Document:

Exhibit 10.4

 

 

Shareholder Voting Rights Proxy Agreement

 

Concerning

 

Beijing Wanguo Chang’an Science & Technology Co., Ltd.

 

 

Between

 

Shanghai Free Trade Zone GDS Management Co., Ltd.

 

Beijing Wanguo Chang’an Science & Technology Co., Ltd.

 

and

 

William Wei Huang

 

Qiuping Huang

 

Date: April 13, 2016

 

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Shareholder Voting Rights Proxy Agreement

 

This Shareholder Rights Voting Proxy Agreement (“this Agreement”) is entered into on April 13, 2016 in the People’s Republic of China (“China”) by and between:

 

Shanghai Free Trade Zone GDS Management Co., Ltd. (hereinafter referred to as the “WFOE”)

 

Registered Address: Room 4056, Floor 4, 173 Meisheng Road, Shanghai Pilot Free Trade Zone, China

 

Legal Representative: William Wei Huang

 

Beijing GDS Chang’an Science & Technology Co., Ltd. (hereinafter referred to as “GDS Beijing”)

 

Registered Address: Room A-0155, Floor 2, Building 3, Compound 30, Shixing Avenue, Shijingshan Park, Zhongguancun Science Park, Beijing

 

Legal Representative: William Wei Huang

 

William Wei Huang

 

ID Card No.: 31010719671101125x

 

Qiuping Huang (referred to collectively with “William Wei Huang” as “Shareholders”)

 

ID Card No.: 31010719611116122x

 

(In this Agreement, the above parties are referred to individually as “a Party” and collectively as “the Parties”.)

 

Whereas:

 

The Shareholders are existing equity interest holders of GDS Beijing and collectively holding all equity shares of GDS Beijing.

 

The Shareholders intend to appoint the WFOE as their voting proxy for exercising their voting right in GDS Beijing, and the WFOE agrees to accept the appointment and designate a person to exercise the voting right.

 

Now, therefore, the Parties reach an agreement as follows through amicable negotiation:

 

Article 1 Voting Proxy

 

1.1                 The Shareholders hereby irrevocably undertake that they will, upon the WFOE’s written notification during the term of this Agreement and subject to Article 1.2 of this Agreement,

 

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sign a Power of Attorney to authorize              (ID Card No.:            ) to exercise the following rights of them as shareholders of GDS Beijing in line with the articles of incorporation of GDS Beijing in force at the time:

 

(1)                     Right to attend shareholders meetings as the proxy of the Shareholders;

 

(2)                     Right to make decisions on issues to be deliberated by the Shareholders (including but not limited to designation and election of directors, general manager and other senior management of GDS Beijing);

 

(3)                     Any voting rights of the Shareholders as prescribed by law;

 

(4)                     Other voting rights of shareholders under the articles of incorporation of GDS Beijing (including any other voting rights of shareholders under revised and restated articles of incorporation);

 

(5)                     Right to endorse any meeting minutes and resolutions of shareholders meetings or other legal documents; and

 

(6)                     Right to submit documents to relevant corporate registration agency for filing and archiving as the proxy of the Shareholders.

 

GDS Beijing hereby irrevocably undertakes it will, upon the WFOE’s written notification during the term of this Agreement and subject to Article 1.2 of this Agreement, sign a Power of Attorney to authorize              (ID Card No.:            , together with the authorized person in the above paragraph, hereinafter referred to as the “Agent”) to exercise the following rights (together with the rights in the above paragraph hereinafter referred to as the “Agent Rights”) of it as shareholder of its subsidiaries in line with the articles of incorporation of its subsidiaries in force at the time:

 

(1)                     Represent GDS Beijing to attend its subsidiaries’ shareholders meetings;

 

(2)                     Represent GDS Beijing to make decisions on issues to be deliberated by the shareholders of its subsidiaries (including but not limited to designation and election of directors, general manager and other senior management of GDS Beijing’s subsidiaries);

 

(3)                     Any voting rights of GDS Beijing as its subsidiaries’ shareholder as prescribed by law;

 

(4)                     Other voting rights of GDS Beijing under the articles of incorporation of its subsidiaries (including any other voting rights of GDS Beijing under revised and restated articles of incorporation);

 

(5)                     Right to endorse any meeting minutes and resolutions of shareholders meetings where GDS Beijing acts as shareholder of its subsidiaries or other relevant legal documents; and

 

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(6)                     Right to submit documents to relevant corporate registration agency for filing and archiving as the proxy of GDS Beijing.

