully paid, and was issued in accordance with all applicable securities laws, rules and regulations, or pursuant to valid exemptions therefrom.

(d)    Neither the Subsidiary nor the Company is a party or subject to any agreement or understanding, and, to the Company’s knowledge there is no agreement or understanding

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between any Persons, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Subsidiary.

(e)    The registered capital of the New Subsidiary totals US$1,000,000 (the “New Subsidiary Equity”). The rights and privileges of the New Subsidiary Equity are as stated in the New Subsidiary Articles, and as otherwise provided by applicable laws.

(f)    The New Subsidiary is wholly owned by the Company. The Company is the sole legal and beneficial owner of the entire issued share capital of the New Subsidiary, there being no other share or loan capital in the Subsidiary or any share or loan capital under option (actual, contingent or otherwise) to purchase or subscribe.

(g)    The New Subsidiary Equity is all duly and validly authorized and issued and (except as set forth on Schedule 2.3) fully paid, and was issued in accordance with all applicable securities laws, rules and regulations, or pursuant to valid exemptions therefrom.

(h)    Neither the New Subsidiary nor the Company is a party or subject to any agreement or understanding, and, to the Company’s knowledge there is no agreement or understanding between any Persons, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the New Subsidiary.

2.4    Subsidiaries.    Other than the Subsidiary, the New Subsidiary and the PRC Entities, the Company does not own or control, directly or indirectly, any interest in any other Person (excluding passive, indirect interests of a de minimis amount held through money market funds or similar accounts). None of the Company, the Subsidiary or the New Subsidiary is a participant in any joint venture, partnership, or similar arrangement involving the sharing of profits or losses, other than with respect to the PRC Entities.

2.5    Organization of PRC Entities.

(a)    (i)    Beijing eLong Information Technology Co., Ltd. (the “ICP Entity”) is a limited liability company duly established and validly existing under the laws of the PRC and has all requisite corporate power and authority to carry on its business as now conducted. The ICP Entity is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect.

(ii)    Beijing Asia Media Interactive Co., Ltd. (“Asia Interactive”) is a limited liability company duly established and validly existing under the laws of the PRC and has all requisite corporate power and authority to carry on its business as now conducted. Asia Interactive is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect.

(iii)    Beijing eLong Airline Services Co., Ltd. (“eLong Airline”) is a limited liability company duly established and validly existing under the laws of the PRC and has all requisite corporate power and authority to carry on its business as now conducted. eLong Airline is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect.

(iv)    Jiangsu General Chinese Hotel Reservation Network Co. Ltd. (“GCH” and, together with the ICP Entity, Asia Interactive, eLong Airline, the “PRC Entities”) is a limited liability company duly established and validly existing under the laws of the PRC and has all requisite corporate power and authority to carry on its business as now conducted. GCH is

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duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a Material Adverse Effect.

(b)    True and complete copies of the articles of association of each of the PRC Entities, each as in effect on the date hereof, have been made available by the Company to the Investors. True and complete copies of all shareholder consents of each of the PRC Entities have been made available by the Company to the Investor. Each of the PRC Entities has a General Manager. True and complete copies of the business licenses for each of the PRC Entities have been made available by the Company to the Investor.

(c)    (i)    The registered capital of the ICP Entity is RMB 16,000,000, which has been fully paid and is non-assessable, and all of which is pledged to the Subsidiary pursuant to the Founder Share Pledge Agreement and the Zhi Qu Share Pledge Agreement. Justin Yue Tang, an individual domiciled in the PRC (the “Founder”) and Julia Zhi Qu, respectively, hold 75% and 25%, of the equity interests in the ICP Entity, subject to such pledges.

(ii)    The registered capital of Asia Interactive is RMB 8,000,000, which has been fully paid and is non-assessable, and all of which is pledged to the Subsidiary pursuant to the Founder Share Pledge Agreement and the Zhi Qu Share Pledge Agreement. The Founder and Julia Zhi Qu, respectively, hold 75% and 25% of the equity interests in Asia Interactive, subject to such pledges.

(iii)    The registered capital of eLong Airline is RMB 8,000,000, which has been fully paid and is non-assessable and all of which is pledged to the Subsidiary pursuant to the eLong Airline Pledge Agreement. The ICP Entity and Asia Interactive hold 80% and 20%, respectively, of the equity interests in eLong Airline, subject to such pledges.

(iv)    The equity interests of each of the PRC Entities were duly and validly issued and were issued in accordance with all applicable securities laws, rules and regulations or pursuant to exemptions therefrom. Except for the Share Pledge Agreements or as otherwise set forth in Schedule 2.5(c), the equity interests in each of the PRC Entities are not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under the laws of the PRC, the articles of association or any contract to which any of the PRC Entities is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of any of the PRC Entities having the right to vote (or convertible) into, or exchangeable for, securities having the right to vote) on any matters on which holders of equity interests of any PRC Entity may vote. Except as set forth in the Disclosure Schedule or in this section, there are no voting trusts, shareholder agreements, proxies or other agreements in effect with respect to the voting or transfer of any of the equity interests to which any PRC Entity is a party or is otherwise bound.

(v)    The Founder has executed two share pledge agreements by and between the Founder and the Subsidiary dated March 5, 2004 and amended as of the date hereof (the “Founder Share Pledge Agreement”) that irrevocably pledge the ownership of his entire interest in Asia Interactive and the ICP Entity, respectively, to the Subsidiary. Julia Zhi Qu has executed two share pledge agreements by and between Julia Zhi Qu and the Subsidiary dated March 5, 2004 and amended as of the date hereof (the “Zhi Qu Share Pledge Agreement”) that irrevocably pledges the ownership of her entire interest in Asia Interactive and the ICP Entity, respectively, to the Subsidiary. The Subsidiary and eLong Airline entered into a Technical Consulting and Services Agreement on August 22, 2003 and amended as of the date hereof whereby the Subsidiary agreed to provide services to eLong Airline on a fee-charging basis. As security for the fees payable to the Subsidiary under such agreement, each of Asia Interactive and the ICP Entity executed a Share Pledge Agreement

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in favor of the Subsidiary dated August 22, 2003 and amended as of the date hereof and a Supplementary Equity Interests Pledge Agreement in favor of the Subsidiary dated March 5, 2004 (collectively the “eLong Airline Pledge Agreement”) to pledge its entire interest in eLong Airline to the Subsidiary. The eLong Airline Pledge Agreement, the Founder Share Pledge Agreement and the Zhi Qu Share Pledge Agreement shall collectively be called the “Share Pledge Agreements”.

(vi)    True and complete copies of the Share Pledge Agreements have been made available by the Company to the Investor. Each Share Pledge Agreement is a valid, legal and binding obligation, enforceable against each of the parties thereto in accordance with the terms thereof, and no party thereto is in breach of any obligations thereunder, subject to any amendment, modification or termination resulting from the Structure Contracts.

(d)    Section 2.5(d) of the Disclosure Schedule sets forth a true and complete list of all direct and indirect subsidiaries of each of the PRC Entities, including details such as its name, type of entity, the jurisdiction and date of its organization and its registered capital, the number and type of its issued and outstanding shares or similar ownership interests and the current ownership of such shares or similar ownership interests.

(e)    Other than the subsidiaries of each of the PRC Entities listed in Section 2.5(d) of the Disclosure Schedule, there are no other corporations, partnerships, joint ventures, associations, entities or other Persons in which any of the PRC Entities owns, of record or beneficially, any direct or indirect equity or other interest or any right (contingent or otherwise) to acquire the same (excluding passive, indirect interests of a de minimis amount held through money market funds or similar accounts).

(f)    There are no options, warrants, convertible securities, subscriptions or other rights, agreements, arrangements or commitments of any character relating to the equity interests of any subsidiary of any of the PRC Entities or obligating any of the PRC Entities to issue or sell any portion of the equity interests of, or any other interest in, any such subsidiary.

(g)    There is no order, writ, injunction, judgment or decree of any court or government agency or instrumentality (an “Order”) calling for the winding up of any of the PRC Entities, and no PRC Entity has itself passed any resolution calling for such a winding up. None of the PRC Entities is insolvent or unable to pay its debts.

2.6    Authorization.

(a)    All corporate action on the part of the Company and its officers, directors, shareholders and affiliates, and all shareholder action, on the part of the Company’s shareholders, necessary for the authorization, execution and delivery of this Agreement and the Related Agreements (as defined below), the performance of all obligations of the Company hereunder and thereunder, including without limitation the Investor Share Transactions and the authorization, issuance (or reservation for issuance), sale and delivery of the Series B Preferred Shares being sold hereunder and the Conversion Shares (as defined below) has been taken. This Agreement constitutes and the Related Agreements will constitute (upon execution and delivery at the Closing) valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by principles of equity, whether considered in a proceeding in equity or at law, and (c) to the extent the indemnification provisions contained in the Investors Agreement may be limited by applicable foreign, United States or state securities laws. The “Conversion Shares” are the shares of Series B Preferred Shares, Ordinary Shares

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and High Vote Ordinary Shares, as applicable, which the Series B Preferred Shares, Warrants and Option are convertible into. “Related Agreements” means the Escrow Agreement, the Warrant, the Warrant Agreement, the Option Agreement, the Transfer Agreement, the employment agreements in the forms attached hereto as Exhibit G by and between the Company and each of the employees thereof (collectively, the “Management Agreements”), and the Investors Agreement in the form attached hereto as Exhibit H (the “Investors Agreement”).

(b)    All corporate action on the part of the Subsidiary and its officers, directors, shareholders and affiliates, and all shareholder action, on the part of the Subsidiary’s shareholder, necessary for the authorization, execution and delivery of this Agreement and any Related Agreements to which it is or will be a party, and the performance of all obligations of the Subsidiary hereunder and thereunder has been taken. This Agreement and such Related Agreements constitute or will upon execution constitute valid and legally binding obligations of the Subsidiary, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by principles of equity, whether considered in a proceeding in equity or at law.

(c)    All corporate action on the part of the New Subsidiary and its officers, directors, shareholders and affiliates, and all shareholder action, on the part of the New Subsidiary’s shareholder, necessary for the authorization, execution and delivery of this Agreement and any Related Agreements to which it is or will be a party, and the performance of all obligations of the Subsidiary hereunder and thereunder has been taken. This Agreement and such Related Agreements constitute or will upon execution constitute valid and legally binding obligations of the New Subsidiary, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by principles of equity, whether considered in a proceeding in equity or at law.

(d)    All corporate action on the part of each of the Company, the Subsidiary, the New Subsidiary, and/or the PRC Entities and its officers, directors, shareholders and affiliates, and all shareholder action, on the part of the such entities shareholders, necessary for the authorization, execution and delivery of the Structure Contracts to which it is or will be a party, and the performance of all obligations of such entity thereunder has been taken. Each such Structure Contract constitutes or will upon execution constitute valid and legally binding obligations of such entity, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by principles of equity, whether considered in a proceeding in equity or at law.

2.7    Valid Issuance of Warrants, Option, Preferred and Conversion Shares.    Each of the Warrants, Option and the Series B Preferred Shares to be purchased hereunder by the Investor at the Closing, will at the Closing be duly and validly issued, fully paid (assuming full receipt of the consideration therefor), and nonassessable, will be free of restrictions on transfer other than restrictions on transfer under this Agreement, the Related Agreements or applicable laws. The Conversion Shares have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Restated Articles, the Warrant and the other Investor Share Transactions, as applicable, will be duly and validly issued, fully paid (assuming full receipt of the consideration therefor), and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under this Agreement, the Related Agreements or applicable laws.

2.8    Governmental Consents.    No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any United States, local or

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foreign governmental authority on the part of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities is required in connection with the consummation of the transactions contemplated by this Agreement, other than the matters which are subject to the Company’s covenants under Section 5 of this Agreement or which are conditions to Closing under Section 7, except where the failure to obtain such consent, approval, or authorization, or to make or file such registration, qualification, designation, declaration or filing, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

2.9    Offering.    Subject in part to the truth and accuracy of the Investor’s representations set forth in Section 4 of this Agreement, the offer, sale and issuance of the Series B Preferred Shares the Option and the Warrants as contemplated by this Agreement are exempt from the registration requirements of any applicable foreign or United States securities laws.

2.10    Litigation; Compliance with Law.

(a)    Except as set forth in Section 2.10 of the Disclosure Schedule, there is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, threatened in writing against the Company, the Subsidiary, the New Subsidiary, any of the PRC Entities or, to the extent related to the Business, the Founder, including without limitation any such action, suit, proceeding or investigation involving the prior employment of any of the Company’s, the Subsidiary’s, the New Subsidiary’s or any of the PRC Entities’ employees, and either (a) such former employees’ use in connection with the Company’s, the Subsidiary’s, the New Subsidiary’s or any of the PRC Entities’ businesses of any information or techniques allegedly proprietary to any of their former employers, or (b) such former employees’ obligations under any agreements with prior employers. None of the Company, the Subsidiary, the New Subsidiary, or the PRC Entities is a party or subject to the provisions of any Order. There is no action, suit, proceeding or investigation that the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities currently proposes to be asserted against any other Person.

(b) The conduct of the businesses of each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities, individually and taken as a whole (the businesses taken as a whole being, and as currently conducted, the “Business”), complies and has since January 1, 2002 complied with all laws and legal requirements applicable thereto (including, without limitation, those relating to telecommunications, internet content provision, call-center, advertising and air-ticketing businesses) except for such failures to comply as, individually or in the aggregate, have not had or would reasonably be expected to have a Material Adverse Effect. None of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has since January 1, 2002 received notice of any alleged violation of any material legal requirements from any governmental entity applicable to the Business or to their respective business, properties or assets. In addition and not in limitation of the foregoing, except as set forth on Schedule 2.10(b) of the Disclosure Schedule, none of the Company, the Subsidiary, the New Subsidiary or the PRC Entities (or any directors, officers, employees, consultants or agents thereof) has, directly or indirectly, paid or delivered (or offered to pay or deliver) any fee, commission or other sum of money or item of property, however characterized, to any government official or other governmental party, in the PRC or any other country, that is in any manner related to the Business and that was illegal under any applicable statutes, laws, regulations, ordinances, rules, judgments, orders or decrees of any governmental entity (including the FCPA Rules (as defined in Section 5.3 hereof), but only to the extent that the Company, the Subsidiary, the New Subsidiary and the PRC Entities as the case may be, were subject to such FCPA Rules with respect to such actions). As of Closing, the Company is not engaging in any conduct which is prohibited under the FCPA Rules fully as if the Company were subject to such Rules at Closing.

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2.11    Employment Agreements; Key Employees.    Except as set forth on Section 2.11 of the Disclosure Schedule each present and former employee and officer of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has executed an employment agreement in substantially the forms provided to the Investor and identified on Schedule 2.11 (excluding departures from such forms which do not result in any material increase in any liability of the Company or grants a material right assertable against the Company, as compared with such respective forms) (the “Employment Agreements”)). To the Company’s knowledge, none of the Company’s, the Subsidiary’s, the New Subsidiary’s or any PRC Entity’s current or former employees, officers or consultants are in violation of such agreements. Section 2.11 of the Disclosure Schedule lists all employees whose individual continued services are material, in the Company’s reasonable judgment, to the operation of the Business (the “Key Employees”) as well as any employee paid more than $50,000 per year in salary. To the Company’s knowledge, none of the Key Employees are obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any Order, that would interfere with the performance of such employee’s employment duties and responsibilities to the Company, the Subsidiary, the New Subsidiary or the PRC Entities, as the case may be. Neither the execution nor delivery of this Agreement or the Related Agreements, nor the operation of the Business, to the Company’s knowledge conflicts with or results in a breach of the terms, conditions or provisions of, or constitutes a default under, any contract, covenant or instrument under which any of such Key Employees is now obligated. Except as set forth on Schedule 2.11, neither the Company, the Subsidiary, the New Subsidiary nor any of the PRC Entities (a) has agreed to make (or accelerate) any payments (in cash or in-kind) or other benefits to an employee or any other Person upon a merger, sale of substantially all assets or other change in control, or (b) is required to make any loans or advances to any employee, other than ordinary advances for travel expenses.

2.12    Intellectual Property.    Except as set forth on Section 2.12 of the Disclosure Schedule, the Company, the Subsidiary, the New Subsidiary and/or the PRC Entities have sufficient title and ownership of or licenses to, or can obtain on commercially reasonable terms, all valid patents, trademarks, service marks, trade names, domain names, copyrights, trade secrets, information, proprietary rights and processes (the “Intellectual Property”) necessary for the Business without, to the Company’s knowledge with respect to patents, trademarks, service marks and trade names only (but without having conducted any special investigation or patent or trademark search), any violation or infringement of, or other conflict with, the rights of others. Section 2.12 of the Disclosure Schedule contains a complete list of patents and pending patent applications and registrations and applications for trademarks, copyrights and domain names of, or exclusively licensed to, the Company, the Subsidiary, the New Subsidiary or the PRC Entities. None of the Company, the Subsidiary, the New Subsidiary, any of the PRC Entities or the Founder has received any written notice alleging that the Company, the Subsidiary, the New Subsidiary, any of the PRC Entities or the Founder has violated or, by conducting the Business, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other Person. To the Company’s knowledge it has not used, in the operation of the Business, any inventions of any of the Company’s, the Subsidiary’s, the New Subsidiary’s or any of the PRC Entities’ employees (or people the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities currently intend to hire) made prior to or outside the scope of their employment by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities (except to the extent that any such use was authorized or fully allowable under applicable laws).

2.13    Compliance with Other Instruments.    The Company is not in violation or default with or without the passage of time and giving of notice of any provision of (i) its Current Articles and Memorandum, or (ii) any Order to which it is a party or by which it is bound, which, with

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respect to this clause (ii), default or violation would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Subsidiary is not in violation or default of any provision of (i) its Subsidiary Articles, or (ii) any Order to which it is a party or by which it is bound, which, with respect to this clause (ii), default or violation would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The New Subsidiary is not in violation or default of any provision of (i) its New Subsidiary Articles, or (ii) any Order to which it is a party or by which it is bound, which, with respect to this clause (ii), default or violation would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. Each of the PRC Entities is not in violation or default of any provision of (i) its articles of association, as amended and restated, or (ii) any Order to which it is a party or by which it is bound, which, with respect to this clause (ii), default or violation would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The execution, delivery and performance of this Agreement and the Related Agreements, and the consummation of the transactions contemplated hereby and thereby will not result in any such violation or default or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision or Order.

2.14    Agreements and Actions.

(a)    Except as set forth on Section 2.14 of the Disclosure Schedule, and except for this Agreement, the Related Agreements, the Employment Agreements, the Structure Contracts, and any other agreements explicitly contemplated hereby or thereby, there are no agreements or contracts, whether written or oral currently existing (“Contracts”) to which the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities is a party or by which such party is bound pursuant to which the Company, the Subsidiary, the New Subsidiary or such PRC Entity, as the case may be:

(i)    is required by its terms to make payments to any other party thereto in excess of US$100,000 per annum;

(ii)    has granted rights to develop, manufacture, produce, assemble, license, market, or sell their respective products to any other Person, or has agreed to materially restrict the development, manufacture, production, assembly, licensure, marketing or sale of the Company’s, the Subsidiary’s, the New Subsidiary’s or any of the PRC Entities’ products or services;

(iii)    has incurred any indebtedness for money borrowed individually in excess of US$50,000 or, in the case of indebtedness individually less than US$50,000, in excess of US$100,000 in the aggregate (or has guaranteed any such indebtedness of a third party);

(iv)    has granted or agreed to grant any registration rights, including piggyback rights, to any person or entity;

(v)    has agreed to make (or accelerate) any payments (in cash or in-kind) or other benefits to an employee or any other Person upon a merger, sale or other change in control;

(vi)    is required to make any loans or advances to any person, other than ordinary advances for travel expenses;

(vii)    has sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business, or which otherwise relates to (a) the sale, conveyance or disposition of all or substantially all of the assets of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities is disposed of, or (b) the liquidation, dissolution or winding up of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities;

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(viii)    any license of any Intellectual Property to or from the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities (other than the license to the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities of standard, generally commercially available, “off-the-shelf” third party products);

(ix)    indemnification by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities with respect to infringements of proprietary rights.

For the purposes of this subsection (a), all Contracts involving the same Person (including Person the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of this subsection.

(b)    None of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities has declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital shares.

For purposes of this Section 2.14(a), with respect to any Contract for which payments are to be made in any currency other than US dollars, then the US dollar references above in this Section 2.14(a) shall be to be such currency, based on prevailing exchange rates on the date hereof.

(c)    All of the Contracts which are required under Section 2.14 to be listed on Schedule 2.14 are referred to as the “Material Contracts.” Each such Material Contract will be in full force and effect immediately following the Closing and represents the valid and binding obligation of the Company, the Subsidiary, the New Subsidiary or the PRC Entities, as applicable, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies. With respect to each Material Contract, each of the Company, the Subsidiary, the New Subsidiary or the PRC Entities, as applicable, and, to the knowledge of the Company, the other party or parties thereto, has full corporate power and authority to enter into and perform its obligations under such Material Contract, and has performed in all material respects all obligations required to be performed by it thereunder through the Closing Date, and the Company, the Subsidiary, the New Subsidiary or the PRC Entities, as applicable, is not in default with or without the passage of time and the giving of notice under any such Material Contract (other than a default under any Material Contract which does materially impair the operation of the Business and which will not result in material liability to the Company).

2.15    Related-Party Transactions.    Except pursuant to this Agreement, the Related Agreements, and any other agreements explicitly contemplated hereby or thereby, including without limitation, the Structure Contracts, the Employment Agreements and any other Contracts entered into by the Company, the Subsidiary or the New Subsidiary which are set forth on the Schedule 2.15: (a) there are no Contracts, to which the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities is a party or by which such party is bound and which has been entered into with an officer, director or record shareholder of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities (a “Related Party”) in excess of $5,000 individually or $25,000 in the aggregate with respect to all such Contracts, and (b) neither the Company, the Subsidiary, the New Subsidiary nor any of the PRC Entities are indebted to (or guarantors of any third party indebtedness of), or are the payees or beneficiaries of indebtedness of, any Related Party in excess of $5,000 individually or $25,000 in the aggregate with respect to all such Contracts, or, to the Company’s knowledge: (1) any member of such Related Party’s immediate family, or any corporation, partnership or other entity in which such

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Related Party is an officer, director or partner, or (2) any entity in which such Related Party has significant ownership interests or otherwise controls; excluding, however (in the case of each of the foregoing clauses (a) and (b): (i) payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the Company, the Subsidiary, the New Subsidiary or any PRC Entity, and (iii) other standard employee benefits made generally available to all employees (including stock option or similar agreements outstanding under any stock option or similar plan approved by the Company’s Board of Directors (the “Board of Directors”) and share purchase agreements approved by the Board of Directors). To the Company’s knowledge, none of such Persons has any direct or indirect ownership interest in any firm or corporation with which the Company, the Subsidiary, the New Subsidiary or any PRC Entity has a material business relationship, or in any firm or corporation that competes with the Company, the Subsidiary, the New Subsidiary or any PRC Entity, excluding direct or indirect ownership of shares in publicly traded companies. No Related Party or to the knowledge of the Company, any member of their immediate family has a direct or indirect interest in any material Contract with the Company, except as disclosed on Schedule 2.15.

2.16    Permits.    Except as set forth in the Disclosure Schedule, each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has all franchises, permits, licenses, and any similar authority necessary for the conduct of the Business (and has all corporate power and authority to hold the same), the lack of which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. In connection with the operation of the Company’s web sites (the “Web Sites”), the ICP Entity has duly obtained an Internet Information Services License issued by the Beijing Communications Administrative Bureau (“BJCAB”) which authorizes the ICP Entity to provide internet content provisions services and such license is in full force and effect. In connection with the provision of call center services, the ICP Entity has duly obtained a value-added telecommunications operating permit issued by the BJCAB that authorizes the ICP Entity to provide such services and such permit is in full force and effect. In connection with the provision of mobile SMS services, the ICP Entity has duly obtained a value-added telecommunications permit issued by the BJCAB which authorizes the ICP Entity to provide such services and such permit is in full force and effect. In connection with the sale of advertising on the Web Sites, Asia Interactive has duly obtained an Advertising License issued by the State Administration for Industry and Commerce and such license is in full force and effect. In connection with the air-ticketing services, eLong Airline has duly obtained an air-ticketing license from the Civil Air Administration of China to provide such services and such license is in full force and effect. Except as set as set forth on Schedule 2.16, none of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities is in default in any material respect under any of such franchises, permits, licenses, or other similar authority. None of the Company, the Subsidiary, the New Subsidiary or the PRC Entities has a PRC travel agency business operation license (a “Travel Agency License”) issued by the relevant office of the travel administration authority of the PRC, such license is not necessary for the conduct of the Business, and the lack thereof is not reasonably expected to have a Material Adverse Effect.

2.17    Environmental and Safety Laws.    To the Company’s knowledge, none of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities’ is in material violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and to the Company’s knowledge, no material expenditures are required in order to comply with any such existing statute, law or regulation.

2.18    Title to Property and Assets.    Each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has good and marketable title to its owned property and assets, and valid leasehold interests with respect to the property and assets it leases, in each case free and clear of all mortgages, liens, charges and encumbrances (“Liens”), except for such Liens that (a) arise under the Share Pledge Agreements or under this Agreement, the Related

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Agreements or the Structure Contracts; or (b) arise in the ordinary course of the Business and do not materially impair the ownership or use of such property or assets by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities, as the case may be (“Permitted Liens”). With respect to the property and assets it leases, each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities is in material compliance with such leases and holds a valid leasehold interest free and clear of any Liens other than Permitted Liens. None of the Company, the Subsidiary, or the New Subsidiary owns or currently holds any right, by Contract or otherwise, to acquire ownership of any real property. None of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities currently holds a leasehold interest in, or any right, by Contract or otherwise, to acquire a real estate leasehold interest in, real property located in the United States. The consummation of the Investor Share Transactions and the consummation of the Structure Contracts will not result in the creation of any Lien upon any assets of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to the Business, the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities.

2.19    Financial Statements; Payables/Receivables.

(a)    The Company has delivered to the Investor its audited consolidated financial statements (balance sheet and income and cash flow statements, including notes thereto) at December 31, 2003 (the “Financial Statement Date”) and for the fiscal year then ended, and its unaudited consolidated financial statements (balance sheet and income statement) as at and for the three-month period ended March 31, 2004 (the “Financial Statements”). The Financial Statements have been prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods indicated and with each other, except that the unaudited consolidated Financial Statements may not contain all footnotes required by U.S. GAAP. The Financial Statements fairly present in all material respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments. The Company maintains, for its consolidated group financial statements, a standard system of accounting established and administered in accordance with U.S. GAAP.

(b)    Copies of the audited financial statements of the Subsidiary and each PRC Entity, in each case as of and for the years ended December 31, 2004, 2003 and 2002, have been provided to the Investor. Each of such financial statements (which includes a balance sheet and income and cash flow statements, including the footnotes thereto) have been prepared in accordance with general accepted accounting principles as applied in the PRC on a consistent basis. Each of such financial statements fairly present in all material respects the financial condition and operating results of the respective entity as of the dates, and for the periods, indicated therein.

(c)    Since the Financial Statement Date, the receivables and payables of the Company, the Subsidiary, the New Subsidiary and each PRC Entity have been managed in the ordinary course of the Business consistent with past practice prior to such date, with no unusual extensions of credit or time for payment or acceleration of collection outside of the ordinary course of the Business prior to such date.

2.20    Changes.

(a)    Since the Financial Statement Date, except as contemplated by this Agreement, the Related Agreements or the Structure Contracts, or as otherwise set forth on Section 2.20(a) there has not been:

(i)    any change in the assets, liabilities, financial condition or operating results of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities from that reflected

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in the Financial Statements, except changes in the ordinary course of the Business that have not been, in the aggregate, resulted in a Material Adverse Effect;

(ii)    any damage, destruction or loss, whether or not covered by insurance, resulting in a Material Adverse Effect;

(iii)    any waiver by the Company, by the Subsidiary, by the New Subsidiary or by any of the PRC Entities of a material right or of a material debt owed to it;

(iv)    any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities, except in the ordinary course of the Business and that that have not, in the aggregate, resulted in a Material Adverse Effect;

(v)    any material change or amendment to any Contract disclosed pursuant to Section 2.14;

(vi)    any material change in any compensation arrangement or agreement with any employee, officer, director or shareholder;

(vii)    any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets;

(viii)    any resignation or termination of employment of any Key Employee of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities; and to the Company’s knowledge there is no impending resignation or termination of employment of any such Key Employee;

(ix)    receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company, by the Subsidiary, by the New Subsidiary or by any of the PRC Entities;

(x)    any mortgage, pledge, transfer of a security interest in, or lien, created by the Company, the Subsidiary, the New Subsidiary or by any of the PRC Entities, with respect to any of their respective material properties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially impair the Company’s, the Subsidiary’s, the New Subsidiary’s or any of the PRC Entities’ ownership or use of such property or assets and purchase money mortgages and leased equipment;

(xi)    any loans or guarantees made by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities to or for the benefit of their respective employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(xii)    any declaration, setting aside or payment or other distribution in respect of any of the Company’s, the Subsidiary’s, the New Subsidiary’s or any of the PRC Entities’ capital stock, or any direct or indirect redemption, purchase or other acquisition of any of such stock by the Company, by the Subsidiary, by the New Subsidiary or by any PRC Entity;

(xiii)    to the Company’s knowledge, any other event or condition of any character that might materially and adversely affect the assets, properties, financial condition, operating results or business of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities (as such businesses are currently conducted and are proposed to be conducted);

(xiv)    any incurrence by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities of any capital expenditure or any capital commitment in excess of US$100,000;

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(xv)    change by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities in accounting methods, principles or practice; or

(xvi)    any agreement or commitment by the Company to do any of the things described in this Section 2.20.

(b)    Since the Financial Statement Date there has not been a Material Adverse Change. “Material Adverse Change” means any event, change, occurrence, development, condition, circumstance or effect that, alone or in combination, does or could reasonably be expected to (i) materially and adversely affect the condition (financial or otherwise), operations, results of operations, business, assets, liabilities (contingent or otherwise), capital or prospects of the Company, the Subsidiary, the New Subsidiary or the PRC Entities, considered on a consolidated basis; (ii) impair or prevent the Company, the Subsidiary the New Subsidiary, or the PRC Entities from carrying on the Business or their respective businesses in the ordinary course and consistent with past practice in a manner that is materially adverse to the Company, the Subsidiary, the New Subsidiary or the PRC Entities; or (iii) impair, prevent or constrain the Company from performing its obligations under this Agreement or any Related Agreement, or consummating the transactions contemplated hereby or thereby; provided that, for the purposes of clause (i) any effect demonstrably and primarily caused by changes affecting general, worldwide economic or capital market conditions that do not and are not reasonably expected to disproportionately affect the Company, the Subsidiary, the New Subsidiary or the PRC Entities shall not be deemed to constitute or be taken into account in determining whether there is a Material Adverse Change.

