Registration No. 333-      

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form F-3

 

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

Ctrip.com International, Ltd.

(Exact name of Registrant as specified in its charter)

 

 

Not Applicable

(Translation of Registrant’s name into English)

 

 

99 Fu Quan Road
Shanghai 200335, People’s Republic of China
(86 21) 3406-4880

(Address and telephone number of Registrant’s principal executive offices)

 

 

 

CT Corporation System
111 Eighth Avenue
New York, New York 10011
(212) 664-1666

(Name, address, and telephone number of agent for service)

 

 

 

Copies to:

 

Z. Julie Gao, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
c/o 42/F, Edinburgh Tower, The Landmark
15 Queen’s Road, Central
Hong Kong
(852) 3740-4850

 

 

 

Approximate date of commencement of proposed sale to the public:  From time to time after the effective date of this registration statement.

 

If only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.  o

 

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.  þ

 

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

 

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

 

If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.  þ

 

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.  o

 

 

 

CALCULATION OF REGISTRATION FEE

 

 

 

PROSPECTUS

 

 

Ctrip.com International, Ltd.

 

American Depositary Shares
(each representing 0.25 of an ordinary share, par value $0.01 per ordinary share)

 

 

 

 

This prospectus relates to the proposed sale from time to time by us or any selling shareholder of American depositary shares, or ADSs, of Ctrip.com International, Ltd., or Ctrip. Each ADS represents 0.25 of an ordinary share, par value $0.01 per ordinary share, of Ctrip. We will not receive any proceeds from the ADSs sold by any selling shareholder.

 

This prospectus may not be used to consummate any sales of securities unless accompanied by a prospectus supplement which will describe the method and terms of the offering. We will provide the specific terms of any offering and the offered securities as well as information about the selling shareholders, if any, in one or more supplements to this prospectus. Any prospectus supplement may also add, update or change information contained in this prospectus.

 

 

 

 

Investing in our ADSs involves a high degree of risk. You should carefully consider the “Risk Factors” which may be included in any prospectus supplement or which are incorporated by reference into this prospectus.

 

 

 

 

We or any selling shareholder may sell the securities to or through underwriters, to other purchasers, through agents, or through a combination of these methods. The names of any underwriters will be stated in the applicable prospectus supplement.

 

 

 

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

 

 

 

 

The date of this prospectus is March 2, 2010.

 

TABLE OF CONTENTS

 

 

You should read this prospectus and any prospectus supplement together with the additional information described under the heading “Where You Can Find More Information About Us” and “Incorporation of Documents by Reference.”

 

In this prospectus, unless otherwise indicated or unless the context otherwise requires:

 

(1) the terms “we,” “us,” “our company,” “our” and “Ctrip” refer to Ctrip.com International, Ltd., its predecessor entities and subsidiaries and, in the context of describing our operations and consolidated financial information, also include its affiliated Chinese entities;

 

(2) “shares” and “ordinary shares” refer to our ordinary shares, par value of US$0.01 per ordinary share;

 

(3) “ADSs” refers to our American depositary shares, each of which represents 0.25 of an ordinary share;

 

(4) “China” and “PRC” refer to the People’s Republic of China and, solely for the purpose of this prospectus, exclude Taiwan, Hong Kong and Macau, and “Greater China” refers to the People’s Republic of China, Taiwan, Hong Kong and Macau; and

 

(5) all references to “RMB” and “Renminbi” are to the legal currency of China and all references to “U.S. dollars,” “US$,” “dollars” and “$” are to the legal currency of the United States.

 

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, utilizing a “shelf” registration process. Under this shelf process, we or any selling shareholder may sell the securities described in this prospectus in one or more offerings. This prospectus provides you with a general description of the securities we may offer. Each time we or any selling shareholder sell securities pursuant to the registration statement, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained or incorporated by reference in this prospectus.

 

This prospectus and the documents incorporated by reference contain forward-looking statements that reflect our current expectations and views of future events. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “may,” “will,” “expect,” “anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,” “is/are likely to” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other things:

 

 

The forward-looking statements included in this prospectus and the documents incorporated by reference are subject to risks, uncertainties and assumptions about our company. Our actual results of operations may differ materially from the forward-looking statements as a result of the risk factors disclosed in the documents incorporated by reference herein or in any accompanying prospectus supplement, including the following risks:

 

 

 

We would like to caution you not to place undue reliance on these forward-looking statements and you should read these statements in conjunction with the risk factors disclosed in the documents incorporated by reference herein or in any accompanying prospectus supplement for a more complete discussion of the risks of an investment in our securities and other risks outlined in our other filings with the SEC. The forward-looking statements included in this prospectus or incorporated by reference into this prospectus are made only as of the date of this prospectus or the date of the incorporated document, and we do not undertake any obligation to update the forward-looking statements except as required under applicable law.

 

We are a leading travel service provider for hotel accommodations, airline tickets and packaged tours in China. We aggregate information on hotels and flights and enable our customers to make informed and cost-effective hotel and flight bookings. We also sell packaged tours that include transportation and accommodations, as well as guided tours in some instances. Since commencing operations in 1999, we have become one of the best-known travel brands in China. We pioneered the development of a reservation and fulfillment infrastructure that enables our customers to:

 

 

We target our services primarily at business and leisure travelers in China who do not travel in groups. These types of travelers, who are referred to in the travel industry as FITs (frequent independent travelers) and whom we

refer to as independent travelers in this prospectus, form a traditionally under-served yet fast-growing segment of the China travel market. We act as an agent in substantially all of our transactions and generally do not take inventory risks with respect to the hotel rooms and airline tickets booked through us. We derive our hotel reservation, air-ticketing and packaged-tour revenues mainly through commissions from our travel suppliers, primarily based on the transaction value of the rooms, airline tickets and packaged-tour products, respectively, booked through our services.

 

We believe that we are the largest consolidator of hotel accommodations in China in terms of the number of room nights booked. As of December 31, 2009, we had secured room supply relationships with approximately 9,800 hotels in China and approximately 19,000 hotels abroad, which cover a broad range of hotels in terms of price and geographical location. As of December 31, 2009, we had guaranteed room allotments, which allow us to sell hotel rooms to our customers even during peak seasons and provide instant confirmation, with approximately 70% of the hotels in China with whom we have a supply relationship. Rooms booked in hotels with guaranteed allotment arrangement accounted for approximately 80% of our hotel transactions for the year ended December 31, 2009. The quality and depth of our hotel supplier network enable us to offer our customers a wide selection of hotel accommodations. We believe our ability to offer reservations at highly rated hotels is particularly appealing to our customers. Revenues from our bookings for three-, four- and five-star hotels comprised approximately 80% of our revenues from our hotel reservation business in 2009.

 

We believe that we are the largest consolidator of airline tickets in China in terms of the total number of airline tickets booked and sold. Our airline ticket suppliers include all major Chinese airlines and many international airlines that operate flights originating in China. We are among the few airline ticket consolidators in China that maintain a centralized reservation system and ticket fulfillment infrastructure covering substantially all of the economically prosperous regions of China. Our customers can make flight reservations on their chosen routes and arrange ticket payment and delivery through our ticketing offices and third-party agencies located in over 50 major cities in China.

 

We also offer independent leisure travelers bundled packaged-tour products, which include transportation and accommodation, as well as guided tours in some instances. Our packaged-tour products cover a variety of domestic and international destinations.

 

We offer our services to customers through an advanced transaction and service platform consisting of our centralized toll-free, 24-hour customer service centers and bilingual websites. In 2009, transactions effected through our customer service centers accounted for approximately two-thirds of our transaction volume, while our websites accounted for the balance.

 

We have experienced significant growth since we commenced operations in 1999. Our revenues grew from RMB 559 million in 2005 to RMB 2.1 billion (US$311 million) in 2009, which represented a compound annual growth rate, or CAGR, of 40% and our net income grew from RMB 225 million in 2005 to RMB 667 million (US$98 million) in 2009, which represented a CAGR of 31%.

 

We commenced our business in June 1999. In March 2000, we established a new holding company, Ctrip.com International, Ltd., in the Cayman Islands as an exempt company with limited liability under the Companies Law of the Cayman Islands. Since our inception, we have conducted the majority of our operations in China and in 2009, expanded our operations in Greater China. Our principal executive offices are located at 99 Fu Quan Road, Shanghai 200335, People’s Republic of China. Our telephone number is (86-21) 3406-4880 and our principal website address is www.ctrip.com. The contents of our websites should not be deemed to be part of this prospectus. Our agent for service of process in the United States is CT Corporation System, 111 Eighth Avenue, New York, New York 10011.

 

Please see the factors set forth under the heading “Risk Factors” in our annual report on Form 20-F for the year ended December 31, 2009, which is incorporated in this prospectus by reference, and any accompanying prospectus supplement before investing in any securities that may be offered pursuant to this prospectus.

 

Except as may be described otherwise in an accompanying prospectus supplement, (i) we intend to use the net proceeds from the sale of securities by us to fund capital expenditures and for other general corporate purposes and (ii) we will not receive any of the proceeds from the sale of our securities by any selling shareholder.

 

As of the date of this prospectus, our authorized share capital consists of 100,000,000 ordinary shares, par value US$0.01 each, 34,074,835 of which are issued and outstanding (excluding the 1,465,281 ordinary shares that we reserved for issuance upon the exercise of our outstanding options). As of the same date, there are 4,392,619 options issued and outstanding under our share incentive plans, which, once vested, are exercisable for the equivalent amount of our ordinary shares. We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Law (2009 Revision) of the Cayman Islands, which is referred to as the Companies Law below.

 

On August 15, 2007, Rakuten, Inc., a then shareholder of our company completed a public offering and sale of 13,290,000 ADSs, each then representing one-half of an ordinary share, par value US$0.01 per ordinary share.

 

On April 11, 2006, we effected a change of the ratio of our ADSs to ordinary shares from one ADS representing two ordinary shares to one ADS representing one ordinary share. On July 31, 2007, we effected a further change of the ratio of our ADSs to ordinary shares from one ADS representing one ordinary share to two ADSs representing one ordinary share. On January 21, 2010, we effected a further change of the ratio of our ADSs to ordinary shares from two ADSs representing one ordinary share to four ADSs representing one ordinary share. Unless otherwise indicated, ADSs and per ADS amount in this prospectus have been retroactively adjusted to reflect the changes in ratio for all periods presented.

 

Ordinary Shares

 

General.  All of our outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are issued in registered form. Our shareholders who are nonresidents of the Cayman Islands may freely hold and vote their shares.

 

Dividends.  The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors subject to the Companies Law.

 

Voting Rights.  Each ordinary share is entitled to one vote on all matters upon which the ordinary shares are entitled to vote. Voting at any meeting of shareholders is by show of hands unless a poll is demanded. A poll may be demanded by the chairman of our board of directors or any other shareholder present in person or by proxy and holding at least ten percent of the shares giving a right to vote at the meeting.

 

A quorum required for a meeting of shareholders consists of at least two shareholders holding at least one-third of the outstanding voting shares in our company, present or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. Shareholders’ meetings are held annually and may be convened by our board of directors on its own initiative or upon a request to the directors by shareholders holding in the aggregate ten percent or more of our voting share capital. Advance notice of at least seven days is required for the convening of our annual general shareholders’ meeting and other shareholders meetings.

 

An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast in a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the ordinary shares. A special resolution is required for matters such as a change of name or amending the memorandum and articles of association. Holders of the ordinary shares may by ordinary resolution, among other things, make changes in the amount of our authorized share capital and consolidate and divide all or any of our share capital into shares of larger amount than our existing share capital and cancel any shares.

Liquidation.  On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of shares), assets available for distribution among the holders of ordinary shares shall be distributed among the holders of our ordinary shares on a pro rata basis. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders proportionately.

 

Calls on Shares and Forfeiture of Shares.  Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid are subject to forfeiture.

 

Redemption of Shares.  Subject to the provisions of the Companies Law, we may issue shares on the terms that they are, or at our option or at the option of the holders are, subject to redemption on such terms and in such manner as may be determined by special resolution.

 

Variations of Rights of Shares.  All or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Law, be varied either with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.

 

Shareholder Rights Plan

 

On November 23, 2007, our board of directors declared a dividend of one ordinary share purchase right, or a Right, for each of our ordinary shares outstanding at the close of business on December 3, 2007. As long as the Rights are attached to the ordinary shares, we will issue one Right (subject to adjustment) with each new ordinary share so that all such ordinary shares will have attached Rights. When exercisable, each Right will entitle the registered holder to purchase from us one ordinary share at a price of $700 per ordinary share, subject to adjustment.

 

The Rights will expire on November 23, 2017, subject to our right to extend such date, and are exercisable upon the earlier of (i) 10 days following a public announcement that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership of 20% or more of the voting securities of our company, or (ii) 10 business days following the commencement or announcement of an intention to make a tender offer or exchange offer, the consummation of which would result in the beneficial ownership by a person or group of 20% or more of the voting securities of our company. Upon exercise, all Rights holders except for the potential acquirer will be entitled to acquire our ordinary shares at a discount. We are entitled to redeem the Rights in whole at any time on or before the tenth day following acquisition by a person or group of 20% or more of our voting securities (which for these purposes include ADSs representing ordinary shares).

 

The Rights were not distributed in response to any specific effort to acquire control of our company.

 

Differences in Corporate Law

 

The Companies Law is modeled after that of the United Kingdom but does not follow recent United Kingdom statutory enactments. In addition, the Companies Law differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

 

Mergers and Similar Arrangements.  The Companies Law permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies.

 

For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company and (b) a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation (a “Plan”), which must then be authorized by either (a) a special resolution of the shareholders of each

constituent company voting together as one class if the shares to be issued to each shareholder in the consolidated or surviving company will have the same rights and economic value as the shares held in the relevant constituent company or (b) a shareholder resolution of each constituent company passed by a majority in number representing seventy-five percent in value of the shareholders voting together as one class.

 

The Plan must be filed with the Registrar of Companies together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and published in the Cayman Islands Gazette. Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) if they follow the required procedures, subject to certain exceptions. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

 

In addition, 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:

 

 

When a take-over offer is made and accepted by holders of ninety percent of the ordinary shares within four months, the offerer may, within a two-month period, require the holders of the remaining ordinary shares to transfer such ordinary shares on the terms of the offer. An objection may be made to the Grand Court of the Cayman Islands but is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.

 

If the arrangement and reconstruction are thus approved, any dissenting shareholders would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the ordinary shares.

 

Shareholders’ Suits.  The Cayman Islands courts can be expected to follow English case law precedents. The common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) which permit a minority shareholder to commence a class action against or derivative actions in the name of the company to challenge (a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud against the minority where the wrongdoers are themselves in control of the company, and (c) an action which requires a resolution with a qualified (or special) majority which has not been obtained) have been applied and followed by the courts in the Cayman Islands.

 

Inspection of Books and Records

 

Holders of our ordinary 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, we will provide our shareholders with our annual audited financial statements.

Indemnification

 

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 civil fraud or 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, except through their own willful neglect or default.

 

Insofar as indemnification for liabilities arising under the U.S. Securities Act of 1933, as amended, or the Securities Act, may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and therefore is unenforceable.

 

The Bank of New York Mellon is acting as the depositary for our ADSs. The depositary’s corporate trust office is at 101 Barclay Street, New York, New York 10286. Each ADS represents 0.25 of an ordinary share (or a right to receive 0.25 of an ordinary share) or other securities, cash or other property deposited with The Bank of New York Mellon but not distributed to ADS holders. ADSs may be represented by certificates that are commonly known as “American depositary receipts,” or “ADRs.” The depositary appointed the Hong Kong office of The Hongkong and Shanghai Banking Corporation Limited as the custodian to safekeep the securities on deposit.

