Exhibit
10.17


 


Exclusive Option Agreement


 


This
Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of the 23rd day of September, 2005 in Beijing, China:


 


Party A:       ChinaCache International Holdings Ltd., a Cayman corporation,   organized and existing under
the company law
of the Cayman Islands, British West Indies (“Cayman”), with its address at
Offshore Incorporations (Cayman) Limited, Scotia Center, 4th Floor, P.O. Box
2804, George Town, Cayman Islands, British West Indies;


 


Party B:       Xiaohong Kou,
a citizen of the People’s Republic of China (“China”) with Chinese
Identification No.:          , whose
address is at No.301, Unit 2, Building 3, Block 9, Liuli Bridge Beili, Fengtai
District, Beijing; and


 


Party C:       Beijing Blue I. T. Technologies Co., Ltd., a limited liability company organized
and existing under the laws of China, with its address at No. 8 A,  Lang Qiu Garden,
Ta Yuan, Hai Dian District, Beijing.


 


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 45% of the equity interest in Party C;


 


2.          Party
A and Party B executed a  Loan
Agreement
on September 23, 2005 (the
“Loan Agreement”).


 


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


 


1.      Sale and
Purchase of Equity Interest


 


1.1        Option Granted


 


In
consideration of the payment  by Party A of the  amount of loan specified under the Loan
Agreement between the Parties dated September 23, 2005 , 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


 


Unless
an appraisal is required by the laws of China applicable to the Equity Interest
Purchase Option when exercised by Party A, the purchase price of the Optioned Interests (the “Equity
Interest Purchase Price”) shall equal
to the amount of outstanding loan provided under the Loan Agreement between
Party A and Party B. The Equity Interest Purchase Price shall be off-set by the
amount of outstanding loan payable by Party B..


 


1.4        Transfer of Optioned Interests


 


For
each exercise of the Equity Interest Purchase Option:


 


1.4.1       Party B shall cause Party C to promptly convene a
shareholders’ meeting, at which a resolution shall be adopted approving Party B’s
transfer of the Optioned Interests to Party A and/or the Designee(s);


 


Party B
shall cause the shareholders’ meeting and
board meeting of Party C to adopt the following
resolutions in the forms as set forth in Appendices II and III.


 


(a)           Party
B’s transfer
of its
equity interests in part or in whole to Party A and/or the transferee designated
by Party A; and


 


(b)              Other
matters upon reasonable requirements of Party A.


 


1.4.2       Party B shall execute a
share transfer agreement with respect to each transfer with Party A and/or each Designee
(whichever is applicable), in accordance with the provisions of this Agreement
and the Equity Interest Purchase Option Notice regarding the Optioned Interests. In order to facilitate the Equity Interest Purchase Option in this
Agreement, Party B shall, upon the requirements of Party A, execute the Share
Transfer Agreement in seven counterparts in accordance with the form set forth
in Appendix I attached hereto, and provide the shareholders’ resolutions and
the resolutions of the board of directors in accordance with the forms of
Appendix II and Appendix III when executing and delivering this Agreement. The
executed Share Transfer Agreement and the


 

















 


shareholders’ resolutions and the resolutions of
the board of directors mentioned above shall be delivered to Party A for its
custody.


 


In
order to avoid the doubt, the Parties herein confirm that, for the intention of
this Agreement, if the documents executed in accordance with Appendices I, II
and III of this Agreement cannot meet the specific situation and/or the
requirements of the laws and regulations of China then effective at the time of
Party A’s exercise of the Option, Party B agrees to execute with Party A and/or
the Designee such additional share transfer documents and other documents as
necessary to make the share transfer documents effective and enforceable.


 


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, the Trademarks License Agreements
and the Domain Names License Agreement  executed by and between Party C and Party A.


 


1.5        Payment of the Equity Interest Purchase Price


 


The
Parties have agreed in the Loan Agreement that any
proceeds obtained by Party B through the transfer of its equity interests in
Party C shall be used for repayment of the loan provided by Party A in
accordance with the Loan Agreement. Accordingly, upon exercise of the Equity
Interest Purchase Option, Party A may elect to make payment of the Equity
Interest Purchase Price through cancellation of the outstanding amount of the
loan owed by Party B to Party A, in which case Party A shall not be required to
pay any additional Equity Interest Purchase Price to Party B.


