Exhibit
10.34


 


Exclusive Option Agreement


 


This
Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of January 10, 2008 in
Beijing, People’s Republic of China (“PRC”):


 


	
  Party A:

  	
   

  	
  ChinaCache Network Technology (Beijing) Co., Ltd., a wholly owned foreign enterprise incorporated and
  existing under the laws of the PRC,
  with its address at Floor 6, Tower A, Galaxy Plaza, No.10 Jiu Xian Qiao
  Middle Road, Chaoyang District, 100016, Beijing;

  
	
   

  	
   

  	
   

  
	
  Party B:

  	
   

  	
  Huiling
  Ying, a citizen of PRC with Chinese Identification No.:         ; and

  
	
   

  	
   

  	
   

  
	
  Party
  C:

  	
   

  	
  Shanghai
  Jnet Telcom Co., Ltd.,
  a wholly owned foreign enterprise incorporated and existing under the laws of
  the PRC, with its address at  Room 221,
  No.728 Guanghua Road, Minhang District, Shanghai

  



 


In
this Agreement, each of Party A, Party B and Party C shall be referred to as a “Party” respectively, and they shall be
collectively referred to as the “Parties”.


 


Whereas:


 


1.                   Party B holds 50% of the equity interest in Party C;


 


2.                   Party
A and Party B executed a  Loan
Agreement
on December 21, 2007, under which Party A
provides a loan of RMB500,000 to Party B to acquire 50% of the equity interest
of Party C.


 


Now
therefore, upon mutual discussion and negotiation, the Parties have reached the
following agreement:


 


1.                  Sale and
Purchase of Equity Interest


 


1.1         Grant of Right


 


In consideration of the payment  by Party A of
RMB10, the
receipt and sufficiency of which is hereby acknowledged by Party B, Party B hereby irrevocably grants Party A an irrevocable and exclusive right to purchase, or
designate one or more persons (each, a “Designee”) to purchase  the equity interests in Party C then held by
Party B once or at multiple times at any time in part or in whole at Party A’s sole and absolute
discretion to the extent permitted by Chinese laws and at the price described
in Section 1.3 herein (such right being the “Equity Interest Purchase
Option”). Except for Party A and the Designee(s), no other person shall be
entitled to the Equity Interest Purchase Option or other rights with respect to
the equity interests of Party B. Party C hereby agrees to the grant by Party B
of the Equity Interest Purchase Option to Party A. The term “person” as used
herein shall 


 

















 


refer to individuals, corporations,
partnerships, partners, enterprises, trusts or non-corporate organizations.


 


1.2         Steps for Exercise of Equity Interest Purchase Option


 


Subject to the provisions of the laws and
regulations of China, Party A may exercise the Equity Interest Purchase Option
by issuing a written notice to Party B (the “Equity Interest Purchase Option
Notice”),
specifying:  (a) Party A’s decision to exercise the Equity Interest Purchase
Option; (b) the portion of equity
interests to be purchased from Party B (the “Optioned Interests”); and (c) the
date for purchasing the Optioned Interests
and/or the date for transfer of the Optioned
Interests.


 


1.3         Equity Interest Purchase Price


 


The purchase price for the Optioned Interest
shall be RMB10 (“Base Purchase Price”).  If
an appraisal is required by the laws of
China applicable to the Equity Interest Purchase Option when exercised by Party A, the parties shall determine such based on the principle of good faith,
and shall make necessary adjustment to the purchase price based on the
appraisal to comply with any applicable PRC laws (collectively, the “Equity Interest Purchase Price”)


 


1.4         Transfer of Optioned Interests


 


For each exercise of the Equity Interest
Purchase Option:


 


1.4.1                       Party B, as a shareholder, shall transfer the Optioned Interest to Party
A and/or Designee, the decision of which shall be in writing, and shall be
signed by Party B and be kept with Party C;


 


1.4.2                       Party B shall execute share transfer agreement for each transfer with
Party A and/or Designee (when applicable) in accordance with this Agreement and
the Equity Interest Purchase Option Notice;


 