2.21    Employee Benefit Plans and Employee Agreements.

(a)    Schedule 2.21 of the Disclosure Schedule contains a list of all benefit plans, benefit programs, insurance arrangements, share purchase, share option or other equity plans, fringe benefits, perquisites and any superannuation fund, retirement benefit or other pension schemes or arrangements that the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities maintain, sponsor or contribute to and that benefit any current or former employee, officer, director or consultant of the Company, the Subsidiary, the New Subsidiary or any PRC Entity (each, a “Benefit Plan”).

(b)    The Company has furnished the Investor with a true and complete copy of each Benefit Plan (or a written summary of any Benefit Plan that is not in writing) and a true and complete copy of each material document, if any, prepared in connection with such Benefit Plan, including without limitation (i) a copy of each trust agreement or other funding arrangement, (ii) each summary or other document delivered to participants, (iii) all forms of participation agreement, share purchase agreement, share option agreement or other agreement with participants, (iv) all documents filed with any governmental agency and (v) all documents received from any governmental agency.

(c)    To the Company’s knowledge, none of the Benefit Plans is subject to the U.S. Employee Retirement Income Security Act of 1974, as amended.

(d)    Except as set forth on Schedule 2.21 of the Disclosure Schedule, each Benefit Plan is now and always has been operated and has satisfied all applicable registration or tax qualifications requests in all material respects in accordance with its terms (including the making of all required contributions) and the requirements of all applicable laws. Except as set forth on Schedule 2.21 of the Disclosure Schedule, no lawsuit, legal action, administrative proceeding or claim is pending or, to the knowledge of the Company or Subsidiary, threatened with respect to any Benefit Plan (other than claims for benefits in the ordinary course).

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(e)    The Company has furnished the Investors with a true and complete copy of (i) each Employment Agreement and (ii) each form of employee handbook currently used by the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities (each, an “Employee Handbook”).

(f)    Except as set forth in the Disclosure Schedule, each Employment Agreement, each Management Agreement and each Employee Handbook complies with the requirements of all applicable laws.

(g)    Except as required by applicable law or expressly in accordance with its terms, no Benefit Plan provides medical, life or other welfare benefits beyond the termination of employment.

2.22    Labor Agreements and Actions; Employee Compensation.

(a)    None of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities is bound by or subject to (and none of their respective assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and, to the Company’s knowledge, no labor union has requested or has sought to represent any of the employees, representatives or agents of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities. There is no strike or other labor dispute involving the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities pending, or to the Company’s knowledge, threatened, that could have a Material Adverse Effect, nor is the Company aware of any labor organization activity involving the Company’s, the Subsidiary’s, the New Subsidiary’s or any of the PRC Entities’ employees.

(b)    Except as described or referred to in the Disclosure Schedule, or pursuant to or as set forth in the Employment Agreements: (1) none of the Company, the Subsidiary, the New Subsidiary or the PRC Entities has any liability whatsoever to make any payment to or for the benefit of any employee, officer, consultant, independent contractor or agent in respect of past service, pension or the termination of the employment or engagement of that or any other person (including, without limitation, payments for wrongful or unfair dismissal, loss of office or redundancy), other than in respect to current month payroll expenses and related deductions in relation to employee and employer contributions; (2) the Subsidiary, the New Subsidiary and each of the PRC Entities has complied in all material respects with all applicable PRC Laws related to employment; (3) the Company, the Subsidiary, the New Subsidiary and each of the PRC Entities do not owe any severance to or have any termination payment agreements with respect to Zhang Ligang; and (4) the transactions contemplated by this Agreement (whether taken alone or in conjunction with any other event) will not result in any additional, increased or accelerated payments or benefits.

(c)    The Company, the Subsidiary, the New Subsidiary and the PRC Entities have no current or former employees, executive officers or directors who are employed by any of the PRC Entities or providing services for any of the PRC Entities (or who were formerly employed by any of the PRC Entities or formerly provided services for any of the PRC Entities) who were or are employed by the Company, the Subsidiary, the New Subsidiary or the PRC Entities in, or substantially provided or now provide their services to the Company, Subsidiary, the New Subsidiary or the PRC Entities from, the United States.

2.23    Tax Returns, Payments and Elections.    Notwithstanding anything herein to the contrary, this Section 2.23 is subject in its entirety to the matters set forth on Schedule 2.23. Each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has timely filed all Tax (as defined below) returns, statements, reports, declarations and other forms and

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documents (including without limitation estimated Tax returns and reports and material information returns and reports) (“Tax Returns”) required pursuant to applicable law to be filed with any Tax Authority (as defined below), all such Tax Returns are accurate, complete and correct in all material respects, and each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has timely paid all Taxes due. None of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities has made any elections pursuant to any applicable Tax laws, rules and regulations (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have a material effect in the aggregate on the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities, their respective financial condition, their respective business as presently conducted or proposed to be conducted or any of their respective properties or material assets. Since their respective dates of incorporation, none of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities has incurred any Taxes other than in the ordinary course of business, and each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has made adequate provisions on its respective books of account (in accordance with U.S. GAAP, except in the case of the PRC Entities) for all actual and contingent Taxes with respect to its consolidated business, properties and operations for such period. Each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities has withheld or collected from each payment made to each of its employees, the amount of all Taxes (including, but not limited to, United States income taxes and other foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority. Each of the Company, the Subsidiary, the New Subsidiary and the PRC Entities is not a “Controlled Foreign Corporation,” a “Foreign Personal Holding Company” or a “Passive Foreign Investment Company,” as such terms are defined in the United States Internal Revenue Code of 1986, as amended (the “Code”). None of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities has ever engaged in a trade or business in the United States, as that term is used for United States federal income tax purposes. No claim has ever been made by a Taxing Authority in a jurisdiction in which the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities does not file Tax Returns that it is or may be required to file a Tax Return in that jurisdiction. No election has been made with respect to the Company, the Subsidiary, the New Subsidiary or the PRC Entities to treat such entity as a partnership or a disregarded entity for United States federal income tax purposes. For purposes of this Agreement, the following terms have the following meanings: “Tax” (and, with correlative meaning, “Taxes” and “Taxable”) means any and all taxes including, without limitation, (i) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, business, use, ad valorem, transfer, franchise, profits, value added, net worth, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any United States, local or foreign governmental authority or regulatory body responsible for the imposition of any such tax (domestic or foreign) (a “Tax Authority”), (ii) any liability for the payment of any amounts of the type described in (i) as a result of being a member of an affiliated, consolidated, combined or unitary group for any taxable period or as the result of being a transferee or successor thereof and (iii) any liability for the payment of any amounts of the type described in (i) or (ii) as a result of any express or implied obligation to indemnify any other person.

2.24    Insurance.    The Disclosure Schedule describes the insurance currently held by the Company, the Subsidiary, the New Subsidiary and each of the PRC Entities.

2.25    Minute Books.    True and correct copies of the minute books of the Company, the Subsidiary, the New Subsidiary and each of the PRC Entities have been made available to the Investor.

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2.26    Brokers/Finders.    Except as set forth on Section 2.26 of the Disclosure Schedule, none of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities has any contract, arrangement or understanding with any broker, finder or similar agent with respect to the transactions contemplated by this Agreement.

2.27    Significant Customers and Suppliers.    No customer or supplier that was material to the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities during the last six (6) calendar months or that has been material to the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities thereafter, has, since the Financial Statement Date terminated, materially reduced or threatened to terminate or materially reduce its purchases from, or provision of products or services to, the Company, the Subsidiary, the New Subsidiary or the PRC Entities, as the case may be.

2.28    No Undisclosed Liabilities.    Except as set forth on Section 2.28 of the Disclosure Schedule (and excluding the obligations for performance arising under this Agreement or Related Agreements), none of the Company, the Subsidiary, the New Subsidiary or any of the PRC Entities has any liabilities of any nature (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for: (i) liabilities reflected, or reserved against, in the Financial Statements (and in such amounts); (ii) liabilities incurred in the ordinary course of business consistent with past practice since the Financial Statement Date; (iii) liabilities arising under contracts incurred in the ordinary course of business consistent with past practice and not required under U.S. GAAP to be reflected in the Financial Statements; (iv) liabilities which either individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect; or (v) liabilities with respect to, or arising in connection with, any matters which are either: (1) disclosed within the Disclosure Schedule, or (2) within the general subject matter of any of Sections 2.1 through 2.27, inclusive, but which were not required to be disclosed on the Disclosure Schedule as a result of a knowledge, dollar or materiality threshold, or any other qualifying language, within said sections.

3.    No Implied Representations.    Notwithstanding anything to the contrary herein: (1) it is the explicit intent and acknowledgement of each party hereto that the Company has not made and are not making any representation or warranty whatsoever, express or implied, other than those expressly given in Section 2 of this Agreement, and without limiting the foregoing the Company has not made and is not making any implied warranty or representation as to the post-Closing business, results of operations, financial condition or prospects of the Company, the Subsidiary, the New Subsidiary, any PRC Entity or the Business, or as to the post-Closing value, condition, merchantability or suitability of the Company, the Subsidiary, the New Subsidiary, any PRC Entity or the Business; and the Investor is not relying on any other statement, representation or warranty, oral or written, express or implied, made by any officers, directors, employees, affiliates, representatives or agents of the Company, the Subsidiary, the New Subsidiary, or the PRC Entities, including any such statement, representation or warranty contained in any offering memorandum or any information, document or material made available to the Investor or its officers, directors, employees, affiliates, representatives or agents within due diligence materials, management presentations or any other form in expectation of the transactions contemplated by this Agreement and the Related Agreements; and (2) the Investor has undertaken its own analyses and methodologies to value the Company, the Subsidiary, the New Subsidiary, the PRC Entities and the Business, and in no event shall the Company be charged with knowledge of, or have responsibility for, such analyses or methodologies or the valuation resulting therefrom. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN SECTION 2 OF THIS AGREEMENT, THE COMPANY EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OR REPRESENTATION.

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4.    Representations and Warranties of the Investor and Investor Parent.    The Investor and Investor Parent each hereby represents and warrants to the Company, the Subsidiary and the New Subsidiary that:

4.1    Organization, Good Standing and Qualification.    The Investor is an exempted limited liability company duly organized, validly existing and in good standing under the laws of the Cayman Islands and has all requisite corporate power and authority to carry on its business as now conducted. The Investor is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect upon the Investor. The Investor Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted. The Investor Parent is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect upon the Investor Parent.

4.2    Existence; Authorization; Legal Proceedings.    All corporate action on the part of each of the Investor and the Investor Parent and its respective officers, directors, shareholders and affiliates, and all shareholder action, on the part of the Investor shareholders, necessary for the authorization, execution and delivery of this Agreement and the Related Agreements to which it is a party, the performance of all obligations of the Investor or the Investor Parent hereunder and thereunder, including without limitation the purchase of the Series B Preferred Shares being sold hereunder has been taken. This Agreement constitutes and the Related Agreements will constitute (upon the execution and delivery at Closing) valid and legally binding obligations of the Investor and the Investor Parent, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (c) to the extent the indemnification provisions contained in the Investors Agreement may be limited by applicable foreign, United States or state securities laws. The execution, delivery and performance by the Investor and the Investor Parent of this Agreement and the applicable Related Agreements to which it is respectively a party, and the consummation of the transactions contemplated hereby and thereby: (i) will not result in any violation or default or be in conflict with or constitute, with or without the passage of time and giving of notice, a default under any provision of the Investor’s charter documents; (ii) will not result in the breach of or constitute a default under any material contract, lease, license, franchise, permit, indenture, mortgage, deed of trust, note, agreement or other instrument to which the Investor and the Investor Parent is a party or by which it is bound; and (iii) will not violate any law or order applicable to or bearing upon the Investor or its assets or businesses, except in the case of clauses (ii) and (iii) for such breaches, defaults or violations that could not reasonably be expected to have a material adverse effect on the legal ability of the Investor or the Investor Parent to consummate the transactions contemplated by this Agreement. Neither Investor nor the Investor Parent is required to obtain any consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any United States, local or foreign governmental authority or from any Person in connection with the execution, delivery and performance of this Agreement or the applicable Related Agreements or the consummation of the transactions contemplated hereby or thereby which it has not already obtained except where the failure to obtain such consent, approval, or authorization, or to make or file such registration, qualification, designation, declaration or filing, would not reasonably be expected to have a material adverse effect on the Investor or the Investor Parent, as the case may be. There are no legal or governmental proceedings pending, or to the knowledge

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of the Investor or the Investor Parent, threatened against the Investor or the Investor Parent that would have the effect of preventing or materially delaying the Investor or the Investor Parent from executing and delivering this Agreement or consummating any of the transactions contemplated by this Agreement.

4.3    Securities Representations.    The Investor understands and acknowledges that the Series B Preferred Shares, the Ordinary Shares, the High-Vote Ordinary Shares, the Warrant and the Option (i) have not been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws (ii) must be held indefinitely unless a subsequent disposition thereof is registered under the Act or is exempt from such registration and (iii) will bear a legend to such effect. The Investor is acquiring the Series B Preferred Shares (and any shares issued upon conversion of the Series B Preferred Shares), the Warrant and the Option (and any shares issued upon exercise of the Warrant or the Option) for investment, solely for the Investor’s own account, not as a nominee or agent, and not with a view to the distribution of any part thereof. The Investor is an “accredited investor” as defined in Rule 501(a) of the Securities Act. The Investor, alone or in connection with its financial, legal and other advisers, is sufficiently experienced in financial and business matters to be capable of analyzing and evaluating the merits and risks of an investment in the Series B Preferred Shares, the Warrant and the Option and to make an informed decision relating thereto, and otherwise to protect its own interests with respect to the investment in the Series B Preferred Shares, the Warrant and the Option and has made an investigation of the Company, the Subsidiary, the New Subsidiary, the PRC Entities and the Business as it deemed necessary and has had an opportunity to discuss and review the Business, management and financial affairs of the Company, the Subsidiary, the New Subsidiary and the PRC Entities with the Company’s management as it deemed necessary.

4.4    Brokers/Finders.    Neither the Investor nor the Investor Parent has any contract, arrangement or understanding with any broker, finder or similar agent with respect to the transactions contemplated by this Agreement.

5.    Other Covenants and Agreements.    The covenants and agreements in this Section 5 below shall take effect from and after the Closing (subject to Section 7.1(b)):

5.1    Related Party Transactions.    None of the Company, the Subsidiary, the New Subsidiary or any PRC Entity shall knowingly enter into any transactions with a Related Party or member of such Related Party’s immediate family, or any corporation, partnership or other entity in which such Related Party or family member is an officer, director or partner, or in which such Related Party or family member has significant ownership or economic interests or otherwise controls, unless the terms of such transaction are approved by the Board of Directors, including each IAC Director (as defined in the Investors Agreement); provided, however, that neither the Investor nor any of its affiliates shall be deemed to be a Related Party for purposes of this Section 5.1.

5.2    Use of Proceeds.    The Company shall use the proceeds from its sale of the Series B Preferred Shares pursuant to Section 1.1 hereof as follows: (i) all such proceeds shall be deposited into the bank account at set forth at Schedule 1.2 hereto (the “Proceeds Account”); and (ii) all such proceeds shall only be withdrawn and used for corporate purposes and in furtherance of the Business. In addition, the Company agrees that in the event that it wishes to make a Qualifying Withdrawal (as defined below) from the Proceeds Account, it shall give prior notice thereof (which will include a statement regarding the purpose of such withdrawal(s)) to the Board of Directors (including the IAC Directors). If the Board of Directors does not, by notice to the Company within 5 days of the notice from the Company to the Board of Directors described above, prohibit the proposed Qualifying Withdrawal (which such notice and prohibition shall be made only by majority vote of the

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Board of Directors) then the Company may make such Qualifying Withdrawal. Notwithstanding the foregoing, the Company shall not draw proceeds from such Proceeds Account to the extent that the proceeds in such Proceeds Account, following such withdrawal, would be less than the aggregate amount of any outstanding and unpaid claims for indemnification brought under Section 6 by any Investor Indemnified Party against the Company, the Subsidiary or the New Subsidiary. Notices sent by or to the Company and the Board of Directors pursuant to this Section 5.2 may be sent by e-mail to the e-mail addresses specified by the respective parties, and receipt of such notice sent by e-mail shall be deemed to have occurred upon successful transmission thereof. As used above, the term “Qualifying Withdrawal” means any proposed withdrawal from the Proceeds Account which (1) is itself in amount of US$1,000,000 or more, or (2) would result in an aggregate of US$1,000,000 having been withdrawn from such Proceeds Account either (a) since the Closing Date, if there has been no prior withdrawal for which notice was provided pursuant to this Section 5.2 or (b) since the last withdrawal for which notice was provided pursuant to this Section 5.2

5.3    FCPA.    From and after the Closing Date, the Company will review its business practices to ensure that the operation of the Business will comply with all aspects of the Foreign Corrupt Practices Act, as amended, and related laws with respect to the conduct of business by U.S. persons and regulations issued by the Department of Treasury (collectively, the “FCPA Rules”). The Company, the Subsidiary and the New Subsidiary will take all commercially reasonable actions necessary to ensure that the Company, the Subsidiary, the New Subsidiary and the PRC Entities (and each director, officer, employee, consultant and agent thereof, with respect to the Business) comply at all times (as if each such Person were subject to the FCPA Rules at such times) with the FCPA Rules (including, without limitation, distributing information regarding the FCPA Rules to its employees from time to time, training such employees to adhere to the FCPA Rules and fully enforcing compliance with the FCPA Rules), and will from time to time update the Investor with respect to such matters. In the event that the Company, the Subsidiary or the New Subsidiary receives any notice with respect to its compliance with the FCPA Rules, it will promptly notify Investor and take any actions which Investor reasonably requests in order to comply with the FCPA Rules. The Investor will provide to the Company, at the Investor’s expense, copies of the FCPA Rules materials that the Investor and its affiliates use with respect to activities outside the United States (to the extent that the Company in fact intends to use such materials).

5.4    Insurance Policies.

(a)    The Company, the Subsidiary and the New Subsidiary shall each use its reasonable best efforts to (and shall cause each PRC Entity to) obtain, within 90 days of the Closing Date, and maintain insurance relating to the assets, properties and businesses of the Company, the Subsidiary, the New Subsidiary and each PRC Entity in amounts, and covering such risks, as are reasonable and prudent for companies similarly situated, including, without limitation, by obtaining the insurance described on Schedule 5.5 hereto.

(b)    Without limiting the foregoing, so long as the Founder remains Chief Executive Officer of the Company, the Company shall use commercially reasonable efforts to obtain and/or maintain key man life insurance policies covering the Founder, provided that the insurance company and the details of such policies are reasonably acceptable to the Investor. Such policy shall name the Company as the beneficiary and shall not be cancelable without the prior approval of the Investor.

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(c)    Without limiting the foregoing, the Company shall use commercially reasonable efforts to obtain and/or maintain a directors’ and officers’ liability insurance policy; provided such insurance policy is reasonably acceptable to the Investor.

5.5    Tax.

(a)    The Company shall withhold or collect, and shall cause each of its subsidiaries and affiliates to withhold or collect, from the payment of any compensation to any officer, director, agent, or employee of the Company or any of its subsidiaries or affiliates, the proper amount of any Tax which is required (by any Tax Authority) to be withheld or collected with respect to such payment. The Company shall pay over, and shall cause each of its subsidiaries and affiliates to pay over, any such Tax to the appropriate Tax Authority.

(b)    Subject to Section 5.7, the Company shall (i) pay, and shall cause each of its subsidiaries and affiliates to pay, all Taxes due and owing by the Company or its subsidiaries or affiliates; and (ii) take all commercially reasonable actions, and shall cause each of its subsidiaries and affiliates to take all commercially reasonable actions, necessary to comply in all material respects with applicable Tax law applicable to the Company and its subsidiaries and affiliates, and (iii) file and cause each of its subsidiaries and affiliates to file any Tax Returns required pursuant to applicable Tax law to be filed with any Tax Authority.

(c)    Subject to Section 5.7, the Company shall file, and shall cause each of its subsidiaries and affiliates to file, any and all amended Tax Returns necessary to completely and accurately reflect all compensation paid by the Company or any of its subsidiaries or affiliates to any officer, director, agent, or employee of the Company of any of its subsidiaries or affiliates as the case may be, prior to the date hereof, and the Company shall pay over, and shall cause each of its subsidiaries and affiliates to pay over, to the appropriate Tax Authority, any Tax due with respect to such previously paid compensation. As used in this Section 5.5, the term “affiliate,” shall not include any individual (or trusts or other entities solely owned or controlled by such individual).

(d)    The Company shall use commercially reasonable efforts to minimize for any taxable year of the Company, “subpart F income,” as such term is defined in Section 952 of the Code, provided that the foregoing shall not (a) delay, impair or hinder a Qualified Public Offering, (b) prohibit or restrict the Company from investing cash or cash equivalents in money market instruments on a short-term basis, including without limitation proceeds for the Investor Share Transactions or a Qualified Public Offering or (b) require the Company to incur any material liability or obligation.

(e)    No later than two months following the end of each Company taxable year, the Company shall provide to the Investor the Company’s capitalization table as of the end of the last day of such taxable year. The Company shall provide the Investor with access to such other Company information (including, without limitation, the tax returns of the Company and each of its subsidiaries and affiliates) as may be reasonably requested by the Investor: (i) to determine the Company’s status as an FPHC, (ii) to determine the amount of the Investor’s pro rata portion of the Company’s “Subpart F income” (as defined in the Code), (iii) to determine the amount of income the Investor must include in connection with a “Qualified Electing Fund” election made by the Investor pursuant to Section 1295 of the Code, (iv) to determine the availability to Investor of foreign tax credits, or (v) to allow the Investor to otherwise comply with applicable United States federal income tax laws.

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(f)    Except to the extent that the Investor agrees otherwise, the Company shall take such actions, including making an election to be treated as a corporation or refraining from making an election to be treated as a partnership, as may be required to ensure that at all times each of the Company, the Subsidiary and the New Subsidiary is treated as a corporation for United States federal income tax purposes.

(g)    If the Company acquires stock or other equity securities in any entity organized outside of the United States that is treated as a corporation for U.S. federal income tax purposes (such entity, a “Foreign Target”) in any transaction (or series of transactions) consummated at any time after the date hereof, and such acquisition constitutes a “qualified stock purchase” within the meaning of Section 338(d) of the Code, the Company shall, to the extent permitted by law, and to the extent such election does not impose any incremental Tax costs on the Foreign Target or the Company, make a timely, effective, and irrevocable election under Section 338 of the Code (and any comparable election under U.S. state or local tax law), and shall file such election in accordance with the applicable U.S. Treasury regulations to treat the Company’s purchase of such Foreign Target’s stock or other equity securities as a deemed asset purchase; provided however that if such election imposes any incremental tax costs on the Company or the such Foreign Target, the Company will consult with the Investor to determine whether or not such an election should be made.

(h)    The Investor and the Company will work together in good faith to develop a mutually agreeable business operation plan for the New Subsidiary within 60 days following the Closing Date. Without the prior written consent of the Investor, which shall not be unreasonably withheld, the New Subsidiary shall not (i) incur any liabilities or obligations, (ii) hire or employ any officers, employees, personnel or any other persons, (iii) acquire, dispose of or hold any assets, (iv) enter into any contract, agreement, arrangement or transaction, (v) conduct any business, or (vi) otherwise carry on any operations whatsoever; except to the extent that such a mutually agreed upon business plan has in fact been adopted and the foregoing are consistent with such business operation plan.

(i)    Within 120 days following the Closing Date, the Company and the Subsidiary (and the New Subsidiary, if appropriate) shall enter into secondment agreements for the provision of services to the Subsidiary by the Company through the secondment to the Subsidiary of senior managers who have entered into employment agreements with the Company. Such secondment agreements shall be in a form and substance approved by IAC as advised by an internationally recognized accounting firm selected by the Investor and based on similar agreements and arrangements for the secondment of personnel by offshore corporations with their primary operating subsidiaries in the PRC, and shall otherwise be in compliance with PRC Laws to the extent it applies to such arrangements.

(j)    Commencing within 60 days following the Closing Date, the Subsidiary (and the New Subsidiary, as appropriate) shall set forth in detail the method(s) by which it has calculated the business tax payable since its establishment on all types of transactions which are subject to business tax, in the form of a footnote in each monthly business tax payment certificate, for six consecutive monthly reporting periods, with a view to putting the relevant tax bureau on notice of such business tax calculation methodology.

5.6    Maintenance and Conduct of Business.

(a)    Each of the Company, the Subsidiary and the New Subsidiary shall (and shall cause each PRC Entity to), from and after the date hereof, to (i) preserve and maintain in

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full force and effect its existence and good standing under the laws of its jurisdiction of formation or organization, (ii) preserve and maintain in full force and effect all rights, privileges, qualifications, applications, licenses, permits and franchises, (iii) comply in all material respects with all applicable laws, ordinances, rules and regulations, as well as judicial interpretations and decisions and with the directions of any governmental authority or regulatory body having jurisdiction over it or its respective businesses or properties, and (iv) file or cause to be filed in a timely manner all reports, applications, estimates and licenses that shall be required by a governmental authority or regulatory body, in the case of each of (i), (ii), (iii) and (iv), where the failure to so preserve, maintain, comply or file would have a Material Adverse Effect.

(b)    The Company shall use all commercially reasonable efforts to cause a finance controller, and a general counsel to be hired and employed by the Business within 90 days following Closing, and a vice president of marketing as soon as reasonably practical (it being understood and agreed that each such person must be qualified to perform the duties and responsibilities typically assigned to persons with such job titles and be adequately experienced in such fields). Without limiting the foregoing, such general counsel (i) shall be qualified to administer and lead the Business’s compliance with various laws and regulations affecting it, including, without limitation, the FCPA Rules and (ii) shall promptly become thoroughly familiar with the Conduct Code (as defined below) and be in a position to lead the efforts with respect to compliance with the Conduct Code described in Section 5.6(d) hereof.

(c)    Upon the request of the Investor, the Company shall use its reasonable best efforts to make all necessary changes to its internal controls, disclosure controls and other corporate reporting functions such that it would fully comply with the Sarbanes-Oxley Act of 2002 (including the rules and regulations thereunder) (the “SOX Requirements”) were it subject to such statute, rules and regulations as a stand-alone public company which is a “foreign private issuer” under US securities laws), provided, however, that if such request is made prior to the earlier of the IAC Control Date (as defined in the Investors Agreement) or the date on which it would be required to do so as a public company, the Investor shall reimburse the Company for all of the reasonable expenses of such efforts. Prior to any such request, the Company shall use its reasonable best efforts to implement such necessary changes to its internal controls, disclosure controls and other corporate reporting functions as would be reasonably consistent with the Company’s being in compliance with the SOX Requirements by no later than nine months after the IAC Control Date.

(d)    The Company, the Subsidiary, the New Subsidiary and each of their respective Boards of Directors shall (and shall cause each PRC Entity and its respective boards of directors to) adopt the Investor’s Code of Business Conduct, attached hereto as Schedule 5.6(d) (as amended from time to time by the Investor, the “Conduct Code”), and use all commercially reasonable efforts to ensure adherence to such Conduct Code from and after the date hereof. The Company and its subsidiaries and affiliates shall distribute the Conduct Code to its directors, officers and employees, train such directors, officers and employees regarding compliance with the Conduct Code and vigorously enforce compliance with the Conduct Code.

(e)    None of the Company, the Subsidiary or the New Subsidiary shall amend, assign or terminate (and each shall prevent the other parties thereto from doing the same) any of the agreements listed on Schedule 5.6(c) hereto (the “Structure Contracts”), without the prior written consent of the Investor. The Company, the Subsidiary and the New Subsidiary shall cause all the parties to the Structure Contracts to comply with the terms thereof in all material respects. The parties hereto agree that,

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from the date hereof until the date the Warrants expire unexercised or are otherwise terminated, (i) with respect to any disputes that may arise in connection with any such Structure Contracts, the Investor shall have the right to select the forum for any dispute resolution with respect thereto and to participate fully in such resolution and (ii) in no way shall the corporate or operational structure of the Company, the Subsidiary, the New Subsidiary or the PRC Entities (individually or as a group) be altered or restructured (including, without limitation, by the liquidation or sale of any such entity, by the creation of any subsidiary or affiliated entity of any such entity or by the operation of the Business in a manner not contemplated by the Structure Contracts) without the prior written consent of the Investor (it being understood and agreed that a change in “operational structure” shall not be deemed to include any changes to the internal operations of any such entity (or such entities taken as a whole), but shall be deemed to include any structural change to the way the Business is conducted among by such entities (taken as a whole) (including, without limitation, changing which such entity holds material licenses and other material assets).

(f)    The New Subsidiary shall amend its articles of association so as to be comparable in substance to the amended articles of association of the Subsidiary, as reasonably approved by the Investor within 60 days following the Closing.

(g)    The Company and the Subsidiary shall make all necessary filings and applications to the requisite PRC governmental or other authorities to effect the assignment of the “A” logo trademarks that are registered in the PRC in classes 35, 36 and 41 (registration numbers 1631670, 1749484 and 1731794, respectively) from eLong.com Inc. to the Subsidiary, as quickly as reasonably practical. The Company and the Subsidiary shall take all commercially reasonable efforts to ensure that all commercial contracts entered into between the Subsidiary or the New Subsidiary and third parties (an all renewals of existing contracts) that involve the grant of a license to use trademarks of the Subsidiary contain trademark use guidelines consistent with those set forth on Schedule 5.6(g)(1). The Company and Subsidiary shall use reasonable commercial efforts to ensure that all commercial contracts entered into by any of the Company, the Subsidiary, the New Subsidiary and any of the PRC Entities and third parties grant, where appropriate under the circumstances in the reasonable judgment of the Company, such companies the right to customer information (including the right of use of such information) and to any databases that may be created pursuant to such contracts. The Company and the Subsidiary shall take all commercially reasonable efforts to transfer from eLong.com, Inc. to the Subsidiary the domain names listed on Schedule 5.6(g)(2) within 60 days of the date hereof. The Company and the Subsidiary shall use reasonable commercial efforts to register certain trademarks and domain names of the Subsidiary in the US or other jurisdictions as may be reasonably requested by Investor from time to time. The Company, the Subsidiary and the New Subsidiary shall each use commercially reasonable efforts to consider and address U.S. and PRC tax implications, to the extent applicable to the Company, the Subsidiary or the New Subsidiary, when making the transfers contemplated by this Section 5.7(g).

(h)    The Company, the Subsidiary and the New Subsidiary shall make, as soon as is reasonably practicable following the Closing, all necessary filings and applications to the requisite PRC governmental or other authorities to effect the acquisition by the Company, the Subsidiary or the New Subsidiary of (i) a 50% equity interest in the ICP Entity or instead, upon the agreement of the Company and the Investor, to establish a new sino-foreign joint venture company which, subject to the approval of the relevant authorities, shall possess the same value-added telecommunications licenses as the ICP Entity and in which the Company will hold a 50% equity interest (“New ICP JV”) and

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(ii) a 70% equity interest in Asia Interactive, unless the Company and the Investor otherwise agree to terminate and liquidate Asia Interactive. In the event of the establishment of such a New ICP JV, the Investor shall have the right to direct the Company, the Subsidiary and the Founder promptly to terminate and liquidate the ICP Entity and transfer all operations, rights and liabilities of the ICP Entity to the New ICP JV. Without limiting the foregoing, (i) the Company, the Subsidiary and the New Subsidiary shall make all necessary additional filings and applications, as soon as it is permissible under PRC law, to acquire additional equity interests (to the maximum amount then-allowed) in the ICP Entity and Asia Interactive and (ii) the Investor shall have the right to direct the Company or the Subsidiary to acquire such additional equity interests if the Investor determines in good faith that such acquisitions are allowable under PRC law.

