Document:

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

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  10,015,804Exhibit 10.28

 

Loan
Agreement

 

This
Loan Agreement (this “Agreement”) is made and entered into by and between the
Parties below as of January 10, 2008 in Beijing, People’s Republic of China (the “PRC” or “China”):

 

(1)     ChinaCache
Network Technology (Beijing) Co., Ltd.  (“Lender”), a limited liability company organized 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;

 

(2)     Huiling Ying (“Borrower”), a citizen of the PRC with Chinese
Identification No.:            .

 

Each of the Lender and the Borrower shall be hereinafter
referred to as a “Party” respectively, and as the “Parties” collectively.

 

Whereas:

 

1.                             Borrower intends to acquire a limited liability company— Shanghai Jnet Telcom Co., Ltd. (“Domestic Company”) in Shanghai,
China.  The proposed registered capital
of the Domestic Company is RMB1,000,000, among which, Borrower intends to
purchase 50% of the equity interest of the Domestic Company (“Borrower Equity Interest”) with RMB500,000;

 

2.                             Lender intends to provide Borrower with a loan to
be used for the purposes set forth under this Agreement.

 

1.                   Loan

 

1.1                      In accordance with the terms and conditions of this Agreement, Lender
agrees to provide a loan in USD equivalent to the amount of RMB 500,000 (the “Loan”)
to Borrower. The term of the Loan
shall be ten years
from the date of this Agreement, which may be extended upon mutual written
consent of the Parties.  During the term of the Loan or the extended term of the Loan, Borrower shall immediately repay
the full amount of the Loan  in the event any one or more of the following  circumstances occur:

 

30
days elapse after  Borrower receives a written notice from Lender requesting repayment of the Loan;

 

Borrower
ceases (for any reason) to be an employee of Lender or its affiliates;

 

Borrower
engages in criminal act or is involved in criminal activities;

 

1

 

According
to the applicable laws of China, foreign investors are permitted to invest in
the value-added telecommunication services business in China with a controlling
stake or in the form of wholly-foreign-owned enterprises, the relevant competent
authorities of China begin to approve such investments, and Lender exercises
the exclusive option under Section 4.1.1 and 4.2.5 of the Exclusive Option
Agreement (the “Exclusive Option Agreement”) described in this Agreement.

 

Lender agrees to remit such amount of the Loan to the
account designated by Borrower within 20 days after receiving a written
notification from the Borrower regarding the same, provided that all the conditions
precedent in Section 2 are fulfilled. Borrower shall provide Lender with a
written receipt for the Loan on the date of receiving the Loan. The Loan
provided by Lender under this Agreement shall inure to Borrower’s benefit only
and not to Borrower’s successors or assigns.

 

Borrower agrees to accept the aforementioned Loan
provided by Lender, and hereby agrees and warrants using the Loan to purchase
the registered capital of the Domestic Company in Shanghai, China. Borrower
will thereby become a shareholder to the Domestic Company holding 50% of the
latter’s equity interest (“Borrower Equity Interest”).  Borrower agree to provide a full set of the
Domestic Company’s registration documents (copies), business license and
articles of association within 60 days following the execution of this
Agreement. Without Lender’s prior written consent, Borrower shall not use the
Loan for any purpose other than as set forth herein.

 

Lender and Borrower hereby agree and acknowledge that
Borrower’s method of repayment shall be at the sole discretion of Lender, and
may at Lender’s option take the form of Borrower’s transferring the Borrower
Equity Interest in whole to Lender or Lender’s designated persons (legal or
natural persons) pursuant to the Lender’s exercise of its right to acquire the
Borrower Equity Interest under the Exclusive Option Agreement executed by
Lender, Borrower and Domestic Company.

 

Lender and Borrower hereby agree and acknowledge that
any proceeds from the transfer of the Borrower Equity Interest (to the extent
permissible) shall be used to repay the Loan to Lender, in accordance with this
Agreement and in the manner designated by Lender.

 

Lender and Borrower hereby agree and acknowledge that to
the extent permitted by applicable laws, Lender shall have the right but not
the obligation to purchase or designate other persons (legal or natural
persons) to purchase Borrower Equity Interest in part or in whole at any time,
at the price stipulated in the Exclusive Option Agreement.