 

As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through an account established by the depositary in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary (commonly referred to as the “direct registration system,” or DRS). The DRS reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary. Under the DRS, ownership of ADSs is evidenced by periodic statements issued by the depositary to the holders of the ADSs. The DRS includes automated transfers between the depositary and The Depository Trust Company, or DTC, the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as an ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC. This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and, as such, we will refer to you as the “ADS holder.” When we refer to “you,” we assume the reader owns ADSs and will own ADSs at the relevant time.

 

As an ADS holder, we will not treat you as one of our shareholders and you will not have shareholder rights. The depositary will be the holder of the ordinary shares underlying your ADSs. However, as a holder of ADSs, you will have ADS holder rights. A deposit agreement among us, the depositary and you, as an ADS holder and the beneficial owners of ADSs set out ADS holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADSs.

 

We are providing you with a summary of the deposit agreement. You should read this summary together with the deposit agreement and the form of ADR attached thereto. A copy of the deposit agreement is on file with the SEC as Exhibit 2.4 of our annual report on Form 20-F (file no. 001-33853) filed with the SEC on April 29, 2008. You may obtain a copy of the deposit agreement from the SEC’s Public Reference Room at 100 F Street, N.W., Washington, D.C. 20549. You can also inspect a copy of the deposit agreement at the corporate trust office of the depositary, currently located at 101 Barclay Street, New York, New York 10286, and at the principal offices of the custodian under the deposit agreement, currently located at 1 Queen’s Road, Central, Hong Kong. We urge you to review the deposit agreement in its entirety as well as the form of ADR attached to the deposit agreement.

Dividends and Other Distributions

 

The Bank of New York Mellon 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.

 

 

Before making a distribution, any withholding taxes that must be paid will be deducted. See “Taxation — Certain U.S. Federal Income Tax Consideration — Information Reporting and Backup Withholding” and “Taxation — PRC Taxation.” The Bank of New York Mellon will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when The Bank of New York Mellon cannot convert RMB, you may lose some or all of the value of the distribution.

 

 

If The Bank of New York Mellon makes rights available to you, it will exercise the rights and purchase the ordinary shares on your behalf. The depositary will then deposit the ordinary shares and deliver the ADSs to you. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.

 

U.S. securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after exercise of rights. Under the deposit agreement, The Bank of New York Mellon will not distribute rights to holders of ADSs unless the distribution and sale of rights and the securities to which these rights relate are either exempt from registration under the Securities Act with respect to all holders of ADSs, or are registered under the provisions of the Securities Act. We can give no assurance that we can establish an exemption from registration under the Securities Act and we are under no obligation to file a registration statement with respect to these rights or underlying securities or to endeavor to have a registration statement declared effective. In this case, The Bank of New York Mellon may deliver the ADSs under a separate restricted deposit agreement which will contain the same provisions as the deposit agreement, except for changes needed to put the restrictions in place.

 

 

The Bank of New York Mellon is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADS holders. We have no obligation to register ADSs, ordinary shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to ADS holders. 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.

 

Deposit, Withdrawal and Cancellation

 

The Bank of New York Mellon will deliver ADSs if you or your broker deposit ordinary shares or evidence of rights to receive ordinary shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will register the appropriate number of ADSs in the names you request and will deliver the ADSs at its corporate trust office to the persons you request.

 

You may turn in your ADSs at The Bank of New York Mellon’s office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will deliver:

 

 

Voting Rights

 

You may instruct The Bank of New York Mellon to vote the ordinary shares underlying your ADSs but only if we ask The Bank of New York Mellon to ask for your instructions. Otherwise, you will not be able to exercise your right to vote unless you withdraw the ordinary shares. However, you may not know about the meeting enough in advance to withdraw the ordinary shares.

 

If we ask for your instructions, The Bank of New York Mellon will notify you of the upcoming vote and arrange to deliver our voting materials to you. The materials will:

 

 

We cannot assure you that you will receive the voting materials in time to ensure that you can instruct The Bank of New York Mellon to vote the ordinary shares underlying your ADSs. In addition, The Bank of New York Mellon 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.

 

If we timely ask The Bank of New York Mellon to solicit your instructions and The Bank of New York Mellon does not receive voting instructions from you by the specified date, it will consider you to have authorized and directed it to give a discretionary proxy to a person designated by us to vote the number of deposited securities represented by your ADSs. The Bank of New York Mellon will give a discretionary proxy to such person in those circumstances to vote on all questions to be voted upon unless we notify The Bank of New York Mellon that:

 

 

 

Notices and Reports

 

Upon receipt of notice of any meeting of holders of ordinary shares or other deposited securities, if requested in writing by our company, The Bank of New York Mellon will, as soon as practicable thereafter, mail to the owners of ADSs a notice which contains (a) such information as is contained in such notice of meeting received by The Bank of New York Mellon from our company, (b) a statement that the owners of ADSs as of the close of business on a specified record date will be entitled, subject to any applicable provisions of Cayman Islands law and of the memorandum and articles of association of our company, to instruct The Bank of New York Mellon as to the exercise of the voting rights, if any, pertaining to the amount of ordinary shares or other deposited securities represented by their respective ADSs and (c) a statement as to the manner in which instructions may be given.

 

The Bank of New York Mellon will make available for inspection by registered holders at its Corporate Trust Office any reports and communications, including any proxy soliciting material, received from our company, which are both (a) received by The Bank of New York Mellon as the holder of the deposited securities, and (b) made generally available to the holders of such deposited securities by our company. The Bank of New York Mellon will also, upon our written request, send to the registered holders copies of such reports when furnished by our company pursuant to the deposit agreement. Any such reports and communications, including any proxy soliciting material, furnished to The Bank of New York Mellon by our company will be furnished in English.

 

Fees and Expenses

 

 

Payment of Taxes

 

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities underlying your ADSs. The Bank of New York Mellon may refuse to transfer your ADSs or allow you to withdraw the deposited securities underlying your ADSs until such taxes or other charges are paid. It may apply

payments owed to you or sell deposited securities underlying your ADSs to pay any taxes owed and you will remain liable for any deficiency. If it sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to you any proceeds, or send to you any property remaining after it has paid the taxes.

 

Reclassifications, Recapitalizations and Mergers

 

 

Amendment and Termination

 

We may agree with The Bank of New York Mellon to amend the deposit agreement and the ADRs without your consent for any reason. If the amendment will cause any of the following results, the amendment will become effective 30 days after The Bank of New York Mellon notifies you of the amendment:

 

 

 

 

At the time an amendment becomes effective, you are considered, by continuing to hold your ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.

 

The Bank of New York Mellon will terminate the deposit agreement if we ask it to do so. In such case, The Bank of New York Mellon must notify you at least 90 days before termination. The Bank of New York Mellon may also terminate the deposit agreement if The Bank of New York Mellon has told us that it would like to resign and we have not appointed a new depositary bank within 90 days.

 

After termination, The Bank of New York Mellon and its agents will be required to do only the following under the deposit agreement:

 

 

One year after termination, The Bank of New York Mellon may sell any remaining deposited securities by public or private sale. After that, The Bank of New York Mellon will hold the proceeds of the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADS holders that have not surrendered their ADSs. It will not invest the money and will have no liability for interest. The Bank of New York

Mellon’s only obligations will be an indemnification obligation and an obligation to account for the proceeds of the sale and other cash. After termination, our only obligations will be an indemnification obligation and our obligation to pay specified amounts to The Bank of New York Mellon.

 

Limitations On Obligations and Liability to ADS Holders

 

The deposit agreement expressly limits our obligations and the obligations of The Bank of New York Mellon, and it limits our liability and the liability of The Bank of New York Mellon. We and The Bank of New York Mellon:

 

 

In the deposit agreement, we and The Bank of New York Mellon have agreed to indemnify each other under designated circumstances.

 

Requirements for Depositary Actions

 

The ADSs are transferable on the books of The Bank of New York Mellon, provided that The Bank of New York Mellon may close the transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. Before The Bank of New York Mellon will deliver or register transfer of ADS, make a distribution on ADSs, or process a withdrawal of shares, The Bank of New York Mellon may require:

 

 

The Bank of New York Mellon may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of The Bank of New York Mellon are closed, or at any time if The Bank of New York Mellon or we think it advisable to do so.

 

Right to Receive the Ordinary Shares Underlying the ADSs

 

You have the right to surrender your ADSs and withdraw the underlying ordinary shares at any time except:

 

 

The right of withdrawal may not be limited by any other provision of the deposit agreement.

 

Pre-Release of ADSs

 

In compliance with the provisions of the deposit agreement, The Bank of New York Mellon may deliver ADSs before deposit of the underlying ordinary shares. This is called a pre-release of the ADSs. The Bank of New York Mellon may also deliver ordinary shares upon cancellation of pre-released ADSs, even if the ADSs are cancelled before the pre-release transaction has been closed out. A pre-release is closed out as soon as the underlying ordinary shares are delivered to The Bank of New York Mellon. The Bank of New York Mellon may receive ADSs instead of ordinary shares to close out a pre-release. The Bank of New York Mellon may pre-release ADSs only under the following conditions:

 

 

In addition, The Bank of New York Mellon will limit the number of ADSs that may be outstanding at any time as a result of pre-release to 30.0% of the total shares deposited, although The Bank of New York Mellon may disregard the limit from time to time, if it thinks it is appropriate to do so.

 

We are incorporated in the Cayman Islands because of the following benefits found there:

 

 

However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include:

 

 

Our constituent documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders, be arbitrated.

 

A substantial portion of our current operations is conducted in China, and the majority of our assets are located in China. We also conduct part of our operations in Taiwan and Hong Kong. We have appointed CT Corporation System, 111 Eighth Avenue, New York, NY 10011, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States. A majority of our directors and officers are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against us or them 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 in the United States.

Maples and Calder, our counsel as to Cayman Islands law and Commerce & Finance Law Offices, our counsel as to Chinese law, have advised us, respectively, that there is uncertainty as to whether the courts of the Cayman Islands and China, respectively, would:

 

 

Maples and Calder has further advised us that a final and conclusive judgment in the 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 which was neither obtained in a manner nor is of a kind, the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands, may be subject to enforcement proceedings as a debt in the courts of the Cayman Islands under the common law doctrine of obligation without any re-examination of the merits of the underlying disputes. The Cayman Islands courts are unlikely to enforce a punitive judgment of a United States court predicated upon the liabilities provision of the federal securities law in the United States without a retrial on the merits if such judgment gives rise to obligations to make payments that may be regarded as fines, penalties or similar charges.

 

Commerce & Finance Law Offices has advised us further that the recognition and enforcement of foreign judgments are provided for under Chinese Civil Procedures Law. Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of Chinese Civil Procedures Law based either on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions.

 

The following summary of the material Cayman Islands and U.S. federal income tax consequences of an investment in our ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under state, local and other tax laws. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Maples and Calder, our Cayman Islands counsel.

 

Cayman Islands Taxation

 

The Cayman Islands currently levies 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 us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

 

PRC Taxation

 

If the PRC tax authorities determine that our Cayman Islands holding company is a “resident enterprise” for PRC enterprise income tax purposes, a withholding tax of 10% for our foreign ADS holders may be imposed on dividends they receive from us and on gains realized on their sale or other disposition of ADSs. See “Risk Factors — Risks Related to Our Corporate Structure — Our subsidiaries and affiliated Chinese entities in China are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements” included in our annual report on Form 20-F for the fiscal year ended December 31, 2009, which is incorporated by reference in this prospectus.

Certain U.S. Federal Income Tax Consequences

 

The following description generally summarizes certain U.S. federal income tax consequences generally applicable to U.S. Holders (as defined below) under present law of ownership in and disposition of the ADSs or ordinary shares. This description is based on the U.S. Treasury regulations issued under the Internal Revenue Code of 1986, as amended, as well as judicial and administrative interpretations available on the date hereof, all of which are subject to change, possibly with retroactive effect. You should note that no rulings have been or are expected to be sought from the U.S. Internal Revenue Service, or the IRS, with respect to any U.S. federal income tax consequences described below, and we cannot assure you that the IRS or a court will not taken contrary positions.

 

The following discussion does not address all U.S. federal income tax consequences applicable to any particular investor or to certain investors who may be subject to special terms (regardless of whether or not such persons constitute U.S. Holders as defined below) such as banks, insurance companies, broker dealers, dealers or traders in securities or commodities, tax-exempt entities, persons liable for alternative minimum tax, U.S. expatriates, regulated investment companies or real estate investment trusts, partnerships (including certain entities treated as partnerships for U.S. federal income tax purposes) or persons holding ADSs or ordinary shares through partnerships (including entities treated as partnerships for U.S. federal income tax purposes), S-corporations, estates and trusts, persons holding an ADS or ordinary share as part of a straddle, hedging, conversion or integrated transaction, investors whose “functional currency” is not the U.S. dollars, holders that actually or constructively own 10% or more (by voting power or value) of all classes of our outstanding capital stock, or persons who acquired ADSs or ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation. Please note this description does not address (i) alternative minimum tax consequence or (ii) the indirect effects on persons who hold equity interests as a holder.

 

PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF ADSs OR ORDINARY SHARES.

 

As used in this section, “U.S. Holder” means a beneficial owner of ADSs or ordinary shares that for U.S. federal income tax purposes is,

 

 

If you are a partner in a partnership or other entity taxable as a partnership that holds ADSs or ordinary shares, your tax treatment will generally depend on your status and the activities of the partnership. Partnerships holding the ADSs or ordinary shares, and partners in such partnerships, should consult their tax advisors regarding the tax consequences of an investment in the ADSs or ordinary shares.

 

The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement have been and will be complied with in accordance with the terms. If you hold ADSs, you should be treated as the holder of the underlying ordinary shares represented by those ADSs for U.S. federal income tax purposes.

 

Taxation of Dividends and Other Distributions on the ADSs or Ordinary Shares

 

Subject to the description below under “— Passive Foreign Investment Company,” the amount of any distribution to you with respect to the ADSs or ordinary shares, before deduction for any taxes imposed by the PRC, will be included in your gross income as dividend income on the date of receipt by the depositary, in the case

of ADSs, or by you, in the case of ordinary shares, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits, such excess amount will be treated first as a tax-free return of your tax basis in your ADSs or ordinary shares, and then, to the extent such excess amount exceeds your tax basis, as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will generally be reported as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. Any dividends we pay will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.

 

With respect to non-corporate U.S. Holders (including individual U.S. Holders), for taxable years beginning before January 1, 2011, dividends may be taxed at the lower capital gains rate applicable to “qualified dividend income,” provided that (1) the ADSs or ordinary shares are readily tradable on an established securities market in the United States or we are eligible for the benefits of an income tax treaty with the United States that the U.S. Treasury has determined satisfactory for purposes of the rules applicable to qualified dividends and that includes an exchange of information program, (2) we are neither a passive foreign investment company, or PFIC, nor treated as such with respect to you (as discussed below) for our taxable year in which the dividend was paid or the preceding taxable year, and (3) certain holding period requirements are met. U.S. Treasury guidance indicates that common or ordinary shares, or ADSs representing such shares, are considered for the purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the Nasdaq Global Select Market, as are our ADSs (but not our ordinary shares). If we are treated as a “resident enterprise” for PRC tax purposes under its Enterprise Income Tax Law, or EIT Law, we may be eligible for the benefits of the income tax treaty between the United States and the PRC. You should consult your tax advisors regarding the availability of the lower capital gains rate applicable to qualified dividend income for dividends paid with respect to our ADSs or ordinary shares and any possible change in law relating to the availability of such lower rate for dividends paid by us.