(i)    The Company, the Subsidiary and the New Subsidiary shall take all commercially reasonable actions so that the Business obtains the Travel Agency License within 120 days of the date hereof.

(j)    If there is an adverse change in PRC law or interpretation thereof with respect to foreign ownership rules or other PRC structural or operational rules or regulations, in a way that is reasonably expected to have a Material Adverse Effect as determined in good faith by the Investor, then at the Investor’s request (so long as the Warrants have not expired unexercised or been terminated) the Company shall restructure the PRC Entities or the operational structure of the Business as directed by the Investor in a manner that is equitable to the then-current Stockholders of the Company, is reasonably efficient from a structural, tax and economic standpoint, and such restructuring and its implementation is in compliance with applicable laws or regulations.

(k)    The Investor shall have the right at any time from and after the date hereof to replace the current shareholders in each PRC Entity with a designee of its choice, and the Company, the Subsidiary and the New Subsidiary shall cause such transfer to occur promptly after the Investor notifies the Company of its desire to effect such replacement (but in no event later than 10 business days after such notice). Notwithstanding the foregoing, the appointment of any designee by the Investor pursuant to this section will give the Investor no additional rights or obligations not otherwise set forth in this Agreement.

(l)    If and to the extent that any required foreclosure under any Share Pledge Agreements would, in the Investor’s reasonable determination, be contrary to PRC law, then the Investor shall have the right to approve of any transferee of such equity interests that would comply with PRC law.

5.7    Certain Post Closing Matters.

(a)    The Company shall take all commercially reasonable efforts to complete each of the actions described on Schedule 5.7 to the Investor’s reasonable satisfaction as soon as reasonably practical (or as otherwise indicated therein).

(b)    The Company shall pay the Investor (i) 30% of any payments made by, penalties levied on, or judgments entered against the Company, the Subsidiary, the New Subsidiary or any PRC Entity in connection with or arising from the completion or satisfaction of the actions described on Schedule 5.7 hereto (it being understood and agreed that such payment to the Investor shall (A) be made by release of a portion of the Escrow Deposit in accordance with the terms of the Escrow Agreement and the Transfer Agreement and (B) not be subject to the Indemnification Threshold (as defined

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below)) and (ii) 15% of any investment banking fees incurred by the Company as described on Schedule 2.26 (it being understood and agreed that such payment in respect of investment banking fees shall be made directly by the Company (and not from the Escrow Deposit) and shall be considered a purchase price adjustment). Notwithstanding anything to the contrary herein or in the Disclosure Schedule, the specific matters which are the subject of Schedule 5.7 shall be deemed disclosed to the Investor and the Investor Parent (a) for all purposes of determining whether “fraud” (as defined in Section 6.4(b)) has occurred; and (b) for all other purposes of this Agreement and the Disclosure Schedules, and with respect to every representation and warranty herein; provided, however, that this clause (b) shall not be applicable with respect to any indemnification claims of the Investor Indemnified Parties, pursuant and subject to Section 6 hereof, resulting from a third party claim as described in Section 6.2.

5.8    Delivery of June Financial Statements.    Promptly following the Closing (but in any event within ninety days thereof), the Company shall prepare and deliver to the Investor consolidated financial statements for the Company as of, and for the six months ended, June 30, 2004 (the “June Financial Statements”), including a balance sheet as of June 30, 2004 and a profit and loss statement and a cash flow statement covering the period from the beginning of the Company’s current fiscal year and ending on June 30, 2004. The June Financial Statements shall be prepared in accordance with U.S. GAAP applied on a consistent basis and shall be audited and reported on by KPMG, an independent certified accounting firm which has in the past reviewed and reported on the Company’s financial statements (the “Company’s Auditor”). The Investor shall be entitled, entirely at its own expense, to select one firm of certified public accountants (the “Investor’s Auditor”) to review the June Financial Statements and the audit thereof and report thereon by the Company’s Auditor. In performing its review, the Investor’s Auditor shall have reasonable access to all underlying documentation and data used by the Company or the Company’s Auditor in preparing the June Financial Statements. The Investor and the Investor’s Auditor shall have 30 days from the date the Investor received the June Financial Statements to conduct such review. In addition to the foregoing, the Company shall prepare and deliver to the Company, within 30 days of the Closing, unaudited versions of the June Financial Statements.

5.9    Cooperation Regarding IPO.    Notwithstanding anything else in this Agreement, at the Company’s request the Investor and the Investor Parent shall in good faith cooperate with the Company in order to facilitate the Company’s plans to effect a Qualified Public Offering (as defined in the Investors Agreement), and in connection with the foregoing the Investor shall take such actions as may be reasonably requested from time to time by the Company and each of the Investor and the Investor Parent agrees that it shall not take any action which is intended to impair, delay or hamper such plans, provided, however, that (a) the Company shall comply with the restrictions in Section 5.1(a) of the Investors Agreement, and (b) only Ordinary Shares are offered in the Qualified Public Offering. In connection with any Qualified Public Offering, the Investor Parent shall have the reasonable right of prior approval with respect to how the Investor Parent is to be described in the Registration Statement relating thereto.

5.10    Non-Competition Covenant.

(a)    Each of the Investor and the Investor Parent agrees that, subject to the terms and conditions of this Section 5.10, it shall not directly or indirectly (including without limitation through its affiliates or subsidiaries (as the case may be) Expedia.com and Hotels.com) own, manage, operate, finance, join, or control, or participate in the ownership, management, operation, financing or control of, or be associated as a

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director, partner, lender, investor or representative in connection with, any entity or business which operates a travel service in the PRC or which markets travel services to PRC residents (it being understood and agreed that Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan shall not be deemed to be a part of the PRC for purposes of this Section 5.10), including without limitation CTRIP (a “Competitive Business”) as long as at least one of the following is true: (1) the Warrant has not expired or otherwise been terminated, (2) the Qualified Public Offering (as defined in the Investors Agreement) has not occurred and the Investor holds more than a 50% economic interest in the Company or (3) the Qualified Public Offering has occurred and the Investor holds more than a 15% economic interest in the Company; provided, however, that notwithstanding the foregoing:

(1)    if the Qualified Public Offering has occurred and the Warrant has expired without being exercised, then the Investor and Investor Parent’s covenants above in this Section 5.10(a) (the “IAC Non-Compete”) shall not be applicable if the Investor and its affiliates transfer their voting rights with respect to their holdings of Company shares issued pursuant to this Agreement (including without limitation any and all rights to appoint Directors to the Company’s Board of Directors) to the Company or its designee(s) (it being understood and agreed that the Company shall accept such transfer of voting rights);

(2)    the IAC Non-Compete shall not restrict the Investor or the Investor Parent from:

(A)    acquiring any business or entity engaged in a Competitive Business, provided that the assets acquired in carrying on the Competitive Business constitute less than 10% of the assets of, and the revenues for the most recent fiscal year attributable to such Competitive Business do not exceed 10% of the revenues for the most recent fiscal year of, either (I) such business or entity as a whole, including such Competitive Business, or (II) the Company; provided further that if such revenues do in fact exceed either such 10% threshold, neither the Investor nor Investor Parent shall be deemed to be in breach of the IAC Non-Compete by reason thereof unless the Investor or Investor Parent has not divested or agreed to sell (and does sell) the portion of such business giving rise to such breach (but for this proviso) within the six (6) month period following the closing of said acquisition; or

(B)    entering into or participating in any joint venture, partnership, commercial agreement (including, without limitation, management agreements and other strategic relationships) or other similar arrangement with any business or entity engaged in a Competitive Business (any of the foregoing, a “Strategic Relationship”) provided that the assets associated with such Strategic Relationship and attributable to the Competitive Business constitute less than 10% of the assets of, and the revenues for the most recent fiscal year associated with such Strategic Relationship and attributable to the Competitive Business do not exceed 10% of the revenues for the most recent fiscal year of, either (I) such Strategic Relationship as a whole, including such Competitive Business, or (II) the Company.

(3)    The IAC Non-Compete shall not restrict Interval International, an affiliate of the Investor Parent, from conducting its current business, including reasonable extensions, of (i) providing sales, marketing and operational services to developers of timeshare properties, and (ii) providing Membership Services to timeshare owners and other independent members, provided that in no event shall the foregoing be deemed to allow Interval International to directly or indirectly

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(A) provide online travel agency or similar services within the PRC or (B) market online travel agency or similar services to customers or members located within the PRC. “Membership Services” include, but are not limited to, the right to exchange owned vacation accommodations for other accommodations or travel products (i.e. cruises, spa packages, etc.), access to other vacation properties at special rates, and other travel or leisure related benefits.

(4)    It is understood and agreed that, for all purposes of this Section 5.10 (including, without limitation, with respect to the proviso of the first sentence of Section 5.10(a)(3)), the fact that a person located in the PRC may be able to access a travel service of IAC Parent or its subsidiaries of affiliates shall not mean, in and of itself, that the IAC Non-Compete has been violated or otherwise breached, unless such service was marketed specifically to the residents of the PRC, the parties acknowledging that global communications and the Internet make it possible for individuals around the world to connect with services that are neither intended to be, nor targeted, for such persons. Without derogating from the foregoing for purposes of clarity, “Competitive Business” shall not mean either (i) providing travel services to PRC residents if such services are not marketed specifically to such PRC residents, for example, if a PRC resident clicks on an advertisement on Google.com that Expedia purchased, is taken to Expedia.com, and subsequently purchases travel services on Expedia.com including travel services provided in the PRC; or (ii) commercial arrangements with third party websites (e.g., private label arrangements) operated or managed from within the PRC that may promote the travel services of the Investor and the Investor Parent on their websites to PRC residents including travel services provided in the PRC; provided that in each such case the Investor and the Investor Parent are not marketing such services specifically to residents of the PRC)

(b)    Until the IAC Control Date, neither the Investor nor the Investor Parent shall directly or indirectly solicit any person employed by the Company or its affiliates to enter the employ of the Investor, the Investor Parent or any other person or entity.

(c)    The Investor and the Investor Parent agree that they shall not (and shall ensure and guarantee that their subsidiaries and affiliates do not) at any time reveal to any person or entity any Proprietary Information (as defined below) and shall not use or attempt to use any Proprietary Information for its own benefit, or for the benefit of any third party or in any manner which may injure or cause loss or may be calculated to injure or cause loss (whether directly or indirectly) to the Company, the Subsidiary or the New Subsidiary. As used herein, the term “Proprietary Information” shall mean all data, business methods, trade secrets, information, documents or forms pertaining to the financial condition, business affairs or prospects of, or otherwise developed or owned by, the Company, the Subsidiary or the New Subsidiary, whether or not any of the foregoing is published or unpublished, protected or susceptible to protection under patent, trademark, copyright or similar laws and whether or not any party has elected to secure or attempted to secure such protection, provided that notwithstanding the foregoing, the term “Proprietary Information” shall not include any of the foregoing information or materials to the extent (i) generally known to the public through no wrongful act of the Investor or the Investor Parent; (ii) lawfully received by the Investor or the Investor Parent from a third party without restriction on disclosure and without a breach by the third party of any obligation of confidentiality; (iii) independently developed by the Investor or the Investor Parent without use of any Proprietary Information, or (iv) required to be disclosed by a court of competent jurisdiction; provided, however, in the case of the foregoing clause (iv), the Company is provided reasonable advance opportunity to seek in camera or other protection with respect to such disclosure.

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(d)    The parties hereby agree that each provision of this Section 5.10 shall be treated as a separate and independent provision, and the unenforceability of any one provision shall in no way impair the enforceability of any other provision hereof. Moreover, if one or more of the provisions contained in this Section 5.10(a) shall for any reason be held to be excessively broad as to scope, activity or subject so as to be unenforceable, such provision or provisions shall be construed by the appropriate judicial body by limiting or reducing it or them, so as to be enforceable to the maximum extent permitted by applicable law. It is acknowledged that any breach of this Section 5.10 by the Investor or the Investor Parent may cause the Company irreparable damage and that in the event of such breach the Company shall have, in addition to any and all remedies at law, the right to seek an injunction, specific performance or other equitable relief to prevent the violation of any obligations of the Investor or the Investor Parent under this Section 5.10. The Investor and the Investor Parent each acknowledges and agrees that the enforcement of this Section 5.10 is necessary to ensure the preservation, protection and continuity of the business, trade secrets, goodwill and other assets of the Company and further acknowledges and agrees that the restrictions set forth in this Agreement are reasonable as to time and scope. Each of the Investor and the Investor Parent also acknowledges that (a) the Company, the Subsidiary, and the New Subsidiary would not have entered into this Agreement or the other Related Agreements but for this Section 5.10, and (b) the Investor Parent would not have entered into this Section 5.10 but for the execution and delivery by the Company, the Subsidiary, and the New Subsidiary of this Agreement.

(e)    Notwithstanding anything else herein to the contrary, the parties acknowledge and agree that the limitations of Section 6.4 shall not apply to any breach by the Investor or the Investor Parent of its covenants and obligations under this Section 5.10.

6.    Survival and Indemnification.

6.1    Survival.    Each covenant or agreement in this Agreement shall survive the date hereof without limitation as to time until fully performed in accordance with its terms, and each representation and warranty in this Agreement shall survive the date hereof until March 31, 2006 (the “Survival Date”); provided, however, that: (a) the Major Representations (as defined below), and the indemnity obligations under Section 6.2 relating thereto, shall survive through the expiration of the relevant statute of limitations, and (b) unless earlier terminated in accordance with their respective terms, the Company’s covenants and agreements under Section 5 of this Agreement, and the indemnity obligations under Section 6.2 relating thereto, shall terminate upon, and be of no further force and effect from and after, the date which is the earlier of:

(1)    the date upon which any IAC Competitive Conduct (as defined below) occurs; and

(2)    90 days following the earlier of (A) the IAC Control Date (as defined in the Investors Agreement); or (B) the date upon which the Investor beneficially owns securities of the Company equaling 15% or less of the capital stock of the Company on a fully diluted basis,

provided that such termination will not operate to terminate any then pending and outstanding indemnity claims made by the Investor pursuant to Section 6 prior to such termination date.

In connection with the foregoing clause (2), the Company shall reasonably cooperate with the Investor during the 90-day period described in said clause in order to facilitate an orderly transition to the Investor of the outstanding or pending matters, if any, which are the subject of Section 5. During such 90 day period, the Company shall not be liable for breach of any covenant or agreement under Section 5 which arises from any actions of the Investor or any actions of the Company if such Company actions were approved or directed by the Investor.

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As used above, the term “IAC Competitive Conduct” means any conduct or action by the Investor or the Investor Parent, which (a) occurs following the termination of the IAC Non-Compete under Section 5.10, and (b) would have been in violation of said Section 5.10 had the IAC Non-Compete been in full force and effect on such date.

As used herein, the term “Major Representations” means the Company’s representations and warranties to the Investor set forth within:

(A)    the first sentence of Section 2.1 (a);

(B)    the first sentence of Section 2.1 (b);

(C)    the first sentence of Section 2.1 (c);

(D)    Section 2.2(a);

(E)    the first sentence of Section 2.5(a)(i);

(F)    the first sentence of Section 2.5(a)(ii);

(G)    the first sentence of Section 2.5(a)(iii);

(H)    the first sentence of Section 2.6(a);

(I)    the first sentence of Section 2.6(b);

(J)    the first sentence of Section 2.6(c);

(K)    Section 2.7; and

(L)    Section 2.23.

6.2    Indemnification By Company and Investor.

(a)    From and after the date hereof the Company, the Subsidiary, and the New Subsidiary each agrees, jointly and severally, to indemnify fully, hold harmless, protect and defend the Investor, its affiliates, and their respective directors, officers, agents and employees, successors and assigns (the “Investor Indemnified Parties”) from and against any and all Investor Losses (as defined below) incurred by them and arising out of or resulting from any breach of any of the representations, warranties, covenants or agreements of the Company contained in or incorporated into this Agreement or the Related Agreements.

(b)    From and after the date hereof the Investor and the Investor Parent each agrees, jointly and severally, to indemnify fully, hold harmless, protect and defend the Company, the Subsidiary, the New Subsidiary, the PRC Entities, their respective affiliates, and their respective directors, officers, agents and employees, successors and assigns (the “Company Indemnified Parties”) from and against any and all Company Losses (as defined below) incurred by them and arising out of or resulting from any breach of any of the representations, warranties, covenants or agreements of the Investor or the Investor Parent contained in or incorporated into this Agreement or the Related Agreements.

(c)    As used herein: (1) “Investor Losses” shall mean all Losses incurred or suffered by the Investor Indemnified Parties; (2) “Company Losses” shall mean all Losses incurred or suffered by any Company Indemnified Parties; (3) “Losses” shall mean any and all losses, costs, claims, damages, liabilities, Taxes, obligations, judgments, settlements, assessments, awards, demands, offsets, reasonable out-of-pocket costs, expenses and attorneys’ fees (including any such reasonable costs, expenses and attorneys’ fees incurred in enforcing a party’s right to indemnification against any indemnifying party or with respect to any appeal) and penalties and

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interest, if any; (4) “Indemnified Party” shall mean in the case of a claim for indemnification under Section 6.2(a), each Investor Indemnified Party, and in the case of a claim for indemnification under Section 6.2(b), each Company Indemnified Party; (5) “Indemnifying Party” shall mean in the case of a claim for indemnification under Section 6.2(a), the Company, and in the case of a claim for indemnification under Section 6.2(b), the Investor.

6.3    Procedure for Indemnification for Third Party Claims.

(a)    Promptly after receipt by an Indemnified Party of written notice of a threatened third party claim or notice of the commencement of any proceeding against it for which indemnification is applicable under Section 6.2(a) or Section 6.2(b), such Indemnified Party will, if a claim is to be made against an Indemnifying Party under such Section, give notice to the Indemnifying Party of the threat or commencement of such claim, but the failure to notify the Indemnifying Party will not relieve the Indemnifying Party of any liability that it may have to any Indemnified Party, except to the extent that the Indemnifying Party demonstrates that the defense of such action has been materially prejudiced by the Indemnified Party’s failure to give such notice.

(b)    If any proceeding referred to in Section 6.3(a) is brought against an Indemnified Party and it gives notice to the Indemnifying Party of the commencement of such proceeding, the Indemnifying Party will be entitled to participate in such proceeding and, to the extent that it wishes (unless (i) the Indemnifying Party is also a party to such proceeding and the Indemnified Party determines in good faith that joint representation would be materially prejudicial to the Indemnified Party’s defense, or (ii) the Indemnifying Party fails to provide reasonable assurance to the Indemnified Party of its financial capacity to defend such proceeding and provide indemnification with respect to such proceeding), to assume the defense of such proceeding with counsel reasonably satisfactory to the Indemnified Party and, after notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of such proceeding, the Indemnifying Party will not, as long as it diligently conducts such defense, be liable to the Indemnified Party under this Section 6 for any fees of other counsel or any other expenses with respect to the defense of such proceeding, in each case subsequently incurred by the Indemnified Party in connection with the defense of such proceeding, other than reasonable costs of investigation. If the Indemnifying Party assumes the defense of a proceeding, (i) it will be conclusively established for purposes of this Agreement that the claims made in that proceeding are within the scope of and subject to indemnification; (ii) no compromise or settlement of such claims may be effected by the Indemnifying Party without the Indemnified Party’s consent, which shall not be unreasonably withheld, unless (A) there is no finding or admission of any violation of law or any violation of the rights of any Person and no effect on any other claims that may be made against the Indemnified Party, and (B) the sole relief provided is monetary damages that are paid in full by the Indemnifying Party; and (iii) the Indemnified Party will have no liability with respect to any compromise or settlement of such claims effected without its consent. If notice is given to an Indemnifying Party of the commencement of any proceeding and the Indemnifying Party does not, within ten days after the Indemnified Party’s notice is given, give notice to the Indemnified Party of its election to assume the defense of such proceeding, the Indemnifying Party will be bound by any determination made in such proceeding or any compromise or settlement effected by the Indemnified Party.

(c)    Notwithstanding the foregoing, if an Indemnified Party determines in good faith that there is a reasonable probability that a proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the Indemnified Party may, by notice to the Indemnifying Party, assume the

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exclusive right to defend, compromise, or settle such proceeding, but the Indemnifying Party will not be bound by any determination of a proceeding so defended or any compromise or settlement effected without its consent (which may not be unreasonably withheld).

6.4    Limitations; Offset; Remedies; etc.

(a)    Limitations.

(i)    The maximum aggregate liability of the Company, the Subsidiary and/or the New Subsidiary for indemnification under this Section 6 shall be limited to the Indemnification Cap. As used herein the term “Indemnification Cap” shall mean US$7,336,258, provided however, if the Warrant Agreement is exercised, then the Indemnification Cap shall be increased to be the sum of US$7,336,258 plus fifteen percent (15%) of the Exercise Price as defined in the Warrant Agreement, provided however that with respect to any claims for indemnification under Section 6.2(a) for breaches of any of the Major Representations only, the Indemnification Cap shall be US$58,690,062.

(ii)    The Investor Indemnified Parties shall not be entitled to indemnification under this Section 6, except to the extent that the aggregate Investor Losses exceed US$750,000 (the “Indemnification Threshold”), in which event such indemnification shall be required to the full extent of the Investor Losses, including the Indemnification Threshold; provided, however, that this Section 6.4(a)(ii) shall not apply to (x) the covenants of the Company and the indemnification obligations relating thereto, (y) the Company’s obligations under Section 5.7, or (z) the Company’s representation and warranty under Section 2.19(c).

(iii)    With respect to any matter for which indemnification has been provided hereunder, the Indemnified Party hereby covenants and agrees to use all commercially reasonable efforts to collect amounts payable to the Indemnified Party under any applicable insurance policy of the Indemnified Party, and any such amounts so paid to the Indemnified Party shall reduce the indemnification obligations of the Indemnifying Party with respect to such matters.

(iv)    In no event shall Losses include amounts arising from consequential, special, exemplary, or punitive damages.

(v)    In no event shall this Section 6 require duplicative payments or indemnities by an Indemnifying Party (including without limitation to the extent payment is achieved through the cash reconciliation provisions of Section 1.7).

(vi)    Subject solely to Section 6.4(c), the Investor acknowledges and agrees that its sole recourse for indemnification with respect to any breach by the Company, the Subsidiary and/or the New Subsidiary of its representations and warranties under this Agreement or any Related Agreement shall be to the Escrow Deposit pursuant to the Escrow Agreement and the Transfer Agreement, provided that this clause (vi) shall not apply to any breaches of the Major Representations.

(vii)    The parties acknowledge that the limitations set forth in the preceding clauses (i), (ii), (iii), (iv), (v), and (vi), of this Section 6.4(a) are not mutually exclusive, but rather are separate and independent limitations, and that each and all such limitations may, alone or together, apply to a party’s indemnification obligations in accordance with their respective terms.

(b)    Exclusivity of Remedies.    Notwithstanding anything herein to the contrary, each party’s sole and exclusive remedy against any other party for any breach of a representation, warranty, covenant or other obligation made in or imposed by this Agreement or any breach of a representation or a warranty in Related Agreement or the other transactions contemplated

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hereunder shall be a claim for indemnification under this Section 6, subject to all of the limitations of this Section 6, including under this Section 6.4; provided however that neither this Section 6.4(b) nor Section 6.1 shall limit either party’s rights (a) in the event and to the extent of any fraud in connection with this Agreement or the Related Agreements; (b) with respect to any covenants (but not representations or warranties) under the Related Agreements; and/or (c) to seek specific performance by the other party with respect to any post-Closing covenants of such other party under this Agreement or any Related Agreement. For purposes of the foregoing clause (a) the term “fraud” when used with respect to the Company shall include, without limitation, any breach by the Company of any of its covenants, representations or warranties in this Agreement or its representations and warranties in the Related Agreements if such breach constituted an intentional or knowing misrepresentation and breach by the Company; provided, however, that neither the existence nor knowledge of any facts which give rise to a breach of any such covenant, representation or warranty shall, in and of itself, constitute “fraud” or an intentional or knowing misrepresentation and breach. Notwithstanding Section 8.10, the “knowledge” referred to in connection with a “knowing” breach as set forth above shall be limited to the actual, conscious (and not constructive) knowledge of such breach as of the date hereof by Justin Tang, Derek Palaschuk, Richard Zheng Xue, Richard Chen and Frank Zheng.

(c)    Offset.    The Investor shall have the right, with respect to any Investor Losses incurred or sustained by any of the Investor Indemnified Parties and for which indemnification is available pursuant to Section 6.2 (subject to the other limitations of this Section 6), to reduce by an amount equal to the amount of such Losses (as so limited, if applicable) any payment due to the Company as Exercise Price (as defined in the Warrant Agreement) in connection with the exercise by the Investor of the Warrants.

7.    Certain Covenants; Closing Conditions; Termination.

7.1    Covenants Regarding Closing.

(a)    The Company and the Investor shall each use their reasonable best efforts to consummate the transactions contemplated by this Agreement (and will cause each of their respective affiliates to do the same) as of the earliest practicable date and shall not take, or cause to be taken, or to the best of their ability permit to be taken, any action that would impair the prospect of completing the transactions contemplated by this Agreement. Without limiting the foregoing, the Company, the Investor and the Investor Parent each agree to, subject to the terms and conditions hereof, execute and deliver at the Closing each Related Agreement to which it is a party and to use their reasonable best efforts to cause each other shareholder or employee of the Company to execute and deliver at the Closing each Related Agreement to which it is a party.

(b)    In addition to the foregoing, from and after the date of this Agreement through Closing, the Company shall comply with the covenants set forth in Section 5 of this Agreement and in Section 8 of the Investors Agreement, fully as if such sections and agreement were applicable from and after the date hereof in accordance with its terms, excluding only those such covenants which by their terms are not capable of being performed prior to the Closing, provided however, that to the extent that any such covenant becomes applicable only upon request or other affirmative action of the Investor, then such covenant shall be excluded from this Section 7.1(a).

7.2    Closing Conditions.

(a)    Conditions to the Obligations of the Investor and the Investor Parent.    The obligations of the Investor and the Investor Parent to be performed on the Closing Date shall be subject to

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the satisfaction of each of the conditions stated in this Section 7.2(a) on or before (with satisfaction continuing on) the Closing Date, except to the extent that the Investor waives such satisfaction in writing:

(1)    Representations and Warranties.    All Closing Representations and Warranties (as defined below) that are qualified as to materiality shall be true and correct, and those that are not so qualified shall be true and correct in all material respects, in each case, at and as of the date of this Agreement and at and as of the Closing Date as though restated on and as of such date (except in the case of any representation or warranty that by its terms is made as of a date specified therein, in which case such representation or warranty that is qualified as to materiality shall be true and correct, and any representation or warranty not so qualified shall be true and correct in all material respects, as of such date). As used above, the term “Closing Representations and Warranties” shall mean the Major Representations, excluding Section 2.23.

(2)    Covenants.    The Company, the Subsidiary and the New Subsidiary shall have complied in all material respects with its covenants under Sections 7.1 (a) and (b), provided that in the event of a breach of the same, the Company shall be given a reasonable opportunity by the Investor to cure such breach (if such breach is susceptible to cure).

(3)    Subsidiary Charter.    The Company shall have received unequivocal approval of the amended and restated articles of association of the Subsidiary, in the form agreed and initialed by Investor and the Company on or before the date hereof, by the Chaoyang District Commission of Foreign Trade and Economic Cooperation and the registration of the same with the Beijing Administration of Industry and Commerce.

(4)    Absence of Fraud.    The Company shall not have committed fraud against the Investor in connection with this Agreement or the transactions contemplated hereby (and as used in this Section 7.2(a)(4), “fraud” shall have the meaning set forth in Section 6.4(b), provided that if such “fraud” is in the form of an intentional or knowing breach by the Company of any of its covenants, representations or warranties in this Agreement pursuant to such definition, such breach shall only constitute “fraud” for purposes of this Section 7.2(a)(4) if it has created or resulted in a Material Adverse Effect).

(b)    Conditions to the Obligations of the Company, the Subsidiary and the New Subsidiary.    The obligations of the Company, the Subsidiary and the New Subsidiary to be performed on the Closing Date shall be subject to the satisfaction of each of the conditions stated in this Section 5 on or before (with satisfaction continuing on) the Closing Date, except to the extent that the Investor waives such satisfaction in writing:

(1)    Representations and Warranties.    All of the representations and warranties in Section 4 that are qualified as to materiality shall be true and correct, and those that are not so qualified shall be true and correct in all material respects, in each case, at and as of the date of this Agreement and at and as of the Closing Date as though restated on and as of such date (except in the case of any representation or warranty that by its terms is made as of a date specified therein, in which case such representation or warranty that is qualified as to materiality shall be true and correct, and any representation or warranty not so qualified shall be true and correct in all material respects, as of such date).

(2)    Covenants.    The Investor and the Investor Parent shall have complied in all material respects with their covenants under Section 7.1 (a).

(3)    Absence of Fraud.    Neither the Investor nor the Investor Parent shall have committed fraud against the Company in connection with this Agreement or the Related Agreements.

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7.3    Termination.    This Agreement may be terminated, and the transactions contemplated hereby may be abandoned prior to the Closing

(i)    upon the written consent of each party hereto;

(ii)    if the Closing shall not have occurred within 21 days after the date hereof, in which case any party hereto shall have the right to terminate this Agreement at any time thereafter;

(iii)    by the Investor or the Investor Parent upon the material breach by the Company of its representations, warranties and covenants under this Agreement; or

(iv)    by the Company upon the material breach by the Investor of its representations, warranties and covenants under this Agreement; or

In the event of a termination by the Investor or the Investor Parent under the foregoing clause (iii), such termination shall be the sole right and remedy with respect to the matters giving rise to such termination, and neither the Company, the Subsidiary nor the New Subsidiary shall have any further liability with respect thereto, provided, the Company shall have materially complied with its covenant under Section 7.1 (a), provided further that in the event of a breach of the same, the Company shall have been given a reasonable opportunity by the Investor to cure such breach (if such breach is susceptible to cure) but shall not have such cured such breach.

The occurrence of the Closing shall not be deemed to be a waiver or acceptance by the parties of any breach of any representation or warranty of any other party, but the occurrence of the Closing shall be deemed to be a waiver and acceptance by the parties of the performance, or non-performance, of the pre-closing covenants of the other parties.

8.    Miscellaneous.

8.1    Successors and Assigns.    Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any securities purchased hereunder). No party shall in any manner assign any of its rights or obligations under this Agreement without the express prior written consent of each of the other parties hereto. Nothing in this Agreement is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware. Each of the parties hereto agrees that any State or Federal court sitting in Delaware (“Delaware Courts”) shall have exclusive jurisdiction (subject only to Section 8.2(b)) to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 8.5, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

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(b)    Notwithstanding the foregoing, in the event that either the Company, the Subsidiary or the New Subsidiary, on the one hand (with respect only to Section 5.10 only), or the Investor, on the other hand, reasonably determines that it is or will be unable to enforce, against the other, a judgment to be obtained from and issued by a Delaware Court with respect to a controversy or claim arising out of or relating to this Agreement, then at the option of such first party such controversy or claim shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

8.3    Counterparts.    This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.4    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.5    Notices.    All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) ten (10) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) two (2) days after deposit with an internationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on Schedule 8.5 hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 8.5).

