Exhibit
10.27


 


SUPPLEMENTARY
AGREEMENT


 


THIS
SUPPLEMENTARY AGREEMENT (this “Agreement”) is entered into on January 28, 2010 in the People’s Republic of
China (the “PRC” or “China”) by and among the following parties:


 


(1)                                  CHINACACHE
INTERNATIONAL HOLDINGS LTD. (the “Buyer”),  a company duly incorporated and existing under the laws of the Cayman Islands;


 


(2)                                  JNET HOLDINGS LIMITED  (the “Company”), a company
duly incorporated and existing under the laws of the British Virgin
Islands;


 


(3)                                  SUNDREAM HOLDINGS LIMITED and SMART ASIA HOLDINGS LIMITED, each
a company duly incorporated and existing under the laws of the British Virgin
Islands (collectively the “Sellers” and
individually, a “Seller”);


 


(4)                                  SHANGHAI JNET TELCOM CO., LTD.  (“Shanghai JNET”), a
limited liability company duly incorporated and existing under the laws of the
PRC;


 


(5)                                  CHEN PEIDI  ,  a
PRC citizen whose ID card No. is 330622490421004, MEI YONGKAI ,
a PRC citizen whose ID card No. is 330622750103001, LU JUN ,
a PRC citizen whose ID card No. is 310105196909290415, MEI Xiurong ,
a PRC citizen whose ID card No. is            ,
ZHANG SHIJIE ,
a PRC citizen whose ID card No. is            ,
and HAN DANHUA ,
a PRC citizen whose ID card No. is            
(collectively the “Shareholders” and each, a “Shareholder”).


 


WHEREAS, a Share Purchase and Sale Agreement (the “SPSA”) was entered
into by and among  the Buyer, the
Company, the Sellers, Shanghai JNET and the Shareholders on December 20,
2007, under which the Buyer agreed to purchase the shares of the Company from
the Sellers (the “Share Purchase”).


 


WHEREAS, as of the date of this Agreement, the
Buyer has paid to the Sellers the Purchase Consideration of US$5,823,333 (the “Paid
Amount”).  The dates and methods of
payment of the Paid Amount are set out in Appendix I hereto.  The parties acknowledge that the Paid Amount
has been duly paid, and will not be returned by the Sellers.


 


1

















 


WHEREAS, from January 1, 2007 to December 31,
2009, Shanghai Jnet has lent to Mei Yongkai loans in the total amount of
RMB62,785,046 and Lu Jun loans in the total amount of RMB2,806,645
(collectively, the “Shanghai Jnet Loans”).


 


WHEREAS, the parties now wish to enter into this
Agreement to make amendment and supplement to the SPSA. Unless
otherwise defined herein, capitalized terms used herein but not defined herein shall
have the same meaning ascribed to them in the SPSA.


1.                                       Notwithstanding any other payment obligations set forth in the SPSA, the
parties hereby agree and confirm that the total amount of outstanding Purchase
Consideration due to the Sellers by the Buyer as of December 31, 2008 for
the Share Purchase is US$1,000,000 (the “2008 Outstanding Payment”).  The Buyer shall pay the 2008 Outstanding
Payment to the Sellers in the form of cash within five (5) business days
after the date of this Agreement.


 


2.                                       Shanghai Jnet hereby extends the maturity date of all of the Shanghai
Jnet Loans to the fifth anniversary date of this Agreement (the “Maturity
Date”).


 


3.                                       The Buyer has the option to pay to the Sellers an US dollar amount that
is equivalent to RMB 49,510,891 (the “Deemed Payment”) within five (5) years
after the date of this Agreement, subject to the final confirmation and
adjustment made by the auditor appointed by the Buyer.  The Deemed Payment can be made either wholly
or partially. If the Buyer pays a certain amount of the Deemed Payment to the
Sellers within the five year period, then within five (5) business days
after the receipt of such payment from the Buyer, Mei Yongkai and Lu Jun shall
repay the portion of the Shanghai Jnet Loans to Shanghai Jnet that is
equivalent to the amount of Deemed Payment received by the Sellers, applying
the middle exchange rate between US dollar and RMB promulgated by the Bank of
China on the date of receipt of the Deemed Payment.  If the Buyer elects not to pay the Deemed
Payment to the Sellers within the five year period, Shanghai Jnet may further
extend the Maturity Date of the Shanghai Jnet Loans.