 

Dividends will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced tax rate applicable to qualified dividend income and divided by the highest tax rate normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to the ADSs or ordinary shares will be “passive category income” or, in the case of certain U.S. Holders, “general category income.”

 

If PRC withholding taxes apply to dividends paid to you with respect to our ADSs or ordinary shares, subject to certain conditions and limitations, such PRC withholding taxes may be treated as foreign taxes eligible for credit against your U.S. federal income tax liability. The rules relating to the determination of the foreign tax credit are complex and you should consult your tax advisors regarding the availability of a foreign tax credit in your particular circumstances.

 

Taxation of a Disposition of ADSs or Ordinary Shares

 

Subject to description below under “— Passive Foreign Investment Company,” you will recognize capital gain or loss on any sale, exchange or other taxable disposition of an ADS or ordinary share equal to the difference between the amount realized for the ADS or ordinary share and your tax basis in the ADS or ordinary share. Your tax basis in an ADS or ordinary share will generally be equal to the cost of such ADS or ordinary share. The gain or loss will generally be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the ADS or ordinary share for more than one year, you generally will be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize will generally be treated as U.S. source income or loss for foreign tax credit limitation purposes, which will generally limit the availability of foreign tax credits. However, if we are treated as a “resident enterprise” for PRC tax purposes, we may be eligible for the benefits of the income tax treaty between the United States and the PRC. In such event, if PRC tax were to be imposed on any gain from the disposition of the ADSs or ordinary shares, a U.S. Holder that is eligible for the benefits of the income tax treaty between the United States and the PRC may elect to treat the gain as

PRC source income. You should consult your tax advisors regarding the proper treatment of gain or loss recognized on a sale, exchange or other taxable disposition of the ADSs or ordinary shares in your particular circumstances.

 

Passive Foreign Investment Company

 

Based on the market price of our ADSs, the value of our assets, and the composition of our assets and income, we do not believe that we were a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2009. A non-U.S. corporation will be a PFIC for any taxable year if either:

 

 

We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In applying this rule, however, it is not clear whether the contractual arrangements between us and our affiliated Chinese entities will be treated as ownership of stock.

 

We must make a separate determination after the close of each year as to whether we were a PFIC for that year. Accordingly, we cannot assure you that we will not be a PFIC for our current taxable year ending December 31, 2010 or any future taxable year. Because the value of our assets for purposes of the asset test will generally be determined by reference to the market price of our ADSs and ordinary shares, fluctuations in the market price of our ADSs or ordinary shares may cause us to become a PFIC. If we are a PFIC for any year during which you hold ADSs or ordinary shares, we will generally continue to be treated as a PFIC with respect to you for all succeeding years during which you hold ADSs or ordinary shares, unless we cease to be a PFIC and you make a deemed sale election with respect to the ADSs or ordinary shares, as applicable. If such election is made, you will be deemed to have sold the ADSs or ordinary shares you hold at their fair market value and any gain from such deemed sale would be subject to the consequences described below. After the deemed sale election, your ADSs or ordinary shares with respect to which such election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC.

 

For each taxable year that we are treated as a PFIC with respect to you, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you realize from a sale or other disposition (including a pledge) of the ADSs or ordinary shares, unless you make a “mark-to-market” election as discussed below. Under these special tax rules:

 

 

A U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed in the preceding paragraph. If you make a valid mark-to-market election for our ADSs or ordinary shares, you will include in income for each year that we are treated as a PFIC with respect to you an amount equal to the excess, if any, of the fair market value of the ADSs or ordinary shares you hold as of the close of the year over your adjusted basis in such ADSs or ordinary shares. You will be allowed a deduction for the excess, if any, of the adjusted basis of the ADSs or ordinary shares over their fair market value as of the close of the year. However, deductions will be allowable only to the extent of any net mark-to-market gains on the ADSs or ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as any gain on the actual sale or other disposition of the ADSs or ordinary shares, will be treated as ordinary income. The mark-to-market election is available only for “marketable stock,” which is

stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market, as defined in applicable U.S. Treasury regulations. Our ADSs are listed on the Nasdaq Global Select Market, which is a qualified exchange or other market for these purposes. Consequently, if the ADSs continue to be listed on the Nasdaq Global Select Market and are regularly traded, and you are a holder of ADSs, we expect that the mark-to-market election would be available to you were we to be or become a PFIC. You should consult your tax advisors as to the availability and desirability of a mark-to-market election.

 

Alternatively, if a non-U.S. corporation is a PFIC, a U.S. holder of shares in that corporation may avoid taxation under the rules described above by making a “qualified electing fund” election to include in income its share of the corporation’s income on a current basis. However, you can make a qualified electing fund election with respect to your ADSs or ordinary shares only if we agree to furnish you annually with certain tax information, and we currently do not intend to prepare or provide such information. Therefore, U.S. Holders should assume that they will not receive such information from us and would not be able to make a qualified electing fund election.

 

You are urged to consult your tax advisor regarding the application of the PFIC rules to your investment in ADSs or ordinary shares.

 

Information Reporting and Backup Withholding

 

Dividend payments with respect to ADSs or ordinary shares and proceeds from the sale, exchange or redemption of ADSs or ordinary shares may be subject to information reporting to the Internal Revenue Service and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however, to a U.S. Holder that furnishes a correct taxpayer identification number and makes any other required certification or that is otherwise exempt from backup withholding. U.S. Holders that are required to establish their exempt status generally must provide such certification on Internal Revenue Service Form W-9. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

 

Backup withholding is not an additional tax. Amounts withheld as backup withholding can be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the Internal Revenue Service and furnishing any required information in a timely manner.

 

We or any selling shareholder may sell our ordinary shares, represented by ADSs, from time to time, in one or more offerings, as follows:

 

 

In addition, we may issue the securities as a dividend or distribution or in a subscription rights offering to our existing security holders. In some cases, we or dealers acting for us or on our behalf may also repurchase securities and reoffer them to the public by one or more of the methods described above. This prospectus may be used in connection with any offering of our securities through any of these methods or other methods described in the applicable prospectus supplement.

 

Our securities distributed by any of these methods may be sold to the public, in one or more transactions, either:

 

 

 

We may solicit offers to purchase the securities directly from the public from time to time. We may also designate agents from time to time to solicit offers to purchase securities from the public on our or their behalf. The prospectus supplement relating to any particular offering of securities will name any agents designated to solicit offers, and will include information about any commissions we may pay the agents, in that offering. Agents may be deemed to be “underwriters” as that term is defined in the Securities Act.

 

From time to time, we may sell securities to one or more dealers as principals. The dealers, who may be deemed to be “underwriters” as that term is defined in the Securities Act, may then resell those securities to the public.

 

We may sell securities from time to time to one or more underwriters, who would purchase the securities as principal for resale to the public, either on a firm-commitment or best-efforts basis. If we sell securities to underwriters, we will execute an underwriting agreement with them at the time of sale and will name them in the applicable prospectus supplement. In connection with those sales, underwriters may be deemed to have received compensation from us in the form of underwriting discounts or commissions and may also receive commissions from purchasers of the securities for whom they may act as agents. Underwriters may resell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from purchasers for whom they may act as agents. The applicable prospectus supplement will include information about any underwriting compensation we pay to underwriters, and any discounts, concessions or commissions underwriters allow to participating dealers, in connection with an offering of securities.

 

Underwriters, dealers, agents and other persons may be entitled, under agreements that they may enter into with us, to indemnification by us against civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which they may be required to make.

 

In connection with an offering, the underwriters, including any affiliate of ours that is acting as an underwriter or prospective underwriter, may engage in transactions that stabilize, maintain or otherwise affect the price of the securities offered. These transactions may include overalloting the offering, creating a syndicate short position, and engaging in stabilizing transactions and purchases to cover positions created by short sales. Overallotment involves sales of the securities in excess of the principal amount or number of the securities to be purchased by the underwriters in the applicable offering, which creates a short position for the underwriters. Short sales involve the sale by the underwriters of a greater number of securities than they are required to purchase in an offering. Stabilizing transactions consist of certain bids or purchases made for the purpose of preventing or retarding a decline in the market price of the securities in connection with an offering.

 

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount it received because the underwriters have repurchased securities sold by or for the account of that underwriter in stabilizing or short-covering transactions.

 

As a result, the price of the securities may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued by the underwriters at any time. These transactions may be effected on an exchange or automated quotation system, if the securities are listed on that exchange or admitted for trading on that automated quotation system, or in the over-the-counter market or otherwise.

 

The underwriters, dealers and agents, as well as their associates, may be customers of or lenders to, and may engage in transactions with and perform services for, Ctrip and its subsidiaries.

 

In addition, we expect to offer securities to or through our affiliates, as underwriters, dealers or agents. Our affiliates may also offer the securities in other markets through one or more selling agents, including one another.

 

If so indicated in an applicable prospectus supplement, we will authorize dealers or other persons acting as our agent to solicit offers by some institutions to purchase securities from us pursuant to contracts providing for

payment and delivery on a future date. Institutions with which these contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others.

 

Unless otherwise indicated in an applicable prospectus supplement or confirmation of sale, the purchase price of the securities will be required to be paid in immediately available funds in New York City.

 

We are being represented by Skadden, Arps, Slate, Meagher & Flom LLP with respect to legal matters of United States federal securities and New York State law. Certain legal matters in connection with this offering will be passed upon for the underwriters by a law firm named in the applicable prospectus supplement. The validity of the ordinary shares represented by the ADSs offered in this offering and legal matters as to Cayman Islands law will be passed upon for us by Maples and Calder. Legal matters as to PRC law will be passed upon for us by Commerce & Finance Law Offices and for the underwriters by a law firm named in the applicable prospectus supplement. Skadden, Arps, Slate, Meagher & Flom LLP may rely upon Maples and Calder with respect to matters governed by Cayman Islands law and Commerce & Finance Law Offices with respect to matters governed by PRC law.

 

The consolidated financial statements and management’s assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal Control over Financial Reporting) incorporated in this prospectus by reference to the annual report on Form 20-F for the year ended December 31, 2009 have been so incorporated in reliance on the report of PricewaterhouseCoopers Zhong Tian CPAs Limited Company, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

 

The offices of PricewaterhouseCoopers Zhong Tian CPAs Limited Company are located at 11^th Floor, PricewaterhouseCoopers Centre, 202 Hu Bin Road, Shanghai 200021, People’s Republic of China.

 

We will furnish to you, through the depositary, English language versions of any reports, notices and other communications that we generally transmit to holders of our ordinary shares.

 

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and, in accordance with the Exchange Act, we file annual reports and other information with the SEC. You may read and copy any of this information in the SEC’s Public Reference Room, 100 F Street, NE Washington, D.C. 20549. You may also obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, NE Washington, D.C. 20549, at prescribed rates. You can obtain information on the operation of the SEC’s Public Reference Room in Washington, D.C. by calling the SEC at 1-800-SEC-0330.

 

The SEC also maintains an Internet website that contains reports, proxy and information statements, and other information about issuers, like us, that file electronically with the SEC. The address of that website is http://www.sec.gov.

 

The SEC allows us to “incorporate by reference” the information we file with them. This means that we can disclose important information to you by referring you to those documents. Each document incorporated by reference is current only as of the date of such document, and the incorporation by reference of such documents shall not create any implication that there has been no change in our affairs since the date thereof or that the information contained therein is current as of any time subsequent to its date. The information incorporated by reference is considered to be a part of this prospectus and should be read with the same care. When we update the information contained in documents that have been incorporated by reference by making future filings with the

SEC, the information incorporated by reference in this prospectus is considered to be automatically updated and superseded. In other words, in the case of a conflict or inconsistency between information contained in this prospectus and information incorporated by reference into this prospectus, you should rely on the information contained in the document that was filed later.

 

We incorporate by reference the documents listed below:

 

 

Our annual report on Form 20-F for the fiscal year ended December 31, 2009 filed on February 3, 2010, contains a description of our business and audited consolidated financial statements with a report by an independent registered public accounting firm. These financial statements are prepared in accordance with U.S. GAAP.

 

Copies of all documents incorporated by reference in this prospectus, other than exhibits to those documents unless such exhibits are specially incorporated by reference in this prospectus, will be provided at no cost to each person, including any beneficial owner, who receives a copy of this prospectus on the written or oral request of that person made to:

Ctrip.com International, Ltd.

99 Fu Quan Road

Shanghai 200335, People’s Republic of China

Tel: (86 21) 3406-4880

Attention: Investor Relationship Manager

 

You should rely only on the information that we incorporate by reference or provide in this prospectus. We have not authorized anyone to provide you with different information. We are not making any offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of those documents.

PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

 

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 civil fraud or 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, except through their own willful neglect or default.

 

The underwriting agreement between us and the underwriters, a form of which will be filed as Exhibit 1.1 to this registration statement, provides for indemnification and contribution by the underwriters with respect to certain liabilities of our directors, officers and other controlling persons.

 

Pursuant to the indemnification agreements between us and our directors and officers, the form of which was filed as Exhibit 10.2 to our registration statement on Form F-1 (file no. 333-110455) that was filed with the SEC on November 12, 2003, we agreed to indemnify our directors and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.

 

 

 

(a) The undersigned Registrant hereby undertakes:

 

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or any decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment 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.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4) To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the Registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-K if such financial statements and information are contained in periodic reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Act of 1934 that are incorporated by reference in this Form F-3.

 

(5) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

 

(i) Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

 

(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of

1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of 314 securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.

 

(6) That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

 

The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i) Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;

 

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

 

(iv) Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

 

(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement 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.

 

(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the 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 whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Shanghai, People’s Republic of China, on March 2, 2010.

 

CTRIP.COM INTERNATIONAL, LTD.

 

Name:     Min Fan

 

POWER OF ATTORNEY

 

Each person whose signature appears below constitutes and appoints each of Min Fan and Jane Jie Sun as his or her true and lawful attorney-in-fact and agent, 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 SEC, hereby ratifying and confirming all that said attorney-in-fact and agent, or its substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities set forth below on March 2, 2010.

 

SIGNATURE OF AUTHORIZED REPRESENTATIVE OF THE REGISTRANT

 

Under the Securities Act, the undersigned, the duly authorized representative in the United States of Ctrip.com International, Ltd., has signed this registration statement in Newark, Delaware, on March 2, 2010.

 

Authorized U.S. Representative

 

Name:     Donald J. Puglisi

Puglisi & Associates

INDEX TO EXHIBITS

 

 

 

Exhibit 5.1

Our ref            AEO\302248\3691635v4
Direct tel         +852 2971 3081
Email               alice.ooi@maplesandcalder.com

Ctrip.com International, Ltd.
99 Fu Quan Road
Shanghai 200335
People’s Republic of China

2 March 2010

Dear Sirs

Ctrip.com International, Ltd.

We act as Cayman Islands counsel for Ctrip.com International, Ltd. (the “Company”) in connection with the Company’s registration statement on Form F-3, including all amendments or supplements thereto (the “Registration Statement”), filed with the Securities and Exchange Commission (the “Commission”) under the U.S. Securities Act of 1933, as amended (the “Act”) and the base prospectus (the “Prospectus”) included therein, with respect to the public offering by the Company of ordinary shares with a par value of US$0.01 (the “Shares”) in the form of American Depositary Shares (the “ADSs”).