8.6    Expenses.    Each party hereto shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement and any applicable Related Agreement.

8.7    Amendments and Waivers.    Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of each party hereto.

8.8    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

8.9    Entire Agreement.    This Agreement, the Related Agreements and the documents referred to herein and therein constitute the entire agreement among the parties with respect to the subject matter hereof and thereof (and supercedes all prior oral and written communications

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and agreements, and all contemporaneous communications and agreements, with respect to the subject matter hereof and thereof, including, without limitation, all letters of intent previously entered into among some or all of the parties hereto) and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein.

8.10    Knowledge of the Company.    The term “knowledge of the Company” (or similar terms) shall, for purposes of this Agreement, mean the actual knowledge after reasonable inquiry of Justin Tang, Derek Palaschuk, Richard Zheng Xue, Richard Chen, Frank Zheng, Liming Sun, Xiaojian Zhong and Raymond Huang.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

ELONG, INC.
By:	/s/
Name:
Title:
ELONGNET INFORMATION TECHNOLOGY (BEIJING) CO., LTD.
By:	/s/
Name:
Title:
ELONGNET HI-TECH (BEIJING) CO., LTD.
By:	/s/
Name:
Title:
IACT ASIA PACIFIC LIMITED
By:	/s/
Name:
Title:
INTERACTIVECORP
By:	/s/
Name:
Title:

EX-10.36

Exhibit 10.36

TRANSFER AND ESCROW CONTRIBUTION AGREEMENT

BY AND AMONG

IACT ASIA PACIFIC LIMITED,

THE SELLING SHAREHOLDERS LISTED ON EXHIBITS A AND B HERETO

AND

ELONG, INC.

JULY 23, 2004

THIS TRANSFER AND ESCROW CONTRIBUTION AGREEMENT (the “Agreement”) is made as of the 23rd day of July, 2004 (the “Closing Date”), by and among eLong, Inc., an exempted limited liability company under the laws of the Cayman Islands (the “Company”), the individuals or entities listed under the heading “Selling Shareholders” on Exhibit A and Exhibit B hereto (the “Selling Shareholders”), and IACT Asia Pacific Limited, an exempt limited liability company organized in the Cayman Islands (the “Investor”).

WHEREAS, in connection with a certain Transaction Agreement by and between the Company, eLongNet Information Technology (Beijing) Co., Ltd., a company organized under the laws of the People’s Republic of China (the “Subsidiary”), eLongNet Hi-Tech (Beijing) Co., Ltd., a company organized under the laws of the People’s Republic of China (the “New Subsidiary”), the Investor, and an affiliate of the Investor dated as of the date hereof (the “Transaction Agreement”), the Selling Shareholders desire to transfer to the Company and the Company desires to acquire and redeem from the Selling Shareholders, certain securities of the Company, upon the terms and subject to the conditions set forth herein;

WHEREAS, the Investor has required as a condition to entering into the Transaction Agreement that the Selling Shareholders agree to indemnify the Investor Indemnified Parties (as defined in the Transaction Agreement) against certain indemnification obligations of the Company under the Transaction Agreement, all as set forth herein; and

WHEREAS, any terms used herein and not defined herein shall have the meaning ascribed to such term in the Transaction Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby covenant and agree as follows:

1.    Closing; Transfer.

1.1    Closing.    The closing (the “Redemption Closing”) of the transactions contemplated by this Agreement shall take place simultaneously with the Closing (as defined in the Transaction Agreement), at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York, effective at 10:00 A.M. (local time), on the Closing Date. All matters at the Redemption Closing shall be considered to take place and have taken place simultaneously.

1.2    Transfer and Redemption of Ordinary Shares or Series A Preferred Shares to the Company.    At and as part of the Redemption Closing:

(a)    Each Selling Shareholder hereby agrees to, and shall, sell, transfer, convey, assign and set over to the Company, and the Company hereby agrees to, and shall, purchase, accept and redeem from each Selling Shareholder, all of the Selling Shareholder’s right, title and interest in and to the number of shares of Ordinary Shares or the number of shares of Series A Preferred Shares as set forth opposite each Selling Shareholder’s name on Exhibit A under the heading “Shareholder Shares.” for an aggregate purchase price of US $29,345,029 (the “Shareholder Payment”). The Shareholder Payment will be made by the Company as set forth in Section 1.2(c) below.

(b)    Each of the Selling Shareholders shall deliver to the Company stock certificates representing all of such Selling Shareholder’s Shareholder Shares, in each case endorsed in blank or accompanied by stock powers duly executed in blank, in proper form for transfer and with any stock transfer stamps attached, along with, as and if applicable, lost stock certificate affidavits and such other documents, certificates or instruments as may be

reasonably requested by the Company in order to fully transfer all right, title and interest in and to the Shareholder Shares to the Company.

(c)    The Shareholder Payment will be made as follows: (x) the Company shall pay to each Selling Shareholder 90% of each Selling Shareholder’s portion of the Shareholder Payment (which portions are set forth opposite each Selling Shareholder’s name on Exhibit A) minus any Shareholder Obligation Amounts (as defined below) by wire transfer of immediately available funds to accounts of the Selling Shareholders specified by the Selling Shareholders to the Company; and (y) the remaining 10% of each Selling Shareholder’s portion of the Shareholder Payment (which portions are set forth opposite each Selling Shareholder’s name on Exhibit A) (collectively, the “Share Escrow Contribution”) is being deposited into escrow by wire transfer of immediately available funds to the account of the Escrow Agent set forth in the Escrow Agreement, as part of the escrow deposit described in Section 1.2(c) of the Transaction Agreement. Such Share Escrow Contribution will be released from escrow to the Selling Shareholders subject to the terms set forth below and subject to the Escrow Agreement.

(d)    Each Selling Shareholder hereby agrees and authorizes the Company to withhold and deduct from each Selling Shareholder’s portion of the Shareholder Payment the following (which shall collectively be referred to herein as the “Shareholder Obligation Amounts”):

(i)    The amount set forth opposite each Selling Shareholder’s name on Exhibit A under the column “Expenses,” which represents such Selling Shareholder’s pro rata portion of the Company’s fees and expenses incurred in connection with the transactions contemplated by this Agreement and the Transaction Agreement, including, without limitation, investment banking, legal and accounting fees;

(ii)    The amount, if applicable, set forth opposite each Selling Shareholder’s name on Exhibit A under the column “Exercise or Loan Repayment Amount” which represents the amounts due and payable to the Company by such Selling Shareholder (1) pursuant to certain indebtedness of such Selling Shareholder in favor of the Company; (2) in connection with such Selling Shareholder’s exercise of certain options in connection with the transactions contemplated by this Agreement; and/or (3) in connection with such Selling Shareholder’s exercise of certain warrants in connection with the transactions contemplated by this Agreement.

Without derogating from the foregoing, the Selling Shareholder acknowledges and agrees that the amount payable to such Selling Shareholder at the Redemption Closing pursuant to this Agreement is set forth on Exhibit A under the column “Net Amount Payable at Redemption Closing.”

1.3    Warrant.    At and as part of the Closing, the Company is issuing to the Investor a Warrant to purchase certain securities of the Company (the “Warrant Shares”) pursuant to the terms and conditions of a certain Warrant Agreement (the “Warrant Agreement”) between the Company and the Investor.

(a)    In the event that the Investor exercises its rights under the Warrant Agreement to purchase securities of the Company (the “Warrant Closing”), then:

(i)    Each Selling Shareholder listed on Exhibit B hereto, hereby agrees to and shall sell, transfer, convey, assign and set over to the Company, and the Company hereby agrees to and shall purchase, accept and redeem from each such Selling Shareholder, all of the Selling Shareholder’s right, title and interest in and to the number of shares of Ordinary Shares or the number of shares of Series A Preferred Shares, as are equal to

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such Selling Shareholder’s Warrant Shareholder Shares (as defined below) for an aggregate price based on a price per share for each Warrant Shareholder Share equal to the Exercise Price (as such term is defined in the Warrant Agreement) (such aggregate price, the “Warrant Shareholder Payment”). The Warrant Shareholder Payment will be made by the Company as set forth in Section 1.3(a)(ii) below.

As used above, the term “Warrant Shareholder Shares” means, with respect to any given Selling Shareholder listed on Exhibit B hereto, the number of shares of Ordinary Shares or of Series A Preferred Shares set forth opposite such Selling Shareholder’s name on Exhibit B under the heading “Initial Warrant Shareholder Shares;” provided, however, that the Warrant Shareholder Shares of each Selling Shareholder shall be increased from time to time such that, and to the extent necessary so that, the aggregate Warrant Shareholder Shares of all the Selling Shareholders at any time shall be equal to 50% of the Control Number (as defined in the Warrant Agreement) at such time (it being understood that each Selling Shareholder’s Warrant Shareholder Shares shall be increased pro rata (as measured against all other Selling Shareholders listed on Exhibit B)).

(ii)    The Warrant Shareholder Payment will be made as follows: (x) the Company shall pay to each Selling Shareholder listed on Exhibit B hereto 90% of each Selling Shareholder’s portion of the Warrant Shareholder Payment minus any Warrant Shareholder Obligation Amounts (as defined below) by wire transfer of immediately available funds to accounts of the Selling Shareholders as specified by the Selling Shareholders to the Company; and (y) the remaining 10% of each such Selling Shareholder’s portion of the Warrant Shareholder Payment is being deposited into escrow (the “Warrant Escrow Contribution,” together with the Share Escrow Contribution, the “Escrow Contribution”) by wire transfer of immediately available funds to the account of the Escrow Agent (as defined below) set forth in the Escrow Agreement (as defined below), as part of the escrow deposit described in Section 3.4 of the Warrant Agreement; provided, however, that in the event that the Investor places the Force Majeure Escrow Deposit (as defined in the Warrant Agreement) into escrow with the Escrow Agent pursuant to Section 3.8 of the Warrant Agreement, then the percentage set forth in the foregoing clause (x) shall be 75%, and the percentage set forth in the foregoing clause (y) shall be 25% (it being acknowledged and agreed that such 25% includes the Selling Shareholders’ 15% Force Majeure Escrow Deposit pursuant to the Warrant Agreement). Said Escrow Contribution will be released from the Escrow Deposit to the Selling Shareholders subject to the terms set forth below and subject to the Escrow Agreement.

(b)    At and as part of the Redemption Closing, each of the Selling Shareholders listed on Exhibit B hereto shall deliver to the Company, for further delivery to the Escrow Agent to be held in escrow pursuant to the Escrow Agreement, either (i) stock certificates representing all of such Selling Shareholder’s Initial Warrant Shareholder Shares as is set forth on Exhibit B, or (ii) if such Selling Shareholder is exercising vested stock options or warrants in order to sell its Warrant Shareholder Shares to the Company pursuant to Section 1.3(a)(i) above, a conditional option or warrant exercise notice relating to such Initial Warrant Shareholder Shares, all to be held in escrow by the Escrow Agent in accordance with the terms of this Agreement and the Escrow Agreement. All of the shares either (1) held in escrow pursuant to the foregoing clause (i) or Section 1.3(c); or (2) to be issued upon exercise of warrants or options pursuant to exercise notices held in escrow pursuant to the foregoing clause (ii) or Section 1.3(c), of a given Selling Shareholder, are referred to herein as such Selling Shareholder’s “Escrow Warrant Shares.”

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(c)    If for any reason (including, without limitation, because of an increase in the Control Number or the termination of vested stock options that are represented in the Escrow Warrant Shares upon the termination of an employee who is a Selling Shareholder) the number of shares included within any Selling Shareholder’s then-current Escrow Warrant Shares is less than such Selling Shareholder’s Warrant Shareholder Shares at such time, at the request of the Investor, the Selling Shareholder listed on Exhibit B hereto shall deliver to the Escrow Agent to be held in escrow, either (i) stock certificates representing (1) such number of Ordinary Shares or Series A Preferred Shares as is necessary to eliminate such deficit or (ii) if such Selling Shareholder is exercising vested stock options or warrants in order to sell its Warrant Shareholder Shares to the Company pursuant to Section 1.3(a)(i) above, a conditional option or warrant exercise notice relating to such number of Ordinary Shares as is necessary to eliminate such deficit, all to be held by the Escrow Agent in accordance with the terms of the Escrow Agreement; and all such shares, or such shares issuable pursuant to such exercise notices, shall be included within the Escrow Warrant Shares of such Selling Shareholder. Notwithstanding the foregoing, if any such Selling Shareholder is unable to or otherwise fails to make such delivery to the Escrow Agent for any reason (including, without limitation, because such Selling Shareholder does not own sufficient additional Ordinary Shares or Series A Preferred Shares), then all of the remaining Selling Shareholders on Exhibit B shall make sufficient deliveries to the Escrow Agent (on a pro rata basis measured against all other Selling Shareholders on Exhibit B other than such failing Selling Shareholder) so that the aggregate Escrow Warrant Shares of all Selling Shareholders after such deliveries shall equal 50% of the Control Number at such time (not to exceed, as to any given Selling Shareholder, the total shares held by such Selling Shareholder in the Company). The Selling Shareholders acknowledge and agree that a failure by a Selling Shareholder to make such delivery to the Escrow Agent for any reason (other than, and only to the extent, that such Selling Shareholder does not own sufficient shares) shall, with respect to the other Selling Shareholders only, be a breach of this Agreement, and the other Selling Shareholders shall have all rights and remedies available to them at law or in equity in respect of such breach, provided that the foregoing breach shall also be a breach (by such Selling Shareholder only) as to the Company and the Investor if as a result of such failure the aggregate Escrow Warrant Shares of all Selling Shareholders after such deliveries do not equal, at the Warrant Closing, 50% of the Control Number. The Company shall give the Investor prompt notice each time an event occurs (including without limitation a change in the Control Number or the termination of stock options as aforesaid) which would result in additional deliveries being required to be made to the Escrow Agent under this Section 1.3(c). Each of the Selling Shareholders agrees not to Transfer any of the Escrow Warrant Shares prior to the expiration or termination of the Warrant in accordance with the terms of the Warrant Agreement; provided, however, that Escrow Warrant Shares may be Transferred by the Selling Shareholders to Controlled Affiliates and/or partners in Selling Shareholders which are partnerships and/or members of Selling Shareholders which are limited liability companies, subject to the transferee in each case agreeing in writing to be bound by this Agreement. In the event that as to any Selling Shareholder, the Escrow Warrant Shares exceed the number of Warrant Shareholder Shares to be redeemed by the Company at the Warrant Closing, the Company and the Investor shall jointly direct the Escrow Agent to return such Escrow Warrant Shares (or the exercise notices relating thereto, as applicable) to such Selling Shareholder on the Warrant Closing. As used herein, “Transfer” shall mean any direct or indirect offer, sale, gift, transfer, assignment or other disposition and shall include agreeing to do any of the foregoing. As used herein “Controlled Affiliate” shall mean an entity that is controlled by, controlling, or under common control with the Selling Shareholder, provided having “control” will mean having at least a majority of the voting power and the power to elect a majority of the board of directors or other governing body of an entity.

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(d)    Each Selling Shareholders listed on Exhibit B hereto, hereby agrees and authorizes the Company to withhold and deduct from each such Selling Shareholder’s portion of the Warrant Shareholder Payment the following (which shall collectively be referred to herein as the “Warrant Shareholder Obligation Amounts”):

(i)    The amount equal to the percentage set forth opposite each Selling Shareholder’s name on Exhibit B under the column “Warrant Expense Percentage” of the Warrant Closing Expenses (defined below); and

(ii)    The aggregate amount due and payable to the Company from such Selling Shareholder in connection with such Selling Shareholder’s exercise of any options or warrants into such Selling Shareholder’s Warrant Shareholder Shares in connection with the transactions contemplated by this Agreement.

As used above, the term “Warrant Closing Expenses” means 50% of the Company’s reasonable fees and expenses incurred in connection with the Warrant Closing, including without limitation investment banking, legal and accounting fees, arbiter fees (if applicable) and stamp taxes (if applicable) under the Warrant Agreement.

(e)    In the event of that the procedures for determining Fair Market Value (as defined in the Warrant Agreement) have been triggered pursuant to Section 3.7 of the Warrant Agreement, then the Company shall from time to time, at the request of any Selling Shareholder, reasonably apprise and update such Selling Shareholder with respect to the status of such determination.

1.4    Escrow Agreement.    Simultaneously with the Redemption Closing, the Company, IACT, and Bank of New York (or such other bank or escrow agent reasonably satisfactory to the Company and the Investor) (the “Escrow Agent”) will enter into an Escrow Agreement (the “Escrow Agreement”), as contemplated by the Transaction Agreement.

1.5    Cash and Other Reconciliations.

(a)    Closing Cash Statement Under the Transaction Agreement.    Pursuant to the Transaction Agreement, the Company is required to deliver to the Investor a Closing Cash Statement following the Closing. If the “cash and cash equivalents” of the Company as of the Closing Date, as set forth on the Final Closing Cash Statement is (A) less than $6,288,508 (such deficit, the “Cash Deficit”), then the Company shall pay the Investor, 30% of the Cash Deficit and the Selling Shareholders hereby agree, immediately prior to the Company’s payment to the Investor, to pay to the Company, as agent for the Selling Shareholders, their pro rata share (based on total amounts received in connection with the Redemption Closing by all Selling Shareholders set forth on Exhibit A) of fifty percent (50%) of such payment to the Investor, or (B) more than $6,288,508 (such surplus, the “Cash Surplus”), then the Investor shall pay the Company, 30% of the Cash Surplus and the Company hereby agrees, promptly upon the Company’s receipt of such payment, to pay to the Selling Shareholders, their pro rata share (based on total amounts received in connection with the Redemption Closing by all Selling Shareholders set forth on Exhibit A) of fifty percent (50%) of such payment. In the case of each of the foregoing clauses (A) and (B), the required payment shall be made within ten (10) days of the date the Final Closing Cash Statement was agreed to or finalized pursuant to the terms of the Transaction Agreement.

(b)    Certain Payments Under the Warrant.    In the event that the Investor places the Force Majeure Escrow Deposit (as defined in the Warrant Agreement) into escrow with the Escrow Agent pursuant to Section 3.8 of the Warrant Agreement, then (A) if all or part of such Force Majeure Escrow Deposit is to be returned to the Company and the Selling Shareholders listed

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on Exhibit B hereto pursuant to said Section 3.8, then promptly upon the Company’s receipt of any such amount (for itself and on behalf of the Selling Shareholders), it shall pay to the Selling Shareholders listed on Exhibit B hereto their pro rata share (based on total amounts received in connection with the Warrant Closing by all Selling Shareholders set forth on Exhibit B) of fifty percent (50%) of such amount; and (B) if the Company is required to make a payment to the Investor pursuant to said Section 3.8, then the Selling Shareholders listed on Exhibit B hereto shall, immediately prior to the Company’s payment to the Investor, pay to the Company, as agent for the Selling Shareholders, their pro rata share (based on total amounts received in connection with the Warrant Closing by all Selling Shareholders set forth on Exhibit B) of fifty percent (50%) of such payment to the Investor.

(c)    Treatment of Payments.    For purposes of clarity, any payments due to the Company or the Investor pursuant to this Section 1.4: (i) shall be deemed an adjustment to the purchase price, (ii) shall be paid directly by the party from which payment is due and (iii) shall not be deemed to be indemnification payments nor in any way reduce or increase the aggregate amount of liability of the Selling Shareholders under Sections 3 and 4 below.

(d)    Withholding.    If the Company in its discretion determines that it is obligated to withhold tax with respect to the exercise by any Selling Shareholder of any options or warrants in connection with its sale of Shareholder Shares or Warrant Shares hereunder, each Selling Shareholder agrees that the Company may withhold from any amounts due such Selling Shareholder hereunder the appropriate amount of the withholding taxes attributable to such exercise and/or payment. Each such Selling Shareholder further agrees that, if the Company does not withhold an amount sufficient to satisfy the Company’s withholding obligation, then such Selling Shareholder will reimburse the Company on demand, in cash, for the amount underwithheld.

2.    Representation and Warranties of the Selling Shareholders.

2.1    Subject to Section 4, each Selling Shareholder (as to itself or himself only and not as to any other Selling Shareholder) hereby represents and warrants to the Investor and the Company, that:

(a)    If such Selling Shareholder is a legal entity, it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to carry on its business as now conducted and to perform its obligations under this Agreement. If such Selling Shareholder is a legal entity, it is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on such Selling Shareholder.

(b)    If such Selling Shareholder is an entity, all corporate, limited liability company or partnership action, as applicable on the part of such Selling Shareholder and its officers, directors, shareholders, managers, partners and affiliates, as applicable, and all shareholder, member or partner action, as applicable, on the part of such Selling Shareholder’s shareholders, members or partners, as applicable, necessary for the authorization, execution and delivery of this Agreement and the Related Agreements (as such term is defined in the Transaction Agreement) to which it is a party, the performance of all of its obligations hereunder and thereunder, including without limitation the sale of the securities being sold hereunder and thereunder, has been taken. This Agreement and the Related Agreements to which it is a party constitute valid and legally binding obligations of such Selling Shareholder, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights

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generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (c) to the extent the indemnification provisions contained in the Investors Agreement (as such term is defined in the Transaction Agreement) may be limited by applicable foreign, United States or state securities laws. The execution, delivery and performance by such Selling Shareholder of this Agreement and the applicable Related Agreements to which it is a party, and the consummation of the transactions contemplated hereby and thereby: (i) will not result in any violation or default or be in conflict with or constitute, with or without the passage of time and giving of notice, a default under any provision of such Selling Shareholder’s applicable organizational documents; (ii) will not result in the breach of or constitute a default under any material contract, lease, license, franchise, permit, indenture, mortgage, deed of trust, note, agreement or other instrument to which such Selling Shareholder is a party or by which it is bound; and (iii) will not violate any law or order applicable to or bearing upon such Selling Shareholder or its assets or businesses, except in the case of clauses (ii) and (iii) for such breaches, defaults or violations that could not reasonably be expected to have a material adverse effect on the ability of such Selling Shareholder to consummate the transactions contemplated by this Agreement. Such Selling Shareholder is not required to obtain any consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any United States, local or foreign governmental authority or from any Person in connection with the execution, delivery and performance of this Agreement or the applicable Related Agreements to which it is a party or the consummation of the transactions contemplated hereby or thereby which it has not already obtained except where the failure to obtain such consent, approval, or authorization, or to make or file such registration, qualification, designation, declaration or filing, would not reasonably be expected to have a material adverse effect on the condition (financial or otherwise), operations, results of operations, business, assets, liabilities (contingent or otherwise), capital or prospects of such Selling Shareholder. There are no legal or governmental proceedings pending, or to the knowledge of such Selling Shareholder, threatened against such Selling Shareholder that would have the effect of preventing or delaying such Selling Shareholder from executing and delivering this Agreement or consummating any of the transactions contemplated by this Agreement or performing its obligations hereunder.

(c)    Such Selling Shareholder owns of record and has good and valid title to the securities being transferred (or to be transferred) by such Selling Shareholder pursuant to this Agreement. Such Selling Shareholder will transfer such securities at the Redemption Closing and the Warrant Closing free and clear of any encumbrances, preemptive rights, escrows, options, rights of first refusal or other similar arrangements, whether written or oral, or any other restrictions affecting the rights of transfer or voting of such securities, in each case, created by or on behalf of such Selling Shareholder or any prior owner of such securities.

2.2    Each Selling Shareholder (as to itself or himself only and not as to any other Selling Shareholder) hereby represents and warrants to the Investor, that (a) such Selling Shareholder has read the Transaction Agreement (including the Disclosure Schedule) and (b) that each Selling Shareholder has no actual, conscious knowledge that the Company is in breach of the Company’s representations and warranties under the Transaction Agreement; provided, however, that neither the existence nor knowledge of any facts which give rise to a breach of any such covenant, representation or warranty shall, in and of itself, constitute knowledge by such Selling Shareholder of such breach.

2.3    Each Selling Shareholder agrees to use all commercially reasonably efforts to consummate the transactions contemplated by this Agreement and to not take, or cause or permit to be taken, any action that would impair the ability of such Selling Shareholder to complete the transactions contemplated by this Agreement.

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2.4    Each Selling Shareholder hereby agrees to indemnify the Company and the Investor and their respective directors, officers, agents and employees, successors and assigns from and against any and all losses, costs, claims, damages, liabilities, Taxes, obligations, judgments, settlements, assessments, awards, demands, offsets, reasonable out-of-pocket costs, expenses and attorneys’ fees (including any such reasonable costs, expenses and attorneys’ fees incurred in enforcing a party’s right to indemnification against any indemnifying party or with respect to any appeal) and penalties and interest, if any incurred by them and arising out of or resulting from any breach by such Selling Shareholder of its representations and warranties or covenants under Sections 1, 2 and 5 hereof.

3.    Company Representations and Warranties.    Subject to Section 4, each Selling Shareholder hereby severally agrees to indemnify fully, hold harmless, protect and defend, subject to the limitations set forth in Section 4 below, the Investor, its affiliates, and their respective directors, officers, agents and employees, successors and assigns (the “Investor Parties”) against (a) all Investor Losses (as defined in the Transaction Agreement), including without limitation those arising in connection with Section 5.7 of the Transaction Agreement, but, in any case, only to the extent that the Investor Parties are entitled to indemnification from the Company as to such Investor Losses pursuant and subject to Section 6 of the Transaction Agreement), and (b) all Investor Losses arising from any fraud (as such term is defined in the Section 6.4(b) of the Transaction Agreement) by the Company against the Investor and the Investor Parent in connection with, and subject to, the Transaction Agreement or the Related Agreements. Nothing in this provision shall require the Investor Parties to look first to the Company to cover any liabilities hereunder.

4.    Limitations on Liabilities.    The Selling Shareholders’ liability for their indemnification obligations under Sections 2 and 3 above, shall be limited as follows:

4.1    Each Selling Shareholder’s aggregate amount of liability with respect to breaches of any of their representations, warranties or covenants under Sections 1, 2 and 5 hereof shall be limited to the amount received by such Selling Shareholder pursuant to Section 1.2 and Section 1.3 hereof (including such Selling Shareholder’s Escrow Contribution); provided however that, with respect to any given Selling Shareholder, in no event shall the Investor be allowed to obtain, from the Escrow Deposit, any amounts other than such Selling Shareholder’s Escrow Contribution on account of such breach.

4.2    Each Selling Shareholder’s aggregate amount of liability with respect to its indemnification obligation under Section 3(a) above, to the extent arising from the representations and warranties (other than with respect to the Major Representations of the Company set forth in the Transaction Agreement) and covenants of the Company in the Transaction Agreement shall be limited to the lesser of (i) such Selling Shareholder’s pro rata share (based on total amounts received hereunder) of any amounts due to the Investor Parties on account of all Selling Shareholder’ indemnification obligations under Section 3(a) to the extent arising from the representations and warranties (other than with respect to the Major Representations of the Company set forth in the Transaction Agreement) and covenants of the Company in the Transaction Agreement; or (ii) the amount of such Selling Shareholder’s respective Escrow Contribution.

4.3    Each Selling Shareholder’s aggregate amount of liability with respect to its indemnification obligation under Section 3(a) above, to the extent arising from the Major Representations of the Company set forth in the Transaction Agreement and under Section 3(b), shall be limited to the lesser of (i) such Selling Shareholder’s pro rata share (based on total amounts received hereunder) of any amounts due to the Investor Parties on account of all Selling Shareholders’ indemnification obligation under Section 3(a) or Section 3(b), as applicable, to the extent arising from the Major Representations of the Company set forth in

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the Transaction Agreement or under Section 3(b); or (ii) the amount received by such Selling Shareholder pursuant to Section 1.2 and Section 1.3 hereof (including such Selling Shareholder’s Escrow Contribution).

4.4    Notwithstanding any herein to the contrary, in no event shall the aggregate liability of any Selling Shareholder under this Agreement exceed the aggregate payments received by such Selling Shareholder pursuant to Section 1.2 and Section 1.3 hereof (including such Selling Shareholder’s Escrow Contribution).

4.5    From and after the IAC Control Date, in the event that the Investor Parties have suffered Investor Losses with respect to which the Investor Parties are entitled to (a) indemnification from the Company under Section 6 of the Transaction Agreement and (b) indemnification from the Selling Shareholders under Section 3 of this Agreement, then the aggregate liability of any Selling Shareholder under Section 3 of this Agreement shall be limited to 50% of such Investor Losses, subject to the other limitations of Sections 4.2, 4.3 and 4.4.

4.6    The parties acknowledge that the limitations set forth in the preceding clauses 4.1 through 4.5, inclusive, are not mutually exclusive, but rather are separate and independent limitations, and that each and all such limitations may, alone or together, apply to a party’s obligations in accordance with their respective terms.

5.    Recourse to Escrow.    Each Selling Shareholder agrees that the Investor shall first look to the Selling Shareholder’s portion of the Escrow Contribution to cover any liability of such Selling Shareholder under this Agreement; provided however, that if the Selling Shareholder’s portion of the Escrow Contribution is insufficient to satisfy any such liability, then the Investor may look to the Selling Shareholder to satisfy any such liability, subject in all events to the limitations in Section 4 above.

6.    Distribution of the Escrow Contribution and Release of Warrant Shareholder Shares.     Twenty five percent (25%) of the then-current Escrow Contribution (it being understood and agreed that the Escrow Contribution may be reduced from time to time to satisfy indemnity obligations of the Selling Shareholders hereunder, subject to the limitations hereunder) shall be released from the Escrow Deposit and distributed to the Selling Shareholders, on the date that is one (1) year after the Closing and the remainder of the then-current Escrow Contribution shall be released from the Escrow Deposit and distributed to the Selling Shareholders on the Survival Date (as such term is defined in the Transaction Agreement) (the “Release Dates”); provided that (a) such 25% release and distribution on the first Release Date shall only be made to the extent the condition in the proviso in clause (a) in the second paragraph of Section 1.9 of the Transaction Agreement is satisfied and (b) amounts subject to pending claims on the Survival Date shall be reserved in accordance with the proviso in clause (b) in the second paragraph of Section 1.9 of the Transaction Agreement. Upon each Release Date, the Company and the Investor hereby agree that they shall promptly issue joint instructions to the Escrow Agent to release each respective portion of the remaining Escrow Contribution as set forth in and subject to the terms of this Agreement. Subject to the foregoing, the Company and the Investor agree that they shall jointly direct the Escrow Agent to release to the Investor amounts in the Escrow Deposit needed to satisfy claims by the Investor Indemnified Parties pursuant to Section 6 of the Transaction Agreement or against any Selling Shareholder pursuant to this Agreement. In addition, the Company and the Investor shall direct the Escrow Agent to release from escrow and distribute to the appropriate Selling Shareholders any stock certificates or conditional option or warrant exercise notices held by the Escrow Agent pursuant to Section 1.3(b) above upon the termination or expiration of the Warrant pursuant to the Warrant Agreement; provided that the Investor has not exercised its rights with respect to the Warrant. The Company, the Investor and the Selling Shareholders agree that any interest earned on the Escrow Contribution

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shall be payable to each of the Selling Shareholders in accordance with their respective portion of the Escrow Contribution pursuant to such joint instructions and this Agreement, and such interest shall also constitute part of the Escrow Contribution hereunder. Notwithstanding anything herein to the contrary, any obligation of the Company to make any distributions described herein shall be subject to the Company actually receiving such funds from the Escrow Agent. Notwithstanding anything herein to the contrary, in the event that the Warrant is exercised (a) after the date which is one (1) year after the Closing but prior to the Survival Date, then, with respect to a Selling Shareholder’s sale and transfer of Warrant Shareholder Shares to the Company in connection with the Warrant Closing, only 75% of the amount which would have otherwise been paid into escrow pursuant to Section 1.3(a) shall be paid into escrow, and the remaining 25% of such amount shall be paid directly to such Selling Shareholder at the Warrant Closing, or (b) after the Survival Date, then, with respect to a Selling Shareholder’s sale and transfer of Warrant Shareholder Shares to the Company in connection with the Warrant Closing, any amounts which would have otherwise been paid into escrow pursuant to Section 1.3(a) shall not be paid into escrow, but instead shall be paid directly to such Selling Shareholder at the Warrant Closing.