 


4.                                       The parties acknowledge and confirm that the Paid Amount, the 2008 Outstanding
Payment and the Deemed Payment together constitute the full payment of the
Closing Payment and Second Payment under the SPSA, and represent 60% of the
Purchase Consideration contemplated in the SPSA.   The Sellers hereby waive the Third Payment
and Fourth Payment under the SPSA, representing 40% of the Purchase
Consideration in the SPSA.  The parties
hereby agree to re-calculate and re-arrange the remaining Purchase
Consideration payable by the Buyer as follows:


 


(1)                                  The Shareholders hereby covenant that the pre-tax operating earnings of
Shanghai Jnet (before transferring to ChinaCache Network Technology (Beijing)
Limited ,
the “WFOE”) in accordance with the Exclusive Business Cooperation Agreement dated January 10,
2008 between Shanghai Jnet and the WFOE) for
each year from 2010 to 2012 (the “Performance Year”) will be at least 


 


2

















 


RMB10,000,000 (the “Performance
Target”).  On the conditions of
achievement of the Performance Target, the Buyer shall pay to the Sellers
certain amount of remaining purchase consideration in the currency of US
dollars (the “Recalculated Remaining Purchase Consideration”) in each
Performance Year.  The Recalculated
Remaining Purchase Consideration shall be paid to the Sellers in cash and
through four installments in each Performance Year, with one installment of the
Recalculated Remaining Purchase Consideration be paid to the Sellers within
thirty (30) days after the end of each quarter based on the pre-tax operating
earnings of Shanghai Jnet (before transferring to the WFOE in accordance with
the Exclusive Business Cooperation Agreement dated January 10, 2008 between Shanghai Jnet and the WFOE) shown on the management report of
Shanghai Jnet for that quarter, subject to the confirmation and consent of the
Buyer.  If based on the annual audit
report of Shanghai Jnet, the Performance Target for a Performance Year is
achieved, then the final amount of the Recalculated Remaining Purchase
Consideration payable by the Buyer to the Sellers for that Performance Year
shall be a total of actual payments for all four installments; if based on the
annual audit report of Shanghai Jnet, the Performance Target for a Performance
Year is not achieved, then the final amount of the Recalculated Remaining
Purchase Consideration payable by the Buyer to the Sellers for that Performance
Year shall be the amount equals to aggregate amount of actual payments for all
four installments multiplied by the fraction, where the numerator is the actual
after-tax profit of Shanghai Jnet for such Performance Year and the denominator
is RMB10,000,000.


 


(2)                                  Once the annual audit report of Shanghai Jnet for a Performance Year is
issued, the final amount of the Recalculated Remaining Purchase Consideration
for that Performance Year (the “Final Amount”) shall be determined by
the Buyer in accordance with Section 4(1) within seven (7) days.  If the Final Amount is less than the amount
of Recalculated Remaining Purchase Consideration actually paid by the Buyer to
the Sellers through all four installments in that Performance Year, then the
Sellers shall return the difference within thirty (30) days after the date of
the annual audit report; if the Final Amount is more than the amount of
Recalculated Remaining Purchase Consideration actually paid by the Buyer to the
Sellers through all four installments in that Performance Year, then the Buyer
shall pay to the Seller the difference within thirty (30) days after the date
of the annual audit report.


 


(3)                              Foreign Exchange:  The Recalculated Remainig Purchase
Consideration shall be paid within thirty (30) days after the end of each
quarter by using the middle exchange rate between US dollar and RMB promulgated
by the Bank of China on the date of remittance of the fund.  The payment of the difference mentioned in Section 4(2) shall
be made by using the middle


 


3

















 


exchange rate between US
dollar and RMB promulgated by the Bank of China on the date of the audit
report.


 


5.                                       Shanghai Jnet hereby covenants that it (a) will not request the
WFOE to return RMB8,000,000 already paid by it to the WFOE under Exclusive
Co-operation Agreement  signed on January 10, 2008, and (b) waives
and therefore will not claim the bandwidth purchase fees of RMB10,015,804
payable by Beijing Blue I.T. Technologies Co., Ltd.  under the Bandwidth Purchase Agreements listed
in Appendix II hereto.