 

Borrower also undertakes to execute an irrevocable Power
of Attorney (the “Power of Attorney”, please refer to Sectin 4.2.4), which
authorizes a legal or natural person designated by Lender to exercise all of
Borrower’s rights as a shareholder of Domestic Company.

 

2

 

2.                   Conditions Precedent

 

The obligation of Lender to provide the Loan to Borrower
contemplated in Section 1.1 shall be subject to the satisfaction of the
following conditions, unless waived in writing by Lender.

 

2.1                      Lender receives the written notification for drawdown
under the Loan sent by Borrower according to Section 1.2.

 

2.2                      All the representations and warranties by Borrower
in Section 3.2 are true, complete, correct and not misleading.

 

2.3                      Borrower has not violated the covenants in Section 4
of this Agreement, and no event which may affect Borrower’s performance of its
obligations under this Agreement has occurred or is expected to occur.

 

3.                   Representations and Warranties

 

3.1                      Between the date of this Agreement and the date of
termination of this Agreement, Lender hereby makes the following
representations and warranties to Borrower:

 

Lender is a corporation duly organized and legally
existing in accordance with the laws of the PRC;

 

Lender
has the legal capacity to execute and perform this Agreement. The execution and
performance by Lender of this Agreement is consistent with Lender’s scope of
business and the provisions of Lender’s corporate bylaws and other
organizational documents, and Lender has obtained all necessary and proper
approvals and authorizations for the execution and performance of this
Agreement; and

 

This Agreement constitutes Lender’s legal, valid and
binding obligations enforceable in accordance with its terms.

 

Between the date of this Agreement and the date of
termination of this Agreement, Borrower hereby makes the following
representations and warranties:

 

Borrower
has the legal capacity to execute and perform this Agreement. Borrower has
obtained all necessary and proper approvals and authorizations for the
execution and performance of this Agreement;

 

This
Agreement constitutes Borrower’s legal, valid and binding obligations enforceable
in accordance with its terms; and

 

3

 

There
are no disputes, litigations, arbitrations, administrative proceedings or any
other legal proceedings relating to Borrower, nor are there any potential disputes,
litigations, arbitrations, administrative proceedings or any other legal
proceedings relating to Borrower.

 

4.                   Borrower’s Covenants

 

As and when he becomes, and for so long as he remains a
shareholder of Domestic Company, Borrower covenants irrevocably that during the
term of this Agreement, Borrower shall cause Domestic Company:

 

to execute an Exclusive Option Agreement with Borrower
and Lender, according to which Borrower will irrevocably grant an exclusive
option to Lender to purchase all of the Borrower Equity Interest; to execute an
Exclusive Business Cooperation Agreement with Lender (the “Exclusive Business
Cooperation Agreement”), according to which, Lender will provide technical
service and business consultation service to Domestic Company as the exclusive
service provider; to execute the above Exclusive Option Agreement and Exclusive
Business Cooperation Agreement as soon as possible after the updated business
license of Domestic Company is issued, and to obtain all relevant governmental
approvals, registrations or filings (if necessary);

 

to strictly abide by the provisions of the Exclusive
Option Agreement and the Business Agreements, and to refrain from any
action/omission that may affect the effectiveness and enforceability of the
Exclusive Option Agreement and the Exclusive Business Cooperation Agreement;

 

at the request of Lender (or a party designated by
Lender), to execute contracts/agreements on business cooperation with Lender
(or a party designated by Lender), and to strictly abide by such
contracts/agreements;

 

to provide Lender with all of the information on
Borrower Company’s business operations and financial condition at Lender’s
request;

 

to immediately notify Lender of the occurrence or
possible occurrence of any litigation, arbitration or administrative
proceedings relating to Borrower Company’s assets, business or income;

 

at the request of Lender, to appoint any persons
designated by Lender as directors of Borrower Company;

 

without the prior written consent of Lender, not to
supplement, change, or amend its articles of association in any manner,
increase 

 

4

 

or decreases its registered capital or change its share
capital structure in any manner.