7.    Exclusivity of Remedies.    Notwithstanding anything herein to the contrary, each party’s sole and exclusive remedy against any Selling Shareholder for any breach of a representation, warranty, covenant or other obligation made in or imposed by this Agreement or the other transactions contemplated hereunder shall be as set forth in this Agreement, subject (without limiting the foregoing) to all of the limitations of Section 4; provided however that this Section 7 shall not limit any party’s rights against any Selling Shareholder (1) in the event and to the extent of any fraud committed by such Selling Shareholder in connection with this Agreement or the Related Agreements; and (2) to seek specific performance by the other party with respect to any covenants of such other party under this Agreement or any Related Agreement.

8.    Covenant of the Company.    Upon the Redemption Closing and the Warrant Closing, the Company hereby agrees that the Shareholder Shares and the Warrant Shareholder Shares (in each case to the extent constituting Series A Preferred Shares) shall be cancelled.

9.    Miscellaneous.

9.1    Successors and Assigns.    Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any securities purchased hereunder). Except as expressly provided in this Agreement, no party shall in any manner assign any of its rights or obligations under this Agreement without the express prior written consent of each of the other parties hereto. Nothing in this Agreement is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

9.2    Governing Law; Arbitration.

(a)    This Agreement shall be governed by and construed under the laws of the State of Delaware as applied to agreements among Delaware residents entered into and to be performed entirely within Delaware.

(b)    Notwithstanding subsection (c) below, at the option of the Investor, each of the parties hereto agrees for the benefit of the Investor that any State or Federal court sitting in Delaware shall have exclusive jurisdiction to settle any disputes (including claims for set-off and counterclaims) and enforce any rights which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationships established by, this Agreement or

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otherwise arising in connection with this Agreement. Each party hereto consents to venue in the Delaware Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any action therein. Each party hereto agrees that the summons and complaint or any other process in any action may be served by notice given in accordance with Section 9.5, or as otherwise permitted by law. Each party hereto irrevocably waives the right to trial by jury.

(c)    Subject to the option in favor of the Investor set out in subsection (b) above, any controversy or claim arising out of or relating to this Agreement shall be determined by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association. The tribunal shall consist of three arbitrators. The seat of the arbitration shall be New York. The language of the arbitration shall be English. The parties hereto agree that the tribunal constituted under this clause shall have the power to grant the relief of specific performance in appropriate circumstances, and further agree, for the avoidance of doubt, that any competent court of its jurisdiction (including in the PRC courts) may enforce an order of the tribunal for specific performance. By agreeing to arbitration pursuant to this clause, the parties hereto waive irrevocably their right to any form of appeal, review or recourse to any state court or other judicial authority, in as far as such waiver may validly be made, save that the parties do not intend to deprive any competent court of its jurisdiction (including the PRC courts) to issue a pre-arbitral injunction, pre-arbitral attachment or other order in aid of the arbitration proceedings or the enforcement of any award.

9.3    Counterparts.    This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.4    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

9.5    Notices.    All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) ten (10) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) two (2) days after deposit with an internationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on Schedule 9.5 hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 9.5).

9.6    Amendments and Waivers.    Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of each party hereto.

9.7    Replacement of Selling Shareholders.    Subject to the consent of the Investor which shall not be unreasonably withheld in the event that prior to the Closing any Selling Shareholder breaches this Agreement, or is otherwise unable for any reason to perform his, her or its obligations under this Agreement, then without limiting any other rights and remedies hereunder, the Company shall have the right to terminate this agreement with respect to such Selling Shareholder and to: (a) allow the other Selling Shareholders to sell and transfer such number of shares to the Company as would have been sold by such first Selling Shareholder but for such termination, fully pursuant to, and subject to the terms and conditions of, this Agreement; and/or (b) allow any other shareholders of the Company to become party to this

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Agreement and sell and transfer such number of shares to the Company as would have been sold by such first Selling Shareholder but for such termination, fully pursuant to, and subject to the terms and conditions of, this Agreement as a “Selling Shareholder” hereunder.

9.8    Termination of Transaction Agreement.    In the event that the Transaction Agreement shall be terminated prior to the Closing thereunder (and at the request of the holders of the Series A Preferred Shares in any event if such Closing shall not have occurred by October 31, 2004), each of the Company and each of the Selling Shareholders shall cooperate with one another to take all actions, make all filings and enter into such agreements among themselves as may be reasonably necessary (a) to restore to the holders of the Series A Preferred Shares all of the rights, preferences and privileges pertaining to such Shares under the Memorandum of Association and Articles of Association of the Company on July 15, 2004 and (b) to restore all of the contractual rights and obligations between and among the Selling Shareholders pursuant to the Previous Shareholder Agreements (as defined in the Investors Agreement, as the same is defined in the Transaction Agreement) that existed prior to the execution and delivery of the Transaction Agreement.

9.9    Entire Agreement.    This Agreement, the Transaction Agreement and the Related Agreements and the documents referred to herein and therein constitute the entire agreement among the parties with respect to the subject matter hereof and thereof (and supercedes all prior oral and written communications and agreements, and all contemporaneous communications and agreements, with respect to the subject matter hereof and thereof, including, without limitation, all letters of intent previously entered into among some or all of the parties hereto) and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein.

The remainder of this page has been intentionally left blank.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

COMPANY:
ELONG, INC.
By:	/s/
Name:
Title:

INVESTOR:
IACT ASIA PACIFIC LIMITED
By:	/s/ Barney Harford
Name:	Barney Harford
Title:	President

SELLING SHAREHOLDERS:
Tiger Technology Private Investment Partners, L.P.
By:	Tiger Technology PIP Performance, L.L.C., its General Partner
By:	/s/ Charles P. Coleman III
Name:	Charles P. Coleman III
Title:	Managing Member
Tiger Technology II, L.P.
By:	Tiger Technology Performance, L.L.C., its General Partner
By:	/s/ Charles P. Coleman III
Name:	Charles P. Coleman III
Title:	Managing Member
Blue Ridge Limited Partnership
By:	JAG Holdings LLC, its General Partner
By:	/s/
Name:	Richard S. Bello
Title:	Managing Director
Blue Ridge Offshore Master Limited Partnership
By:	JAG Offshore Holdings LLC, its General Partner
By:	/s/
Name:	Richard S. Bello
Title:	Managing Director
RMG Holdings LLC
By:	/s/
Name:	Richard M. Gerson
Title:	Managing Director
Derek Palaschuk

[Signature Page to Transfer and

Escrow Contribution Agreement]

RMG Holdings LLC
By:
Name:	Richard M. Gerson
Title:	Managing Director
/s/ Derek Palaschuk Derek Palaschuk
Billable Development Ltd.
By:	/s/
Name:
Title:
/s/ Peter Lerner
Purple Mountain Holding, Ltd.
By:	/s/
Name:
Title:
Time Intelligent Finance Limited
By:	/s/
Name:
Title:
Mind Trade Assets Limited
By:	/s/
Name:
Title:

[Signature Page to Transfer and

Escrow Contribution Agreement]

EX-10.37

Exhibit 10.37

ELONG, INC.

SERIES A PREFERRED SHARES PURCHASE AGREEMENT

THIS SHARES PURCHASE AGREEMENT (the “Agreement”) is made as of the 29th day of August, 2003, by and among eLong, Inc., an International Business Company under the laws of the British Virgin Islands (the “Company”), the investors (severally and not jointly, listed on Schedule A hereto, (each of which is herein referred to as an “Investor” and collectively as the “Investors”), and Justin Yue Tang (the “Founder”).

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.    Purchase and Sale of Shares.

1.1    Sale and Issuance of Series A Preferred Shares.

(a)    The Company shall adopt and file with the Registrar of Companies in the British Virgin Islands on or before the Closing (as defined below in Section 1.2) the Second Amended and Restated Memorandum of Association in the form attached hereto as Exhibit A (the “Restated Memorandum”) and the Second Amended and Restated Articles of Association in the form attached hereto as Exhibit A-1 (the “Restated Articles”).

(b)    On or prior to the Closing, the Company shall have authorized (i) the sale and issuance to the Investors of 9,787,494 of its Series A Preferred Shares (as defined below in Section 2.2(a)) and (ii) the issuance of the Common Shares to be issued upon conversion of the Series A Preferred Shares (the “Conversion Shares”). The Series A Preferred Shares and the Conversion Shares shall have the rights, preferences, privileges and restrictions set forth in the Restated Memorandum and the Restated Articles.

(c)    Subject to the terms and conditions of this Agreement, each Investor agrees, severally and not jointly, to purchase at the Closing and the Company agrees to sell and issue to each Investor at the Closing that number of Series A Preferred Shares set forth opposite such Investor’s name on Schedule A hereto for US$1.5325 per share (the “Series A Purchase Price”).

1.2    Closing.    The purchase and sale of the Series A Preferred Shares shall take place at the offices of Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP (“Gunderson Dettmer”), 220 West 42nd Street, 20th Floor, New York, New York, at 10:00 A.M. (local time), on August 29, 2003, or at such other time and place as the Company and Investors agree upon orally or in writing (which time and place are designated as the “Closing”). At the Closing the Company shall deliver to each Investor a certificate representing the Series A Preferred Shares that such Investor is purchasing against payment of the purchase price therefor by check or wire transfer.

2.    Representations and Warranties of the Company and the Founder.    The Company and the Founder (severally and not jointly) hereby represent and warrant to each Investor that, except as set forth on the disclosure letter of even date herewith (the “Disclosure Letter”) furnished to each Investor and special counsel for the Investors, which exceptions shall be deemed to be representations and warranties as if made hereunder:

2.1    Organization, Good Standing and Qualification.

(a)    The Company is an international business company duly organized, validly existing and in good standing under the laws of the British Virgin Islands and has all requisite corporate power and authority to carry on its business as now conducted and as

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currently proposed to be conducted. To the Company and the Founder’s knowledge, the Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Company.

(b)    ELongNet Information Technologies (Beijing) Co., Ltd. (the “Subsidiary”) is a wholly foreign-owned subsidiary of the Company and is duly established and validly existing under all applicable laws, ordinances, rules and regulations, as well as judicial interpretations and decisions, of the People’s Republic of China (the “PRC”), including, but not limited to, all applicable laws, ordinances, rules and regulations, as well as judicial interpretations and decisions, of the PRC (the “PRC Laws”). The Subsidiary has full corporate power and authority to (i) enter into the agreements to which it is a party, to carry out its obligations thereunder and to consummate the transactions contemplated thereby, and all such agreements have been duly authorized by all necessary corporate action on the part of the Subsidiary, (ii) to possess all governmental licenses, permits, authorizations and approvals necessary to enable it to own, operate, lease or otherwise hold its respective properties and assets now owned, operated, leased or otherwise held by it and (v) to carry on its respective business as it is currently conducted and proposed to be conducted as of the date hereof. To the Company and the Founder’s knowledge, the Subsidiary is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Subsidiary. True and complete copies of the articles of association of the Subsidiary, in effect on the date hereof, have been made available by the Company to the Investors. True and complete copies of all shareholder consents of the Subsidiary have been made available by the Company to the Investors.

2.2    Capitalization and Voting Rights of the Company. The authorized capital of the Company consists of:

(a)    Preferred Shares.    Nine Million Seven Hundred Eighty-Seven Thousand Four Hundred Ninety-Four (9,787,494) Preferred Shares, par value $0.01 (the “Preferred Shares”), all of which shares have been designated Series A Preferred Shares (the “Series A Preferred Shares”) and up to all of which may be sold pursuant to this Agreement. The rights, privileges and preferences of the Series A Preferred Shares will be as stated in the Restated Memorandum and the Restated Articles.

(b)    Common Shares.    Forty Seven Million (47,000,000) Common Shares, par value $0.01 (the “Common Shares”), of which Twenty Million (20,000,000) shares are issued and outstanding.

(c)    The outstanding securities of the Company are owned by the security holders in the numbers specified in Exhibit B hereto.

(d)    The outstanding capital shares of the Company are all duly and validly authorized and issued, fully paid and nonassessable, and were issued in accordance with all applicable securities laws, rules and regulations, or pursuant to valid exemptions therefrom.

(e)    Except for (i) the conversion privileges of the Series A Preferred Shares to be issued under this Agreement, (ii) the rights provided in Section 2.4 of that certain Investors’ Rights Agreement in the form attached hereto as Exhibit C (the “Investors’ Rights Agreement”), (iii) currently outstanding options to purchase Four Million Six Hundred Thousand (4,600,000) Common Shares granted to employees and other service providers pursuant to the Company’s Option Plan (the “Option Plan”) and (iv) currently outstanding warrants to purchase Six Hundred Thousand (600,000) Common Shares, there are not outstanding any options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of its capital shares. In

2

addition, the Company has reserved an additional One Million Five Hundred Thousand (1,500,000) Common Shares for purchase upon exercise of options to be granted in the future under the Option Plan. Except for the Voting Agreement (as defined below in Section 2.6 hereof), the Company is not a party or subject to any agreement or understanding, and, to the Company’s and the Founder’s knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Company.

(f)    All outstanding securities of the Company, including, without limitation, all outstanding capital shares of the Company, all capital shares of the Company issuable upon the conversion or exercise of all convertible or exercisable securities and all other securities that the Company is obligated to issue, are subject to a one hundred eighty (180) day “market stand-off” restriction upon an initial public offering of the Company’s securities pursuant to Section 4 of the Right of First Refusal and Co-Sale Agreement (as defined in Section 2.6 hereof).

(g)    The Disclosure Letter sets forth a complete list of each security of the Company owned by any officer, director or, in the Company’s reasonable belief, key employee of the Company, the Subsidiary or any PRC Entity (as defined in Section 2.5 hereof), or by any affiliate or any member of the immediate family of any such individual, together with a description of the material terms of the vesting provisions and, to the Company’s and the Founder’s knowledge, the rights of first refusal and rights of repurchase applicable to each such security other than, in each case, those vesting provisions and first refusal and repurchase rights set forth in the Ancillary Agreements (as defined in Section 2.6 hereof). Except as set forth in the Ancillary Agreements, no share plan, share purchase, share option or other agreement or understanding between the Company and any holder of any securities or rights exercisable or convertible for securities provides for acceleration or other changes in the vesting provisions or other terms of such agreement or understanding as the result of the occurrence of any event, other than the passage of time.

2.3    Capitalization and Voting Rights of the Subsidiary.

(a)    The registered capital of the Subsidiary totals US$10,000,000 (the “Equity”), all of which is contributed to, and held by, the Company. The rights and privileges of the Equity will be as stated in the Subsidiary’s articles of association, as amended and restated.

(b)    The Subsidiary is wholly owned by, and is the only subsidiary of, the Company. The Company is the sole legal and beneficial owner of the entire issued share capital of the Subsidiary, there being no other share or loan capital in the Subsidiary or any share or loan capital under option (actual, contingent or otherwise) to purchase or subscribe.

(c)    The Equity is all duly and validly authorized and issued and fully paid, and was issued in accordance with all applicable securities laws, rules and regulations, or pursuant to valid exemptions therefrom.

(d)    Neither the Subsidiary nor the Company is a party or subject to any agreement or understanding, and, to the Company’s knowledge, there is no agreement or understanding between any persons and/or entities, which affects or relates to the voting or giving of written consents with respect to any security or by a director of the Subsidiary, except for the Voting Agreement further described in Section 4.12 hereof.

2.4    Subsidiaries.    Other than the Subsidiary and the PRC Entities (as defined in Section 2.5 hereof), the Company does not presently own or control, directly or indirectly, any interest in any other corporation, association, or other business entity. Neither the Company nor the Subsidiary is a participant in any joint venture, partnership, or similar arrangement, other than with respect to the PRC Entities.

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2.5    Organization of PRC Entities.

(a)    (i)    Beijing eLong Information Technology Co., Ltd (the “ICP Entity”) is a limited liability company duly established and validly existing under PRC Laws. The ICP Entity has all requisite corporate power and authority to enter into the agreements to which it is a party, to carry out its obligations thereunder and to consummate the transactions contemplated thereby, and all such agreements have been duly authorized by all necessary corporate action on the part of the ICP Entity.

(ii)    Beijing Asia Media Interactive Co., Ltd. (“Asia Interactive”) is a limited liability company duly established and validly existing under PRC Laws. Asia Interactive has all requisite corporate power and authority to enter into the agreements to which it is a party, to carry out its obligations thereunder and to consummate the transactions contemplated thereby, and all such agreements have been duly authorized by all necessary corporate action on the part of Asia Interactive.

(iii)    Beijing eLong Airline Services Co., Ltd. (“eLong Airline” and, together with the ICP Entity and Asia Interactive, the “PRC Entities”) is a limited liability company duly established and validly existing under PRC Laws. eLong Airline has all requisite corporate power and authority to enter into the agreements to which it is a party, to carry out its obligations thereunder and to consummate the transactions contemplated thereby, and all such agreements have been duly authorized by all necessary corporate action on the part of eLong Airline.

(b)    Each of the PRC Entities has full corporate power and authority to possess all governmental licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its respective properties and assets and own, operate or lease the properties and assets now owned, operated or leased by it and to carry on its respective business as it is currently conducted and proposed to be conducted as of the date hereof. Except as listed in the Disclosure Letter, each of the PRC Entities has transferred to the Subsidiary all of its assets, as allowable under PRC Laws. True and complete copies of the articles of association of each of the PRC Entities, each as in effect on the date hereof, have been made available by the Company to the Investors. Each of the PRC Entities has a three (3) member board of directors that controls the operations of each PRC Entity. True and complete copies of all shareholder consents of each of the PRC Entities have been made available by the Company to the Investors. Except as set forth in the Disclosure Letter, each of the PRC Entities is duly qualified to do business in each jurisdiction where the nature of its respective business or the ownership or leasing of its respective properties make such qualification necessary.

(c)    (i)    The registered capital of the ICP Entity is RMB 1,000,000, which has been fully paid and is non-assessable and all of which is pledged to the Subsidiary. The Founder and Julia Zhi Qu, respectively, hold 75% and 25%, of the equity interests in the ICP Entity.

(ii)    The registered capital of Asia Interactive is RMB 500,000, which has been fully paid and is non-assessable, and all of which is pledged to the Subsidiary. The Founder and Julia Zhi Qu, respectively, hold 75% and 25% of the equity interests in Asia Interactive.

(iii)    The registered capital of eLong Airline is RMB 500,000, which has been fully paid and is non-assessable and all of which is pledged to the Subsidiary. The ICP Entity and Asia Interactive hold 80% and 20%, respectively, of the equity interests in eLong Airline.

(iv)    The equity interests of each of the PRC Entities were duly and validly issued and were issued in accordance with all applicable securities laws, rules and regulations

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or pursuant to exemptions therefrom. Except as set forth in the Disclosure Letter, the equity interests in each of the PRC Entities are not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right under any PRC Law, the articles of association or any contract to which any of the PRC Entities is a party or otherwise bound. There are not any bonds, debentures, notes or other indebtedness of any of the PRC Entities having the right to vote (or convertible) into, or exchangeable for, securities having the right to vote) on any matters on which holders of equity interests of any PRC Entity may vote. Except as set forth in the Disclosure Letter or in this section, there are no voting trusts, shareholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the equity interests to which any PRC Entity is a party or is otherwise bound. The Founder has executed loan and share pledge agreements by and between the Founder and the Subsidiary dated July 28, 2000 and November 27, 2000 (the “Founder Share Pledge Agreement”) that irrevocably pledges the ownership of his entire interest in Asia Interactive and the ICP Entity, respectively, to the Subsidiary. Julia Zhi Qu has executed share pledge agreements by and between Julia Zhi Qu and the Subsidiary dated August 22, 2003 (the “Zhi Qu Share Pledge Agreement”) that irrevocably pledges the ownership of her entire interest in Asia Interactive and the ICP Entity, respectively, to the Subsidiary.

(v)    The Subsidiary and eLong Airline entered into a Technical Consulting and Services Agreement on August 22, 2003 whereby the Subsidiary agreed to provide services to eLong Airline on a fee-charging basis. As security for the fees payable to the Subsidiary under such agreement, Asia Interactive and the ICP Entity executed a Share Pledge Agreement in favor of the Subsidiary dated August 22, 2003 (the “eLong Airline Pledge Agreement”) to pledge their entire interest in eLong Airline to the Subsidiary. The eLong Airline Pledge Agreement, the Founder Share Pledge Agreement and the Zhi Qu Share Pledge Agreement shall collectively be called the “Share Pledge Agreements.”

(d)    The Disclosure Letter sets forth a true and complete list of all direct and indirect subsidiaries of each of the PRC Entities, including details such as its name, type of entity, the jurisdiction and date of its organization and its registered capital, the number and type of its issued and outstanding shares or similar ownership interests and the current ownership of such shares or similar ownership interests.

(e)    Other than the subsidiaries of each of the PRC Entities listed in the Disclosure Letter, there are no other corporations, partnerships, joint ventures, associations or other entities in which any of the PRC Entities owns, of record or beneficially, any direct or indirect equity or other interest or any right (contingent or otherwise) to acquire the same.

(f)    There are no options, warrants, convertible securities, subscriptions or other rights, agreements, arrangements or commitments of any character relating to the equity interests of any subsidiary of any of the PRC Entities or obligating any of the PRC Entities to issue or sell any portion of the equity interests of, or any other interest in, any such subsidiary.

(g)    No order has been made or petition presented or resolution passed for the winding up of any of the PRC Entities, and no distress, execution or process has been levied against any of the PRC Entities or any of its property.

(h)    None of the PRC Entities are insolvent or unable to pay its debts and there is no unfulfilled decree or court order outstanding against any of the PRC Entities.

2.6    Authorization.    All corporate action on the part of the Company and its respective officers, directors, shareholders and affiliates necessary for the authorization, execution and

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delivery of this Agreement, the Investors’ Rights Agreement, that certain First Refusal and Co-Sale Agreement in the form attached hereto as Exhibit D (the “First Refusal and Co-Sale Agreement”) and that certain Voting Agreement in the form attached hereto as Exhibit E (the “Voting Agreement”, and together with the Investors’ Rights Agreement and the Right of First Refusal and Co-Sale Agreement, the “Ancillary Agreements”), the performance of all obligations of the Company hereunder and thereunder, and the authorization, issuance (or reservation for issuance), sale and delivery of the Series A Preferred Shares being sold hereunder and the Conversion Shares has been taken or will be taken prior to the Closing, and this Agreement and the Ancillary Agreements constitute valid and legally binding obligations of the Company and the Founder, enforceable in accordance with their respective terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (c) to the extent the indemnification provisions contained in the Investors’ Rights Agreement may be limited by applicable foreign, United States or state securities laws.

2.7    Valid Issuance of Preferred and Common Shares.    The Series A Preferred Shares being purchased by the Investors hereunder, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Ancillary Agreements and under applicable state and United States securities laws. The Conversion Shares have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Restated Articles, will be duly and validly issued, fully paid, and nonassessable and will be free of restrictions on transfer other than restrictions on transfer under this Agreement and the Ancillary Agreements and under applicable foreign and United States securities laws.

2.8    Governmental Consents.    No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any United States, local or foreign governmental authority on the part of the Company, the Subsidiary or any of the PRC Entitles is required in connection with the consummation of the transactions contemplated by this Agreement, except (a) the filing of the Restated Articles with the Registrar of Companies of the British Virgin Islands; or (b) such other post-closing filings as may be required in the United States.

2.9    Offering.    Subject in part to the truth and accuracy of each Investor’s representations set forth in Section 3 of this Agreement the offer, sale and issuance of the Series A Preferred Shares as contemplated by this Agreement are exempt from the registration requirements of any applicable foreign or United States securities laws.

2.10    Litigation.    There is no action, suit, proceeding or investigation pending or, to the Company’s and the Founder’s knowledge, currently threatened in writing against the Company, the Subsidiary, any of the PRC Entities or the Founder nor is the Company or the Founder aware that there is any basis for the foregoing. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company or the Founder) involving the prior employment of any of the Company’s, the Subsidiary’s or any of the PRC Entities’ employees, and either (a) their use in connection with the Company’s, the Subsidiary’s or any of the PRC Entities’ businesses of any information or techniques allegedly proprietary to any of their former employers, or (b) their obligations under any agreements with prior employers. None of the Company, the Subsidiary or the Founder is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit,

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proceeding or investigation by the Company, the Subsidiary or any of the PRC Entities currently pending or that the Company, the Subsidiary or any of the PRC Entities intends to initiate.

2.11    Employment Agreements.    Each present and former employee and officer of the Company, the Subsidiary and the PRC Entities has executed an employment agreement in substantially the form provided to special counsel for the Investors. The Founder and each senior employee (as reasonably determined by the Investors) of the Company and the Subsidiary has executed an Employment Agreement in the form attached hereto as Exhibit F. Each consultant of the Company and the Subsidiary has executed a Consulting Agreement in substantially the form provided to special counsel to the Investors. Neither the Company nor the Founder is aware that any of the Company’s or the Subsidiary’s current or former employees, officers or consultants are in violation thereof, and the Company will use its diligent efforts to prevent any such violation.

2.12    Intellectual Property.    Except as set forth on the Disclosure Letter, the Company and the Subsidiary have sufficient title and ownership of or licenses to, or can obtain on commercially reasonable terms, all patents, trademarks, service marks, trade names, domain names, copyrights, trade secrets, information, proprietary rights and processes (the “Intellectual Property”) necessary for the business of the Company, the Subsidiary and each of the PRC Entities as now conducted and as currently proposed to be conducted without, to the Company’s and the Founder’s knowledge with respect to patents, trademarks, service marks and trade names only (but without having conducted any special investigation or patent or trademark search), any violation or infringement of, or other conflict with, the rights of others. The Disclosure Letter contains a complete list of patents and pending patent applications and registrations and applications for trademarks, copyrights and domain names of, or exclusively licensed to, the Company or its affiliates. Other than pursuant to the employment agreement previously provided to special counsel to the Investors, there are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership of interests of any kind relating to anything referred to above in this Section 2.13 that is to any extent owned by or licensed to the Company, the Subsidiary or any of the PRC Entities, nor is the Company, the Subsidiary or the Founder bound by or a party to any options, licenses, agreements, claims or encumbrances of any kind with respect to the Intellectual Property of any other person or entity, except, in either case, for intercompany agreements between the Company, the Subsidiary and the PRC Entities, standard end-user, object code, internal-use software license and support/maintenance agreements. None of the Company, the Subsidiary, any of the PRC Entities or the Founder has received any communications alleging that the Company, the Subsidiary, any of the PRC Entities or the Founder has violated or, by conducting its business as currently proposed, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity and neither the company nor the Founder is aware of any reasonable basis for such an allegation or of any reason to believe that such an allegation may be forthcoming. Neither the Company nor the Founder is aware that any of the Company’s, the Subsidiary’s or any of the PRC Entities’ employees are obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of his or her best efforts to promote the interests of the Company or the Subsidiary or that would conflict with the Company’s, the Subsidiary’s or any of the PRC Entities’ businesses as presently conducted or as currently proposed to be conducted. Neither the execution nor delivery of this Agreement or the Ancillary Agreements, nor the carrying on of the Company’s or the Subsidiary’s businesses by the employees of the Company, the Subsidiary or any of the PRC Entities, nor the conduct of the Company’s, the Subsidiary’s or any of the PRC Entities’ business as currently proposed, will, to the Company’s and the Founder’s knowledge, conflict with or result in a breach of the terms,

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conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which any of such employees is now obligated. Neither the Company nor the Founder believes it is or will be necessary to utilize any inventions of any of the Company’s, the Subsidiary’s or any of the PRC Entities’ employees (or people the Company, the Subsidiary or any of the PRC Entities currently intend to hire) made prior to or outside the scope of their employment by the Company, the Subsidiary or any of the PRC Entities.

2.13    Compliance with Other Instruments.    The Company is not in violation or default of any provision of (i) its Restated Articles, (ii) any judgment, order, writ, decree or material contract to which it is a party or by which it is bound, or (iii) to the Company’s and the Founder’s knowledge, any provision of any United States, local or foreign statute, rule or regulation applicable to the Company, which, with respect to clauses (ii) and (iii), default or violation would have a material adverse effect on the business or prospects of the Company, Subsidiary or any of the PRC Entities. The Subsidiary is not in violation or default of any provision of (i) its articles of association, as amended and restated, (ii) any judgment, order, writ, decree or material contract to which it is a party or by which it is bound, or (iii) to the Company’s and the Founder’s knowledge, any provision of any PRC Law applicable to the Subsidiary, which, with respect to clauses (ii) and (iii), default or violation would have a material adverse effect on the business or prospects of the Company, Subsidiary or any of the PRC Entities. Each of the PRC Entities is not in violation or default of any provision of (i) articles of association, as amended and restated, (ii) any judgment, order, writ, decree or material contract to which it is a party or by which it is bound, or (iii) to the Company’s and the Founder’s knowledge, any provision of PRC Law applicable to the Company, including, without limitation, those relating to telecommunication, internet content providers, advertising and ticketing business, occupational health, safety and the environment which, with respect to clauses (ii) and (iii), default or violation would have a material adverse effect on the business or prospects of the Company, Subsidiary or any of the PRC Entities. None of the Company, the Subsidiary or any of the PRC Entities have received any notice from any regulatory body or authority that the Company, the Subsidiary or any of the PRC Entities has committed any criminal, illegal or unlawful act or any violation of or default with respect to any ordinance, statute, regulation, order, decree or judgment of any court of government agency of relevant jurisdiction which, if committed by the Company, the Subsidiary or any of the PRC Entities, may have a material adverse effect upon the assets or business of the Company, the Subsidiary or any of the PRC Entities. The execution, delivery and performance of this Agreement and the Ancillary Agreements, and the consummation of the transactions contemplated hereby and thereby will not result in any such violation or default or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, judgment, order, writ, decree or material contract or an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company, the Subsidiary or any of the PRC Entities or the suspension, revocation, impairment, forfeiture, or nonrenewal of any material permit, license, authorization, or approval applicable to the Company, the Subsidiary or any of the PRC Entities, their respective businesses or operations or any of their respective assets or properties.