The Registration Statement also relates to the sale by any selling shareholder from time to time of certain ADSs representing the Company’s shares (the “Issued Shares”).

We are furnishing this opinion as Exhibit 5.1 to the Registration Statement.

1

Documents Reviewed

For the purposes of this opinion, we have reviewed only originals, copies or final drafts of the following documents:

1.1

the certificate of incorporation dated 3 March 2000;

1.2

the amended and restated memorandum and articles of association of the Company as adopted by a special resolution passed on 8 December 2000 and as further amended by a special resolution passed on 17 October 2006 (the “M&A”);

1.3

the written resolutions of the directors of the Company dated 30 January 2010 (the “Directors’ Resolutions”);

1.4

a certificate from a Director of the Company addressed to this firm dated 2 March 2010, a copy of which is attached hereto (the “Director’s Certificate”);

2

1.5

a certificate of good standing dated 15 January 2010, issued by the Registrar of Companies in the Cayman Islands (the “Certificate of Good Standing”);

1.6		the Registration Statement; and
1.7		the Prospectus.

2

Assumptions

Save as aforesaid we have not been instructed to undertake and have not undertaken any further enquiry or due diligence in relation to the transaction the subject of this opinion. The following opinions are given only as to and based on circumstances and matters of fact existing at the date hereof and of which we are aware consequent upon the instructions we have received in relation to the matter the subject of this opinion and as to the laws of the Cayman Islands as the same are in force at the date hereof. In giving this opinion, we have relied upon the completeness and accuracy (and assumed the continuing completeness and accuracy as at the date hereof) of the Director’s Certificate as to matters of fact and the Certificate of Good Standing without further verification and have relied upon the following assumptions, which we have not independently verified:

2.1

copy documents or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals;

2.2

the genuineness of all signatures and seals; and

2.3

there is no contractual or other prohibition (other than as may arise by virtue of the laws of the Cayman Islands) binding on the Company or on any other party prohibiting it from entering into and performing its obligations.

3

Opinion

The following opinions are given only as to matters of Cayman Islands law and we have assumed that there is nothing under any other law that would affect or vary the following opinions.

Based upon the foregoing and subject to the qualifications set out below and having regard to such legal considerations as we deem relevant, we are of the opinion that:

3.1

the Company has been duly incorporated as an exempted company with limited liability for an unlimited duration and is validly existing and in good standing under the laws of the Cayman Islands;

3.2

the authorised share capital of the Company is US$1,000,000 divided into 100,000,000 ordinary shares of a nominal or par value of US$0.01 each;

3.3

the Issued Shares have been duly authorized and are legally issued, fully paid and non-assessable;

3.4

the issuance and allotment of the Shares has been duly authorised and when allotted, issued and paid for as contemplated in the Registration Statement and entered in the register of members (shareholders), the Shares will be legally issued, fully paid and non-assessable; and

3.5

the statements under the caption “Taxation” in the Prospectus forming part of the Registration Statement, to the extent that they constitute statements of Cayman Islands law, are accurate in all material respects and that such statements constitute our opinion.

3

4

Qualifications

This opinion is subject to the qualification and limitation that under the Companies Law (2009) of the Cayman Islands, the register of members of a Cayman Islands company is by statute regarded as prima facie evidence of any mattes which the Company Law (2009 Revision) directs or authorises to be inserted therein. A third party interest in the shares in question would not appear. An entry in the register of members may yield to a court order for rectification (for example, in the event of fraud or manifest error).

Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions the subject of this opinion.

We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our name under the headings “Enforceability of Civil Liabilities”, “Taxation” and “Legal Matters” and elsewhere in the Prospectus included 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 Act or the Rules and Regulations of the Commission thereunder.

Yours faithfully

/s/ Maples and Calder

Maples and Calder

Encl

Ctrip.com International, Ltd.
March 2, 2010
Page 3

required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Commission thereunder.

Exhibit 8.2

Commerce & Finance Law Offices
6F NCI Tower, A12 Jianguomenwai Avenue,
Chaoyang District, Beijing, PRC; Postcode: 100022
Tel: (8610) 65693399 Fax: (8610) 65693838, 65693836, 65693837, 65693839

E-mail Add : beijing@tongshang.com Website: www.tongshang.com.cn

March 2, 2010

Ctrip.com International, Ltd.
99 Fu Quan Road
Shanghai 200335
People’s Republic of China

Ladies and Gentlemen:

Re: Ctrip.com International, Ltd.

Dear Sirs:

     We are qualified lawyers of the People’s Republic of China (“PRC”) and are qualified to issue an opinion on the laws and regulations of the PRC.

     We have acted as PRC counsel for Ctrip.com International, Ltd. (the “Company”), a Cayman Islands corporation, in connection with the Company’s registration statement on Form F-3 (the “Registration Statement”) to be filed with the United States Securities and Exchange Commission (the “SEC”).

     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.

     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 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.

     Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that the statements set forth under the caption “Taxation” in the Registration Statement insofar as they constitute statement of PRC tax law, are accurate in all material respects.

     We hereby consent to the filing of this opinion with the SEC as an exhibit to the Registration Statement and to the reference to our firm under the heading “Taxation” 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 of 1933, as amended, or the regulations promulgated thereunder.

Sincerely yours,

/s/ Commerce & Finance Law Offices

Commerce & Finance Law Offices

Exhibit 10.1

Execution Copy

Dated 3 February 2010

WING ON TRAVEL (HOLDINGS) LIMITED

C-TRAVEL INTERNATIONAL LIMITED

and

CTRIP.COM INTERNATIONAL, LTD.

SALE AND PURCHASE AGREEMENT

for the sale and purchase of 90% of the issued
share capital of HKWOT (BVI) Limited

Skadden, Arps, Slate, Meagher & Flom
42/F, Edinburgh Tower, The Landmark
15 Queen’s Road Central
Hong Kong
(Ref: 129460/2)

CONTENTS

Clause		Page
1. INTERPRETATION			1
2. SALE AND PURCHASE OF SALE SHARES			12
3. CONSIDERATION			12
4. CONDITIONS			13
5. PRE-COMPLETION OBLIGATIONS			15
6. COMPLETION			17
7. SELLER’S WARRANTIES			18
8. BREAK FEE AND DAMAGES			19
9. PURCHASER’S WARRANTIES			20
10. SELLER UNDERTAKINGS			20
11. PROTECTIVE COVENANTS			21
12. PURCHASER UNDERTAKINGS			23
13. PURCHASER GUARANTOR’S GUARANTEE			24
14. ANNOUNCEMENTS			24
15. CONFIDENTIALITY			24
16. NOTICES			26
17. LANGUAGE			27
18. ASSIGNMENT			27
19. INVALIDITY			27
20. NO PARTNERSHIP			28
21. COUNTERPARTS			28
22. TIME OF THE ESSENCE			28
23. PAYMENTS AND NO SET-OFF			28
24. INTEREST			28
25. COSTS AND EXPENSES			29
26. FURTHER ASSURANCE			29
27. WHOLE AGREEMENT			29
28. GENERAL			29
29. GOVERNING LAW AND JURISDICTION			30
30. AGENT FOR SERVICE OF PROCESS			30
SCHEDULE 1 PARTICULARS OF THE COMPANY			32
SCHEDULE 2 PARTICULARS OF THE SUBSIDIARIES			33
SCHEDULE 3 COMPLETION			47
SCHEDULE 4 WARRANTIES			51
SCHEDULE 5 SELLER’S LIMITATION OF LIABILITY			88
SCHEDULE 6 RESTRICTED ACTIONS			90
SCHEDULE 7 POST-COMPLETION ADJUSTMENTS			92
SCHEDULE 8 FORM OF DEED OF INDEMNITY			94
SCHEDULE 9 FORM OF SHAREHOLDERS’ AGREEMENT			105
SCHEDULE 10 FORM OF SHARE CHARGE			134
SCHEDULE 11 FORM OF TRADEMARKS ASSIGNMENT			138
SCHEDULE 12 FORM OF CERTIFICATE			165

THIS AGREEMENT is made on 3 February 2010

BETWEEN:

(1)

Wing On Travel (Holdings) Limited, a company incorporated under the laws of Bermuda, whose registered office is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the “Seller”);

(2)

C-Travel International Limited, a company incorporated under the laws of the Cayman Islands, whose registered office is at M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands (the “Purchaser”); and

(3)

Ctrip.com International, Ltd., a company incorporated under the laws of the Cayman Islands, whose registered office is at M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands (the “Purchaser Guarantor”).

WHEREAS:

(A)

The Seller has agreed to sell and the Purchaser has agreed to buy the Sale Shares on the terms and subject to the conditions of this Agreement and the other Transaction Documents.

(B)

The Purchaser Guarantor has agreed to guarantee the performance of the payment obligations of the Purchaser under this Agreement.

IT IS AGREED as follows:

1.		INTERPRETATION
1.1		In this Agreement:
		“Accounts” means the audited consolidated financial statements of the Group (when delivered in accordance with Clause 5.3) for the two years ended 31 December 2009 with comparative figures, prepared in accordance with HKFRS and comprising a consolidated statement of comprehensive income, a consolidated statement of financial position, a consolidation statement of cash flows, notes to the consolidated financial statements, and auditors’ report;
		“Accounts Date” means 31 December 2009, in respect of the audited consolidated financial statements of the Group for the year ended 31 December 2009;
		“Accounts Payable” means all the accounts and notes payable by members of the Group to the Seller’s Group that are reflected in the books and records of the members of the Group at Completion;
		“Accounts Receivable” means all the accounts and notes receivable that are reflected in the books and records of the members of the Group at Completion;

“Affiliate” means:

	(a)		in relation to an individual, that individual’s close relatives (being any spouse, child (including adopted child and step-child), parent or sibling of that individual), any person which is Controlled by that individual and/or that individual’s close relatives (acting singly or together) (“Controlled Entity”) and any Affiliate of a Controlled Entity; and
	(b)		in relation to any other person, any other person that (directly or indirectly) Controls, is Controlled by or is under common Control with such person;

		“Agent” shall have the meaning ascribed to it in Clause 30;
		“Agreed Form” means, in relation to any document, the form of that document which has been initialled for the purpose of identification by or on behalf of the Purchaser and the Seller;
		“Articles” means, at any time, the memorandum of association and the articles of association (or other constitutional documents) of the Company at that time;
		“Authorisation” means any license, permit, consent, authorisation, permission, clearance, warrant, confirmation, certificate or approval of any Authority or any other person;
		“Authority” means any competent governmental, administrative, supervisory, regulatory, judicial, determinative, disciplinary, enforcement or Tax raising body, authority, agency, board, department, court or tribunal of any jurisdiction (including any relevant securities exchange) and whether supranational, national, regional or local;
		“Business” means the business of the Group, including airline ticketing, hotel reservation, air and hotel package and inbound and outbound tour groups (including, for the avoidance of doubt, any of such businesses which are conducted online via the internet);
		“Business Assets” means all the assets of the Group and any assets used by or in connection with the Business or necessary for the operation of the Business (including the Fixed Assets), and all the Intellectual Property Rights used by or in connection with the Business;
		“Business Day” means a day on which banks are open for business in Hong Kong (other than a Saturday, Sunday or a public holiday or a day on which a tropical cyclone warning No. 8 or above or a “black rainstorm warning signal” is hoisted or remains hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.);
		“Business Information” means all information, Know-how and records (whether or not confidential and in whatever form held) including all:

	(a)		formulas, designs, specifications, drawings, data, manuals and instructions;
	(b)		customers lists, sales, marketing and promotional information;

	(c)		business plans and forecasts; and
	(d)		technical or other expertise,

		proprietary to any member of the Group;
		“Business Premises” means the Leased Business Premises, or any part or parts of any of them;
		“Certificate” has the meaning ascribed to it in Clause 4.1;
		“Change of Control” means, in relation to any person, any person who at the date of this Agreement Controls (directly or indirectly) that person ceases to Control (directly or indirectly) that person;
		“Claim” means any claim made by a Party arising out of or in connection with any Transaction Documents (or otherwise contemplated by, or referred to in, any Transaction Documents), howsoever arising;
		“Company” means HKWOT (BVI) Limited, a company incorporated and registered in the British Virgin Islands, further details of which are set out in Schedule 1;
		“Completion” means completion of the sale and purchase of the Sale Shares in accordance with Clause 6;
		“Completion Date” means the date on which Completion occurs;
		“Computer System” means the Hardware and the Software and the Data;
		“Condition” or “Conditions” means the conditions precedent to Completion set out in Clause 4.1;
		“Confidential Information” has the meaning ascribed to it in Clause 15.1;
		“Consideration” means the aggregate consideration payable in respect of all of the Sale Shares, as set out in Clause 3.1;
		“Consultancy Agreement” means any contract for services in writing under which services are provided in connection with the Business by a Consultant;
		“Consultant” means an individual, group or agency who provides services under a Consultancy Agreement (whether or not that individual, group or agency is a party to the Consultancy Agreement), including a Worker;
		“Control” means:

(a)

in relation to a corporate person: (i) direct or indirect ownership or control of more than 30% of the outstanding voting securities of such corporate person; (ii) the ability to appoint or remove more than one-third of the directors of the board (or equivalent governing body) of such person; (iii) the right to control the votes at a meeting of the board of directors (or equivalent governing body) of such person; or (iv) the ability to direct or cause the direction of the

			management and policies of such person (whether by contract or howsoever arising); and
	(b)		in relation to a non-corporate person: (i) direct or indirect ownership or control of a comparable voting interest (as set forth in paragraph (a) above) for such person; (ii) the ability to direct or cause the direction of the management and policies of such person (whether by contract or howsoever arising); or (iii) the operational or practical control of such person,

		and the terms “Controls”, “Controlling” and “Controlled” shall be construed accordingly;
		“Data” means any data or information used by or for the benefit of the Business at any time and stored electronically at any time;
		“Data Protection Legislation” means all statutes, enacting instruments and codes of practice in Hong Kong concerning the protection and/or processing of personal data (including the Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong) and the Code of Practice on Consumer Credit Data);
		“Deed of Indemnity” means the deed of indemnity in the form attached as Schedule 8 to be entered into between the Seller and the Purchaser;
		“Directors” means the directors of the Company;
		“Disclosure Letter” means the letter of the same date as this Agreement from the Seller to the Purchaser, in the Agreed Form, containing disclosures against the representations and warranties and details of other matters referred to in this Agreement;
		“Employee” means an individual who is employed by a member of the Group as at the date of this Agreement and includes part-time and temporary Workers;
		“Employment Agreements” means employment agreements in the Agreed Form to be entered into between each member of the Group (or such other person as the Purchaser may specify) and its respective Senior Employees (or such other employees as the Purchaser may specify);
		“Encumbrance” means any lien, pledge, encumbrance, charge (fixed or floating), mortgage, third party claim, debenture, option, right of pre-emption, right to acquire, assignment by way of security, trust arrangement for the purpose of providing security or security interests of any kind (including retention arrangements or other encumbrances and any agreement to create any of the foregoing), and “Encumber” shall be construed accordingly;
		“Final Net Current Asset Value” has the meaning ascribed to it in Schedule 7;
		“Fixed Assets” means all fixtures and fittings and other fixed machinery and equipment physically attached to the Business Premises at the date of this Agreement, and all the machinery, tools and equipment, vehicles and office furniture and other tangible property owned by the Group or which is or will be used by, or in connection with, the Business or necessary for the operation of the Business;