 

1.2                 The above-mentioned authorization and assignment shall only be effective on the condition that the Agent is Chinese citizen and the WFOE agrees to such authorization and assignment. When and only when the WFOE issues a written notice to the Shareholders requesting the dismissal and replacement of the Agent Shall the Shareholders immediately revokes the assignment of the current Agent under this Agreement and entrust another Chinese citizen designated by the WFOE at the time to exercise Agent Rights in accordance with provisions of this Agreement; the new authorization shall replace the original authorization immediately. Under no other circumstances shall the Shareholders revoke the authorization to the Agent.

 

1.4                 The WFOE shall ensure the Agent fulfills his/her proxy duties within the scope of authorization under this Agreement with due diligence and caution; the Shareholders shall acknowledge and be held liable for any legal consequence arising from the Agent’s exercise of the above-mentioned rights.

 

1.5                 The Shareholders hereby confirm that the Agent does not have to consult the Shareholders before making decisions during his/her exercise of the above-mentioned Agent Rights. The WFOE shall nonetheless ensure that the Agent will inform the Shareholders of any such decision in a timely manner once the decision is made.

 

Article 2 Right to Know

 

The Agent designated in accordance with Article 1.1 of this Agreement shall, for the purpose of exercising the Agent Rights under this Agreement, have the right to access relevant data (including but not limited to any account book, statement, contract, and internal communication that is related to their financial, business and operational activities, all meeting minutes of the board of directors, and other documents) of GDS Beijing in order to get necessary information of GDS Beijing on their operation, business , clients, finance, and employees, and GDS Beijing shall give full cooperation with respect to that.

 

Article 3 Exercise of Agent rights

 

3.1                 The Shareholders shall give full assistance to facilitate the Agent’s exercise of the Agent Rights, including prompt execution of the decisions made by the Agent as the proxy of GDS Beijing and other pertinent legal documents when necessary (e.g. documents required to be submitted to government agencies for examination and approval, registration, and/or filing).

 

3.2                 If, at any time during the term of this Agreement, the conferral or exercise of the Agent Rights under this Agreement is unenforceable for any reason (except for breach of the agreement by the Shareholders or GDS Beijing), the Parties shall immediately look for an alternative scheme most similar to the unenforceable one, and sign a supplementary agreement to make modifications or adjustments to the provisions of this Agreement when

 

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necessary, in order to ensure the continuous fulfillment of the purpose of this Agreement.

 

Article 4 Exemption and compensation

 

4.1                 The Parties acknowledge that the WFOE shall not be requested to be liable for or compensate (monetary or otherwise) other Parties or any third party due to the exercise of the Agent Rights by Agent designated by the WFOE under this Agreement.

 

4.2                 GDS Beijing and the Shareholders agree to indemnify the WFOE and the Agent and hold them harmless against all losses incurred or likely to incur due to the exercise of the Agent Rights by the Agent designated by the WFOE, including but not limited to any loss resulting from any litigation, demand, arbitration or claim initiated or raised by any third party against it or from administrative investigation or penalty of governmental authorities. However, losses incurred due to willful misconduct or gross negligence of the WFOE or the Agent shall not be indemnified.

 

Article 5 Representations and Warranties

 

5.1                 The Shareholders hereby represent and warrant that:

 

5.1.1         They are Chinese citizens with full capacity of action, full and independent legal status, and legal capacity, and are capable acting independently as a subject of proceedings.

 

5.1.2         They have full power and authority to sign and deliver this Agreement and all other documents to be signed by them for the transaction referred to in this Agreement and they have full power and authority to complete the transaction referred to in this Agreement.

 

5.1.3         This Agreement is executed and delivered by the shareholders lawfully and properly ; this Agreement constitutes the legal and binding obligations on them and is enforceable on them in accordance with the terms and conditions hereof.

 

5.1.4         They are the enrolled shareholders of GDS Beijing en bloc as of the effective date of this Agreement, and except the rights created by this Agreement, the Equity Pledge Agreement between them and the WFOE, and the Exclusive Call Option Agreement between them and GDS Beijing and the WFOE, there exists no third party right on the Agent Rights. Pursuant to this Agreement, the Agent may fully and sufficiently exercise the Agent Rights in accordance with the effective articles of incorporation of GDS Beijing.

 

5.2                 The WFOE and GDS Beijing hereby respectively represent and warrant that:

 

5.2.1         It is a limited liability company duly incorporated and validly existing under the laws

 

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of the People’s Republic of China as an independent judicial person and with complete, independent legal status and legal competence to sign, deliver and perform this Agreement, as an independent subject of proceedings.