1.4.3                       The relevant Parties shall execute all other necessary contracts,
agreements or documents, obtain all necessary government licenses and permits
and take all necessary actions to transfer valid ownership of the Optioned
Interests to Party A and/or the Designee(s), unencumbered by any security
interests, and cause Party A and/or the Designee(s) to become the
registered owner(s) of the Optioned Interests. For the purpose of this Section and
this Agreement, “security interests” shall include securities, mortgages, third
party’s rights or interests, any stock options, acquisition right, right of
first refusal, right to offset, ownership retention or other security arrangements,
but shall be deemed to exclude any security interest created by this Agreement
and Party B’s Share Pledge Agreement. “Party B’s Share Pledge Agreement” as
used in this Section and this Agreement shall refer to the Share Pledge
Agreement (“Share Pledge Agreement”) executed by and among 


 

















 


Party A, Party B and Party C as of the date hereof,
whereby Party B pledges all of its equity interests in Party C to Party A, in
order to guarantee Party C’s performance of its obligations under the Exclusive
Business Corporation Agreement executed by and between Party C and Party A.


 


1.5                       Upon exercise of the Equity Interest Purchase Option by Party A, if Party B as borrower has not fully repaid to
Party A the loan under the Loan Agreement, the outstanding amount of the loan
owed by Party B to Party A shall be used to make payment of the Equity Interest
Purchase Price, in which case Party A shall not be required to pay any
additional Equity Interest Purchase Price to Party B, and Party B’s outstanding
loan shall be cancelled.


 


2.                  Covenants


 


2.1                       Covenants regarding Party C


 


Party B (as the shareholders of Party C) and Party
C hereby covenant as follows:


 


2.1.1                       Without the prior written consent of Party A,
they shall not in any manner supplement,
change or amend the articles of association and bylaws of Party C, increase or decrease its registered capital, or change
its structure of registered capital
in other manners;


 


2.1.2                       They shall maintain Party C’s corporate existence in accordance with
good financial and business standards and practices by prudently and
effectively operating its business and handling its affairs;


 


2.1.3                       Without the prior written consent of Party A, they shall not at any time
following the date hereof, sell, transfer, mortgage or dispose of in any manner
any assets of Party C or legal or beneficial interest in the business or
revenues of Party C, or allow the encumbrance thereon of any security interest;


 


2.1.4                       Without the prior written consent of Party A, they shall not incur,
inherit, guarantee or suffer the existence of any debt, except for (i) debts
incurred in the ordinary course of business other than through loans; and (ii) debts
disclosed to Party A for which Party A’s written consent has been obtained;


 


2.1.5                       They shall always operate all of Party C’s businesses during the
ordinary course of business to maintain the asset value of Party C and refrain
from any action/omission that may affect Party C’s operating status and asset
value;


 


2.1.6                       Without the prior written consent of Party A, they shall not cause Party
C to execute any major contract, except the contracts in the 


 

















 


ordinary course of business (for purpose of this
subsection, a contract with a value exceeding RMB500,000 shall be deemed a
major contract);


 


2.1.7                   Without
the prior written consent of Party A, they shall not cause Party C to provide
any person with any loan or credit;


 


2.1.8                       They shall provide Party A with information on Party C’s business
operations and financial condition at Party A’s request;


 


2.1.9                       If requested by Party A, they shall procure and maintain insurance in
respect of Party C’s assets and business from an insurance carrier acceptable
to Party A, at an amount and type of coverage typical for companies that
operate similar businesses;


 


2.1.10                 Without
the prior written consent of Party A, they shall not cause or permit Party C to
merge, consolidate with, acquire or invest in any person;


 


2.1.11                 They
shall immediately notify Party A of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to Party C’s
assets, business or revenue;


 


2.1.12                 To
maintain the ownership by Party C of all of its assets, they shall execute all
necessary or appropriate documents, take all necessary or appropriate actions
and file all necessary or appropriate complaints or raise necessary and
appropriate defenses against all claims;


 


2.1.13                 Without
the prior written consent of Party A, they shall ensure that Party C shall not
in any manner distribute dividends to its shareholders, provided that upon
Party A’s written request, Party C shall immediately distribute all
distributable profits to its shareholders; and


 


2.1.14                 At
the request of Party A, they shall appoint any persons designated by Party A as
directors of Party C.