		“Group” means the Company and the Subsidiaries, and “member of the Group” shall be construed accordingly;
		“Hardware” means any computer equipment used by or for the benefit of the Business at any time including parts of computer equipment such as firmware, screens, terminals, keyboards, disks, cabling and other peripheral and associated electronic equipment but excluding all Software;
		“HK$” means Hong Kong dollars, the lawful currency of Hong Kong;
		“HKFRS” means Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards, Statements of Standard Accounting Practice, and Interpretations issued by the Hong Kong Institute of Certified Public Accountants;
		“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China;
		“Information Technology” means all material computer systems (including Software and Hardware and Data) used by, owned by or licensed to any member of the Group;
		“Intellectual Property Rights” means:

	(a)		copyright, patents, goodwill, Know-How, trade secrets, data base rights, trade marks, trade names, business names, domain names, logos, get-up and designs (whether registered or unregistered);
	(b)		applications for registration (including all corresponding foreign counterpart applications, re-issues, re-examinations, divisionals, continuations (including part and extensions thereof)) and the right to apply for registration for any of the same; and
	(c)		all other intellectual property rights and equivalent or similar forms of protection, howsoever described, existing anywhere in the world;

		“Know-How” means all technical and commercial information, data and documents of whatever kind, including the knowledge and skill of employees, drawings, specifications, photographs, samples, models, processes, procedures, reports and correspondence, including the underlying copyright in works of authorship (other than Software) embodying the foregoing, but excluding any other intellectual property rights rested thereon;
		“Lease” means the lease or leases under which a member of the Group holds its interest in the Leased Business Premises;
		“Leased Business Premises” means the land, premises and real property leased by any member of the Group, and “Leased Business Premise” means any one of them;
		“Listing Rules” means the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;
		“Long Stop Date” means 30 September 2010;

		“Losses” means, in respect of any matter, event or circumstances, all demands, claims, actions, proceedings, damages, payments, fines, penalties, losses, costs (including legal costs), expenses (including Taxes), disbursements and other losses of any kind whatsoever arising;
		“Management Accounts” means the unaudited management accounts of each member of the Group for the period of 12 months ended on the Management Accounts Date;
		“Management Accounts Date” means 31 December 2009;
		“Manager” means a person who is a director or senior officer or key management personnel of each member of the Group as of the date hereof;
		“Material Adverse Change” means any change, effect, event, occurrence, state of facts or any combination of them that is (or could reasonably be expected to be) materially adverse to the business, operations, properties, assets, liabilities (including contingent liabilities), employee relationships, customer or supplier relationships, earnings, results of operations, financial projections or forecasts, or the business prospects or condition of the Group taken as a whole;
		“Material Agreement” means any subsisting written contract, agreement, arrangement and commitment entered into by, involving, or relating to any member of the Group, the Business or the Business Assets that has not been fully performed and:

	(a)		involves performance of services or delivery of goods or materials by one or more member of the Group of an amount or value in excess of HK$1,000,000 (or its equivalent in any other currency);
	(b)		involves performance of services or delivery of goods or materials to one or more member of the Group of an amount or value in excess of HK$1,000,000 (or its equivalent in any other currency);
	(c)		is a lease, rental or occupancy agreement, license, instalment and conditional sale agreement, and other agreement or contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real or personal property (except personal property leases and instalment and conditional sales agreements having a value per item or aggregate payments of less than HK$1,000,000 (or its equivalent in any other currency) and with terms of less than one year);
	(d)		is a licensing agreement or other contract or agreement with respect to Intellectual Property Rights, including agreements with current or former employees, consultants or contractors regarding the appropriation or the non-disclosure of any Intellectual Property Rights;
	(e)		is a collective bargaining agreement and other agreement or contract with any labour union or other employee representative of a group of employees;

	(f)		is a joint venture, partnership, and other agreement or contract (however named) involving a sharing of profits, Losses, costs or liabilities by any member of the Group with any other person;
	(g)		contains covenants which in any way purport to restrict the business activity of any member of the Group or limit the freedom of any of the foregoing to engage in any line of business or to compete with any person;
	(h)		constitute a power of attorney that is currently effective and outstanding;
	(i)		provides for payment to or by any person based on sales, purchases or profits, other than direct payment for goods or standard contracts entered into with Business personnel;
	(j)		contains or provides for an express undertaking by any member of the Group to be responsible for consequential or speculative damages;
	(k)		calls for capital expenditures in excess of HK$1,000,000 (or its equivalent in any other currency) or involves obligations, restrictions, expenditures or receipts of an unusually onerous or exceptional nature;
	(l)		is a warranty, guarantee or other similar undertaking with respect to contractual performance extended by any member of the Group;
	(m)		any director of any member of the Group or any person connected with any such director is interested in, directly or indirectly (other than through that director or person’s shareholding in the Seller or any of its subsidiaries, including any member of the Group);
	(n)		results in a loss to that member of the Group on completion of performance;
	(o)		is for the provision of management services to that member of the Group and which is not terminable by it on less than three months’ notice without compensation;
	(p)		(excluding all normal standard industry agreements entered into in the ordinary course of business consistent with past practice) is of a long term nature (that is, unlikely to have been fully performed in accordance with its terms more than 12 months after the date it was entered into or undertaken, or incapable of termination by members of the Group on 12 months’ notice or less without compensation); or
	(q)		was not entered into in or in connection with the ordinary and usual course of business and is material to the Business or the Group as a whole.

		“Net Current Asset Value” means an amount in HK$ equal to (i) all assets of the Group that, in accordance with HKFRS, are reflected as current assets on the applicable balance sheet; minus (ii) all liabilities of the Group that, in accordance with HKFRS, are reflected as current liabilities on the applicable balance sheet;
		“Non-Current Assets” means all assets of the Group that, in accordance with HKFRS, are reflected as non-current assets on the applicable balance sheet, which

		represent property, plant and equipment but exclude, for the avoidance of doubt, interests in associates;
		“Notice” has the meaning ascribed to it in Clause 16.1;
		“Party” means a party hereto and “Parties” means more than one or all of them;
		“Post-Completion Adjustment” means the adjustment to be made to the Consideration pursuant to Clause 3.3 and in Schedule 7;
		“Prime Rate” means the prime lending rate as quoted by The Hongkong and Shanghai Banking Corporation Limited from time to time;
		“Proceedings” means any proceeding, suit or action arising out of or in connection with this Agreement or its subject matter (including its validity, formation, effect, interpretation, performance or termination) or any transaction contemplated by this Agreement;
		“Purchaser’s Accountant” means PricewaterhouseCoopers;
		“Purchaser’s Completion Date Accounts” shall have the meaning ascribed to it in Schedule 7;
		“Purchaser’s Completion Date Value” shall have the meaning ascribed to it in Schedule 7;
		“Purchaser’s Group” means the Purchaser and all other members of the same group of companies as the Purchaser (including, with effect from Completion, each member of the Group);
		“Purchaser’s Solicitors” means Skadden, Arps, Slate, Meagher & Flom of 42/F, Edinburgh Tower, The Landmark, 15 Queen’s Road Central, Hong Kong;
		“Representative” means, in relation to any person, such person’s directors, officers, employees, lawyers, accountants, bankers or other advisers, agents, sub-contractors or brokers;
		“Representative Body” means any association, trade union, works council or any other persons elected or appointed to represent any of the Employees or Workers;
		“Restricted Actions” means the matters listed in Schedule 6;
		“Restricted Business” means any or all of the businesses carried on at Completion by any member of the Group and any development thereof which is currently being implemented in any member of the Group, including all such businesses conducted online via the Internet (including, for the avoidance of doubt, airline ticketing, hotel reservation, air/hotel packages, and inbound and outbound group tour operations);
		“Restricted Territories” means the People’s Republic of China including (for the purpose of this Agreement) Hong Kong, Macau Special Administrative Region and Taiwan;

		“Restructuring” means the corporate restructuring of the Group in preparation for the Transaction, pursuant to which (among other things) the Business, the Business Assets and all of the entities carrying on the Business, or which owned the Business Assets, were transferred to the direct or indirect ownership of the Company;
		“Restructuring Documents” means all agreements, arrangements or documents relating to the Restructuring;
		“Sale Shares” means 90 ordinary shares of the Company, representing 90% of the issued and outstanding share capital of the Company at Completion;
		“Secured Facilities” means the overdraft, guarantee and corporate credit card facilities from Hang Seng Bank Limited pursuant to the terms of a facility letter dated 8 August 2008;
		“Seller’s Accountant” means Deloitte Touche Tohmatsu;
		“Seller’s Completion Date Accounts” shall have the meaning ascribed to it in Schedule 7.
		“Seller’s Group” means the Seller and all other members of the same group of companies as the Seller (including, until Completion, each member of the Group);
		“Senior Employee” means any employee of a member of the Group whose total remuneration in the 12 months preceding the date of this Agreement exceeded HK$500,000 (or its equivalent in any other currency);
		“Share Charge” means the share charge in the form attached as Schedule 11 to be entered into between the Seller and the Purchaser;
		“Shareholders’ Agreement” means the shareholders’ agreement in the form attached as Schedule 9 to be entered into among the Seller, the Purchaser, the Purchaser Guarantor and the Company;
		“Software” means any set of instructions for execution by a computer processor used by or for the benefit of the Business (or where so specified, by or for the benefit of any other person) at any time irrespective of application, language or medium;
		“Specified Purpose” has the meaning ascribed to it in Clause 5.3;
		“Stock Exchange” means The Stock Exchange of Hong Kong Limited;
		“Subsidiaries” means all the subsidiaries of the Company, being those companies whose details are set out in Schedule 2, and “Subsidiary” means any of them;
		“Surviving Provisions” means Clauses 1 (Interpretation), 8 (Break Fee and Damages), 14 (Announcements), 15 (Confidentiality), 16 (Notices), 17 (Language), 19 (Invalidity), 24 (Interest), 25 (Costs and Expenses), 27 (Whole Agreement), 28 (General), 29 (Governing Law and Jurisdiction) and 30 (Agent for Service of Process);

		“Tax Authority” means any taxing or other authority competent to impose any liability in respect of Taxation or responsible for the administration and/or collection of Taxation or enforcement of any law in relation to Taxation;
		“Taxation” or “Tax” means all forms of taxation, duties, levies, imposts and other similar impositions of any jurisdiction whether national, regional or local (including corporate income tax, value added tax, goods and services tax, personal income tax, withholding tax, import tax, export tax, stamp duty and other transaction or documentary taxes, social security and state pension contributions, taxes arising from the ownership of any property or assets, payroll and employment taxes, taxes arising on the sale, lease, hire, gift or other disposal of real or personal assets or property, and taxes of any kind whatsoever), together with any interest and levies and all penalties, charges, costs and additions to tax in relation to any of the foregoing or resulting from failure to comply with the provisions of any legislation, enactment or other law relating to the foregoing;
		“Territories” means the countries listed in the first column of the table set out in schedule 1 to the Trademarks Assignment;
		“Third Accountant” shall have the meaning ascribed to it in Schedule 7;
		“Trademarks” shall have the meaning ascribed to it in the Trademarks Assignment;
		“Trademarks Assignment” means the trademarks assignment in the form attached as Schedule 12 to be entered into between the Seller and the Purchaser;
		“Transaction” means the acquisition by the Purchaser of the Sale Shares pursuant to the terms and conditions of this Agreement and the other Transaction Documents;
		“Transaction Documents” means this Agreement, the Shareholders’ Agreement, the Deed of Indemnity, the Trademarks Assignment, the Share Charge and any other documents to be entered into pursuant to any such documents;
		“US$” means United States dollars, the lawful currency of the United States of America;
		“Warranties” means the representations and warranties contained in Clauses 7.1 and Schedule 4, and “Warranty” means any one of them; and
		“Worker” means an individual providing services to the Group on a self-employed basis or is supplied by an agency or other third party.
1.2		In this Agreement, except where the context otherwise requires:

	(a)		a reference to Clauses, paragraphs, Schedules, Appendices and the Recitals are to clauses, paragraphs, and the recitals of, and the schedules and appendices to, this Agreement;
	(b)		a reference to this Agreement or to any specified provision of this Agreement are to this Agreement or provision as in force for the time being (as amended, modified, supplemented, varied, assigned or novated from time to time);

	(c)		a reference to this Agreement includes the Schedules and Appendices to it, each of which forms part of this Agreement for all purposes;
	(d)		a reference to a “company” shall be construed so as to include any company, corporation or other body corporate (wherever and however incorporated or established);
	(e)		the expressions “subsidiary”, “holding company” and “group of companies” shall have the meanings given to them in Section 2 of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong);
	(f)		a reference to a “person” shall include any individual, company, corporation, joint stock company, body corporate, association, trust, joint venture, partnership, firm, organisation, governmental entity or any other entity (whether or not having separate legal personality), its successors and assigns;
	(g)		a reference to writing shall include any mode of reproducing words in a legible and non-transitory form;
	(h)		a reference to a time of a day is to Hong Kong time;
	(i)		a reference to “indemnify” and “indemnifying” any person against any circumstance includes indemnifying and keeping that person harmless from all Losses from time to time made against that person and all Losses made or incurred by that person as a consequence of or which would not have arisen but for that circumstance;
	(j)		a reference to any Hong Kong legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall in respect of any jurisdiction other than Hong Kong be deemed to include what most nearly approximates the Hong Kong legal term in that jurisdiction, and references to any Hong Kong statute or enactment shall be deemed to include any equivalent or analogous laws or rules in any other jurisdiction;
	(k)		a reference to any law or enactment includes references to:

	(i)		that law or enactment as re-enacted, amended, extended or applied by or under any other enactment (before or after execution of this Agreement);
	(ii)		any law or enactment which that law or enactment re-enacts (with or without modification); and
	(iii)		any subordinate legislation made (before or after execution of this Agreement) under any law or enactment, as re-enacted, amended, extended or applied, as described in paragraph (i) above, or under any law or enactment referred to in paragraph (ii) above;

and “law” and “enactment” includes any legislation in any jurisdiction;

	(l)		the Parties acknowledge that they have participated jointly in the negotiation and drafting of this Agreement and, in the event that a question of interpretation arises (including as to the intention of the Parties), no presumption or burden of proof shall arise in favour of or against any Party based on the authorship of any provisions;
	(m)		words importing the singular include the plural and vice versa, and words importing a gender include every gender;
	(n)		headings are included in this Agreement for convenience only and do not affect its interpretation;
	(o)		in construing this Agreement the so-called “ejusdem generis” rule does not apply and accordingly the interpretation of general words is not restricted by:

	(i)		being preceded by words indicating a particular class of acts, matters or things; or
	(ii)		being followed by particular example; and

(p)

the words “include” and “including” shall be construed without limitation.