2.14    Agreements and Actions.

(a)    Except for agreements explicitly contemplated hereby and by the Ancillary Agreements, including without limitation, all employment agreements and proprietary information and inventions agreements entered into by the Company or the Subsidiary and set forth on the Disclosure Letter, there are no agreements, understandings or proposed transactions between the Company, the Subsidiary, any of the PRC Entities and their respective officers, directors, affiliates or any affiliate thereof.

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(b)    There are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company, the Subsidiary or any of the PRC Entities is a party or by which such party is bound that may involve (i) obligations (contingent or otherwise) of, or payments to such party in excess of, $25,000 per annum, or (ii) any license of any patent, copyright, trade secret or other proprietary right to or from the Company, the Subsidiary or any of the PRC Entities (other than the license to the Company, the Subsidiary or any of the PRC Entities of standard, generally commercially available, “off-the-shelf” third party products that are not and will not to any extent be part of, or influence development of, or require payment with respect to, any product, service or intellectual property offering of the Company, the Subsidiary or any of the PRC Entities), or (iii) provisions materially restricting or affecting the development, manufacture or distribution of the Company’s, the Subsidiary’s or any of the PRC Entities’ products or services, or (iv) indemnification by the Company, the Subsidiary or any of the PRC Entities with respect to infringements of proprietary rights.

(c)    None of the Company, the Subsidiary or any of the PRC Entities has (i) declared or paid any dividends or authorized or made any distribution upon or with respect to any class or series of its capital shares, (ii) incurred any indebtedness for money borrowed or any other liabilities individually in excess of $25,000 or, in the case of indebtedness and/or liabilities individually less than $25,000, in excess of $50,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business.

(d)    For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections.

(e)    Neither the Company nor any of its affiliates has engaged since the date of their respective formations in any discussion (i) with any representative of any corporation or corporations regarding the consolidation or merger of the Company, the Subsidiary or any of the PRC Entities with or into any such corporation or corporations, (ii) with any corporation, partnership, association or other business entity or any individual regarding the sale, conveyance or disposition of all or substantially all of the assets of the Company, the Subsidiary or any of the PRC Entities or a transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Company, the Subsidiary or any of the PRC Entities is disposed of, or (iii) regarding any other form of acquisition, liquidation, dissolution or winding up of the Company, the Subsidiary or any of the PRC Entities.

(f)    None of the agreements set forth on the Disclosure Letter (i) involves or is likely to involve obligations, restrictions or expenditure of any unusual or onerous nature that would have a material adverse effect on the business of the Company, the Subsidiary or any of the PRC Entities, (ii) involves the purchase of materials, supplies or equipment that are in excess of the requirements of the Company, the Subsidiary or any of the PRC Entities for its normal operating purposes, (iii) involves any sales agency, distribution, marketing, purchasing or licensing agreements other than in the ordinary course of business and (iv) involves any joint venture, agency or partnership arrangement or agreement or similar arrangement or agreement other than in the ordinary course of its business.

2.15    Related-Party Transactions.    No employee, officer, director or shareholder of the Company or the Subsidiary (a “Related Party”) or member of such Related Party’s immediate

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family, or any corporation, partnership or other entity in which such Related Party is an officer, director or partner, or in which such Related Party has significant ownership interests or otherwise controls, is indebted to the Company or the Subsidiary, nor is the Company or the Subsidiary indebted (or committed to make loans or extend or guarantee credit) to any of them other than (a) for payment of salary for services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company or the Subsidiary, and (c) for other standard employee benefits made generally available to all employees (including Share Option agreements outstanding under any shares plan approved by the Company’s Board of Directors (the “Board of Directors”) and share purchase agreements approved by the Board of Directors). To the Company’s and the Founder’s knowledge, none of such persons has any direct or indirect ownership interest in any firm or corporation with which the Company or the Subsidiary is affiliated or with which the Company or the Subsidiary has a business relationship, or any firm or corporation that competes with the Company or the Subsidiary, except that employees, officers, or directors of the Company and the Subsidiary and members of such Related Parties’ immediate families may own shares in publicly traded companies that may compete with the Company or the Subsidiary. No Related Party or member of their immediate family is directly or indirectly interested in any material contract with the Company or the Subsidiary.

2.16    Permits.    Each of the Company, the Subsidiary and the PRC Entities has all franchises, permits, licenses, and any similar authority necessary for the conduct of its respective business as now being conducted by it, the lack of which could materially and adversely affect the respective business, properties, prospects or financial condition of the Company, the Subsidiary or any of the PRC Entities, and each of the Company and the Founder believes in good faith that the Company, the Subsidiary and each of the PRC Entities can obtain, without undue burden or expense, any similar authority for the conduct of the business of the Company, the Subsidiary and each of the PRC Entities as planned to be conducted. In connection with the operation of the Company’s web sites (the “Web Sites”), the ICP Entity has duly obtained an Internet Information Services License issued by the Telecommunications Bureau of Beijing Municipality and such license is in full force and effect. In connection with the sale of advertising on the Web Sites, Asia Interactive has duly obtained an Advertising License issued by the State Administration for Industry and Commerce and such license is in full force and effect. None of the Company, the Subsidiary or any of the PRC Entities is in default in any material respect under any of such franchises, permits, licenses, or other similar authority.

2.17    Environmental and Safety Laws.    To the Company’s and the Founder’s knowledge, none of the Company, the Subsidiary or any of the PRC Entities’ is in material violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and to the Company’s and the Founder’s knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation.

2.18    Manufacturing, Marketing and Development Rights.    None of the Company, the Subsidiary or any of the PRC Entities has granted rights to manufacture, produce, assemble, license, market, or sell their respective products to any other person and is not bound by any agreement that affects the Company’s, the Subsidiary’s or any of the PRC Entities exclusive rights to develop, manufacture, assemble, distribute, market or sell their respective products.

2.19    Disclosure.    The Company has fully provided each Investor with all the information that such Investor has requested in connection with deciding whether to purchase the Series A Preferred Shares. None of this Agreement (including the Disclosure Letter), any of the Ancillary Agreements, or any statements or certificates made or delivered in connection herewith or therewith contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein not misleading in light of the circumstances

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under which they were made. No part of any document or information provided to the Investors throughout the course of the parties’ communications and negotiations leading up to the Closing was provided with any intention to mislead the Investors and the Company and the Founder have each acted in good faith and with due and careful consideration in providing such documents and information, and believing the same to be true in all material aspects at the time of provision of such documents and information.

2.20    Registration Rights.    Except as provided in the Investors’ Rights Agreement, none of the Company, the Subsidiary or any of the PRC Entities has granted or agreed to grant any registration rights, including piggyback rights, to any person or entity.

2.21    Corporate Documents. Except for amendments necessary to satisfy the representations, warranties or conditions contained in this Agreement (the form of which amendments has been approved by the Investors), the Restated Articles, the articles of association of the Subsidiary and the articles of association of each of the PRC Entities are in the form previously provided to special counsel for the Investors.

2.22    Title to Property and Assets.    Each of the Company, the Subsidiary and the PRC Entities has good and marketable title to its property and assets free and clear of all mortgages, liens, loans and encumbrances, except such encumbrances and liens that arise in the ordinary course of business and do not materially impair the ownership or use of such property or assets by the Company, the Subsidiary or any of the PRC Entities, as the case may be. With respect to the property and assets it leases, each of the Company, the Subsidiary and the PRC Entities is in material compliance with such leases and holds a valid leasehold interest free of any liens, claims or encumbrances. Neither the Company nor the Subsidiary owns or currently holds any right, by contract or otherwise, to acquire any real property. None of the Company, the Subsidiary or any of the PRC Entities currently holds a leasehold interest or any right, by contract or otherwise, to acquire a leasehold interest in the United States.

2.23    Financial Statements.    The Company has delivered to each Investor its audited consolidated financial statements (balance sheet and income and cash flow statements, including notes thereto) at December 31, 2002 and for the fiscal year then ended, and its unaudited consolidated financial statements (balance sheet and income statement) as at and for the five-month period ended May 31, 2003 (the “Financial Statements”). The Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) applied on a consistent basis throughout the periods indicated and with each other, except that the unaudited consolidated Financial Statements may not contain all footnotes required by U.S. GAAP. The Financial Statements fairly present the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments. Except as set forth in the Financial Statements, the Company has no material liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to May 31, 2003 (the “Financial Statement Date”) and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under U.S. GAAP to be reflected in the Financial Statements, which, in both cases, individually or in the aggregate, are not material to the financial condition or operating results of the Company. Except as disclosed in the Financial Statements, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with U.S. GAAP.

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2.24    Financial Information of PRC Entities.

(a)    The audited consolidated financial statements of each of the ICP Entity and Asia Interactive for the fiscal years ended December 31, 2000, 2001 and 2002 which have been made available to the Investors (the “PRC Financial Statements”) have been prepared in accordance with U.S. GAAP consistently applied and consistent with prior periods. The PRC Financial Statements fairly present the consolidated financial position of the ICP Entity and Asia Interactive, as the case may be, and their respective consolidated subsidiaries (including eLong Airline) as of the dates thereof. Neither the ICP Entity or Asia Interactive or their respective subsidiaries (including eLong Airline) has any material liabilities or obligations (whether absolute, accrued, contingent or otherwise), except for those (i) that are disclosed in the PRC Financial Statements (or reflected in the notes thereto) or the balance sheet as of May 31, 2003 included in the PRC Interim Financials (as defined below) and reflected in the notes thereto or (ii) that are set forth in the Disclosure Letter.

(b)    The consolidated interim balance sheet, income statement, statement of cash flows and statements of shareholders’ equity of each of the ICP Entity and Asia Interactive and their respective subsidiaries (including eLong Airline) for the five-month period ended May 31, 2003 which have been made available to the Investors (including the notes, the “PRC Interim Financials”) have been prepared in accordance with U.S. GAAP consistently applied and consistent with prior periods, subject to year-end adjustments (which consist only of normal recurring adjustments) and the absence of certain footnote disclosures. The consolidated balance sheets of each of the ICP Entity and Asia Interactive, as the case may be, included in the PRC Interim Financials fairly present the consolidated financial position of the ICP Entity and Asia Interactive and their respective subsidiaries (including eLong Airline) at May 31, 2003, and the related consolidated statements of operations, cash flows and shareholders’ equity included in the PRC Interim Financials fairly present the consolidated results of operations of the ICP Entity and Asia Interactive, as the case may be, and their respective subsidiaries (including eLong Airline) for the five months ended May 31, 2003.

2.25    Changes.    Since the Financial Statement Date there has not been;

(a)    any change in the assets, liabilities, financial condition or operating results of the Company, the Subsidiary or any of the PRC Entities from that reflected in the Financial Statements, except changes in the ordinary course of business that have not been, in the aggregate, materially adverse;

(b)    any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the assets, properties, financial condition, operating results, prospects or business of the Company, the Subsidiary or of any of the PRC Entities (as such businesses are currently conducted and are proposed to be conducted);

(c)    any waiver by the Company, by the Subsidiary or by any of the PRC Entities of a valuable right or of a material debt owed to it;

(d)    any satisfaction or discharge of any lien, claim or encumbrance or payment of any obligation by the Company, the Subsidiary or any of the PRC Entities, except in the ordinary course of business and that is not material to the assets, properties, financial condition, operating results or business of the Company, the Subsidiary or any of the PRC Entities (as such businesses are currently conducted and are proposed to be conducted);

(e)    any material change or amendment to a material contract or arrangement by which the Company, the Subsidiary, any of the PRC Entities or any of their respective assets or properties is bound or subject;

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(f)    any material change in any compensation arrangement or agreement with any employee, officer, director or shareholder;

(g)    any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets;

(h)    any resignation or termination of employment of any key officer of the Company, the Subsidiary or any of the PRC Entities; and neither the Company nor the Founder knows of the impending resignation or termination of employment of any such officer or key employee;

(i)    receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company, by the Subsidiary or by any of the PRC Entities;

(j)    any mortgage, pledge, transfer of a security interest in, or lien, created by the Company, the Subsidiary or by any of the PRC Entities, with respect to any of their respective material properties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially impair the Company’s, the Subsidiary’s or any of the PRC Entities’ ownership or use of such property or assets and purchase money mortgages and leased equipment;

(k)    any loans or guarantees made by the Company, the Subsidiary or any of the PRC Entities to or for the benefit of their respective employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(l)    any declaration, setting aside or payment or other distribution in respect of any of the Company’s, the Subsidiary’s or any of the PRC Entities’ capital stock, or any direct or indirect redemption, purchase or other acquisition of any of such stock by the Company or by the Subsidiary;

(m)    to the Company’s or the Founder’s knowledge, any other event or condition of any character that might materially and adversely affect the assets, properties, financial condition, operating results or business of the Company, the Subsidiary or any of the PRC Entities (as such businesses are currently conducted and are proposed to be conducted);

(n)    any incurrence by the Company, the Subsidiary or any of the PRC Entities of any capital expenditure or any capital commitment in excess of US$100,000;

(o)    change by the Company, the Subsidiary or any of the PRC Entities in accounting methods, principles or practice; or

(p)    any agreement or commitment by the Company to do any of the things described in this Section 2.26.

2.26    Employee Benefit Plans and Employee Agreements.

(a)    The Disclosure Letter contains a list of all benefit plans, benefit programs, insurance arrangements, share purchase, share option or other equity plans, fringe benefits, perquisites and any superannuation fund, retirement benefit or other pension schemes or arrangements that the Company, the Subsidiary or any of the PRC Entities maintain, sponsor or contribute to and that benefit any current or former employee, officer, director or consultant of the Company or the Subsidiary (each, a “Benefit Plan”).

(b)    The Company has furnished the Investors with a true and complete copy of each Benefit Plan (or a written summary of any Benefit Plan that is not in writing) and a true and complete copy of each material document, if any, prepared in connection with such Benefit Plan, including without limitation (i) a copy of each trust agreement or other funding

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arrangement, (ii) each summary or other document delivered to participants, (iii) all forms of participation agreement, share purchase agreement, share option agreement or other agreement with participants, (iv) all documents filed with any governmental agency and (v) all documents received from any governmental agency.

(c)    None of the Benefit Plans is subject to the U.S. Employee Retirement Income Security Act of 1974, as amended.

(d)    Each Benefit Plan is now and always has been operated in all material respects in accordance with its terms and the requirements of all applicable laws. No lawsuit, legal action, administrative proceeding or claim is pending or, to the knowledge of the Company or Subsidiary, threatened with respect to any Benefit Plan (other than claims for benefits in the ordinary course). No fact or event exists that could give rise to any such lawsuit, action, proceeding or claim.

(e)    Each Benefit Plan may be amended, terminated or otherwise discontinued at any time without material liability to the participants, the Investors, the Company, the Subsidiary or any of the PRC Entities, other than ordinary administration expenses.

(f)    The Disclosure Letter contains a list of all employment agreements, consulting agreements and other agreements and contracts between (i) the Company or the Subsidiary and (ii) any current or former employee, officer, director or consultant of the Company or the Subsidiary (each, an “Employment Agreement”).

(g)    The Company has furnished the Investors with a true and complete copy of (i) each Employment Agreement and (ii) each form of employee handbook currently used by the Company, the Subsidiary or any of the PRC Entities (each, an “Employee Handbook”).

(h)    Except as set forth in the Disclosure Letter, each Employment Agreement and each Employee Handbook complies with the requirements of all applicable laws. No employee, officer, director or consultant has commenced or, to the knowledge of the Company, threatened a lawsuit, legal action, administrative proceeding or claim against the Company, the Subsidiary or any of the PRC Entities. To the Company’s and Founder’s knowledge, no fact or event exists that could give rise to any such lawsuit, action, proceeding or claim.

2.27    Labor Agreements and Actions: Employee Compensation.

(a)    None of the Company, the Subsidiary or any of the PRC Entities is bound by or subject to (and none of their respective assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the Company’s and the Founder’s knowledge, has sought to represent any of the employees, representatives or agents of the Company, the Subsidiary or any of the PRC Entities. There is no strike or other labor dispute involving the Company, the Subsidiary or any of the PRC Entities pending, or to the Company’s and the Founder’s knowledge, threatened, that could have a material adverse effect on the assets, properties, financial condition, operating results, or business of the Company, the Subsidiary or any of the PRC Entities (as such businesses are currently conducted and are proposed to be conducted), nor is the Company or the Founder aware of any labor organization activity involving the Company’s, the Subsidiary or any of the PRC Entities’ employees.

(b)    The employment of each officer and employee of the Company, the Subsidiary and each of the PRC Entities is terminable at the will of the Company, the Subsidiary or the PRC Entities, as the case may be; provided, such termination is in compliance with PRC Laws.

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(c)    To the Company’s and the Founder’s knowledge, the Subsidiary and each of the PRC Entities has complied in all material respects with all applicable PRC Laws related to employment. Except as described in Section 2.27(a) or 2.28(a) or the Disclosure Letter, none of the Company, the Subsidiary or any of the PRC Entities is a party to or bound by any currently effective employment contract, deferred compensation agreement, bonus plan, incentive plan, profit sharing plan, retirement agreement, vacation, severance, disability, death benefit, hospitalization, medical or other plan, policy, trust or arrangement or other employee compensation agreement. There are no employment, indemnification, severance or termination agreements or arrangements between the Company, the Subsidiary or any of the PRC Entities and any person or entity. The Company, the Subsidiary and each of the PRC Entities do not owe any severance to or have any termination payment agreements with respect to Zhang Ligang.

(d)    None of the Company, the Subsidiary or the PRC Entities has any liability whatsoever (whether legally binding or not) to make any payment to or for the benefit of any employee, officer, consultant, independent contractor or agent in respect of past service, pension or the termination of the employment or engagement of that or any other person (including, without limitation, payments for wrongful or unfair dismissal, loss of office or redundancy), other than in respect to current month payroll expenses and related deductions in relation to employee and employer contributions.

(e)    The Company, the Subsidiary and the PRC Entities have no current or former employees, executive officers or directors who are employed by any of the PRC Entities or providing services for any of the PRC Entities (or who were formerly employed by any of the PRC Entities or formerly provided services for any of the PRC Entities) in the United States.

2.28    Tax Returns, Payments and Elections.    Each of the Company, the Subsidiary and the PRC Entities has timely filed all Tax (as defined below) returns, statements, reports, declarations and other forms and documents (including without limitation estimated Tax returns and reports and material information returns and reports) (“Tax Returns”) required pursuant to applicable law to be filed with any Tax Authority (as defined below), all such Tax Returns are accurate, complete and correct in all material respects, and each of the Company, the Subsidiary and the PRC Entities has timely paid all Taxes due. None of the Company or the Subsidiary or any of the PRC Entities has made any elections pursuant to any applicable Tax laws, rules and regulations (other than elections that relate solely to methods of accounting, depreciation or amortization) that would have a material effect on a consolidated basis on the Company or the Subsidiary or any of the PRC Entities, their respective financial condition, their respective business as presently conducted or proposed to be conducted or any of their respective properties or material assets. Since their respective dates of incorporation, none of the Company or the Subsidiary or any of the PRC Entities has incurred any taxes, assessments or governmental charges other than in the ordinary course of business, and each of the Company, the Subsidiary and the PRC Entities has made adequate provisions on its respective books of account (in accordance with U.S. GAAP, except in the case of the PRC Entities) for all actual and contingent Taxes with respect to its consolidated business, properties and operations for such period. Each of the Company, the Subsidiary and the PRC Entities has withheld or collected from each payment made to each of its employees, the amount of all Taxes (including, but not limited to, United States income taxes and other foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority. Each of the Company, the Subsidiary and the PRC Entities is not a “Controlled Foreign Corporation,” a “Foreign Personal Holding Company” or a “Passive Foreign Investment Company,” as such terms are defined in the United States Internal Revenue Code of 1986, as amended (the “Code”). For purposes of this Agreement, the following terms have the following meanings: “Tax” (and, with correlative

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meaning, “Taxes” and “Taxable”) means any and all taxes including, without limitation, (i) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, value added, net worth, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any United States, local or foreign governmental authority or regulatory body responsible for the imposition of any such tax (domestic or foreign) (a “Tax Authority”), (ii) any liability for the payment of any amounts of the type described in (i) as a result of being a member of an affiliated, consolidated, combined or unitary group for any taxable period or as the result of being a transferee or successor thereof and (iii) any liability for the payment of any amounts of the type described in (i) or (ii) as a result of any express or implied obligation to indemnify any other person.

2.29    Insurance.    The Company, the Subsidiary and each of the PRC Entities has in full force and effect fire and casualty insurance policies, with extended coverage, sufficient in amount (subject to reasonable deductibles) to allow them to replace any of their properties that might be damaged or destroyed. The Company, the Subsidiary and each of the PRC Entities has in full force and effect products liability and errors and omissions insurance in amounts customary for companies similarly situated.

2.30    Minute Books.    The minute books of the Company, the Subsidiary and each of the PRC Entities provided to the Investors contain a complete summary of all meetings of directors and shareholders since their respective times of formation and reflect all transactions referred to in such minutes accurately in all material respects.

2.31    Brokers.    None of the Company, the Subsidiary or any of the PRC Entities has any contract, arrangement or understanding with any broker, finder or similar agent with respect to the transactions contemplated by this Agreement.

2.32    Significant Customers and Suppliers.    No customer or supplier that was material to the Company, the Subsidiary or any of the PRC Entities during the last six (6) calendar months or that has been material to the Company, the Subsidiary or any of the PRC Entities thereafter, has terminated, materially reduced or threatened to terminate or materially reduce its purchases from, or provision of products or services to, the Company, the Subsidiary or the PRC Entities, as the case may be.

3.    Representations and Warranties of the Investors.    Each Investor, severally and not jointly, hereby represents and warrants, that:

3.1    Authorization.    Such Investor has full power and authority to enter into this Agreement and the Ancillary Agreements and each such Agreement constitutes the valid and legally binding obligation, enforceable in accordance with its terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, and (c) to the extent the indemnification provisions contained in the Investors’ Rights Agreement may be limited by applicable United States securities laws.

3.2    Purchase Entirely for Own Account.    This Agreement is made with such Investor in reliance upon such Investor’s representation to the Company, which by such Investor’s execution of this Agreement such Investor hereby confirms that the Securities will be acquired for investment for such Investor’s own account for investment only, and not with a view to the resale or distribution of any part thereof.

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3.3    Disclosure of Information.    Such Investor believes it has received all the information it considers necessary or appropriate for deciding whether to purchase the Series A Preferred Shares. Such Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Series A Preferred Shares and the business, properties, prospects and financial condition of the Company. The foregoing, however, does not limit or modify the representations and warranties of the Company and the Founder in Section 2 of this Agreement or the right of the Investors to rely thereon.

3.4    Investment Experience.    Such Investor is an investor in securities of companies in the development stage and acknowledges that it is able to fond for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Series A Preferred Shares. If other than an individual, such Investor also represents it has not been organized for the purpose of acquiring the Series A Preferred Shares.

3.5    Accredited Investor: Non-US Investor.    Such Investor either (1) is an “accredited investor” within the meaning of Rule 501 under the Securities Exchange Act of 1934, as amended (2) is not a “US Person,” and is not acquiring the securities for the account or benefit of any U.S. person, within the meaning of Regulation S under the Securities Act of 1933, as amended (the “Act”). If such Investor is not a U.S. Person, such Investor agrees to resell such securities only in accordance with the provisions of Regulation S under the Act, pursuant to registration under the Act, or pursuant to an available exemption from registration, and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the Act.

3.6    Further Limitations on Disposition.    Without in any way limiting the representations set forth above, such Investor further agrees not to make any disposition of all or any portion of the Securities unless and until:

(a)    There is then in effect a Registration Statement under the Act covering such proposed disposition and such disposition is made in accordance with such Registration Statement; or

(b)    (i)    Such Investor shall have provided ten (10) days prior notice to the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (ii) if reasonably requested by the Company, such Investor shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company that such disposition will not require registration of such shares under the Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual circumstances.

(c)    Notwithstanding the provisions of subsections (a) and (b) above, no such registration statement or opinion of counsel shall be necessary for a transfer (i) by an Investor that is a partnership to a partner of such partnership or a retired partner of such partnership who retires after the date hereof or to the estate of any such partner of retired partner or the transfer by gift, will or intestate succession of any partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse, (ii) by an Investor that is a limited liability company to a member of such limited liability company or a retired member of such limited liability company who retires after the date hereof or to the estate of any such member of retired member or the transfer by gift, will or intestate succession of any member to his or her spouse or to the siblings, lineal descendants or ancestors of such member or his or her spouse, or (iii) by an Investor to an

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affiliate or related individual or to the estate of any such affiliate or related individual or the transfer by gift, will or intestate succession of any affiliate or related individual to his or her spouse or to the siblings, lineal descendants or ancestors of such affiliate or related individual or his or her spouse, provided, however, in any such event, the Investor shall give the Company ten (10) days’ prior notice of such transfer and the prospective transferee agrees in all such instances in writing to be subject to the terms hereof to the same extent as if he, she or it were an original Investor hereunder.

4.    Conditions of Investors’ Obligations at the Closing.    The obligations of each Investor under subsection 1.1 (c) of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, the waiver of which shall not be effective against any Investor who does not consent thereto:

4.1    Representations and Warranties.    The representations and warranties of the Company and the Founder contained in Section 2 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of such Closing.

4.2    Performance.    The Company and the Founder shall have performed and complied with all agreements, obligations and material conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

4.3    Compliance Certificates.    The President of the Company shall deliver to each Investor at the Closing a certificate stating that the conditions specified in Sections 4.1 and 4.2 have been fulfilled and stating that, except for the effects of the SARS epidemic, there shall have been no material adverse change in the business, affairs, prospects, operations, properties, assets or financial condition of the Company or the Subsidiary since December 31, 2002. The Founder shall deliver to each Investor at the Closing a certificate stating that the conditions specified in Sections 4.1 and 4.2, with respect to the Founder, have been fulfilled.

4.4    Qualifications.    All authorizations, approvals, or permits, if any, of any foreign, United States or local governmental authority or regulatory body that are required in connection with the lawful issuance and sale of the Series A Preferred Shares pursuant to this Agreement shall be duly obtained and effective as of the Closing.

4.5    Proceedings and Documents.    All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to the special counsel for the Investors, and they shall have received all such counterpart original and certified or other copies of such documents as they may reasonably request.

4.6    Secretary’s Certificate.    The Secretary or Assistant Secretary of the Company shall deliver to each Investor at the Closing a certificate stating that the copies of (a) the Restated Articles and the Company’s Restated Memorandum and (b) the Board of Director and Company’s shareholder resolutions relating to the sale of the Series A Preferred Shares attached thereto, are true and complete copies of such documents and resolutions.

4.7    Restated Articles.    The Restated Articles shall provide that the Board of Directors shall consist of five (5) persons.

4.8    Board of Directors.    Four of the five directors of the Company shall be Justin Tang, Lawrence Auriana, Sun Li Ming and Zhong Xiao Jian.

4.9    Opinion of Company Counsel.    Each Investor shall have received from Nardlicht & Hand, counsel for the Company, an opinion, dated as of the Closing, in the form attached hereto

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as Exhibit G. Each Investor shall have received from Conyers Dill & Pearman, counsel for the Company, an opinion, dated as of the Closing, in the form attached hereto as Exhibit H. Each Investor shall have received from Jiangtian & Gongcheng, counsel for the Company, an opinion, dated as of the Closing, in the form attached hereto as Exhibit I.

4.10    Investors’ Rights Agreement.    The Company, each Investor, each Common Holder (as such term is defined therein) and the Founder shall have entered into the Investors’ Rights Agreement in the form attached as Exhibit C.

4.11    First Refusal and Co-Sale Agreement.    The Company, each Investor, each Common Holder (as such term is defined therein) and the Founder shall each have entered into a First Refusal and Co-Sale Agreement in the form attached hereto as Exhibit D.

4.12    Voting Agreement.    The Company, each Investor, each Common Holder (as such term is defined therein) and the Founder shall each have entered into a Voting Agreement in the form attached hereto as Exhibit E.

4.13    Indemnification Agreements.    The Company shall have entered into indemnification agreements with each director in the form previously provided to and approved by special counsel to the Investors.

4.14    Corporate Records.    The corporate records of the PRC Entities, including, without limitation, all records with respect to the Share Pledge Agreements, including the shareholder consent to such agreements, shall be in the form previously provided to and approved by special counsel to the Investors.

4.15    Service Agreements.    Each of the agreements listed on Exhibit J attached hereto shall have been amended to the satisfaction of the Investors and their special counsel.

4.16    Youyuan Agreement.    The Trust Investment Agreement by and between the Subsidiary and Shenzhen Youyuan Investment Co., Ltd. (“Youyuan”) dated May 29, 2001, as amended from time to time, (the “Youyuan Agreement”) shall be terminated. Youyuan shall repay the Subsidiary all of the principal amounts that the Subsidiary transferred to Youyuan, whether pursuant to the Youyuan Agreement or otherwise, in addition to all interest and income earned on such principal.

4.17    Intellectual Property.    The evidence of the proper ownership of the Intellectual Property shall be provided to the satisfaction of the Investors and their special counsel.

4.18    Registration of Share Pledge.    The Share pledge Agreements shall be executed by the relevant parties before a notary public and recorded on the shareholder list and other corporate records of the relevant PRC Entities. The registration of the share pledges shall also be completed, to the satisfaction of the Investors and their special counsel, and registered with the local Administration for Industry and Commerce, to the extent possible under PRC Laws.

5.    Conditions of the Company’s Obligations at Closing.    The obligations of the Company to each Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by each Investor:

5.1    Representations and Warranties.    The representations and warranties of the Investors contained in Section 3 shall be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the Closing.

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5.2    Payment of Purchase Price.    The Investor shall have delivered the purchase price as specified in Section 1.1 (c).

5.3    Qualifications.    All authorizations, approvals, or permits, if any, of any applicable governmental authority or regulatory body that are required in connection with the lawful issuance and sale of the Series A Preferred Shares pursuant to this Agreement shall be duly obtained and effective as of the Closing.