 

















 


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 RMB1,000,000 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 and/or Party A’s PRC
subsidiary ChinaCache
Network Technology (Beijing) Co., Ltd., 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 hereunder or under the Share Pledge Agreement among
the same parties hereto or under the Power of Attorney granted in favor of
Party A’s PRC subsidiary ChinaCache Network Technology (Beijing) Co., Ltd.,
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, and
the times of such renewal are unlimited.


 


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 the formally
published and publicly available laws
of China.  Matters
not covered by formally published and publicly available 


 

















 


laws
of China shall be governed by international legal principles and practices.


 


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:  ChinaCache International Holdings Ltd.


Address:  Offshore Incorporations (Cayman) Limited,
Scotia Center, 4th Floor, P.O. Box 2804, George Town, Cayman Islands,
British West Indies


Attn:
General Manager


Phone: 6437 3399


Facsimile: 6437 4251


 

















 


Party
B:  Xiaohong Kou


Address:  No.301, Unit 2, Building 3, Block 9, Liuli
Bridge Beili, Fengtai District, Beijing


Tel:
6437 3399 ext. 202


 


Party C:
Beijing Blue I. T.
Technologies Co., Ltd.


Address:  No. 8 A, Lang
Qiu Garden, Ta Yuan, Haidian District, Beijing


Attn:
General Manager


Phone:
6437 3399


Facsimile:
6437 4251


 


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 both Chinese and English language in three copies, each Party having one
copy with equal legal validity; in case there is any conflict between the
Chinese version and the English version, the Chinese  version shall prevail.


 


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


 


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.


 


10.8         Survival


 


10.8.1     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.


 


10.8.2      The provisions of Sections 5, 7,  8 and
this Section 10.8 shall survive the termination of this Agreement.


 

















 


10.9         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 International Holdings Ltd.


 


	
  By:

  	
        /s/ Xiaohong Kou

  	
   

  
	
  Name:
  Xiaohong Kou

  	
   

  
	
  Title:    Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Party
  B:  Xiaohong
  Kou

  	
   

  
	
   

  	
   

  
	
  By:

  	
        /s/ Xiaohong Kou

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Party C: Beijing Blue I. T. Technologies Co., Ltd.

  	
   

  
	
   

  	
   

  
	
  By:

  	
        /s/ Xiaohong Kou

  	
   

  
	
  Name:  Xiaohong
  Kou

  	
   

  
	
  Title:    Legal Representative

  	
   

  



 














 


Exclusive Option Agreement


 


This
Exclusive Option Agreement (this “Agreement”) is executed by and among the following Parties as of the 23rd day of September, 2005 in Beijing, China:


 


Party A:       ChinaCache International Holdings Ltd., a Cayman corporation,   organized and existing under
the company law
of the Cayman Islands, British West Indies (“Cayman”), with its address at
Offshore Incorporations (Cayman) Limited, Scotia Center, 4th Floor, P.O. Box
2804, George Town, Cayman Islands, British West Indies;


 


Party B:       Song Wang,
a citizen of the People’s Republic of China (“China”) with Chinese
Identification No.:          , whose
address is at No.4, Unit 8, No.2, Xilangxia Hutong, Xicheng District, Beijing;
and


 


Party C:       Beijing Blue I. T. Technologies Co., Ltd., a limited liability company organized
and existing under the laws of China, with its address at No. 8 A,  Lang Qiu Garden,
Ta Yuan, Hai Dian District, Beijing.


 


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 55% of the equity interest in Party C;


 


2.                             Party A and Party B executed a  Loan
Agreement
on September 23, 2005 (the
“Loan Agreement”).


 


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


 


1.                  Sale and
Purchase of Equity Interest


 


1.1                      Option Granted


 


In
consideration of the payment  by Party A of the  amount of loan specified under the Loan
Agreement between the Parties dated September 23, 2005 , 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

















 


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


 


Unless
an appraisal is required by the laws of China applicable to the Equity Interest
Purchase Option when exercised by Party A, the purchase price of the Optioned Interests (the “Equity
Interest Purchase Price”) shall equal
to the amount of outstanding loan provided under the Loan Agreement between
Party A and Party B. The Equity Interest Purchase Price shall be off-set by the
amount of outstanding loan payable by Party B..


 


1.4                     Transfer of Optioned Interests


 


For
each exercise of the Equity Interest Purchase Option:


 


1.4.1                      Party B shall cause Party C to promptly convene a shareholders’ meeting, at which a resolution shall be adopted approving Party B’s
transfer of the Optioned Interests to Party A and/or the Designee(s);


 


Party B
shall cause the shareholders’ meeting and
board meeting of Party C to adopt the following
resolutions in the forms as set forth in Appendices II and III.