 

to maintain its corporate existence in accordance with
good financial and commercial standars and practice, and diligently and
effectively manage its business and handle its matters;

 

without the prior written consent of Lender, not sell,
transfer, mortgage or dispose of in any other manner any legal or beneficial
interests in its assets, business or incomes, or allow establishment of any
other collateral interests thereon;

 

without the prior written consent of Lender, not to incur,
inherit, guarantee or allow the existence of any debts, except for (i) those
incurred in the ordinary or daily course of business other than by loans, and (ii) those
disclosed to Lender and to which Lender has consented to in writing;

 

to operate all of its business in ordinary course of
business to maintain its asset value;

 

without the prior written consent of Lender, not to
enter into any material contracts (for the purpose of this paragraph, if the
value of a contract exceeds RMB100,000, such contracts shall be deemed a
material contract), except for those entered into in the ordinary course of
business;

 

without the prior written consent of Lender, not to
provide loans or credit to any persons;

 

to purchase and maintain insurance with insurance company
accepted by Lender, the amount and type of such insurance shall be the same or
have the same level with those purchased by companies which operate similar business
and own similar property or assets in the same district;

 

without the prior written consent of Lender, not to
consolidate or merge with any entities, or purchase or invest in any entities;

 

to execute all necessary or appropriate documents, adopt
all necessary or appropriate actions and bring all necessary or appropriate
claims or make all necessary or appropriate defends to all claims so as to maintain
ownership to all of its assets;

 

without the prior written consent of Lender, not to
issue dividends in any forms to the shareholders, however, upon request by
Lender, to distribut all or part of its distributable profits to the
shareholders.

 

Borrower covenants that during the term of this
Agreement, he shall:

 

5

 

To compelte the acquisition of the Domestic Company in
accordance with the PRC laws within 60 days after the execution of this
Agreement;

 

To make all contributions corresponding to the Borrower
Equity Interest in accordance with relevant laws, and provide Lender with a
capital verification report regarding such contribution issued by qualified
accounting firm;

 

To use best efforts to cause Domestic Company to engage
in relevant value-added telecommunication service business, the detaild
business scope shall be subject to its business license; Borrower shall cause
Domestic Company to obtain all governmental approvals, authorizations,
licenses, registrations and filings necessary for engagement in the business
stated in its business license and to own its assets, and provide relevant
governmental approval and filing documents to Lender for its verification;

 

to execute an irrevocable Power of Attorney, which
authorizes Lender or Lender’s designated person (legal or natural person) to
exercise all of Borrower’s rights as a shareholder in Domestic Company, and
refrain from exercising such shareholder rights except for those otherwise
specified in this Agreement, the Share Pledge Agreement (defined as follows) or
by Lender.

 

to execute an Exclusive Option Agreement with Lender and
Domestic Company, under which Borrower shall irrevocably grant Lender an
exclusive option to purchase all of the Borrower Equity Interest;

 

to execute a Share Pledge Agreement with Lender and
Domestic Company (“Share Pledge Agreement”), under which Borrower agrees to
pledge all of Borrower Equity Interest to Lender;

 

To execute the above power of attorney, Exclusive Option
Agreement and Share Pledge Agreement as soon as possible after issuance of the
business license of Domestic Company, and obtain all relevant governmental
approvals, registrations or filings (if necessary);

 

To strictly comply with this Agreement, the power of attorney,
Share Pledge Agreement and Exclusive Option Agreement, and perform its
obligations under such documents, and not no commit any actions/inactions that
may affect the validity and enforceability of such documents;

 

not to sell, transfer, mortgage or dispose of in any
other manner the legal or beneficial interest in Borrower Equity Interest, or
allow the encumbrance thereon of any security interest or the encumbrance,
except in accordance with the Share Pledge Agreement;

 

6

 

To cause any shareholders’ meeting and/or the board of
directors of Domestic Company not to approve the sale, transfer, mortgage or
disposition in any other manner of any legal or beneficial interest in Borrower
Equity Interest, or allow the encumbrance thereon of any security interest,
except to Lender or Lender’s designated person;

 

To cause any shareholders’ meeting and/or the board of
directors of the Borrower Company not to approve the merger or consolidation of
Borrower Company with any person, or its acquisition of or investment in any
person, without the prior written consent of Lender;

 

To immediately notify Lender of the occurrence or
possible occurrence of any litigation, arbitration or administrative
proceedings relating to Borrower Equity Interest;

 

to the extent necessary to maintain his ownership of the
Borrower Equity Interest, to execute all necessary or appropriate documents,
take all necessary or appropriate actions and file all necessary or appropriate
complaints or raise necessary and appropriate defense against all claims;

 

without the prior written consent of Lender, to refrain
from any action / omission that may have a material impact on the assets,
business and liabilities of Borrower Company;

 