6.    Agreements of the Company.    The Company, the Subsidiary and the Founder covenant and agree with each of the Investors, for the benefit of the Investors, that:

6.1    Preservation of Existence.    Unless approved by the Board of Directors, including the director elected by the Investors (the “Preferred Director”), the Company shall, and shall cause each of the Subsidiary and the PRC Entities to:

(a)    preserve and maintain in full force and effect its existence and good standing under the laws of its jurisdiction of formation or organization where the failure to so preserve and maintain would have a material adverse effect on the assets, properties, financial condition, operating results, or business of the Company, the Subsidiary or the PRC Entities (as such businesses are currently conducted and are proposed to be conducted);

(b)    preserve and maintain in full force and effect all rights, privileges, qualifications, applications, licenses, permits and franchises where the failure to so preserve and maintain would have a material adverse effect on the assets, properties, financial condition, operating results, or business of the Company, the Subsidiary or the PRC Entities (as such businesses are currently conducted and are proposed to be conducted);

(c)    use its reasonable commercial efforts to preserve its business organization;

(d)    conduct its business in the ordinary course in accordance with sound business practices, keep its properties in good working order and condition (normal wear and tear excepted), and from time to time make all needed repairs to, renewals of or replacements of its properties to the extent commercially reasonable so that the efficiency of its business operation shall be reasonably maintained and preserved;

(e)    comply in all material respects with all applicable laws, ordinances, rules and regulations, as well as judicial interpretations and decisions and with the directions of any governmental authority or regulatory body having jurisdiction over the Company, the Subsidiary, any of the PRC Entities or their respective businesses or properties, where the failure to so comply would have a material adverse effect on the assets, properties, financial condition, operating results, or business of the Company, the Subsidiary or the PRC Entities (as such businesses are currently conducted and are proposed to be conducted);

(f)    keep true books and records and accounts in which full and correct entries will be made of all of its business transactions, and to reflect in its financial statements adequate accruals and appropriations to reserves all in accordance with U.S. GAAP and consistent with prior business practice;

(g)    file or cause to be filed in a timely manner all reports, applications, estimates and licenses that shall be required by a governmental authority or regulatory body and that, if not timely filed, would have a material adverse effect on the assets, properties, financial condition, operating results, or business of the Company, the Subsidiary or any of the PRC Entities (as such businesses are currently conducted and are proposed to be conducted), including, without limitation, the Subsidiary shall take all commercially reasonable efforts to file for (i) an Advertising Operating Permit with the State Administration for Industry and Commerce within ninety (90) days of the date hereof, (ii) a qualification with the Civil

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Aviation Administration of China (CAAC) as a ticketing agency within two hundred seventy (270) days of the date hereof, (iii) a hotel reservation license with the Beijing Tourism Bureau and Beijing Commission of Foreign Economic Relations and Trade within two hundred seventy (270) days of the date hereof and (iv) a call center license with the Ministry of Information Industry within two hundred seventy (270) days of the date hereof; and

(h)    take all commercially reasonable efforts, to cause all of its hotel reservations contracts to be (i) entered into (with respect to new contracts) and (ii) amended or renewed (with respect to existing contracts), as a tri-partite contract with the Subsidiary, the ICP Entity and such hotel (substantially in the form attached hereto as Exhibit K) and such tri-partite contract would distribute the fees received by the Subsidiary and the ICP Entity from such hotel in proportion to the respective services performed by the Subsidiary and the ICP Entity; provided, however, this Section 6.1(h) shall no longer apply in the event that the Subsidiary obtains the hotel reservation license referenced in Section 6.1 (g)(iii).

6.2    Related Party Transactions.    The Company or the Subsidiary shall not enter into any transactions with a Related Party or member of such Related Party’s immediate family, or any corporation, partnership or other entity in which such Related Party or family member is an officer, director or partner, or in which such Related Party or family member has significant ownership or economic interests or otherwise controls, unless (a) at least twenty (20) days prior to the entry into such transaction, the Related Party notifies each member of the Board of Directors, including the Preferred Director, that such transaction is a “Related Party” transaction subject to this Section 6.2 and (b) the terms of such transaction are equivalent to the terms that could be obtained in a bona fide arms length transaction or are approved by the Board of Directors, including the Preferred Director.

6.3    Fundamental Changes.    Unless approved by the Board of Directors, including the Preferred Director, the Company shall not, and shall cause each of the Subsidiary and the PRC Entities not to, directly or indirectly, enter into any transaction or series of related transactions of merger, amalgamation, consolidation or combination, or consolidate, liquidate, windup or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, sublease, transfer or otherwise dispose of, in one transaction or in a series of transactions all or substantially all of its business, property or assets, whether now owned or hereafter acquired.

6.4    Tax.

(a)    The Company and the shareholders of the Company shall not, without the written consent of Tiger Technology Private Investment Partners, L.P. (“Tiger”) and, so long as it is under common control with Tiger, Tiger Technology II, L.P., issue or transfer shares in the Company to any investor if following such issuance or transfer the Company, in the determination of counsel or accountants for Tiger, would be either a “Controlled Foreign Corporation” (a “CFC”) or a “Foreign Personal Holding Company” (“FPHC”) as defined in the Code with respect to the shares held by any Investor. No later than two (2) months following the end of each Company taxable year, the Company shall provide the following information to the Investors; (i) the Company’s capitalization table as of the end of the last day of such taxable year and (ii) a report regarding the Company’s status as a CFC. In addition, the Company shall provide the Investors with access to such other Company information as may be required by such Investors to determine the Company’s status as a CFC or a FPHC, to determine whether each such Investor is required to report its pro rata portion of the Company’s “Subpart F income” (as defined in the Code) on its United States federal income tax return, or to allow such Investors to otherwise comply with applicable United States federal income tax laws. In the event that the Company is determined by counsel or accountants for Tiger to be either a CFC or FPHC as defined in the Code (or any

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successor thereto) with respect to the shares held by any Investor, Company agrees to use commercially reasonable efforts to avoid generating (i) for any taxable year in which the Company is a CFC, “subpart F income,” as such term is defined in Section 952 of the Code, and (ii) for any taxable year in which the Company is an FPHC, “foreign personal holding company income,” as such term is defined in Section 553 of the Code. In the event that Company is determined by counsel or accountants for Tiger to be either a CFC or a FPHC as defined in the Code (or any successor thereto) with respect to the shares held by any Investor, Company agrees, to the extent permitted by law, to annually make dividend distributions to each Investor in an amount equal to fifty percent (50%) of any income deemed distributed to such Investor pursuant to either of the foregoing provisions.

(b)    The Company shall use its best efforts to avoid being a “passive foreign investment company” within the meaning of Section 1297 of the Code (or any successor thereto). In connection with a “Qualified Electing Fund” election made by Investor pursuant to Section 1295 of the Code (or any successor thereto), the Company shall provide annual financial information to Investors in the PFIC Annual Information Statement (substantially in the form attached hereto as Exhibit L) and shall provide Investors with access to such other Company information as may be required for purposes of filing United States federal income tax returns in connection with such Qualified Electing Fund election. In the event that an Investor who has made a “Qualified Electing Fund” election must include in its gross income for a particular taxable year its pro rata share of the Company’s earnings and profits pursuant to Section 1293 of the Code (or any successor thereto), the Company agrees to make a dividend distribution to such Investor (no later than ninety (90) days following the end of the Investor’s taxable year) in an amount equal to fifty percent (50%) of the amount so included by such Investor.

(c)    The Company shall obtain representations, warranties and covenants from each entity in which it invests or has invested substantially to the effect of the representations, warranties and covenants contained in the foregoing Sections 6.4(a) and (b) and such additional representations, warranties and covenants as shall be necessary to allow the Company to comply with the provisions of the foregoing Sections 6.4(a) and (b).

(d)    Except to the extent that the Tiger elects otherwise, the Company shall take such actions, including making an election to be treated as a corporation or refraining from making an election to be treated as a partnership, as may be required to ensure that at all times the Company is treated as a corporation for United States federal income tax purposes.

6.5    eLong Advertising.    The Company, the Subsidiary and the Founder will take all commercially reasonable actions to dissolve and wind up the affairs of eLong Advertising within two-hundred seventy (270) days of the date hereof. In the event such dissolution occurs, the Company, the Subsidiary and the Founder will take the necessary measures to transfer eLong Advertising’s equity ownership in eLong Airline to an appropriate party or nominee, as directed by the Company.

6.6    Intellectual Property.    In the event that all of the Intellectual Property has not been transferred to the Subsidiary as of the Closing, the Company and the Subsidiary shall use its best efforts to ensure that all Intellectual Property is transferred to the Subsidiary within two hundred seventy (270) days of the date hereof.

6.7    Employment Agreements.    Each employee of the Company, the Subsidiary and the PRC Entities shall execute an Employment Agreement in the form attached hereto as Exhibit F within thirty (30) days of the date hereof.

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6.8    Indemnification by the Company.    After the date hereof, the Investors and their respective affiliates, officers, directors, employees, agents, successors and assigns (collectively, the “Company Indemnified Parties”) shall be indemnified and held harmless by the Company for any and all liabilities, losses, damages of any kind, diminution in value, claims, costs, expenses, fines, fees, deficiencies, interest, awards, judgments, amounts paid in settlement and penalties (including, without limitation, reasonable attorneys’, consultants’ and experts’ fees and expenses and other costs of defending, investigating or settling claims) suffered, incurred, accrued (in accordance with U.S. GAAP) or paid by them (including, without limitation, in connection with any action brought or otherwise initiated by any of them) (hereinafter, a “Loss”), without adjustment for any insurance recovery or tax deduction relating thereto, arising out of or resulting from any tax liabilities owed to employees of the Company, the Subsidiary or any of the PRC Entities as a result of remuneration received by such employees before the date hereof, As used herein. “Losses” are not limited to matters asserted by third parties, but include Losses incurred or sustained by the Company Indemnified Parties in the absence of claims by third parties.

6.9    Use of Proceeds.    The Company and the Subsidiary shall use the proceeds from the sale of the Series A Preferred Shares as follows: (i) US$5,000,000 will be used to repurchase 1,800,000 Common Shares from Billable Development, Ltd., 1,000,000 Common Shares from Lawrence Auriana, 422,494 Common Shares from the Founder and 40,000 Common Shares from Ira S. Nordlicht and Helen S. Scott JTWROS, pursuant to documentation satisfactory to the Investors and (ii) US$10,000,000 will be used for expansion of its current business and for working capital.

6.10    Insurance Policies.

(a) So long as the Founder remains Chief Executive Officer of the Company, the Company and the Subsidiary shall use commercially reasonable efforts to obtain and/or maintain key man life insurance policies covering the Founder, provided that the insurance company and the details of such policies are reasonably acceptable to Tiger. Such policy shall name the Company as the beneficiary and shall not be cancelable without the prior approval of a majority in interest of the Investors.

(b)    The Company shall use commercially reasonable efforts to obtain and/or maintain a directors and officers liability insurance policy; provided such insurance policy is reasonably acceptable to Tiger.

(c)    Notwithstanding the foregoing, the provisions of this Section 6.10 shall terminate and be of no further effect upon the earlier of (i) the consummation by the Company of a firm commitment underwritten public offering of its Common Shares where the shares are subsequently primarily traded on the Nasdaq Stock Market’s National Market, the New York Stock Exchange or another comparable exchange or marketplace approved by the Board of Directors, or (ii) the date on which Tiger ceases to own any securities of the Company.

6.11    Board of Directors Seat.    Upon the occurrence of the earlier of the following (i) the Company obtains a directors and officers liability insurance policy pursuant to Section 6.10(b) hereof or (ii) the Company receives a written waiver from Tiger of the provisions of Section 6.10(b) hereof, the Company shall cause Scott Shleifer to be elected as a director of the Company. Notwithstanding the foregoing, the provisions of this Section 6.11 shall terminate and be of no further effect upon the earlier of (i) the consummation by the Company of a firm commitment underwritten public offering of its Common Shares where the shares are subsequently primarily traded on the Nasdaq Stock Market’s National Market, the New York Stock Exchange or another comparable exchange or marketplace approved by the Board of Directors, or (ii) the date on which Tiger ceases to own any securities of the Company.

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6.12    Asset Transfer.    The Company shall cause the ICP Entity to enter into an assets transfer agreement with the Subsidiary with respect to all assets that have previously been transferred to the ICP Entity, and to acknowledge the outstanding payment to the Subsidiary, which totals approximately RMB500,000 within thirty (30) days of the date hereof.

6.13    Repayment of Loans.    The Company shall cause the ICP Entity and Asia Interactive to repay to the Subsidiary those funds previously provided for the purpose of investment in eLong Airline, and to attend to the related adjustments to those PRC Entities accounting records, as necessary within thirty (30) days of the date hereof.

6.14    Notarization Certificates.    Within ten (10) days of the date hereof, the Company shall obtain a notarization certificate for each of the documents required to be executed before a notary public under Section 4.18.

7.    Miscellaneous.

7.1    Survival of Warranties; Limitation of Liability.    The warranties and representations of the Founder that are contained in this Agreement shall survive until four (4) months after the Company has provided each Investor with audited financial statements for the twelve (12) month period ending December 31, 2003, which have been audited and certified by independent public accountants of internationally recognized standing who are approved by the Board of Directors, and any liability of the Founder (as applicable) to the Investors for breach of any such representation or warranty shall not be reduced or otherwise affected by any investigation and inquiry made by or on behalf of any Investor after the date of the Closing; provided, however, that (a) the Founder’s representations and warranties regarding authority (in Section 2.6) and any matter that is fraudulently or deliberately concealed by the party from whom indemnification is sought, (b) the Founder’s representations regarding capitalization matters (in Sections 2.2 and 2.3) and (c) the representations regarding tax matters (in Section 2.29) shall survive through the expiration of the relevant statute of limitations. The warranties and representations of the Company and Investors contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall in no way be affected by any investigation of the subject matter thereof made by or on behalf of the Investors or the Company. Except when another time period is specified herein, all of the covenants in this Agreement (including for indemnification) shall survive until they have been performed in full or waived in writing by the party hereto entitled to the benefit of such performance. Notwithstanding anything in this Section 7.1, any claim made by or on behalf of any Investor shall first be made against the Company and the Investor will exercise reasonable efforts to collect on such claim from the Company before any claim is made against the Founder. The Company’s liability for breach of any representation and warranty contained in this Agreement shall be limited to US$15,000,000, plus attorneys’ fees and costs, and the Founder’s liability for breach of any representation and warranty contained in this Agreement shall be limited to US$647,501.

7.2    Successors and Assigns.    Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

7.3    Governing Law.    This Agreement shall be governed by and construed under the laws of the State of New York as applied to agreements among New York residents entered into and

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to be performed entirely within New York. Without limiting the right of the Investors to bring any action or proceeding arising out of or relating to this Agreement, any of the agreements annexed as Exhibits hereto or any of the transactions contemplated hereby or thereby (an “Action”) in the courts of other jurisdictions, each party hereto irrevocably submits in any Action to the jurisdiction of any New York State or Federal court sitting in New York City (“New York Courts”). Each of the Company and the Founder further agrees that, in the case of any Action instituted by either such party, the New York Courts shall have exclusive jurisdiction thereof, and the Company and the Founder may not institute an Action in any forum other than the New York Courts. Each party hereto consents to venue in the New York Courts and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any Action therein. Each party agrees that the summons and complaint or any other process in any Action may be served by notice given in accordance with Section 7.6, or as otherwise permitted by law.

7.4    Counterparts.    This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

7.5    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

7.6    Notices.    All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given; (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (o) ten (10) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) two (2) days after deposit with an internationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 7.6).

7.7    Finder’s Fee.    Each party represents that it neither is nor will be obligated for any finders’ fee or commission in connection with this transaction. Each Investor agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such liability or asserted liability) for which such Investor or any of its officers, partners, employees, or representatives is responsible.

The Company agrees to indemnify and hold harmless each Investor from any liability for any commission or compensation in the nature of a finders’ fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company, or any of its officers, employees or representatives is responsible.

7.8    Expenses.    The Company shall pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery and performance of this Agreement. If the Closing is effected, the Company shall, at the Closing, by way of deduction from gross proceeds, pay the reasonable fees and out-of-pocket expenses up to $200,000 of Gunderson Dettmer, LLP, special counsel for the Investors. The Investors acknowledge that payment of Gunderson Dettmer, LLP’s fees by the Company raises a potential conflict of interest and hereby consents to the payment arrangement set forth herein. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the Ancillary Agreements or the Restated Articles, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

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7.9    Amendments and Waivers.    Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of a majority of the Conversion Shares issued or issuable upon conversion of the Series A Preferred Shares purchased hereunder. Any amendment or waiver effected in accordance with this section shall be binding upon each holder of any securities purchased under this Agreement at the time outstanding (including securities into which such securities are convertible), each future holder of all such securities, and the Company.

7.10    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

7.11    Aggregation of Shares.    All Preferred Shares held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

7.12    Entire Agreement.    This Agreement and the documents referred to herein constitute the entire agreement among the parties and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein or therein.

[REMAINDER OF PAGE INTENTIALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

COMPANY:
ELONG, INC.
By:	/s/ Justin Yue Tang
Name:	Justin Yue Tang
Title:	Chairman & CEO
Address: Suite 604, union plaza 20 Chao Yang Men Wai Avenue, Beijing China 100020

SIGNATURE PAGE TO SERIES A PREFERRED SHARES PURCHASE

AGREEMENT FOR ELONG, INC.

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FOUNDER:

/s/ Justin Yue Tang

Justin Yue Tang

Address: Suite 604, Union Plaza

20 Chao Yang Men Wai

Avenue Beijing,

China 100020

SIGNATURE PAGE TO SERIES A PREFERRED SHARES PURCHASE

AGREEMENT FOR ELONG, INC.

28

INVESTORS:
TIGER TECHNOLOGY PRIVATE
INVESTMENT PARTNERS, L.P.
By:	Tiger Technology PIP Performance, L.L.C., its General Partner
By:	/s/ Scott Shleifer
Name:	Scott Shleifer
Title:	Managing Director
Address: 101 Park Avenue, 48th Floor New York, NY 10178

SIGNATURE PAGE TO SERIES A PREFERRED SHARES PURCHASE

AGREEMENT FOR ELONG, INC.

29

INVESTORS (cont.):
TIGER TECHNOLOGY II, L.P.
By:	Tiger Technology Performance, L.L.C., its General Partner
By:	/s/ Scott Shleifer
Name:	Scott Shleifer
Title:	Managing Director
Address: Walker House, P.O, Box 908GT George Town, Grand Cayman Cayman Islands

SIGNATURE PAGE TO SERIES A PREFERRED SHARES PURCHASE

AGREEMENT FOR ELONG, INC.

30

INVESTORS (cont.):
BLUE RIDGE LIMITED PARTNERSHIP
By:	JAG Holdings LLC, General Partner
By:	/s/
Name:	Richard S. Bello
Title:	Managing Director
Address:
RMG HOLDINGS, LLC
By:	/s/
Name:	Richard M. Gerson
Title:	Managing Director
Address:

SIGNATURE PAGE TO SERIES A PREFERRED SHARES PURCHASE

AGREEMENT FOR ELONG, INC.

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EX-21.1

Exhibit 21.1

Subsidiaries of eLong, Inc.

eLongNet Information Technology (Beijing) Co., Ltd., a PRC company.

eLongNet Hi-Tech (Beijing) Co., Ltd, a PRC company.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

eLong Inc.:

We consent to the use of our report included herein and to the reference to our firm under the heading “Experts” in the registration statement.

Our report refers to a change in the accounting for goodwill in 2002.

/s/ KPMG

Hong Kong, China

October 7, 2004

EX-99.1

Exhibit 99.1

Commerce & Finance Law Offices

714 Huapu International Plaza 19 Chaowai Avenue,

Chaoyang District, Beijing, PRC; Postcode: 100020

Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203

E-mail Add: beijing@tongshang.com Website: www.tongshang.com.cn

[            ], 2004

To: eLong, Inc.

Re: Beijing eLong Information Technology Co., Ltd.

Ladies and Gentlemen,

We are lawyers qualified in the People’s Republic of China (“PRC”) and are qualified to issue an opinion on the laws of the PRC.

We have acted as PRC counsel for eLong, Inc, a company incorporated under the laws of the Cayman Islands (the “Company”), in relation to the Company’s Registration Statement on Form F-1 covering its proposed initial public offering of American depositary shares (“ADSs”) representing its ordinary shares and listing of ADSs on the NASDAQ. We have been requested to give this opinion on, inter alia, the legal ownership structure of Beijing eLong Information Technology Co., Ltd. (“Beijing Information”) and the legality and validity of the following arrangement (“Arrangement”) under the relevant agreements (“Agreements”) among the Company, eLongNet Information Technology (Beijing) Co., Ltd, which is a wholly-owned subsidiary of the Company in PRC (“eLong Information”), Beijing Information, and shareholders of Beijing Information.

The following chart illustrates the legal ownership structure of Beijing eLong and the Arrangements

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The following terms as used in this opinion are defined as follows:

“Approvals” means all approvals, consents, waivers, sanctions, authorizations, filings, registrations, exemptions, permissions, endorsement, annual inspects, qualifications and licence;

“eLong Information” means eLongNet Information Technology (Beijing) Co., Ltd, a limited liability company incorporated under the laws of the PRC.

“Company” means eLong, Inc, a company incorporated under the laws of the Cayman Islands;

“Documents” means the documents reviewed by us for the purpose of issuing this legal opinion, a list of which is contained in Schedule I and copies annexed to this opinion;

“Laws” means all laws, regulations, statutes, orders, decrees, guidelines, notices, judicial interpretations, subordinary legislations of PRC;

“Prospectus” means the U. S. prospectus;

“Beijing Information” means Beijing eLong Information Technology Co., Ltd., a limited liability company incorporated under the laws of the PRC;

“PRC” means the People’s Republic of China.

In so acting, we have examined the originals or copies certified or otherwise identified to our satisfaction, of documents provided to us by the Company and such other documents, corporate records, certificates issued by governmental authorities in the PRC and officers of the Company and other instruments as we have deemed necessary or advisable for the purposes of rendering this opinion, including and without limitation to, copies of the documents set out in Schedule I.

We summarize each of the Arrangements below.

1.    Loans (together with the Option Agreement described below, the “Loan Arrangements”) respectively to Tang Yue and Qu Zhi, who are the current registered shareholders (“Ultimate Shareholders”) of Beijing Information.

1.1    Under the loan agreement entered into by and among the Company, and the two Ultimate Shareholders, the Company advanced certain loans to each of the Ultimate Shareholders for the purpose of providing funding to Beijing Information as registered capital.

1.2    The term of such loans is 10 years, but can be extended with consent from both parties until the Ultimate Shareholder transfer any of his interests in the registered capital of Beijing Information to the Company or entity or entities to be designated by the Company. The Ultimate Shareholders can only repay the loan by way of transferring all of their interests in the entire registered capital of Beijing Information to the Company or entity or entities to be designated by the Company .

1.3    The loans provided to each of the Ultimate Shareholders shall respectively become wholly due and all of the equity interest shall be transferred by such Ultimate Shareholders to

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the Company or entity or entities designated by the Company upon the occurrence of any of the following events:

Ÿ Tang Yue is no longer employed by the Company or an affiliate of the Company;

Ÿ Such Ultimate Shareholder dies or becomes a natural person with limited civil capacity or without civil capacity;

Ÿ Such Ultimate Shareholder is involved in criminal activities;

Ÿ Such Ultimate Shareholders is subject to a claim by any third party for an amount in excess of RMB 100,000; or

Ÿ Under the applicable PRC laws and regulations, the Company or its designee(s) has been permitted to invest in business of Internet content provision services and other services engaged by Beijing Information, and the Company has issued a written notice to such Ultimate Shareholder to execute the purchase option according to the Option Agreements described below.

1.4    No interest will accrue on these loans. However, the Company will be entitled to any proceeds resulting from the sale by these Ultimate Shareholders of their equity interests in Beijing Information.

2.    Exclusive purchase arrangement (“Option Agreements”) respectively to the Ultimate Shareholders of Beijing Information.

2.1    Under the Option Agreements entered into respectively by and among the Company, each of the Ultimate Shareholders and Beijing Information, the Company or its designee have an exclusive option to purchase from each of the Ultimate Shareholders all or part of his interest in Beijing Information in accordance with PRC laws.

2.2    Under the option agreements, Beijing Information agrees not to take any of the following actions without prior written consent from the Company:

Ÿ alter its articles of association or registered capital;

Ÿ sell or in any way transfer its assets, business, receivables or rights or to create any encumbrances thereon;

Ÿ take up or assume any debt (except those arising in the normal course of business or having been disclosed to the Company );

Ÿ enter in to any transaction or contract of value exceeding RMB 100,000(except those executed in the normal course of business);

Ÿ grant any loan or credit;

Ÿ enter into any merger, consolidation, acquisition or investment agreement.

2.3    Under the option agreements, the Ultimate Shareholders agree not to take any of the following actions without prior written consent from the Company:

Ÿ sell or in any way dispose of or create any encumbrances on his interest in Beijing Information (except for the pledge of shares in favor of eLong Information);

Ÿ procure the passing of any shareholder’s resolution relating to the sale, transfer or pledge of their shares of Beijing Information (except for the pledge of shares in favor of eLong Information); or

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Ÿ procure the passing of any resolution relating to a merger or consolidation of Beijing Information or any acquisition by, or investment in, any business by Beijing Information.

3.    Economic relationships and contractual arrangements between eLong Information, Beijing Information and the Ultimate Shareholders (“Contractual Arrangements”).

3.1    eLong Information and Beijing Information have entered into a technology services agreement (“Technology Services Agreement”), which has been amended and restated. According to the Technology Services Agreement, eLong Information has agreed to provide technology services to Beijing Information relating to its website operations, eLong Information has also granted Beiing Information a non-exclusive license to use certain software owned by eLong Information, and Beijing Information has agreed to make quarterly payments to eLong Information for the technical services and the software license.

3.2    Both Ultimate Shareholders have entered into a separate equity interests pledge agreement (“Equity Pledge Agreement”) with eLong Information, which has been amended and restated. According to the Equity Pledge Agreements, the Ultimate Shareholders will pledge their equity interests in Beijing Information to eLong Information to guarantee the performance of Beijing Information under the Technology Services Agreement and the obligations of Beijing Information under the Trademark Agreement, the Domain Name License Agreement, the Cooperative Agreement and the Business Operation Agreement described below. The equity pledge may be enforced by eLong Information upon the occurrence of certain events of default specified in the Equity Pledge Agreement including failure of Beijing Information to make required payment to eLong Information under the Technology Services Agreement or to perform any of its obligations under the Cooperative Agreement, the Business Operation Agreement, the Trademark Agreement and the Domain Name License Agreement.

3.3    eLong Information and Beijing Information have entered into a trademark license agreement (“Trademark Agreement”), which has been amended and restated. According to the Trademark Agreement, eLong Information has granted Beijing Information a non-exclusive license to use certain trademarks owned by eLong Information in return for a license fee.

3.4    eLong Information and Beijing Information have entered into a domain name license agreement (“Domain Name License Agreement”), which has been amended and restated. According to the Domain Name License Agreement, eLong Information has granted Beijing Information the right to use certain domain names owned by eLong Information in return for a license fee.

3.5    eLong Information, Beijing Information and the Ultimate Shareholders have entered a business operation agreement (“Business Operation Agreement”), which has been amended and restated. According to the Business Operation Agreement,

Ÿ in order for Beijing Information to obtain bank financing, eLong Information agrees to provide a guarantee for the payment obligations of Beijing Information when it is required by any of third party.

Ÿ Beijing Information agrees to appoint as Chief Executive Officer, Chief Financial Officer and other high-ranking officers, individuals that are recommended by eLong Information.

Ÿ Beijing Information agrees not to engage in any activity that could substantially affect its assets, liabilities, equity or operations, such as incurring any debt, purchasing or selling

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any assets, granting any third party a security interest in its property or assigning any of its contracts to a third party, without the prior written approval of eLong Information.

3.6    eLong Information and Beijing Information have entered into a cooperative agreement (“Cooperative Agreement”), which has been amended and restated. Under the Cooperative Agreement, Beijing Information agrees to bulletin prices, markets information and other relevant information on its website, and process customer orders and other relevant matters through its website and call center at the request of eLong Information, and eLong Information is obliged to pay to Beijing Information an information and service fees quarterly based on market prices.

In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with authentic original documents submitted to us as copies. We have also assumed the completeness of the Documents as they were presented to us up to the date of this legal opinion and that none of the Documents has been revoked, amended, varied or supplemented. We have further assumed the accuracy and completeness of all factual statements in the Documents. Where important facts were not independently established to us, we have relied upon certificates issued by governmental agents and representatives of the Company with proper authority and upon representations, made in or pursuant to the Agreements.

Based on the foregoing and our review of the relevant documents (including, without limitation, the Documents), we are of the opinion that:

1.    Beijing Information has been duly incorporated and is validly existing as a privately owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of Beijing Information RMB 16,000,000 has been fully paid for and, 75% and 25% of the equity interest in the registered capital of Beijing Information is respectively owned by Tang Yue and Qu Zhi, and to the best of our knowledge after due inquiry, such equity interests are each, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, or any third party right, save for pursuant to the pledge and the option created under the Contractual Arrangements.

2.    eLong Information has been duly incorporated and is validly existing as a wholly foreign owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of eLong Information has been fully paid and is owned by the Company and to the best of our knowledge after due inquiry, such equity interest is free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity or any third party right.

3.    All Approvals in the PRC required for the establishment and the maintenance of the enterprise legal person status of each of eLong Information and Beijing Information respectively have been duly issued and obtained and all such Approvals are in full force and effect, have not been revoked, withdrawn, suspended or cancelled and are not subject to any condition other than annual inspection conducted by relevant government authorities. Each of eLong Information and Beijing Information respectively has complied with all applicable registration and filing requirements under PRC laws for its establishment and the maintenance of its status and existence as an enterprise legal person.

4.    Each of eLong Information and Beijing Information has legal right, power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in their business licenses and to enter into and perform its obligations under the Contractual Arrangements.

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5.    Each agreement related to the Contractual Arrangements, to which eLong Information and Beijing Information are the parties has been duly authorized, executed and delivered by such eLong Information and Beijing Information, and on the performance of which will not require any approvals, consents, etc other than the ones that are clearly obtained or waived, is in proper legal form under the laws of the PRC for the enforcement thereof against the parties thereto with no conflict or violation with PRC laws or regulations, and constitutes a valid and legally binding obligation of the parties thereto, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

6.    Each of agreements related to the Loan Arrangement is in proper legal form under the laws of the PRC for the enforcement thereof against each of Ultimate Shareholders and the Company with no conflict or violation with PRC laws or regulations and, assuming due authorization, execution and delivery by the Company, and due approval, consent for the performance of agreements obtained or waived, constitutes a valid and legally binding obligation of each of Ultimate Shareholders and the Company under the PRC law, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

This opinion relates to the laws of the PRC (other than the laws of the Hong Kong Special Administrative Region) in effect on the date hereof.

We hereby consent to the use of this opinion in, and the filing hereof as an Exhibit to, the above-mentioned Registration Statement and to the reference to our name under the headings “Risk Factors,” “Regulations,” “Corporate Structure and Related Party Transactions,” “Enforceability of Civil Liabilities” and “Legal Matters” in the Prospectus included in such Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the regulations promulgated thereunder.

Yours faithfully,

Commerce & Finance Law Offices

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Schedule I

1.    Latest articles of association, business license and other material constitutional documents, licenses and certificates of Beijing eLong Information Technology Co., Ltd and eLongNet Information Technology (Beijing) Co., Ltd.

2.    Amended and Restated Technical Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.

3.    Amended and Restated Loan Agreement dated July 20, 2004 among the Company, Tang Yue and Qu Zhi.

4.    Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Tang Yue regarding Beijing eLong Information Technology Co., Ltd.

5.    Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Qu Zhi regarding Beijing eLong Information Technology Co., Ltd.

6.    Amended and Restated Trademark License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.

7.    Amended and Restated Domain Name License Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.

8.    Amended and Restated Cooperative Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Information Technology Co., Ltd.

9.    Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd., Tang Yue and Qu Zhi.

10.    Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Company, eLongNet Information Technology (Beijing) Co., Ltd., Tang Yue and Beijing eLong Information Technology Co., Ltd.

11.    Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Company, eLongNet Information Technology (Beijing) Co., Ltd., Qu Zhi and Beijing eLong Information Technology Co., Ltd.

7

EX-99.2

Exhibit 99.2

Commerce & Finance Law Offices

714 Huapu International Plaza 19 Chaowai Avenue,

Chaoyang District, Beijing, PRC; Postcode: 100020

Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203

E-mail Add: beijing@tongshang.com Website: www.tongshang.com.cn

[            ], 2004

To: eLong, Inc.