 


(a)    Party
B’s transfer
of its
equity interests in part or in whole to Party A and/or the transferee
designated by Party A; and


 


(b)     Other
matters upon reasonable requirements of Party A.


 


1.4.2                      Party B shall execute a share transfer agreement with respect to each transfer with Party A and/or each Designee
(whichever is applicable), in accordance with the provisions of this Agreement
and the Equity Interest Purchase Option Notice regarding the Optioned Interests. In order to facilitate the Equity Interest Purchase Option in this
Agreement, Party B shall, upon the requirements of Party A, execute the Share
Transfer Agreement in seven counterparts in accordance with the form set forth
in Appendix I attached hereto, and provide the shareholders’ resolutions and
the resolutions of the board of directors in accordance with the forms set
forth in the Appendix II and Appendix III when executing and delivering this
Agreement. The executed Share Transfer Agreement


 


2

















 


and the shareholders’ resolutions and the
resolutions of the board of directors mentioned above shall be delivered to
Party A for its custody.


 


In
order to avoid the doubt, the Parties herein confirm that, for the intention of
this Agreement, if the documents executed in accordance with Appendices I, II
and III of this Agreement cannot meet the specific situation and/or the
requirements of the laws and regulations of China then effective at the time of
Party A’s exercise of the Option, Party B agrees to execute with Party A and/or
the Designee such additional share transfer documents and other documents as
necessary to make the share transfer documents effective and enforceable.


 


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, the Trademarks License Agreements
and the Domain Names License Agreement  executed by and between Party C and Party A.


 


1.5                     Payment of the Equity Interest Purchase Price


 


The
Parties have agreed in the Loan Agreement that any
proceeds obtained by Party B through the transfer of its equity interests in Party
C shall be used for repayment of the loan provided by Party A in accordance
with the Loan Agreement. Accordingly, upon exercise of the Equity Interest
Purchase Option, Party A may elect to make payment of the Equity Interest
Purchase Price through cancellation of the outstanding amount of the loan owed
by Party B to Party A, in which case Party A shall not be required to pay any
additional Equity Interest Purchase Price to Party B.


 


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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 RMB1,000,000 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;


 


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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


 


5

















 


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 and/or Party A’s
PRC subsidiary ChinaCache Network Technology (Beijing) Co., Ltd., 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 hereunder or under the Share Pledge Agreement among
the same parties hereto or under the Power of Attorney granted in favor of
Party A’s PRC subsidiary ChinaCache Network Technology (Beijing) Co., Ltd.,
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


 


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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,and the
times of such renewal are unlimited.


 


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 the formally
published and publicly available


 


7

















 


laws
of China.  Matters
not
covered by formally published and publicly available laws of China shall be
governed by international legal principles and practices.


 


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:  ChinaCache International Holdings Ltd.


Address:  Offshore Incorporations (Cayman) Limited,
Scotia Center, 4th Floor, P.O. Box 2804, George Town, Cayman Islands,
British West Indies


Attn:
Director


Phone: 6437 3399


Facsimile: 6437 5315


 


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Party B:  Song Wang


Address:  No.4, Unit 8, No.2, Xilangxia Hutong,
Xicheng District, Beijing


Tel: 6437 3399 ext. 201


 


Party C:
Beijing Blue I. T.
Technologies Co., Ltd.


Address:  No. 8 A, Lang
Qiu Garden, Ta Yuan, Haidian District, Beijing


Attn:
General Manager


Phone:   6437 3399


Facsimile: 6437 5315


 


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.


 


9

















 


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 both Chinese and English language in three copies, each Party having one
copy with equal legal validity; in case there is any conflict between the
Chinese version and the English version, the Chinese  version shall prevail.


 


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


 


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.


 


10.8                           Survival


 


10.8.1                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.


 


10.8.2                The
provisions of Sections 5,
7,  8 and this Section 10.8 shall survive the
termination of this Agreement.


 


10

















 


10.9                          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.


 


 


11

















 


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 International
  Holdings Ltd.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Xiaohong Kou

  	
   

  
	
  Name:

  	
  Xiaohong
  Kou

  	
   

  
	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Party B: Song Wang

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Song
  Wang

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Party C: Beijing Blue I. T. Technologies
  Co., Ltd.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Xiaohong Kou

  	
   

  
	
  Name:

  	
  Xiaohong
  Kou

  	
   

  
	
  Title:

  	
  Legal
  Representative

  	
   

  
					



 


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