 

5.2.2         It is vested with full power and authority to complete the transaction referred to in this Agreement and the signing of all other documents related to the transaction referred to in this Agreement.

 

5.3                 GDS Beijing further represents and warranties that the Shareholders are the enrolled shareholders of GDS Beijing en bloc on the effective date of this Agreement. Pursuant to this Agreement, the Agent may fully and sufficiently exercise the Agent Rights in accordance with the effective articles of incorporation of GDS Beijing

 

Article 6 Term of Agreement

 

6.1                 This Agreement takes effect as of the date of due execution of all the parties hereto, unless terminated in advance by written agreement between all parties or in accordance with the stipulations in Article 8.1 of this Agreement.

 

6.2                 If any Shareholder transfers his/her equity interest in the GDS Beijing with advance consent of the WFOE, he/sher will cease to be a party of this Agreement, while the obligations and commitments of other parties shall not be negatively affected.

 

Article 7 Notice

 

7.1                 All notices or other correspondences between the Parties in connection with the performance of the rights and obligations under this Agreement shall be in writing and be delivered in person, by registered mail, postage prepaid mail, recognized express mail, facsimile to the party concerned.

 

7.2                 If any of such notices or other correspondences is transmitted by facsimile or telex , it shall be treated as delivered immediately upon transmission; if delivered in person, it shall be treated as delivered at the time of delivery; if posted by mail, it shall be deemed delivered five (5) days after posting.

 

Article 8 Breach of Agreement

 

8.1                 The Parties agree and acknowledge that, any substantial violation of any provision under this Agreement, or substantially non-performance of this Agreement by a Party (the “Breaching Party”) constitutes a breach of the Agreement (“Breach of Agreement”). Any of the non-breaching parties (the “Non-breaching Parties”) shall be entitled to require the Breaching Party to correct or take remedial measures within a reasonable time limit. Where the Breaching Party does not take any remedy measures in a reasonable time limit by the Non-breaching Party or within 10 days after the written notice of the Non-breaching Party,

 

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if the Breaching Party is any of the Shareholders or GDS Beijing, then the Non-breaching Party has the right to take any of the following measures at its discretion: (1) terminate this Agreement and require full compensation from the Breaching Party; or (2) require the compulsory performance of the obligations of and full compensation from the Breaching Party under this Agreement; if the Breaching Party is the WFOE, then the Non-breaching Party has the right to require the compulsory performance of the obligations of and full compensation from the Breaching Party under this Agreement .

 

8.2                 The Parties agree and acknowledge that the Shareholders or GDS Beijing shall under no circumstances prematurely terminate this Agreement for whatever reasons, unless otherwise specified in this Agreement or required by law.

 

8.3                 Notwithstanding any other provisions herein, the effect of this Article shall survive the suspension or termination of this Agreement.

 

Article 9 Miscellaneous

 

9.1                 This Agreement is made in quadruplicate (4 copies), with each party holding a copy.

 

9.2                 The conclusion, validity, performance, amendment, interpretation and termination of this Agreement are governed by the laws of the People’s Republic of China.

 

9.3                 The Parties shall strive to settle any dispute, conflicts, or compensation claims arising from the interpretation or performance (including any issue relating to the existence, validity and termination) in connection with this Agreement through amicable negotiation. If the discrepancies cannot be solved by negotiations within thirty (30) days, they should be submitted to Beijing Arbitration Commission for arbitration in accordance with the commission’s arbitration rules in Beijing. The decision of the arbitration tribunal shall be final and binding upon the Parties. After the decision takes effect, any Party shall have the right to submit an application to a court with jurisdiction for enforcement of the arbitration decision. A Party to the arbitration proceeding may move the court with jurisdiction for a provisional remedy, such as announcing its judgment or order the seizure or freeze of the Breaching party’s properties or equity shares.

 

9.4                 Any right, power or remedy granted to a Party by one term of this Agreement does not exclude the Party from any right, power or remedy granted by other terms or laws and regulations; the exercise of any right, power or remedy by a Party shall not preclude the Party’s exercise of its other rights, powers or remedies.

 

9.5                 No failure or delay by any Party in exercising any right or remedy provided by law or under this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy.

 

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9.6                 The headings hereof have been inserted for convenience of reference only, under no circumstances shall such headings be construed to affect the meaning, construction or effect of this Agreement.

 

9.7                 The provisions of this Agreement are severable and independent to one another. If at any time one or several articles herein shall be deemed invalid, illegal or unenforceable, the validity, legality or enforceability of other provisions herein shall not be affected thereby.