Re: Beijing eLong Airline Services Co., Ltd.

Ladies and Gentlemen,

We are lawyers qualified in the People’s Republic of China (“PRC”) and are qualified to issue an opinion on the laws of the PRC.

We have acted as PRC counsel for eLong, Inc, a company incorporated under the laws of the Cayman Islands (the “Company”), in relation to the Company’s Registration Statement on Form F-1 covering its proposed initial public offering of American depositary shares (“ADSs”) representing its ordinary shares and listing of ADSs on the NASDAQ. We have been requested to give this opinion on, inter alia, the legal ownership structure of Beijing eLong Airline Services Co., Ltd. (“Beijing Airline”) and the legality and validity of the following arrangement (“Arrangement”) under the relevant agreements (“Agreements”) among eLongNet Information Technology (Beijing) Co., Ltd, which is a wholly-owned subsidiary of the Company in PRC (“eLong Information”), Beijing Airline and shareholders of Beijing Airline.

The following chart illustrates the legal ownership structure of Beijing Air and the Arrangements

Contractual Agreements include Technology Services Agreement, Trademark Agreement and Business Operation Agreement.

1

The following terms as used in this opinion are defined as follows:

“Approvals” means all approvals, consents, waivers, sanctions, authorizations, filings, registrations, exemptions, permissions, endorsement, annual inspects, qualifications and license;

“eLong Information” means eLongNet Information Technology (Beijing) Co., Ltd, a limited liability company incorporated under the laws of the PRC.

“Company” means eLong, Inc, a company incorporated under the laws of the Cayman Islands;

“Documents” means the documents reviewed by us for the purpose of issuing this legal opinion, a list of which is contained in Schedule I and copies annexed to this opinion;

“Laws” means all laws, regulations, statutes, orders, decrees, guidelines, notices, judicial interpretations, subordinary legislations of PRC;

“Prospectus” means the U. S. prospectus;

“Beijing Airline” means Beijing eLong Airline Services Co., Ltd., a limited liability company incorporated under the laws of the PRC;

“Beijing Information” means Beijing eLong Information Technology Co., Ltd., a limited liability company incorporated under the laws of the PRC;

“Beijing Media” means Beijing Asia Media Interactive Advertising Co., Ltd., a limited liability company incorporated under the laws of the PRC;

“PRC” means the People’s Republic of China.

In so acting, we have examined the originals or copies certified or otherwise identified to our satisfaction, of documents provided to us by the Company and such other documents, corporate records, certificates issued by governmental authorities in the PRC and officers of the Company and other instruments as we have deemed necessary or advisable for the purposes of rendering this opinion, including and without limitation to, copies of the documents set out in Schedule I.

We summarize each of the economic relationships and contractual arrangements between eLong Information, Beijing Airline and Shareholders of Beijing Airline below (“Contractual Arrangements”):

1.    eLong Information and Beijing Airline have entered into a technical consulting and services agreement (“Technology Services Agreement”), which has been amended and restated. According to the Technology Services Agreement, eLong Information will provide technology-consulting services to Beijing Airline relating to its air-ticketing business through www.elong.com, eLong Information has also granted Beijing Airline a non-exclusive license to use certain software owned by eLong Information, and Beijing Airline has agreed to pay eLong Information service fees and software license fees based on market prices as agreed by the parties.

2

2.    Beijing Information and Beijing Media have entered into an equity interest pledge agreement with eLong Information (“Equity Pledge Agreement”), which has been amended and restated. According to the Equity Pledge Agreement, Beijing Information and Beijing Media will pledge their equity interest in Beijing Airline to eLong Information to guarantee the performance of obligations of Beijing Airline under the Technology Services Agreement described above, and the performance of its obligations under the Business Operation Agreement and the Trademark Agreement described below. The equity pledge may be enforced by eLong Information upon the occurrence of certain events of default specified in the Equity Pledge Agreement including failure of Beijing Airline to make required payment to eLong Information under the Technology Services Agreement or to perform any of its obligations under the Business Operation Agreement and the Trademark Agreement.

3.    eLong Information, Beijing Airline, Beijing Information and Beijing Media have entered into a business operation agreement (“Business Operation Agreement”), which has been amended and restated. According to the Business Operation Agreement,

Ÿ in order for Beijing Airline to obtain bank financing, eLong Information agrees to provide a guarantee for the payment obligations of Beijing Airline when it is required by any of third party.

Ÿ Beijing Airline shall appoint as Chief Executive Officer, Chief Financial Officer and other high-ranking officers, individuals that are recommended by eLong Information.

Ÿ Beijing Airline agrees not to engage in any activity that could substantially affect its assets, liabilities, equity or operations, such as incurring any debt, purchasing or selling any assets, granting any third party a security interest in its property or assigning any of its contracts to a third party, without the prior written approval of eLong Information.

4.    Beijing Airline and Beijing Information have entered into a cooperative agreement (“Cooperative Agreement”), which has been amended and restated. Under the Cooperative Agreement, Beijing Information has agreed to provide website hosting services and call center services to Beijing Airline. Beijing Airline has agreed to pay information service fees to Beijing Information.

5. eLong Information and Beijing Airline have entered into a trademark license agreement (“Trademark Agreement”). According to the Trademark Agreement, eLong Information has granted Beijing Airline a non-exclusive license to use certain trademarks owned by eLong Information in return for a license fee.

In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with authentic original documents submitted to us as copies. We have also assumed the completeness of the Documents as they were presented to us up to the date of this legal opinion and that none of the Documents has been revoked, amended, varied or supplemented. We have further assumed the accuracy and completeness of all factual statements in the Documents. Where important facts were not independently established to us, we have relied upon certificates issued by governmental agents and representatives of the Company with proper authority and upon representations, made in or pursuant to the Agreements.

Based on the foregoing and our review of the relevant documents (including, without limitation, the Documents), we are of the opinion that:

1.    Beijing Airline has been duly incorporated and validly exists as a privately owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of Beijing Airline RMB8,000,000 has been fully paid for and 80% and 20% of

3

the equity interest in the registered capital of Beijing Airline is respectively owned by Beijing Information and Beijing Media, and to the best of our knowledge after due inquiry, such equity interests are each, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, or any third party right, save for pursuant to the pledge created under the Contractual Arrangements.

2.    eLong Information has been duly incorporated and is validly existing as a wholly foreign owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of eLong Information has been fully paid and is owned by the Company and to the best of our knowledge after due inquiry such equity interest is free and, clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity or any third party right.

3.    All Approvals in the PRC required for the establishment and the maintenance of the enterprise legal person status of each of eLong Information and Beijing Airline respectively have been duly issued and obtained and all such Approvals are in full force and effect, have not been revoked, withdrawn, suspended or cancelled and are not subject to any condition other than annual inspection conducted by relevant government authorities. Each of eLong Information and Beijing Airline respectively has complied with all applicable registration and filing requirements under PRC laws for its establishment and the maintenance of its status and existence as an enterprise legal person.

4.    Each of eLong Information and Beijing Airline has legal right, power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in their business licenses and to enter into and perform its obligations under the Contractual Arrangements.

5.    Each agreement related to the Contractual Arrangements, to which eLong Information and Beijing Airline are the parties has been duly authorized, executed and delivered by such eLong Information and Beijing Airline, and on the performance of which will not require any approvals, consents, etc other than the ones that are clearly obtained or waived, is in proper legal form under the laws of the PRC for the enforcement thereof against the parties thereto with no conflict or violation with PRC laws or regulations, and constitutes a valid and legally binding obligation of the parties thereto, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

This opinion relates to the laws of the PRC (other than the laws of the Hong Kong Special Administrative Region) in effect on the date hereof.

We hereby consent to the use of this opinion in, and the filing hereof as an Exhibit to, the above-mentioned Registration Statement and to the reference to our name under the headings “Risk Factors,” “Regulations,” “Corporate Structure and Related Party Transactions,” “Enforceability of Civil Liabilities” and “Legal Matters” in the Prospectus included in such Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the regulations promulgated thereunder.

Yours faithfully,

Commerce & Finance Law Offices

4

Schedule I

1.    Latest articles of association, business license and other material constitutional documents, licenses and certificates of Beijing eLong Airline Services Co., Ltd. and eLongNet Information Technology (Beijing) Co., Ltd.

2.    Amended and Restated Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Airline Service Co., Ltd.

3.    Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd and Beijing Asia Media Interactive Advertising Co., Ltd. regarding Beijing eLong Airline Service Co., Ltd.

4.    Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Airline Service Co., Ltd. Beijing eLong Information Technology Co., Ltd, and Beijing Asia Media Interactive Advertising Co., Ltd.

5.    Amended and Restated Cooperative Agreement dated July 20, 2004 between Beijing eLong Information Technology Co., Ltd. and Beijing eLong Airline Service Co., Ltd.

6.    Trademark License Agreement Dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing eLong Airline Service Co., Ltd.

5

EX-99.3

Exhibit 99.3

Commerce & Finance Law Offices

714 Huapu International Plaza 19 Chaowai Avenue,

Chaoyang District, Beijing, PRC; Postcode: 100020

Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203

E-mail Add: beijing@tongshang.com Website: www.tongshang.com.cn

[            ], 2004

To: eLong, Inc.

Re: Beijing Asia Media Interactive Advertising Co., Ltd.

Ladies and Gentlemen,

We are lawyers qualified in the People’s Republic of China (“PRC”) and are qualified to issue an opinion on the laws of the PRC.

We have acted as PRC counsel for eLong, Inc, a company incorporated under the laws of the Cayman Islands (the “Company”), in relation to the Company’s Registration Statement on Form F-1 covering its proposed initial public offering of American depositary shares (“ADSs”) representing its ordinary shares and listing of ADSs on the NASDAQ. We have been requested to give this opinion on, inter alia, the legal ownership structure of Beijing Asia Media Interactive Advertising Co., Ltd. (“Beijing Media”) and the legality and validity of the following arrangement (“Arrangement”) under the relevant agreements (“Agreements”) among the Company, eLongNet Information Technology (Beijing) Co., Ltd, which is a wholly-owned subsidiary of the Company in PRC (“eLong Information”), Beijing Media, and shareholders of Beijing Media.

The following chart illustrates the legal ownership structure of Beijing Media and the Arrangements

1

The following terms as used in this opinion are defined as follows:

“Approvals” means all approvals, consents, waivers, sanctions, authorizations, filings, registrations, exemptions, permissions, endorsement, annual inspects, qualifications and licence;

“eLong Information” means eLongNet Information Technology (Beijing) Co., Ltd, a limited liability company incorporated under the laws of the PRC.

“Company” means eLong, Inc, a company incorporated under the laws of the Cayman Islands;

“Documents” means the documents reviewed by us for the purpose of issuing this legal opinion, a list of which is contained in Schedule I and copies annexed to this opinion;

“Laws” means all laws, regulations, statutes, orders, decrees, guidelines, notices, judicial interpretations, subordinary legislations of PRC;

“Prospectus” means the U. S. prospectus;

“Beijing Media” means Beijing Asia Media Interactive Advertising Co., Ltd., a limited liability company incorporated under the laws of the PRC;

“Beijing Information” means Beijing eLong Information Technology Co., Ltd., a limited liability company incorporated under the laws of the PRC;

“PRC” means the People’s Republic of China.

In so acting, we have examined the originals or copies certified or otherwise identified to our satisfaction, of documents provided to us by the Company and such other documents, corporate records, certificates issued by governmental authorities in the PRC and officers of the Company and other instruments as we have deemed necessary or advisable for the purposes of rendering this opinion, including and without limitation to, copies of the documents set out in Schedule I.

We summarize each of the Arrangements below.

1.    Loans (together with the Option Agreement described below, the “Loan Arrangements”) respectively to Tang Yue and Qu Zhi, who are the current registered shareholders (“Ultimate Shareholders”) of Beijing Media

1.1    Under the loan agreements entered into by and between the Company, and each of the Ultimate Shareholders, the Company advanced certain loans to each of the Ultimate Shareholders for the purpose of providing funding to Beijing Media as registered capital.

1.2    The term of such loans is 10 years, but can be extended with consent from both parties until the Ultimate Shareholder transfer any of his interests in the registered capital of Beijing Media to the Company or entity or entities to be designated by the Company. The Ultimate Shareholders can only repay the loan by way of transferring all of their interests in the entire registered capital of Beijing Media to the Company or entity or entities to be designated by the Company.

2

1.3    The loans provided to each of the Ultimate Shareholders shall respectively become wholly due and all of the equity interest shall be transferred by such Ultimate Shareholders to the Company or entity or entities designated by the Company upon the occurrence of any of the following events:

Ÿ Tang Yue is no longer employed by the Company or an affiliate of the Company;

Ÿ Such Ultimate Shareholder dies or becomes a natural person with limited civil capacity or without civil capacity;

Ÿ Such Ultimate Shareholder is involved in criminal activities;

Ÿ Such Ultimate Shareholders is subject to a claim by any third party for an amount in excess of RMB100,000; or

Ÿ Under the applicable PRC laws and regulations, the Company or its designee(s) has been permitted to invest in business of advertising and other services engaged by Beijing Media, and, the Company has issued a written notice to such Ultimate Shareholders to execute the purchase option according to the Option Agreements described below.

1.4    No interest will accrue on these loans. However, the Company will be entitled to any proceeds resulting from the sale by these Ultimate Shareholders of their equity interests in Beijing Media.

2.    Exclusive purchase arrangement (“Option Agreements”) respectively to the Ultimate Shareholders of Beijing Media.

2.1    Under the Option Agreements entered into respectively by and among the Company, each of the Ultimate Shareholders and Beijing Media, the Company or its designee have an exclusive option to purchase from each of the Ultimate Shareholders all or part of his interest in Beijing Media in accordance with PRC laws.

2.2    Under the option agreements, Beijing Media agrees not to take any of the following actions without prior written consent from the Company:

Ÿ alter its articles of association or registered capital;

Ÿ sell or in any way transfer its assets, business, receivables or rights or to create any encumbrances thereon;

Ÿ take up or assume any debt (except those arising in the normal course of business or having been disclosed to the Company );

Ÿ enter into any transaction or contract of value exceeding RMB 100,000 (except those executed in the normal course of business);

Ÿ grant any loan or credit;

Ÿ enter into any merger, consolidation, acquisition or investment agreement.

2.3    Under the option agreements, the Ultimate Shareholders agree not to take any of the following actions without prior written consent from the Company:

Ÿ sell or in any way dispose of or create any encumbrances on his interest in Beijing Media (except for the pledge of shares in favor of eLong Information);

Ÿ procure the passing of any shareholder’s resolution relating to the sale, transfer or pledge of their shares of Beijing Media (except for the pledge of shares in favor of eLong Information); or

3

Ÿ procure the passing of any resolution relating to a merger or consolidation of Beijing Media or any acquisition by, or investment in, any business by Beijing Media.

3.    Economic relationships and contractual arrangements between eLong Information, Beijing Information, Beijing Media and the Ultimate Shareholders (“Contractual Arrangements”).

3.1    eLong Information and Beijing Media have entered into an advertising technical consulting and services agreement (“Technology Services Agreement”), which has been amended and restated. According to the Technology Services Agreement, eLong Information has agreed to provide technology-consulting services to Beijing Media relating to its advertising operations conducted through www.elong.com, eLong Information has also granted Beiing Media a non-exclusive license to use certain software owned by eLong Information, and Beijing Media has agreed to make payments to eLong Information for the technology-consulting services and the software license.

3.2    Both Ultimate Shareholders have entered into a separate equity interests pledge agreement (“Equity Pledge Agreement”) with eLong Information, which has been amended and restated. According to the Equity Pledge Agreements, the Ultimate Shareholders will pledge their equity interests in Beijing Media to eLong Information to guarantee the performance of Beijing Media under the Technology Services Agreement and the obligations of Beijing Information under the Trademark Agreement and the Business Operation Agreement described below. The equity pledge may be enforced by eLong Information upon the occurrence of certain events of default specified in the Equity Pledge Agreement including failure of Beijing Media to make required payment to eLong Information under the Technology Services Agreement or to perform any of its obligations under the Business Operation Agreement and the Trademark Agreement.

3.3    eLong Information and Beijing Media have entered into a trademark license agreement (“Trademark Agreement”). According to the Trademark Agreement, eLong Information has granted Beijing Media a non-exclusive license to use certain trademarks owned by eLong Information in return for a license fee.

3.4    eLong Information, Beijing Media and the Ultimate Shareholders have entered into a business operation agreement (“Business Operation Agreement”), which has been amended and restated. According to the Business Operation Agreement,

Ÿ In order for Beijing Media to obtain bank financing, eLong Information agrees to provide a guarantee for the payment obligations of Beijing Media when it is required by any of third party.

Ÿ Beijing Media shall appoint as Chief Executive Officer, Chief Financial Officer and other high-ranking officers, individuals that are recommended by eLong Information.

Ÿ Beijing Media agrees not to engage in any activity that could substantially affect its assets, liabilities, equity or operations, such as incurring any debt, purchasing or selling any assets, granting any third party a security interest in its property or assigning any of its contracts to a third party, without the prior written approval of eLong Information.

3.5    Beijing Media and Beijing Information have entered into a cooperative agreement (“Cooperative Agreement”). Under the Cooperative Agreement, Beijing Information has agreed to provide website hosting services and call center services to Beijing Media and Beijing Media has agreed to pay information service fees to Beijing Information.

4

In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with authentic original documents submitted to us as copies. We have also assumed the completeness of the Documents as they were presented to us up to the date of this legal opinion and that none of the Documents has been revoked, amended, varied or supplemented. We have further assumed the accuracy and completeness of all factual statements in the Documents. Where important facts were not independently established to us, we have relied upon certificates issued by governmental agents and representatives of the Company with proper authority and upon representations, made in or pursuant to the Agreements.

Based on the foregoing and our review of the relevant documents (including, without limitation, the Documents), we are of the opinion that:

1.    Beijing Media has been duly incorporated and is validly existing as a privately owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of Beijing Media RMB 500,000 has been fully paid for and, 75% and 25% of the equity interest in the registered capital of Beijing Media is respectively owned by Tang Yue and Qu Zhi, and to the best of our knowledge after due inquiry, such equity interests are each, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, or any third party right, save for pursuant to the pledge and the option created under the Contractual Arrangements.

2.    eLong Information has been duly incorporated and is validly existing as a wholly foreign owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of eLong Information has been fully paid and is owned by the Company and to the best of our knowledge after due inquiry, such equity interest is free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity or any third party right.

3.    All Approvals in the PRC required for the establishment and the maintenance of the enterprise legal person status of each of eLong Information and Beijing Media respectively have been duly issued and obtained and all such Approvals are in full force and effect, have not been revoked, withdrawn, suspended or cancelled and are not subject to any condition other than annual inspection conducted by relevant government authorities. Each of eLong Information and Beijing Media respectively has complied with all applicable registration and filing requirements under PRC laws for its establishment and the maintenance of its status and existence as an enterprise legal person.

4.    Each of eLong Information and Beijing Media has legal right, power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in their business licenses and to enter into and perform its obligations under the Contractual Arrangements.

5.    Each agreement related to the Contractual Arrangements, to which eLong Information and Beijing Media are the parties has been duly authorized, executed and delivered by such eLong Information and Beijing Media, and on the performance of which will not require any approvals, consents, etc other than the ones that are clearly obtained or waived, is in proper legal form under the laws of the PRC for the enforcement thereof against the parties thereto with no conflict or violation with PRC laws or regulations, and constitutes a valid and legally binding obligation of the parties thereto, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

5

6.    Each of agreements related to the Loan Arrangement is in proper legal form under the laws of the PRC for the enforcement thereof against each of Ultimate Shareholders and the Company with no conflict or violation with PRC laws or regulations and, assuming due authorization, execution and delivery by the Company, and due approval, consent for the performance of agreements obtained or waived, constitutes a valid and legally binding obligation of each of Ultimate Shareholders and the Company under the PRC law, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

This opinion relates to the laws of the PRC (other than the laws of the Hong Kong Special Administrative Region) in effect on the date hereof.

We hereby consent to the use of this opinion in, and the filing hereof as an Exhibit to, the above-mentioned Registration Statement and to the reference to our name under the headings “Risk Factors,” “Regulations,” “Corporate Structure and Related Party Transactions,” “Enforceability of Civil Liabilities” and “Legal Matters” in the Prospectus included in such Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the regulations promulgated thereunder.

Yours faithfully,

Commerce & Finance Law Offices

6

Schedule I

1.    Latest articles of association, business license and other material constitutional documents, licenses and certificates of Beijing Asia Media Interactive Advertising Co., Ltd. and eLongNet Information Technology (Beijing) Co., Ltd.

2.    Cooperative Agreement Dated July 20, 2004 between Beijing Asia Media Interactive Advertising Co., Ltd. and Beijing eLong Information Technology Co., Ltd.

3.    Trademark License Agreement Dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and Beijing Asia Media Interactive Advertising Co., Ltd.

4.    Amended and Restated Advertising Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Beijing Asia Media Interactive Advertising Co., Ltd.

5.    Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Tang Yue regarding Beijing Asia Media Interactive Advertising Co., Ltd.

6.    Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Qu Zhi regarding Beijing Asia Media Interactive Advertising Co., Ltd.

7.    Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Tang Yue, Qu Zhi and Beijing Asia Media Interactive Advertising Co., Ltd.

8.    Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Company, eLongNet Information Technology (Beijing) Co., Ltd., Tang Yue and Beijing Asia Media Interactive Advertising Co., Ltd.

9.    Amended and Restated Exclusive Purchase Right Agreement dated July 20, 2004 among the Company, eLongNet Information Technology (Beijing) Co., Ltd., Qu Zhi and Beijing Asia Media Interactive Advertising Co., Ltd.

10. Amended and Restated Loan Agreement dated July 20, 2004 among the Company, Tang Yue and Qu Zhi.

7

EX-99.4

Exhibit 99.4

Commerce & Finance Law Offices

714 Huapu International Plaza 19 Chaowai Avenue,

Chaoyang District, Beijing, PRC; Postcode: 100020

Tel: (8610) 65802255 Fax: (8610) 65802538, 65802678, 65802679, 65802203

E-mail Add: beijing@tongshang.com Website: www.tongshang.com.cn

[            ], 2004

To: eLong, Inc.

Re: Jiangsu General Chinese Hotel Reservation Network, Ltd.

Ladies and Gentlemen,

We are lawyers qualified in the People’s Republic of China (“PRC”) and are qualified to issue an opinion on the laws of the PRC.

We have acted as PRC counsel for eLong, Inc, a company incorporated under the laws of the Cayman Islands (the “Company”), in relation to the Company’s Registration Statement on Form F-1 covering its proposed initial public offering of American depositary shares (“ADSs”) representing its ordinary shares and listing of ADSs on the NASDAQ. We have been requested to give this opinion on, inter alia, the legal ownership structure of Jiangsu General Chinese Hotel Reservation Network, Ltd. ( ,”GCH”) and the legality and validity of the following arrangement (“Arrangement”) under the relevant agreements (“Agreements”) among eLongNet Information Technology (Beijing) Co., Ltd, which is a wholly-owned subsidiary of the Company in PRC (“eLong Information”), GCH, and shareholders of GCH.

The following chart illustrates the legal ownership structure of GCH and the Arrangements

Contractual Agreements include Technology Services Agreement, Trademark Agreement and Business Operation Agreement.

1

The following terms as used in this opinion are defined as follows:

“Approvals” means all approvals, consents, waivers, sanctions, authorizations, filings, registrations, exemptions, permissions, endorsement, annual inspects, qualifications and license;

“eLong Information” means eLongNet Information Technology (Beijing) Co., Ltd, a limited liability company incorporated under the laws of the PRC.

“Company” means eLong, Inc, a company incorporated under the laws of the Cayman Islands;

“Documents” means the documents reviewed by us for the purpose of issuing this legal opinion, a list of which is contained in Schedule I and copies annexed to this opinion;

“Laws” means all laws, regulations, statutes, orders, decrees, guidelines, notices, judicial interpretations, subordinary legislations of PRC;

“Prospectus” means the U. S. prospectus;

“GCH” means Jiangsu General Chinese Hotel Reservation Network, Ltd., a limited liability company incorporated under the laws of the PRC;

“Beijing Information” means Beijing eLong Information Technology Co., Ltd., a limited liability company incorporated under the laws of the PRC;

“Beijing Airline” means Beijing eLong Airline Services Co., Ltd, a limited liability company incorporated under the laws of the PRC;

“PRC” means the People’s Republic of China.

In so acting, we have examined the originals or copies certified or otherwise identified to our satisfaction, of documents provided to us by the Company and such other documents, corporate records, certificates issued by governmental authorities in the PRC and officers of the Company and other instruments as we have deemed necessary or advisable for the purposes of rendering this opinion, including and without limitation to, copies of the documents set out in Schedule I.

We summarize each of the economic relationships and contractual arrangements between eLong Information, GCH and Shareholders of GCH below (“Contractual Arrangements”).

1.    eLong Information and GCH have entered into a technical consulting and services agreement (“Technology Services Agreement”), which has been amended and restated. According to the Technology Services Agreement, eLong Information has agreed to provide technology-consulting services to GCH relating to its hotel reservation business through www.elong.com, eLong Information has also granted GCH a non-exclusive license to use certain software owned by eLong Information, and GCH has agreed to pay eLong Information service fees and software license fees based on market prices as agreed by the parties.

2.    Beijing Information and Beijing Airline have entered into an equity interest pledge agreement (“Equity Pledge Agreement”) with eLong Information, which has been amended and restated. According to the Equity Pledge Agreement, Beijing Information and Beijing Airline

2

will pledge their equity interests in GCH to eLong Information to guarantee the performance of obligations GCH under the Technology Services Agreement described above, and the performance of its obligations under the Business Operation Agreement and the Trademark Agreement described below. The equity pledge may be enforced by eLong Information upon the occurrence of certain events of default specified in the Equity Pledge Agreement including failure of GCH to make required payment to eLong Information under the Technology Services Agreement or to perform any of its obligations under the Business Operation Agreement and the Trademark Agreement.

3.    eLong Information, GCH, Beijing Information and Beijing Airline have entered into a business operation agreement (“Business Operation Agreement”), which has been amended and restated. According to the Business Operation Agreement,

Ÿ in order for GCH to obtain bank financing, eLong Information agrees to provide a guarantee for the payment obligations of GCH when it is required by any of third party.

Ÿ GCH shall appoint as Chief Executive Officer, Chief Financial Officer and other high-ranking officers, individuals that are recommended by eLong Information.

Ÿ GCH agrees not to engage in any activity that could substantially affect its assets, liabilities, equity or operations, such as incurring any debt, purchasing or selling any assets, granting any third party a security interest in its property or assigning any of its contracts to a third party, without the prior written approval of eLong Information.

4.    GCH and Beijing Information have entered into a cooperative agreement (“Cooperative Agreement”), which has been amended and restated. Under the Cooperative Agreement, Beijing Information has agreed to provide website hosting services and call center services to GCH. GCH has agreed to pay information service fees to Beijing Information.

5.    eLong Information and GCH have entered into a trademark license agreement (“Trademark Agreement”). According to the Trademark Agreement, eLong Information has granted GCH a non-exclusive license to use certain trademarks owned by eLong Information in return for a license fee.

In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with authentic original documents submitted to us as copies. We have also assumed the completeness of the Documents as they were presented to us up to the date of this legal opinion and that none of the Documents has been revoked, amended, varied or supplemented. We have further assumed the accuracy and completeness of all factual statements in the Documents. Where important facts were not independently established to us, we have relied upon certificates issued by governmental agents and representatives of the Company with proper authority and upon representations, made in or pursuant to the Agreements.

Based on the foregoing and our review of the relevant documents (including, without limitation, the Documents), we are of the opinion that:

1.    GCH has been duly incorporated and validly exists as a privately owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of GCH RMB4,000,000 has been fully paid for and, 20% and 80% of the equity interest in the registered capital of GCH is respectively owned by Beijing Information and Beijing Airline, and to the best of our knowledge after due inquiry, such equity interests are each, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, or any third party right, save for pursuant to the pledge created under the Contractual Arrangements.

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2.    eLong Information has been duly incorporated and is validly existing as a wholly foreign owned enterprise with legal person status in good standing under the laws of the PRC. All of the registered capital of eLong Information has been fully paid and is owned by the Company and to the best of our knowledge after due inquiry, such equity interest is free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity or any third party right.

3.    All Approvals in the PRC required for the establishment and the maintenance of the enterprise legal person status of each of eLong Information and GCH respectively have been duly issued and obtained and all such Approvals are in full force and effect, have not been revoked, withdrawn, suspended or cancelled and are not subject to any condition other than annual inspection conducted by relevant government authorities. Each of eLong Information and GCH respectively has complied with all applicable registration and filing requirements under PRC laws for its establishment and the maintenance of its status and existence as an enterprise legal person.

4.    Each of eLong Information and GCH has legal right, power and authority (corporate and other) to own, lease and operate its properties and to conduct its business as described in their business licenses and to enter into and perform its obligations under the Contractual Arrangements.

5.    Each agreement related to the Contractual Arrangements, to which eLong Information and GCH are the parties has been duly authorized, executed and delivered by such eLong Information and GCH, and on the performance of which will not require any approvals, consents, etc other than the ones that are clearly obtained or waived, is in proper legal form under the laws of the PRC for the enforcement thereof against the parties thereto with no conflict or violation with PRC laws or regulations, and constitutes a valid and legally binding obligation of the parties thereto, enforceable in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights generally and to general equity principles.

This opinion relates to the laws of the PRC (other than the laws of the Hong Kong Special Administrative Region) in effect on the date hereof.

We hereby consent to the use of this opinion in, and the filing hereof as an Exhibit to, the above-mentioned Registration Statement and to the reference to our name under the headings “Risk Factors,” “Regulations,” “Corporate Structure and Related Party Transactions,” “Enforceability of Civil Liabilities” and “Legal Matters” in the Prospectus included in such Registration Statement. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the regulations promulgated thereunder.

Yours faithfully,

Commerce & Finance Law Offices

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Schedule I

1.    Latest articles of association, business license and other material constitutional documents, licenses and certificates of Jiangsu General Chinese Hotel Reservation Network, Ltd. and eLongNet Information Technology (Beijing) Co., Ltd.

2.    Amended and Restated Technical Consulting and Services Agreement dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd. and Jiangsu General Chinese Hotel Reservation Network Ltd.

3.    Amended and Restated Equity Interest Pledge Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Beijing eLong Information Technology Co., Ltd. and Beijing eLong Airline Services Co., Ltd.

4.    Amended and Restated Business Operation Agreement dated July 20, 2004 among eLongNet Information Technology (Beijing) Co., Ltd., Jiangsu General Chinese Hotel Reservation Network Ltd., Beijing eLong Information Technology Co., Ltd. and Beijing eLong Airline Services Co., Ltd.

5.    Amended and Restated Cooperative Agreement dated July 20, 2004 between Beijing eLong Information Technology Co., Ltd. and Jiangsu General Chinese Hotel Reservation Network Ltd.

6.    Trademark License Agreement Dated July 20, 2004 between eLongNet Information Technology (Beijing) Co., Ltd and Jiangsu General Chinese Hotel Reservation Network Ltd.

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