2.		SALE AND PURCHASE OF SALE SHARES
2.1		On and subject to the terms and conditions of this Agreement, the Seller agrees to sell, and the Purchaser agrees to purchase, the Sale Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attaching or accruing to them as at Completion.
2.2		The Seller irrevocably and unconditionally waives all rights over, or in connection with, any of the Sale Shares including any right of pre-emption or other restriction on transfer in respect of the Sale Shares or any of them conferred on the Seller under the Articles or otherwise and shall, before Completion, procure the irrevocable and unconditional waiver of any such right or restriction conferred on any other person.
2.3		The Purchaser shall not be obliged to complete the purchase of any of the Sale Shares unless the purchase of all the Sale Shares is completed simultaneously in accordance with this Agreement, but completion of the purchase of some of the Sale Shares will not affect the rights of the Purchaser with respect to the purchase of the others.
3.		CONSIDERATION
3.1		Subject to Clause 3.2, the Consideration for the sale and purchase of the Sale Shares shall be US$88 million (equivalent to HK$684 million) to be paid by the Purchaser to the Seller at Completion for value on the Completion Date by electronic funds transfer into the following US$ bank account of the Seller (evidence of such payment taking the form of a written confirmation from the paying bank that it has made such payment):

(i) Bank name:		Hang Seng Bank Limited
(ii) Account number:		024-388-558702-001

(iii) Swift code:		HASEHKHH
(iv) Bank code:		024
(v) Account name:		Wing On Travel (Holdings) Limited

3.2		The Consideration is subject to the following potential pre-Completion adjustment: If the consolidated net profit after Tax of the Group shown in the Accounts for the year ended 31 December 2009 is less than HK$40 million, the portion of the Consideration to be paid at Completion pursuant to Clause 3.1 shall be reduced the US$ equivalent (translated into US$ at the fixed rate of HK$7.766 = US$1.00) of by an amount equal to 20 times the difference between HK$40 million and such consolidated net profit after Tax of the Group.
3.3		The Consideration is subject to the following potential Post-Completion Adjustment: If, as of the Completion Date, the Final Net Current Asset Value is less than HK$0.00, the Seller shall repay to the Purchaser, as a reduction in the Consideration, the US$ equivalent (translated into US$ at the fixed rate of HK$7.766 = US$1.00) of an amount equal to the amount by which the Final Net Current Asset Value is less than HK$0.00.
3.4		For the purpose of the adjustment to the Consideration pursuant to Clause 3.3, the Parties shall follow the procedures set out in Schedule 7.
4.		CONDITIONS
4.1		The sale and purchase of the Sale Shares is conditional upon the satisfaction or waiver (if made in accordance with the provisions hereof) of the following, or their satisfaction subject only to Completion:

	(a)		the passing by shareholders of the Seller who are permitted to vote at a general meeting of the Seller of a resolution to approve the sale of the Sale Shares in accordance with the requirements of the Listing Rules;
	(b)		all Authorisations which are required for the entering into or the performance of obligations under this Agreement by the Parties having been obtained and all filings with any Authorities and other relevant third parties which are required for the entering into and the implementation of this Agreement having been made and such Authorisations (if any) remaining in full force and effect and there being no statement, notification or intimation of an intention to revoke or not to renew the same having been recorded. Without limiting the generality of the foregoing, such Authorisations include:

	(i)		the consent in writing from the Registrar of Travel Agents to the Transaction having been obtained in accordance with the Travel Agents Ordinance (Chapter 218 of the Laws of Hong Kong);
	(ii)		the consent in writing from the International Air Transport Association to the Transaction having been obtained;
	(iii)		the consent in writing from the holders of the 2% convertible exchangeable notes issued by the Seller on 8 June 2006 to the

			Transaction having been obtained in accordance with the terms and conditions of such convertible exchangeable notes; and
	(iv)		the consent from the lessor under each of the relevant Leases, if required by the terms of the relevant leases, to the Transaction having been obtained in accordance with the terms of the relevant Lease;

	(c)		no order or judgment (whether temporary, preliminary or permanent) of any Authority having been issued or made prior to Completion, and no legal or regulatory requirements remain to be satisfied, which has the effect of making unlawful or otherwise prohibiting or restricting the transfer of the Sale Shares to the Purchaser, or any transaction contemplated by this Agreement and the other Transaction Documents;
	(d)		the Purchaser being satisfied that no Material Adverse Change has arisen or occurred since 31 December 2009;
	(e)		there having been no breach in any material respect by the Seller of any of its obligations under this Agreement or any of the other Transaction Documents; and
	(f)		there having been no breach of the Warranties (and no fact, event or circumstance having occurred which would make the Warranties untrue or inaccurate in any respect when repeated at Completion),

		and there having been delivered to the Purchaser a certificate in the form attached as Schedule 13 (“Certificate”) signed by a director of the Seller and dated the Completion Date, in which the Seller certifies the matters set out in paragraphs (b), (c), (d), (e) and (f) above.
4.2		The Seller undertakes to the Purchaser:

	(a)		in the case of the Conditions set out in Clause 4.1(b), to use its reasonable endeavours to ensure that such Conditions are fulfilled as soon as reasonably practicable after the date of this Agreement;
	(b)		in the case of the Condition set out in Clause 4.1(a), to comply with the requirements of the Listing Rules regarding announcements and circulars, and to convene a special general meeting for the approval of shareholders of the Seller in respect of the transactions contemplated in this Agreement and the other Transaction Documents as soon as practicable after the date of this Agreement;
	(c)		request the board of directors of the Seller, but subject to the fiduciary duties of the directors, to recommend and continue to recommend to the shareholders of the Seller all of the transactions contemplated in this Agreement and the other Transaction Documents; and
	(d)		subject to the Purchaser promptly complying with Clause 4.3, as soon as practicable after the signing of this Agreement to prepare and submit

		necessary applications for the purposes of the consents referred to in Clause 4.1(b).
4.3		Each of the Seller and the Purchaser shall (and the Seller shall procure that the Group shall), upon request from the other Party, promptly co-operate with and provide all necessary information and other assistance reasonably required by such other Party in connection with the satisfaction of the Conditions, including for the purposes of the provision of such information to any Authority as shall be necessary in connection with the satisfaction of the Conditions.
4.4		The Purchaser may waive any of the Conditions in Clause 4.1 (other than the Conditions in Clauses 4.1(a), (b)(i), (b)(iii) or (c)) at any time by written notice to the Seller.
4.5		Each of the Purchaser and the Seller shall give notice to the other that a relevant Condition has been satisfied as soon as practicable and in any event within two Business Days of becoming aware of the fact.
4.6		If one or more of the Conditions in Clauses 4.1(a) to (f):

	(a)		remains unsatisfied as at the Long Stop Date and has not been waived on or before the Long Stop Date in accordance with this Agreement; or
	(b)		becomes impossible to satisfy before the Long Stop Date and, if it is a Condition which can be waived by a Party, has not been waived within five Business Days of such Condition becoming impossible to satisfy,

		then this Agreement, other than the Surviving Provisions, shall automatically terminate with immediate effect and each Party’s rights and obligations (other than those in respect of the Surviving Provisions) shall cease immediately on termination. Such termination shall not affect the rights and obligations of any Party existing prior to termination.
5.		PRE-COMPLETION OBLIGATIONS
5.1		Subject to Clause 5.2, the Seller shall procure that, during the period from the date of this Agreement to Completion, each member of the Group shall continue to carry on business in the normal course in compliance with all applicable laws and regulations and in substantially the same manner as their businesses have been carried on before the date of this Agreement. Without limitation to the generality of the foregoing, the Seller shall procure that no member of the Group shall undertake any of the Restricted Actions without the prior written consent of the Purchaser, such consent not to be unreasonably withheld or delayed.
5.2		Clause 5.1 shall not operate so as to restrict or prevent:

(a)

the completion or performance of any obligations undertaken pursuant to any contract or arrangement entered into by any member of the Group in good faith and in the ordinary and usual course of business and disclosed to the Purchaser prior to the date of this Agreement;

	(b)		any matter contemplated in this Agreement or any other Transaction Document; or
	(c)		any matter undertaken at the written request of the Purchaser or with its prior written approval.

5.3		The Seller shall deliver to the Purchaser by no later than seven days after the date of this Agreement the audited consolidated financial statements of the Group for the year ended 31 December 2009 prepared in accordance with HKFRS and comprising a consolidated statement of financial position, a consolidated statement of comprehensive income, a consolidated statement of cash flows, notes to the consolidated financial statements and an auditors’ report.
5.4		Solely for the purposes (“Specified Purpose”) of facilitating a smooth handover of the Business on Completion, after the signing of this Agreement:

	(a)		so far as permitted by applicable law, the Seller shall consult with the Purchaser with respect to any action between the date of this Agreement and Completion which can reasonably be expected materially to affect the business of any member of the Group after Completion. The Seller shall provide, and procure all members of the Group to provide, to the Purchaser such information as the Purchaser may reasonably request for this purpose; and
	(b)		the Purchaser shall be entitled on reasonable notice to send any of its Representatives to and attend at reasonable hours the head office of the Group (being located at the principal place of business in Hong Kong of the Seller) to observe the manner in which management, trading or operational functions are carried out. On receipt of a request in writing (or in other form acceptable to the Seller) of the Purchaser explaining how the subject matter of the request achieves the Specified Purpose with reasons therefor, the Seller shall not unreasonably refuse to procure reasonable access to the books, records and documents of the Group, reasonable access to select employees of the Group, visits to other locations at which the Group carry out management, trading or operational functions, and/or meetings with the staff of any member of the Group. The Purchaser shall ensure that no disruption to the ongoing Business is caused by its access to the Group and its employees, to the extent granted, pursuant to this Clause.

5.5		The Seller hereby represents, undertakes and agrees that it will, and will procure that its Representatives will: (i) not solicit any alternative offer for the Sale Shares; (ii) not enter into discussions or negotiations in relation to the Sale Shares with, or provide any information concerning the Group to, any third party in contemplation of such alternative offer; and (iii) inform the Purchaser of the existence and the terms of any unsolicited alternative offer for the Group which the Seller may receive. The obligations contained in this Clause 5.5 shall cease to apply upon whichever is the earlier of: (a) the Completion Date; and (b) save and except where the termination of this Agreement is caused as a result of the default or breach of this Agreement by the Seller, the termination of this Agreement as provided hereunder.
5.6		The Purchaser covenants with the Seller for itself and as trustee for each member of the Group on the terms set out in Clause 11.1(b) mutatis mutandis at any time before

		Completion. The remaining provisions of Clause 11 shall apply mutatis mutandis to such covenants. The provisions of this Clause 5.6 shall survive termination of this Agreement.
5.7		The Seller shall within 14 Business Days after the date of this Agreement deliver to the Purchaser each of the following in form and substance reasonably satisfactory to the Purchaser:

	(a)		the Certificate of Incumbency of the Seller enclosing certified true copies of the Seller’s Certificate of Incorporation, Memorandum of Association, Bye-Laws, Register of Directors and Register of Members;
	(b)		the Certificate of Good Standing of the Seller;
	(c)		the Certificate of Incumbency of the Company enclosing certified true copies of the Company’s Certificate of Incorporation, Memorandum and Articles of Association, Register of Directors and Officers, Register of Members, and Register of Mortgages and Charges; and
	(d)		the Certificate of Compliance of the Company.

6.		COMPLETION
6.1		Completion shall take place at the offices of the Purchaser’s Solicitors at 10:00 a.m. on the fifth Business Day after the last in time of the Conditions (except such Conditions which are expressed to be satisfied on or as at the Completion Date, but subject to the satisfaction or waiver of such Conditions) is satisfied or waived in accordance with this Agreement, or at such other time and/or venue as may be agreed in writing between the Seller and the Purchaser.
6.2		At Completion, the Seller shall deliver or take (or cause to be delivered or taken) the documents and actions listed in Part A of Schedule 3 and the Purchaser shall deliver or take (or cause to be delivered and taken) the documents and actions listed in Part B of Schedule 3.
6.3		If any foregoing provision of this Clause 6 is not fully complied with, the Purchaser (in the case of non-compliance by the Seller) or the Seller (in the case of non-compliance by the Purchaser) shall be entitled (in addition to and without prejudice to all other rights or remedies available to it, including the right to claim damages) by written notice to the other Party, served on such date:

	(a)		to elect not to proceed with the transactions set out herein whereupon this Agreement, other than the Surviving Provisions, shall automatically terminate with immediate effect and each Party’s rights and obligations (other than those in respect of the Surviving Provisions) shall cease immediately upon such termination, provided that such termination shall not affect the rights and obligations of any Party existing prior to termination; or
	(b)		to effect Completion so far as practicable having regard to the defaults which have occurred; or

(c)

to fix a new date for Completion not being later than 20 Business Days after the original date for Completion, in which case the foregoing provisions of this Clause 6.3 shall apply to Completion as so deferred.

7.		SELLER’S WARRANTIES
7.1		The Seller represents and warrants to and for the benefit of the Purchaser that, as of the date of this Agreement, each of the Warranties is true and accurate and not misleading in any respect.
7.2		The Seller acknowledges that the Purchaser has entered into this Agreement in reliance upon each of the Warranties.
7.3		Each of the Warranties is qualified by matters disclosed in the Disclosure Letter. The Purchaser shall not be entitled to claim that any fact causes any of the Warranties to be breached or renders any misleading if it has been fully, fairly and specifically disclosed to the Purchaser in the Disclosure Letter in the absence of any fraud or dishonesty on the part of the Seller or its Representatives. For the avoidance of doubt, information or material disclosed in drafts of the disclosure letter and not included in the Disclosure Letter shall not qualify the Warranties.
7.4		The Seller represents and warrants to the Purchaser that the Warranties will be true and accurate and not misleading in any respect at Completion by reference to the facts and circumstances then subsisting and, for this purpose, the Warranties shall be deemed to be repeated at Completion as if any express or implied reference in the Warranties to the date of this Agreement was replaced by a reference to the Completion Date.
7.5		Each of the Warranties is separate and independent and (except as expressly provided to the contrary in this Agreement) is not limited:

	(a)		by reference to any other Warranty; or
	(b)		by anything in this Agreement or any other Transaction Document or any other document referred to herein.

7.6		The Seller agrees with the Purchaser (for itself and for each member of the Group and their Representatives) to waive to the greatest extent permissible at law any rights or claims which it may have against any member of the Group or the present or former Representatives of any member of the Group in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by any member of the Group or its Representatives in connection with the giving of the Warranties, this Agreement or the other Transaction Documents or the preparation of the Disclosure Letter.
7.7		The rights and remedies of the Purchaser in respect of a breach of any of the Warranties shall not be affected by Completion, by the giving of any time or other indulgence by the Purchaser to any person, or by any other cause whatsoever except as provided in this Agreement or in a specific waiver or release by the Purchaser in writing and any such waiver or release shall not prejudice or affect any remaining rights or remedies of the Purchaser.

7.8		Subject to the limitations set out in Schedule 5, no information, fact or circumstance (other than those disclosed in writing by or on behalf of the Seller to the Purchaser or its legal advisers during due diligence enquiries prior to the date of this Agreement and in the Disclosure Letter) of which the Purchaser, any member of the Purchaser’s Group or any of their respective Representatives, had knowledge (whether actual, imputed or constructive) or which could have been discovered (whether by investigation, search or enquiry (including of any Authority) made by the Purchaser, any member of the Purchaser’s Group, any of their Representatives or on its or their behalf or otherwise) shall prevent or in any way prejudice any Claim being brought by any member of the Purchaser’s Group under this Agreement (including any claim that any of the Warranties is or was untrue or inaccurate or misleading, whether at the date of this Agreement or on their repetition at Completion) or reduce any amount recoverable hereunder. For the avoidance of doubt, the liability of the Seller pursuant to the Warranties on their repetition at Completion shall not be limited as a result of any disclosure of additional facts and circumstances after the date of this Agreement or matters of which the Purchaser or any of its Representatives became aware (or ought reasonably to have become aware) after the date of this Agreement.
7.9		In each Warranty, where any statement is qualified as being made “so far as the Seller is aware” or any similar expression:

	(a)		the Seller warrants and undertakes that it has made all such due, diligent and careful enquiries as are reasonable in the circumstances before giving such Warranty or making such statement; and
	(b)		a matter shall be treated as being within the awareness, knowledge, information or belief of the Seller if it is within the knowledge, information or belief of any director or officer of the Seller or any member of the Group or any Senior Employee (or would have been within the knowledge, information or belief of such persons if they had made all such due, diligent and careful enquiries as are reasonable in the circumstances).