To appoint any designee of Lender as director of
Borrower Company, at the request of Lender;

 

to the extent permitted by the laws of China, at the
request of Lender at any time, to promptly and unconditionally transfer all of
Borrower Equity Interest to Lender or Lender’s designated representative(s) at
any time, and cause the other shareholders of Domestic Company to waive their
right of first refusal with respect to the share transfer described in this
Section;

 

to the extent permitted by the laws of China, at the
request of Lender at any time, to cause the other shareholders of Domestic
Company to promptly and unconditionally transfer all of their equity interests
to Lender or Lender’s designated representative(s) at any time, and
Borrower hereby waives his right of first refusal (if any) with respect to the
share transfer described in this Section;

 

in the event that Lender purchases Borrower Equity
Interest from Borrower in accordance with the provisions of the Exclusive
Option Agreement, use such purchase price obtained thereby to repay the Loan to
Lender; and

 

7

 

without the prior written consent of Lender, not to
supplement, change, or amend its articles of association in any manner,
increase or decreases its registered capital or change its share capital
structure in any manner.

 

5.                   Liability for Default

 

In
the event either Party breaches this Agreement or otherwise causes the
non-performance of this Agreement in part or in whole, the Party shall be
liable for such breach and shall compensate all damages (including litigation
and attorneys fees) resulting therefrom. In the event that both Parties breach
this Agreement, each Party shall be liable for its respective breach.

 

In
the event that Borrower fails to perform the repayment obligations set forth in
this Agreement, Borrower shall pay overdue interest of 0.01% per day for the
outstanding payment, until the day Borrower repays the full principal of the
Loan, overdue interests and other payable amounts.

 

6.                   Notices

 

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:

 

Notices given by personal delivery, by courier
service or by registered mail, postage prepaid, shall be deemed effectively
given on the date of delivery.

 

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).

 

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

 

Lender:                          ChinaCache
Network Technology (Beijing) Co., Ltd.

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

Facsimile:                                        + 8610-6437 4251

 

Borrower:   Huiling
Ying

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

Facsimile:                                        + 8610-6437 4251

 

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

 

8

 

7.                   Confidentiality

 

The Parties acknowledge that any oral or written
information exchanged among them with respect to this Agreement, the contents
of the Agreement and the preparation or performance thereof is confidential
information. The Parties shall maintain the confidentiality of all such
information, and without the written consent of other Party, either Party shall
not disclose any relevant information to any third party, 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 orders by governmental
authorities or court; or (c) information required to be disclosed by any
Party to its shareholders, investors, legal counsel or financial advisor regarding
the transaction contemplated hereunder, and such shareholders, investors, 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.

 

8.                   Governing Law and Resolution of Disputes

 

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

 

8.2            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 Party 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.

 

8.3            Upon the occurrence of any disputes arising from
the construction and performance of this Agreement or during the pending
arbitration of any dispute, except for the matters under dispute, the Parties
to this Agreement shall continue to exercise their respective rights under this
Agreement and perform their respective obligations under this Agreement.

 

9.                  Miscellaneous

 

9.1            This Agreement shall become effective on the date
thereof, and shall expire upon the date of full performance by the Parties of
their respective obligations under this Agreement.

 

9

 

9.2            This Agreement shall be written
in both Chinese and English language in
two
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.

 

9.3            This
Agreement may be amended or supplemented through written agreement by and
between Lender and Borrower. Such written amendment agreement and/or
supplementary agreement executed by and between Lender and Borrower are an
integral part of this Agreement, and shall have the same legal validity as this
Agreement.

 

9.4            In the event that one or several of the provisions
of this Agreement are found to be invalid, illegal or unenforceable I n 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 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.

 

9.5            The attachments (if any) to this Agreement shall
be an integral part of this Agreement and shall have the same legal validity as
this Agreement.

 

10

 

IN WITNESS THEREOF, the parties have caused their authorized
representatives to sign this Loan Agreement on the date first above written.

 

 

Lender:   ChinaCache Network Technology (Beijing) Co., Ltd.

 

 

	
  By:

  	
      /s/ Song Wang

  	
   

  
	
  Name: Song Wang

  	
   

  
	
  Title: Legal Representative

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Borrower:
  Huiling
  Ying

  	
   

  
	
   

  	
   

  
	
  By:

  	
        /s/
  Huiling Ying 

  	
   

  

 

11

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