 


2.2                       Covenants of Party B and Party C


 


Party
B hereby covenants as follows:


 


2.2.1                       Without the prior written consent of Party A, Party B shall not sell,
transfer, mortgage or dispose of in any other manner any legal or beneficial
interest in the equity interests in Party C held by Party B, or allow the
encumbrance thereon of any security interest, except for the pledge placed on
these equity interests in accordance with Party B’s Share Pledge Agreement;


 

















 


2.2.2                       Party B shall cause the shareholders’ meeting and/or the board of
directors of Party C not to approve the sale, transfer, mortgage or disposition
in any other manner of any legal or beneficial interest in the equity interests
in Party C held by Party B, or allow the encumbrance thereon of any security
interest, without the prior written consent of Party A, except for the pledge
placed on these equity interests in accordance with Party B’s Share Pledge
Agreement;


 


2.2.3                       Party B shall cause the shareholders’ meeting or the board of directors
of Party C not to approve the merger or consolidation with any person, or the
acquisition of or investment in any person, without the prior written consent
of Party A;


 


2.2.4                       Party B shall immediately notify Party A of the occurrence or possible
occurrence of any litigation, arbitration or administrative proceedings
relating to the equity interests in Party C held by Party B;


 


2.2.5                       Party B shall cause the shareholders’ meeting or the board of directors
of Party C to vote their approval of the transfer of the Optioned Interests as
set forth in this Agreement and to take any and all other actions that may be
requested by Party A;


 


2.2.6                       To the extent necessary to maintain Party B’s ownership in Party C,
Party B shall execute all necessary or appropriate documents, take all necessary
or appropriate actions and file all necessary or appropriate complaints or
raise necessary and appropriate defenses against all claims;


 


2.2.7                       Party B shall appoint any designee of Party A as director of Party C, at
the request of Party A;


 


2.2.8                       At the request of Party A at any time, Party B shall promptly and
unconditionally transfer its equity interests in Party C to Party A’s Designee(s) in
accordance with the Equity Interest Purchase Option under this Agreement, and
Party B hereby waives its right of first refusal to the share transfer by the
other existing shareholder of Party C (if any); and


 


2.2.9                       Party B shall strictly abide by the provisions of this Agreement and
other contracts jointly or separately executed by and among Party B, Party C
and Party A, perform the obligations hereunder and thereunder, and refrain from
any action/omission that may affect the effectiveness and enforceability
thereof. To the extent that Party B has any remaining rights with respect to
the equity interests subject to this Agreement or under the Share Pledge
Agreement of Party B or under the Power of Attorney granted in favor of Party
A, Party B shall not exercise such rights except in accordance with the written
instructions of Party A.


 

















 


3.                  Representations
and Warranties


 


Party B and Party C hereby represent and
warrant to Party A, jointly and severally, as of the date of this Agreement and
each date of transfer of the Optioned Interests, that:


 


3.1                       They have the authority to execute and deliver this Agreement and any
share transfer contracts to which they are a party concerning the Optioned
Interests to be transferred thereunder (each, a “Transfer Contracts”), and to perform
their obligations under this Agreement and any Transfer Contracts. Party B and
Party C agree to enter into Transfer Contracts consistent with the terms of
this Agreement upon Party A’s exercise of the Equity
Interest Purchase Option. This Agreement and the Transfer Contracts to which they are a party constitute
or will
constitute their legal, valid and binding obligations and shall be enforceable
against them in accordance with the provisions thereof;


 


3.2                       The execution and delivery of this Agreement or any Transfer Contracts and the obligations under this Agreement or
any Transfer Contracts shall not: (i) cause any violation of any applicable laws of
China; (ii) be inconsistent with the articles
of association, bylaws or other
organizational documents of Party C; (iii) cause the violation of any contracts or instruments to
which they are a party or which are binding on them, or constitute any breach
under any contracts or instruments to which they are a party or which are
binding on them; (iv) cause any violation of any condition for the grant
and/or continued effectiveness of any licenses or permits issued to either of
them; or (v) cause the suspension or revocation of or imposition of
additional conditions to any licenses or permits issued to either of them;