 


6.                                       All of the payment under this Agreement shall be deemed as fully and
duly paid to the Sellers when remitted to the bank account of Sundream Holdings
Limited.


 


7.                                       Each of the parties hereby
confirms that it does not have any claim against the other
party in respect of any matter arising out of or in connection with the SPSA
and Deed of Adherence dated December 20, 2007, and each party hereby agrees to waive
and discharge the other parties from and in respect of all and any liabilities arising out of or in connection
with any antecedent breach in respect of the SPSA and Deed of
Adherence.  In
particular, Sundream Holdings Limited, Smart Asia Holdings Limited, Shanghai
Jnet, the Shareholders and JNET Holdings Ltd. hereby confirm that they have no
claim against the Buyer under the SPSA.


 


8.                                       The parties further agree that, if the Buyer fails to consummate a Qualified IPO with an initial offering
price of more than US$1.02952 (subject to adjustment for share splits, share dividends, combinations, recapitalizations and
similar events; or in the event of share splits, share dividends, combinations,
recapitalizations and similar events, the price shall be adjusted accordingly), then upon the request by a Seller, the Buyer shall have the
obligation to issue additional Ordinary Shares to such Seller to reflect the
difference between the actual initial offering price and US$1.02952. The number
of additional Ordinary Shares shall be calculated based upon the following
formula:


 


Additional Ordinary
Shares = (US$1.02952 - actual initial offering price) X (number of Ordinary
Shares issued to such Seller) / actual initial offering price


 


9.                                       In accordance with the Third Amended Memorandum and Articles of
Association of the Buyer, “Qualified
IPO” shall mean a public offering of ordinary shares of the Buyer (or securities
representing such ordinary shares) registered under the Securities Act
of the United States and with gross proceeds to the Buyer of at least US$50 million and an implied, pre-money valuation
of US$300 million or more, or in a similar public offering of ordinary shares in a
jurisdiction and on an internationally recognized securities exchange or
inter-dealer quotation system outside of the United States, including The Stock
Exchange of Hong Kong 


 


4

















 


Limited, provided such
public offering is equivalent to the aforementioned in terms of offering
proceeds and regulatory approval, and is approved by the holders of at least
fifty-one percent (51%) of the then outstanding preferred shares of the Buyer.


 


10.                                 This Agreement shall supersede all the clauses related to Purchase
Consideration in the SPSA.  All other
terms and conditions of the SPSA shall remain unchanged.  All payments under this Agreement shall only
be made by the Buyer on the condition that the board of directors of the Buyer
has duly approved such payment(s).


 


11.                                 This Agreement
shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to its conflict of laws.  Any dispute, controversy or
claim arising out of, relating to, or in connection with this Agreement, or the
breach, termination or validity hereof, shall be finally settled exclusively by
arbitration.  The arbitration shall be
conducted under the auspice of the Hong Kong
International Arbitration Center in accordance with the
UNCITRAL Arbitration Rules in effect at the time of the arbitration.  Section 9.11 of the SPSA
(Arbitration) shall apply to this Agreement.


 


5

















 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.


 


 


	
   

  	
  CHINACACHE
  INTERNATIONAL HOLDINGS LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Song Wang

  
	
   

  	
  Print Name: Song Wang

  
	
   

  	
  Title: Director

  



 


Supplementary Agreement to Share Purchase
and Sale Agreement


 

















 


IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed as of the date first above
written.


 


 


	
   

  	
  SUNDREAM HOLDINGS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  MEI Yongkai

  
	
   

  	
  Print Name: MEI Yongkai 

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SMART ASIA HOLDINGS LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  MEI Xiurong

  
	
   

  	
  Print Name: MEI Xiurong 

  
	
   

  	
  Title: Director

  



 


Supplementary Agreement to Share Purchase
and Sale Agreement


 

















 


IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed as of the date first above
written.


 


 


	
   

  	
  CHEN PEIDI 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  CHEN PEIDI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEI YONGKAI 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  MEI YONGKAI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LU JUN 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  LU JUN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAN DANHUA 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  HAN DANHUA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ZHANG SHIJIE 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  ZHANG SHIJIE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MEI XIURONG 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  MEI XIURONG

  



 


Supplementary
Agreement to Share Purchase and Sale Agreement


 

















 


IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed as of the date first above
written.