7.10		The Seller shall promptly disclose to the Purchaser any matter or thing which arises or of which it becomes aware after entering into this Agreement but prior to Completion which is inconsistent with or a breach of any of the Warranties or which will or may be a breach of any Warranty when the Warranties are repeated at Completion or which might render any of the Warranties misleading as at Completion.
7.11		No Claim may be made by the Purchaser against and no Losses may be recovered from the Seller in respect of any breaches of Warranties to the extent that the Purchaser has recovered the Losses under the Deed of Indemnity.
8.		BREAK FEE AND DAMAGES
8.1		If this Agreement terminates in accordance with Clause 4.6, without limiting the Purchaser’s right to claim damages, the Seller shall pay to the Purchaser HK$7 million (the “Break Fee”) by no later than five Business Days after the date this Agreement so terminates. The Seller shall pay the Break Fee by electronic transfer of immediately available funds into the Purchaser’s HK$ bank account with a Hong Kong licensed bank as may be notified by the Purchaser to the Seller at least two

		Business Days before the date on which the Seller is obliged to make a payment under this Clause 8.1 for the purpose of such payment.
8.2		The liability of the Seller in respect of a breach of the Warranties shall be limited in the circumstances and to the extent set out in Schedule 5.
9.		PURCHASER’S WARRANTIES
9.1		The Purchaser warrants to the Seller that:

	(a)		it has the requisite power and authority to enter into and to perform each Transaction Document;
	(b)		each Transaction Document to be entered into by the Purchaser shall, upon execution by the Purchaser, constitute binding obligations of the Purchaser; and
	(c)		compliance with the terms of the Transaction Documents does not and will not conflict with or constitute a default or a breach under any provision of:

	(i)		the Purchaser’s memorandum or articles of association (or equivalent constitutional documents); or
	(ii)		any agreement, instrument or contract to which the Purchaser is a party or by which it is bound.

10.		SELLER UNDERTAKINGS
10.1		The Seller agrees to provide reasonable cooperation in order to assist the Purchaser to comply with its obligations under Clause 12.2. In particular, the Seller shall use all reasonable endeavours to procure that no amount is outstanding under the Secured Facilities at Completion other than the letters of guarantee in issue and valid as at Completion and none of the Seller or any member of the Seller’s Group shall draw on the Secured Facilities at any time on or after Completion.
10.2		The Seller shall procure that any member of the Seller’s Group whose corporate, business or trading name or materials (whether in English and/or Chinese) makes reference to the fact that it is part or a member of the “Wing On Travel” group (whether in English and/or Chinese) shall as soon as reasonably practicable following Completion, and in any event by the date falling thirty (30) Business Days after Completion, cease to, and shall at no time thereafter, display, use or make reference to the “Wing On Travel” group (whether in English and/or Chinese) or any confusingly similar name or mark (including the Trademarks) in any of its stationary, business cards, sales literature, business and other corporate materials or signage.
10.3		The Seller shall procure that any member of the Seller’s Group whose corporate, business or trading name contains the words “Wing On” or “Wing On Travel” (whether in English and/or Chinese), as soon as reasonably practicable following Completion, and in any event by the date falling ten (10) Business Days after Completion, passes all required resolutions to change its corporate, business or trading names to a name which does not include or incorporate the words “Wing On” or “Wing On Travel” (whether in English and/or Chinese) or any confusingly similar

		name, and shall procure the prompt registration of the new name with the appropriate Authority. Upon receipt of confirmation from the appropriate Authority that such name change has been effected, the Seller shall provide the Purchaser with written proof that such name change has been effected.
10.4		The Seller shall procure that all members of the Seller’s Group shall as soon as reasonably practicable following Completion, and in any event by thirty (30) Business Days after Completion, destroy or delete from existing stocks or sales literature and stationery or buildings, signage or vehicles the name “Wing On” or “Wing On Travel” (whether in English and/or Chinese) and all associated logos, marks (including the Trademarks) and devices.
10.5		The Seller shall procure that, as of the Completion Date, there are no: (i) Accounts Payable (other than rent and other charges in respect of any Leased Business Premises that are currently leased from the Seller or a member of the Seller’s Group and continue to be leased following Completion); or (ii) Accounts Receivable (other than those arising and are to be settled in the normal course of the business of the Group) by a member of the Group from the Seller’s Group.
10.6		The Seller shall procure that the amount of rent and other charges in respect of any Leased Business Premises that are currently sub-leased from the Seller or a member of the Seller’s Group, where the Seller or respective members of the Group are tenants, and continue to be sub-leased following Completion shall be charged to the Group after Completion on the same basis and at the same level as that existing as of the date of this Agreement until the expiry of the relevant sub-lease.
10.7		The Seller shall (and shall procure the other members of the Seller’s Group to) use its reasonable efforts to assist the Purchaser (or other member of the Purchaser’s Group) to enter into the Employment Agreements prior to Completion.
10.8		The Seller shall maintain the level of Non-Current Assets as of the Completion Date at not less than HK$10 million (without taking into account any depreciation on those Non-Current Assets from 1 January 2010).
10.9		The Seller shall not do, or omit to do, any act, matter or thing whereby the Trademarks or any of them may be invalidated or any rights in any of the Trademarks may be prejudiced.
11.		PROTECTIVE COVENANTS
11.1		The Seller covenants with the Purchaser for itself and as trustee for each member of the Group that it shall not, and shall procure that no member of the Seller’s Group shall, directly or indirectly:

	(a)		for a period of three years from Completion, carry on or otherwise be concerned in any business which is competitive or likely to be competitive with the Restricted Business, or any part of it, in the Restricted Territories; or
	(b)		for a period of three years from Completion, induce or attempt to induce any director (other than a director resigning at Completion) or Senior Employee of a member of the Group to leave the employment of or relationship with that

			member of the Group or enter into any employment or services agreement with the Seller or any member of the Seller’s Group (otherwise than in response to a bona fide newspaper or trade advertisement where there has been no previous contact directly or indirectly in relation to the possible entry into such an agreement between the Seller (or any member of the Seller’s Group) and the individual concerned); or
	(c)		for an unlimited period (except as required by applicable law or any competent regulatory body or recognised stock exchange) make use of or disclose or divulge to any third party any business, technical, financial, operational, administrative, staff management, marketing and economic information relating to the Group, the identities of customers and all other information of a secret and/or proprietary nature relating to the Group, excluding such information relating to the Group which is in, or which comes into, the public domain or is in a Party’s possession other than as a result of (i) a breach of any obligation imposed by this Agreement or (ii) a breach of any other duty of confidentiality relating to that information; or
	(d)		for a period of three years from Completion, canvass or solicit orders for services or goods being provided by any member of the Group at Completion from any of the following customers of the Group:

	(i)		Deloitte Touche Tohmatsu;
	(ii)		PYI Management Ltd;
	(iii)		Cahood Holding Co;
	(iv)		Paul Y Management Limited;
	(v)		Asia Television Ltd;
	(vi)		ITC Properties Management Ltd;
	(vii)		Mega-Vision Pictures Ltd;
	(viii)		ITC Management Ltd;
	(ix)		MATV Ltd;

			For avoidance of doubt, nothing in this paragraph (d) shall prohibit the Seller directly or indirectly providing hotel and/or luxury train services direct to any of the parties named above; or
	(e)		for an unlimited period make use of any Intellectual Property Rights (including the Trademarks) owned by a member of the Group at or at any time after Completion or anything confusingly similar to them.

11.2

For the purpose of this Clause 11, the Seller or a member of the Seller’s Group (as the case may be) will be concerned in a business if it carries on such business as a principal or agent or if it has any direct or indirect financial interest as a shareholder in or lender or consultant to any person who carries on the business. However,

		nothing contained in this Agreement shall preclude or restrict the Seller or a member of the Seller’s Group from holding, as a passive investor and together with the holdings of such person and their members in such company, not more than 5% of the issued share capital of any company whose shares are publicly traded or listed.
11.3		Each of the restrictions in each of the Clauses above shall be construed as a separate undertaking and enforceable independently of each of the others and its validity shall not be affected if any of the others is invalid.
11.4		The Seller acknowledges that the restrictions and undertakings contained in this Clause 11 is reasonable and necessary for the protection of the Purchaser’s legitimate interests in the goodwill of the Group and the Business, but if any such restriction or undertaking shall be found to be void or voidable but would be valid and enforceable if some part or parts of the restriction or undertaking were deleted, such restriction or undertaking shall apply with such modification as may be necessary to make it valid and enforceable. In particular, if any of the restrictive periods of three years in Clause 11.1 shall be found to be void or voidable, then such period shall be reduced to that of two years; and if such reduced period of two years shall be found to be void or voidable, then such period shall be further reduced to that of one year.
11.5		The provisions of this Clause 11 shall survive Completion.
12.		PURCHASER UNDERTAKINGS
12.1		For the purposes of (i) preparing the Seller’s Completion Date Accounts or otherwise in connection with the determination of the Post-Completion Adjustments and (ii) to the extent it is necessary for the Seller’s audit and tax reporting purposes, the Purchaser and Purchaser Guarantor shall jointly and severally procure that at all times after Completion for a period up to (and including) the date of signing off the Seller’s Completion Date Accounts by the Seller’s Accountant, the Seller and any person authorised by it (including but not limited to any of its employees or any of its subsidiaries, its accountants and other professional advisers) will be given such access during normal office hours to the Business Premises and to all the books and records of the each member of the Group relating to events or matters occurring or arising at or before Completion (including to the extent relevant to post-Completion status of the assets and liabilities of the relevant member of the Group as at Completion) as the Seller may reasonably request.
12.2		The Purchaser shall within 14 Business Days after Completion procure that all security and guarantees provided by the Seller or its subsidiary in favour of Hang Seng Bank Limited in respect of the Secured Facilities are released without recourse and returned to the Seller or its relevant subsidiary. The Purchaser and the Guarantor jointly and severally shall on demand indemnify and keep indemnified the Seller (for itself and as trustee on behalf of its relevant subsidiaries) from all Losses (including any legal or other professional costs that may be incurred in defending any claim against Hang Seng Bank Limited or enforcing this indemnity) arising from or in connection with any enforcement or attempted enforcement of such guarantees and security against the Seller and/or its relevant subsidiary in respect of any matter arising after Completion. If and to the extent that any such guarantee or security is not released within the 14 Business Day period referred to above, the Purchaser shall pay a guarantee fee equal to the Prime Rate of the maximum principal amount

		available under the Secured Facility for the whole or part of each month from Completion throughout the period that the guarantee or security remains unreleased in accordance with this Clause.
13.		PURCHASER GUARANTOR’S GUARANTEE
13.1		If Completion occurs, the Purchaser Guarantor as primary obligor unconditionally and irrevocably guarantees the due and punctual performance by the Purchaser of its payment obligation at Completion pursuant to Clause 3.1.
13.2		The Purchaser Guarantor agrees that if the Purchaser fails to make the payment at Completion pursuant to this Agreement, the Purchaser Guarantor shall on demand (without requiring the Seller first to take steps against the Purchaser or any other person) pay that amount to the Seller.
13.3		Each payment to be made by the Purchaser Guarantor under this Clause 13 shall be made in the currency in which the relevant amount is payable by the Purchaser, free and clear of all deductions or withholdings of any kind.
14.		ANNOUNCEMENTS
14.1		No announcement concerning the existence or the subject matter of this Agreement or any ancillary matter shall be made by or on behalf of any Party without the prior written approval of the other Parties (such approval not to be unreasonably withheld or delayed). This Clause 14.1 does not apply in the circumstances described in Clause 14.2.
14.2		A Party may make an announcement concerning the existence or the subject matter of this Agreement if required by:

	(a)		applicable law or the rules or regulations of any stock exchange on which a Party’s shares or other securities are listed; or
	(b)		any Authority to which that Party is subject or submits, wherever situated,
	in which case that Party shall:
	(a)		to the extent permitted by applicable law, first give notice to the other Parties of its intention to make such an announcement; and
	(b)		take all such steps as may be reasonable and practicable in the circumstances to agree the contents of such announcement with the other Parties,

		before making such announcement.
14.3		The restrictions contained in this Clause 14 shall continue to apply after termination of this Agreement without limit in time.
15.		CONFIDENTIALITY
15.1		Subject to Clauses 15.2 and 15.3, each Party shall treat as strictly confidential and shall not disclose to any other person any information received or obtained as a result

		of entering into or performing the Transaction Documents which relates to the provisions of any Transaction Document, the negotiations and subject matter of any Transaction Document, the Group or the other Parties (including written information and information transferred or obtained orally, visually, electronically or by any other means) (“Confidential Information”).
15.2		Notwithstanding the other provisions of this Clause 15, a Party may disclose Confidential Information which would otherwise be subject to the provisions of Clause 15.1, if and to the extent:

	(a)		it is required by applicable law to which such Party is subject or for the purpose of any judicial proceedings or by the rules or regulations of any stock exchange on which such Party’s shares or other securities are listed;
	(b)		it is required by any Authority to which such Party is subject or submits (whether or not the requirement for information has the force of law);
	(c)		it is disclosed on a strictly confidential basis to such Party’s professional advisers, auditors and bankers;
	(d)		it is disclosed on a strictly confidential basis to such Party’s directors and employees (or to directors and employees of its Affiliates) on a need to know basis;
	(e)		it was lawfully in such Party’s possession or in the possession of any of its Affiliates or Representatives (in either case as evidenced by written records) free of any restriction as to its use or disclosure prior to it being so disclosed;
	(f)		the information has come into the public domain through no fault of that Party or any of its Affiliates or Representatives;
	(g)		that the Seller (in relation to disclosure by the Purchaser or the Purchaser Guarantor) or the Purchaser (in relation to disclosure by the Seller) has given prior written consent to the disclosure; or
	(h)		it is required to enable that Party to perform its obligations under the Transaction Documents or enforce its rights under the Transaction Documents,

		and provided that, to the extent permitted by applicable law and otherwise reasonable and practicable in the circumstances, any Confidential Information to be disclosed in reliance on Clauses 15.2(a) or (b) shall be disclosed only after consultation with the Purchaser (in the case of intended disclosure by the Seller) or the Seller (in the case of intended disclosure by the Purchaser or the Purchaser Guarantor) and the Party intending to disclose the Confidential Information shall take into account the reasonable comments or requests of such other Party.
15.3		Each of the Parties agrees that it shall not use Confidential Information for any purpose other than in relation to the proper performance of its obligations and exercise of its rights under the Transaction Documents (and the transactions contemplated thereby) or in connection with the Business.