 


3.3                       Party B has a good and merchantable title to the equity interests in
Party C he holds. Except for Party B’s Share Pledge Agreement, Party B has not
placed any security interest on such equity interests;


 


3.4                       Party C has a good and merchantable title to all of its assets, and has not placed any security interest on the aforementioned assets;


 


3.5                       Party C does not have any outstanding debts, except for (i) debt incurred
in the ordinary course of business; and (ii) debts disclosed to Party A
for which Party A’s written consent has been obtained.


 


3.6                       Party C has complied with all laws and regulations of China applicable
to asset acquisitions; and


 


3.7                       There are no pending or threatened
litigation, arbitration or administrative
proceedings relating to the equity interests in Party
C, assets of Party C  or
Party C.


 

















 


4.                 Effective Date


 


This
Agreement shall become effective upon the date hereof, and remain effective for
a term of 10 years, and may be renewed for an additional10 years at Party A’s
election.


 


5.                 Governing Law and Resolution
of Disputes


 


5.1                       Governing law


 


The execution,
effectiveness, construction, performance, amendment and termination of this
Agreement and the resolution of disputes hereunder shall be governed by laws of
the PRC.


 


5.2                       Methods of Resolution of Disputes


 


In
the event of any dispute with respect to the construction and performance of
this Agreement, the Parties shall first resolve the dispute through friendly
negotiations. In the event the Parties fail to reach an agreement on the
dispute within 30 days after either Party’s request to the other Parties for
resolution of the dispute through negotiations, either Party may submit the
relevant dispute to the China International Economic and Trade Arbitration
Commission for arbitration, in accordance with its then effective arbitration
rules. The arbitration shall be conducted in Beijing, and the language used in
arbitration shall be Chinese. The arbitration award shall be final and binding
on all Parties.


 


6.                  Taxes and Fees


 


Each Party shall pay any
and all transfer and registration tax, expenses and fees incurred thereby or levied thereon in accordance
with the laws of China in connection with the preparation and execution
of this Agreement and the Transfer Contracts, as well as the consummation of
the transactions contemplated under this Agreement and the Transfer Contracts.


 


7.                  Notices


 


7.1                       All notices and other communications required or permitted to be given
pursuant to this Agreement shall be delivered personally or sent by registered
mail, postage prepaid, by a commercial courier service or by facsimile
transmission to the address of such Party set forth below.  A confirmation copy of each notice shall also
be sent by email.  The dates on which
notices shall be deemed to have been effectively given shall be determined as
follows:


 


7.1.1                              Notices given by personal delivery, by courier service or by registered
mail, postage prepaid, shall be deemed effectively given on the date of
delivery or refusal at the address specified for notices.


 

















 


7.1.2                              Notices given by
facsimile transmission shall be deemed effectively given on the date of
successful transmission (as evidenced by an automatically generated
confirmation of transmission).


 


7.2                     For the purpose of notices, the addresses of the Parties are as follows:


 


Party
A: Floor 6, Tower A, Galaxy Plaza, No.10 Jiu
Xian Qiao Middle Road, Chaoyang District, 100016, Beijing


Fax: +8610-6437 4251


 


Party
B: Floor 6, Tower A, Galaxy Plaza, No.10 Jiu
Xian Qiao Middle Road, Chaoyang District, 100016, Beijing


Fax: +8610-6437 4251


 


Party
C: Room 517, Tongji Jiayuan Service Apartment, No.1033 Kangding Road,
2000041, Shanghai


Fax:
+8621-5228 9716-810


 


7.3                       Any Party
may at any time change its address for notices by a notice delivered to the
other Parties in accordance with the terms hereof.