 


 


	
   

  	
  JNET HOLDINGS LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  MEI Yongkai

  
	
   

  	
  Print Name: MEI Yongkai 

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SHANGHAI JNET TELCOM CO., LTD.

  
	
   

  	
  

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  CHEN Peidi

  
	
   

  	
  Print Name: CHEN Peidi 

  
	
   

  	
  Title: Legal Representative

  



 


Supplementary Agreement to Share Purchase and Sale
Agreement


 














 


Appendix
I


 


	
  No.

  	
   

  	
  Paid Amount

  	
   

  	
  Date

  	
   

  	
  Method

  	
   

  
	
  Down
  Payment

  	
   

  	
  US$

  	
  400,000

  	
   

  	
  Dec 27, 07

  	
   

  	
  Bank wire to Sundream Holdings

  	
   

  
	
  First
  Installment

  	
   

  	
  US$

  	
  1,941,333

  	
   

  	
  Jan 26, 08

  	
   

  	
  Bank wire to Sundream Holdings

  	
   

  
	
   

  	
   

  	
  US$

  	
  112,000

  	
   

  	
  Jan 26, 08

  	
   

  	
  Bank wire to SmartAsia Holdings

  	
   

  
	
  Second
  Installment

  	
   

  	
  US$

  	
  2,500,000

  	
   

  	
  May 28, 08

  	
   

  	
  Bank wire to Sundream Holdings

  	
   

  
	
   

  	
   

  	
  US$

  	
  370,000

  	
   

  	
  May 28, 08

  	
   

  	
  Bank wire to SmartAsia Holdings

  	
   

  
	
   

  	
   

  	
  US$

  	
  500,000

  	
   

  	
  Aug 5, 08

  	
   

  	
  Bank wire to Sundream Holdings

  	
   

  
	
  Total

  	
   

  	
  US$

  	
  5,823,333

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  No.

  	
   

  	
  Buyer Shares

  Issued

  	
   

  	
  Date

  	
   

  	
  Method

  	
   

  
	
  First
  Installment

  	
   

  	
  2,168,000

  	
   

  	
  Jun 11, 08

  	
   

  	
  Issue of Ordinary Shares to Sundream Holdings

  	
   

  
	
   

  	
   

  	
  240,889

  	
   

  	
  Jun 11, 08

  	
   

  	
  Issue of Ordinary Shares to SmartAsia Holdings

  	
   

  
	
  Second
  Installment

  	
   

  	
  2,842,258

  	
   

  	
  Jun 11, 08

  	
   

  	
  Issue of Ordinary Shares to Sundream Holdings

  	
   

  
	
   

  	
   

  	
  315,806

  	
   

  	
  Jun 11, 08

  	
   

  	
  Issue of Ordinary Shares to SmartAsia Holdings

  	
   

  
	
  Total

  	
   

  	
  5,566,955

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Appendix
II


 


	
  Contract No.

  	
   

  	
  Terms

  	
   

  	
  Total Contract

  Amount

  	
   

  	
  Monthly

  Fee

  	
   

  	
  Unpaid Amount

  by Dec 31 2008

  	
   

  
	
  SHCHN0605G

  	
   

  	
  07.12.10-08.12.09

  	
   

  	
  666,000

  	
   

  	
  53,000

  	
   

  	
  416,417

  	
   

  
	
  SHCHN0611A/0811A

  	
   

  	
  06.11.10-07.11.09

  	
   

  	
  3,000,000

  	
   

  	
  250,000

  	
   

  	
  3,677,419

  	
   

  
	
  SHCHN0705A/0805A

  	
   

  	
  07.05.20-08.05.19

  	
   

  	
  1,330,000

  	
   

  	
  110,833

  	
   

  	
  1,635,000

  	
   

  
	
  SHCHN0708B/0808B

  	
   

  	
  07.08.15-08.08.14

  	
   

  	
  2,496,000

  	
   

  	
  208,000

  	
   

  	
  3,016,000.00

  	
   

  
	
  SHCHN0802A

  	
   

  	
  07.12.10-08.12.09

  	
   

  	
  1,200,000

  	
   

  	
  100,000

  	
   

  	
  1,270,968

  	
   

  
	
  Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10,015,804