15.4		Each of the Parties undertakes that it shall only disclose Confidential Information to any of its Affiliates and Representatives if it is reasonably required for purposes connected with the Transaction Documents and only if the relevant Affiliate or Representative is informed of the confidential nature of the Confidential Information and accepts equivalent restrictions as those accepted by the Party who discloses the Confidential Information.
15.5		The restrictions contained in this Clause 15 shall continue to apply after termination of this Agreement without limit in time.
16.		NOTICES
16.1		Any notice or other communication to be given under or in connection with this Agreement (a “Notice”) shall be:

	(a)		in writing in the English or Chinese language; and
	(b)		delivered:

	(i)		personally by hand or courier (using an internationally recognised courier company);
	(ii)		by local post or registered mail if local address and by airmail if overseas address; or
	(iii)		by facsimile,
	to the Party due to receive the Notice, to the address and for the attention of the relevant Party set out in this Clause 16 (or to such other address and/or for such other person’s attention as shall have been notified to the giver of the relevant Notice and become effective (in accordance with this Clause 16) prior to despatch of the Notice).

16.2

In the absence of evidence of earlier receipt, any Notice served in accordance with Clause 16.1 shall be deemed given and received:

	(a)		in the case of personal delivery by hand or courier, at the time of delivery at the address referred to in Clause 16.3;
	(b)		in the case of local post (other than airmail) or registered mail, at 10:00 a.m. on the second Business Day after posting;
	(c)		in the case of airmail, at 10:00 a.m. on the fifth Business Day after posting; and
	(d)		in the case of facsimile, at the time of its despatch (subject to confirmation of uninterrupted transmission by the sender by a transmission report).

16.3

The addresses of the Parties for the purpose of this Clause 16 are as follows: The Seller:

For the attention of: The Board of Directors Address: 7/F, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon,                  Hong Kong Fax: 852-2542-0298

The Purchaser and the Purchaser Guarantor:

For the attention of: Jane Sun Address: 99 Fu Quan Road, Shanghai 200335, People’s Republic of China Fax: 86-21 6485-2152

16.4

In proving service, it shall be sufficient to prove that:

	(a)		the envelope containing the Notice was properly addressed and delivered to the address of the relevant Party; or
	(b)		the facsimile containing the Notice was transmitted to the fax number of the relevant Party uninterrupted (which may be satisfied by delivery of a transmission report).

16.5

Any Party may notify the other Parties of any change to its name, address or facsimile number for the purpose of this Clause 16, provided that such Notice shall be sent to the other Parties and shall only be effective on:

	(a)		the date specified in such Notice as the date on which the change is to take effect; or
	(b)		if no date is so specified or the date specified is less than three Business Days after which such Notice was deemed to be given, the fourth Business Day after such Notice was deemed to be given.

16.6		This Clause 16 shall not prejudice the service of, or any step in, Proceedings permitted by applicable law or the rules of the relevant Authority.
17.		LANGUAGE
		This Agreement is executed in English. Any translation of this Agreement into any other language shall be for reference purposes only and the English language text shall prevail.
18.		ASSIGNMENT
		This Agreement shall be binding on and inure for the benefit of the successors of each of the Parties, but the Parties may not assign or transfer all or any of their rights or obligations under this Agreement without the prior written consent of the other Parties.
19.		INVALIDITY
		If at any time any provision of this Agreement shall be held to be illegal, void, invalid or unenforceable in whole or in part under any law in any jurisdiction, then:

(a)

such provision shall:

	(i)		to the extent that it is illegal, void, invalid or unenforceable, be given no effect and shall be deemed not to be included in this Agreement;
	(ii)		not affect or impair the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement;
	(iii)		not affect or impair the legality, validity or enforceability under the law of any other jurisdiction of such provision or any other provision of this Agreement; and

(b)

the Parties shall use all reasonable efforts to replace such a provision with a valid and enforceable substitute provision which carries out, as closely as possible, the intentions of the Parties under this Agreement.

20.		NO PARTNERSHIP
		Nothing in this Agreement shall be deemed to constitute a partnership between the Parties, nor constitute any of them the agent of the other Parties or otherwise entitle a Party to bind the other Parties for any purpose.
21.		COUNTERPARTS
		This Agreement may be executed in counterparts, and by the Parties on separate counterparts, but shall not be effective until each Party has executed at least one counterpart. Each counterpart shall constitute an original of this Agreement, but the counterparts shall together constitute one and the same instrument.
22.		TIME OF THE ESSENCE
		Any time, date or period referred to in this Agreement may be extended by mutual agreement in writing between the Purchaser and the Seller, but, as regards any time, date or period originally fixed or any time, date or period so extended, time shall be of the essence.
23.		PAYMENTS AND NO SET-OFF
23.1		Every amount payable under this Agreement by one Party to another shall be made in full without any set-off or counterclaim howsoever arising and shall be free and clear of deduction or withholding of any kind (other than any deduction or withholding required by applicable law).
23.2		Unless otherwise expressly stated in this Agreement, all payments to be made under this Agreement shall be made in HK$ to such account as the recipient directs by notice to the payer.
24.		INTEREST
		If any sum due for payment under this Agreement is not paid on the due date, the Party in default shall pay interest on that sum from the due date until the date of actual payment (calculated on a daily basis and compounded on a monthly basis) at a rate

		equal to the aggregate of 2% per annum above the Prime Rate for the time being, unless expressly provided to the contrary in this Agreement.
25.		COSTS AND EXPENSES
25.1		Save as otherwise expressly provided in this Agreement, each Party shall pay its own costs and expenses in relation to the negotiations leading up to the sale of the Sale Shares and to the preparation, execution and carrying into effect of this Agreement and all other documents mentioned herein, provided, however, that the Seller shall be responsible for the costs and expenses (if any) of the Group’s legal, financial and other professional advisers in connection with the sale and purchase of the Sale Shares or otherwise in connection with the Transaction Documents and the transactions contemplated hereby and thereby. The Seller may not charge any part of such costs to a member of the Group and if it has already done so it shall refund such amount at Completion.
25.2		Without prejudice to Clause 25.1, all stamp, transfer, registration and other similar taxes, duties and charges payable in connection with the sale or purchase of the Sale Shares under the Transaction Documents shall be borne equally by the Seller and the Purchaser.
26.		FURTHER ASSURANCE
		Without prejudice to any other provision of this Agreement, each Party shall, on being required to do so by the others, do or procure the doing of all such acts and/or execute or procure the execution of such documents as the requesting Party may from time to time reasonably require in order to vest any of the Sale Shares in the Purchaser or as otherwise may be necessary to implement and give full effect to the Transaction.
27.		WHOLE AGREEMENT
27.1		This Agreement and the other Transaction Documents contain the whole agreement and understanding between the Parties relating to the transactions contemplated by this Agreement and supersede all previous agreements, understandings or arrangements (whether oral or written) between the Parties relating to the Transaction.
27.2		Each of the Parties acknowledges that in agreeing to enter into this Agreement it has not relied on any representation, warranty, collateral contract, undertaking or other assurance (except those warranties and undertakings expressly set out in this Agreement) made by or on behalf of any other Party before the execution of this Agreement including during the course of negotiating this Agreement. Each of the Parties waives all rights and remedies which, but for this Clause, might otherwise be available to it in respect of any such representation, warranty, collateral contract, undertaking or other assurance, provided that nothing in this Clause shall limit or exclude any liability for fraud or fraudulent misrepresentation.
28.		GENERAL
28.1		Each of the obligations, covenants, Warranties and undertakings given to the Purchaser or (as the case may be) the Seller in this Agreement and the other Transaction Documents which is not fully performed at Completion shall not be

		affected by Completion, except to the extent waived or released by a specific and duly authorised written waiver or release by the Purchaser or (as the case may be) the Seller.
28.2		No variation of this Agreement shall be effective unless in writing and signed by or on behalf of each of the Parties. The expression “variation” shall, in each case, include any variation, supplement, deletion or replacement however effected.
28.3		Any waiver of any right or default hereunder shall be effective only in the instance given and will not operate as or imply a waiver of any other or similar right or default on any subsequent occasion. No waiver of this Agreement or of any provision hereof will be effective unless in writing and signed by the Party against whom such waiver is sought to be enforced.
28.4		Any delay by any Party in exercising, or failure to exercise, any right or remedy under this Agreement shall not constitute a waiver of the right or remedy or a waiver of any other rights or remedies and no single or partial exercise of any rights or remedy under this Agreement or otherwise shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.
28.5		The rights and remedies of the Parties under this Agreement are not exclusive of any rights or remedies provided by law.
29.		GOVERNING LAW AND JURISDICTION
29.1		This Agreement and any dispute or claim arising out of or in connection with it or its subject matter shall be governed by, and construed in accordance with, Hong Kong law.
29.2		The Parties irrevocably agree to submit to the exclusive jurisdiction of the courts of Hong Kong to settle any claim, dispute or difference which may arise out of or in connection with this Agreement or its subject matter (including a dispute regarding the existence, validity, formation, effect, interpretation, performance or termination of this Agreement) and that accordingly any Proceedings shall be brought in such courts.
29.3		Each Party waives (and agrees not to raise) any objection, on the ground of inconvenient forum or on any other ground, to the bringing of Proceedings in the Hong Kong courts.
29.4		Each Party irrevocably agrees that a judgment or order against it in Proceedings brought in Hong Kong shall (provided there is no appeal pending or open) be conclusive and binding upon it and may be enforced against it in the courts of any other jurisdiction.
30.		AGENT FOR SERVICE OF PROCESS
30.1		Each Party which is not a company incorporated in Hong Kong shall at all times maintain an agent for service of process in Hong Kong (each such entity or any replacement agent appointed pursuant to this Clause, “Agent”) for such purpose.

30.2		The Seller irrevocably appoints Wing On Travel Nominees Limited (for the attention of the Board of Directors) (of 7/F., Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong) as its Agent.
30.3		Each of the Purchaser and the Purchaser Guarantor irrevocable appoints Ctrip.com (Hong Kong) Limited (of Unit 2102, 21/F, The Hennessy, 256 Hennessy Road, Wan Chai, Hong Kong) as its Agent.
30.4		Without prejudice to any other permitted mode of service, each Party agrees that service of any claim, notice or other document for the purpose of any Proceedings commenced in Hong Kong shall be duly served upon it if served on its Agent, whether or not it is forwarded to and received by that Party.
30.5		If for any reason the Agent appointed by any Party at any time ceases to act as such or no longer has an address in Hong Kong, that Party shall promptly appoint another Agent and promptly notify the other Parties of the appointment and the new Agent’s name and address. If the Party concerned does not make such an appointment within five Business Days of such cessation, then the other Parties may do so on its behalf and shall notify the other Parties if it does so.

SCHEDULE 1
PARTICULARS OF THE COMPANY

1.		Registered number:		619318
2.		Date of incorporation:		15 October 2004
3.		Place of incorporation:		British Virgin Islands
4.		Registered office address:		Offshore Incorporations Limited
				P.O. Box 957, Road Town, Tortola,
				British Virgin Islands
5.		Type of company:		BVI Business Company
6.		Authorised share capital:		US$50,000,000 divided into 50,000,000
				shares of US$1.00 each
7.		Issued share capital:		100 shares of US$1.00 par value
8.		Members:
		Full name		Number of shares held
		Wing On Travel (Holdings) Limited		100
9.		Directors:
		Full name
		Yap, Allan
		Chan Ling, Eva
		Lai Tsz Wah
10.		Secretary:		NIL
11.		Accounting reference date:		31 December
12.		Auditors:		NIL
13.		Mortgages and charges:		NIL

SCHEDULE 2
PARTICULARS OF THE SUBSIDIARIES

WING ON TRAVEL (BVI) LIMITED

1.		Registered number:		243234
2.		Date of incorporation:		7 August 1997
3.		Place of incorporation:		British Virgin Islands
4.		Registered office address:		Offshore Incorporations Limited, P.O. Box 957, Road
				Town, Tortola, British Virgin Islands
5.		Authorised share capital:		US$50,000.00 divided into 50,000 shares of US$1.00 par value
6.		Issued share capital:		10,000 shares of US$1.00 par value
7.		Members:
		Full name		Number of shares held
		HKWOT (BVI) Limited		10,000
8.		Directors:
		Full name
		Yap, Allan
		Chan Ling, Eva
		Lai Tsz Wah
9.		Secretary:
		Full name
		Wing On Travel Nominees Limited
10.		Accounting reference date:		31 December
11.		Auditors:		Deloitte Touche Tohmatsu
12.		Mortgages and charges:		NIL

APSLEY AGENTS LIMITED

1.		Registered number:		236354
2.		Date of incorporation:		18 June 1997
3.		Place of incorporation:		British Virgin Islands
4.		Registered office address:		P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
5.		Authorised share capital:		US$50,000.00 divided into 50,000 shares of US$1.00 par value
6.		Issued share capital:		1 share of US$1.00 par value
7.		Members:
		Full name		Number of shares held
		Wing On Travel International Limited		1
8.		Directors:
		Full name
		Yap, Allan
		Chan Ling, Eva
		Lai Tsz Wah
9.		Secretary:
		Full name
		Wing On Travel Nominees Limited
10.		Financial year end:		31 December
11.		Auditors:		Deloitte Touche Tohmatsu
12.		Mortgages and charges:		NIL

ASIAN FAME INTERNATIONAL LIMITED

1.		Registered number:		298890
2.		Date of incorporation:		28 October 1998
3.		Place of incorporation:		British Virgin Islands
4.		Registered office address:		P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands
5.		Authorised share capital:		US$50,000 divided into 50,000 shares of US$1.00 par value
6.		Issued share capital:		1 share of US$1.00 par value
7.		Members:
		Full name		Number of shares held
		Wing On Travel International Limited		1
8.		Directors:
		Full name
		Yap, Allan
		Chan Ling, Eva
		Lai Tsz Wah
9.		Secretary:
		Full name
		Wing On Travel Nominees Limited
10.		Financial year end:		31 December
11.		Auditors:		NIL
12.		Mortgages and charges:		NIL

HONG KONG WING ON TRAVEL SERVICE LIMITED

1.		Registered number:		111506
2.		Date of incorporation:		30 April 1982
3.		Place of incorporation:		Hong Kong
4.		Registered office address:		Unit 1001, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong
5.		Authorised share capital:		HK$200,005,000.00 divided into 18,000,500 ordinary shares of HK$10.00 each and 2,000,000 non-voting deferred shares of HK$10.00 each
6.		Issued share capital:		18,000,010 ordinary shares of HK$10.00 each and 2,000,000 non-voting deferred shares of HK$10.00 each
7.		Members:
		Full name		Number of shares held
		Wing On Travel (BVI) Limited		18,000,010 (ordinary)
		Wing On Travel (BVI) Limited		2,000,000 (non-voting deferred)
8.		Directors:
		Full name
		Yap, Allan
		Chan Ling, Eva
		Lai Tsz Wah
9.		Secretary:
		Full name
		Wing On Travel Nominees Limited
10.		Financial year end:		31 December
11.		Auditors:		Deloitte Touche Tohmatsu
12.		Mortgages and charges:		Running Deed of Charge

WING ON TRAVEL AND TOUR LIMITED

1.		Registered number:		255576
2.		Date of incorporation:		16 June 1989
3.		Place of incorporation:		Hong Kong
4.		Registered office address:		Unit 1005, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong
5.		Authorised share capital:		HK$2,000,000.00 divided into 2,000,000 ordinary shares of HK$1.00 each
6.		Issued share capital:		2,000,000 ordinary shares of HK$1.00 each
7.		Members:
		Full name		Number of shares held
		Wing On Travel (BVI) Limited		2,000,000
8.		Directors:
		Full name
		Yap, Allan
		Chan Ling, Eva
		Lai Tsz Wah
9.		Secretary:
		Full name
		Wing On Travel Nominees Limited
10.		Financial year end:		31 December
11.		Auditors:		Deloitte Touche Tohmatsu
12.		Mortgages and charges:		NIL