 


8.                  Confidentiality


 


The
Parties acknowledge that any oral or written information exchanged among them
with respect to this Agreement is confidential information. Each Party shall
maintain the confidentiality of all such information, and without obtaining the
written consent of other Parties, it shall not disclose any relevant
information to any third parties, except in the following circumstances: (a) such
information is or will be in the public domain (provided that this is not the
result of a public disclosure by the receiving Party); (b) information
disclosed as required by applicable laws or rules or regulations of any
stock exchange; or (c) information required to be disclosed by any Party
to its legal counsel or financial advisor regarding the transaction
contemplated hereunder, and such legal counsel or financial advisor are also
bound by confidentiality duties similar to the duties in this Section.
Disclosure of any confidential information by the staff members or agency hired
by any Party shall be deemed disclosure of such confidential information by such
Party, which Party shall be held liable for breach of this Agreement. This Section shall
survive the termination of this Agreement for any reason.


 


9.                  Further Warranties


 


The Parties agree to
promptly execute documents that are reasonably required for or are conducive to
the implementation of the provisions and purposes of this Agreement and take
further actions that are reasonably required for or are conducive to the
implementation of the provisions and purposes of this Agreement.


 

















 


10.           Miscellaneous


 


10.1                          Amendment, change and supplement


 


Any
amendment, change and supplement to this Agreement shall require the execution
of a written agreement by all of the Parties.


 


10.2                          Entire agreement


 


Except
for the amendments, supplements or changes in writing executed after the
execution of this Agreement, this Agreement shall constitute the entire
agreement reached by and among the Parties hereto with respect to the subject
matter hereof, and shall supercede all prior oral and written consultations,
representations and contracts reached with respect to the subject matter of
this Agreement.


 


10.3                          Headings


 


The
headings of this Agreement are for convenience only, and shall not be used to
interpret, explain or otherwise affect the meanings of the provisions of this
Agreement.


 


10.4                          Language


 


This
Agreement is written in Chinese in three copies, each Party having one copy
with equal legal validity.


 


10.5                          Severability


 


In
the event that one or several of the provisions of this Agreement are found to
be invalid, illegal or unenforceable in any aspect in accordance with any laws
or regulations, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected or compromised in any
respect. The Parties shall strive in good faith to replace such invalid,
illegal or unenforceable provisions with effective provisions that accomplish
to the greatest extent permitted by law and the intentions of the Parties, and
the economic effect of such effective provisions shall be as close as possible
to the economic effect of those invalid, illegal or unenforceable provisions.


 


10.6                          Successors


 


Party
A is entitled to transfer its rights and obligations under this Agreement to
third parties on its own discretion, without the need to obtain prior consent
of Party B and Party C; without Party A’s prior written consent, Party B and
Party C shall not transfer their rights and obligations under this Agreement to
third parties. This Agreement shall be binding on and shall inure to the
interest of the respective successors of the Parties and the permitted assigns
of such Parties.


 

















 


10.7                           Survival


 


10.7.1                  Any obligations that occur or that are due as a result of this Agreement
upon the expiration or early termination of this Agreement shall survive the
expiration or early termination thereof.


 


10.7.2                  The provisions of Sections 5, 7, 8 and this Section 10.7 shall
survive the termination of this Agreement.


 


10.8                           Waivers


 


Any
Party may waive the terms and conditions of this Agreement, provided that such
a waiver must be provided in writing and shall require the signatures of the
Parties. No waiver by any Party in certain circumstances with respect to a
breach by other Parties shall operate as a waiver by such a Party with respect
to any similar breach in other circumstances.


 

















 


IN
WITNESS WHEREOF, the Parties have caused their respective duly authorized
representatives to execute this Agreement as of the date first above written.


 


 


	
  Party A: ChinaCache Network Technology (Beijing) Co., Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Song Wang

  	
   

  
	
  Name: Song Wang

  	
   

  
	
  Title: Legal Representative

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Party B : Huiling Ying

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Huiling Ying

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Party C: Shanghai Jnet Telcom Co., Ltd.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Yong Sha

  	
   

  
	
  Name: Yong Sha

  	
   

  
	
  Title: Legal Representative