 

9.8                 Any amendment or supplement of this Agreement shall be made in writing and duly executed by all Parties herein before taking effect.

 

9.9                 Without prior written permission from the other Parties, no Party may transfer any of its rights and/or obligations under this Agreement to any third Party.

 

9.10          This Agreement is binding to all the parties herein and their respective lawful successors and assignees.

 

[Remainder of this page intentionally left blank]

 

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In witness whereof, this Voting Proxy Agreement is signed by the following parties on the date and at the place first above written.

 

 

	
Shanghai Free Trade Zone   GDS Management Co., Ltd
    	
 
    
	
(Seal)
    	
 
    
	
Signature: 
    	
/s/ William Wei Huang
    	
 
    
	
Name: William Wei   Huang
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Beijing GDS Chang’an   Science & Technology Co., Ltd.
    	
 
    
	
(Seal)
    	
 
    
	
Signature: 
    	
/s/ William Wei Huang
    	
 
    
	
Name: William Wei   Huang
    	
 
    
	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
William Wei Huang
    	
 
    
	
Signature: 
    	
/s/ William Wei Huang
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Qiuping Huang 
    	
 
    
	
Signature: 
    	
/s/ Qiuping Huang 
    	
 
    

 

9Exhibit 10.5

 

 

Exclusive Call Option Agreement

 

Concerning

 

Beijing Wanguo Chang’an Science & Technology Co., Ltd.

 

 

Among

 

William Wei Huang

 

Qiuping Huang

 

and

 

Shanghai Free Trade Zone GDS Management Co., Ltd.

 

Date: April 13, 2016

 

 

Exclusive Call Option Agreement

 

This Exclusive Call Option Agreement (the “Agreement”) is entered into by and between the following parties on April 13, 2016 in Shanghai, China:

 

William Wei Huang, a citizen of the People’s Republic of China (ID Card No.: 31010719671101125x);

 

Qiuping Huang, a citizen of the People’s Republic of China (ID Card No.: 31010719611116122x, hereinafter referred to collectively with William  Wei Huang as the “Existing Shareholders”);

 

Shanghai Free Trade Zone GDS Management Co., Ltd. (hereinafter referred to as the “WFOE”)

 

Registered Address: Room 4056, 4th Floor, 173 Meisheng Road, China (Shanghai) Pilot Free Trade Zone

 

Beijing Wanguo Chang’an Science & Technology Co., Ltd. (“GDS Beijing”)

 

Registered Address: Room A-0155, 2nd Floor, Building 3, Compound 30, Shixing Avenue, Shijingshan Park, Zhongguancun Science Park, Beijing

 

(In this Agreement, the above parties are referred to individually as a “Party” and collectively as the “Parties”.)

 

Whereas:

 

The Existing Shareholders are the registered shareholders of GDS Beijing and own 100% of the equity shares of GDS Beijing on the execution date of this Agreement (general information of GDS Beijing on the execution date of this Agreement is as provided in Exhibit 1 to this Agreement).

 

The Existing Shareholders intend to transfer all of their equity shares in GDS Beijing to the WFOE and/or any other entity or individual designated by the WFOE without violating PRC law, and the WFOE intends to accept the transfer.

 

In order to carry out the aforesaid transfer of shares, the Existing Shareholders hereby irrevocably grant to the WFOE an exclusive call option right to purchase shares (the “Stock Option”). To the extent permitted by PRC Law and in accordance with the Stock Option, the Existing Shareholders shall transfer the Option Stock (defined below) to the WFOE and/or any other entity of individual designated by the WFOE upon its request.

 

GDS Beijing agrees that the Existing Shareholders grant the Stock Option to the WFOE in accordance with this Agreement.

 

Now, therefore, the parties agree as follows through negotiation:

 

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Article 1 Terms and Definitions

 

1.1                               Unless otherwise specified or in cases where the context demands a different interpretation, the terms used in this Agreement shall have the following meanings:

 

	
“Assets of GDS Beijing”
    	
means all tangible and   intangible assets owned or entitled to use by GDS Beijing during the term of   this Agreement, including but not limited to any real estates, movable   properties, intellectual properties including trademark, copyright, patent,   proprietary technology, domain name, software use right and other   intellectual properties.
    
	
 
    	
 
    
	
“Breach of   Contract”
    	
has the same meaning as   stipulated in Article 11.1 of this Agreement.
    
	
 
    	
 
    
	
“Breaching   Party”
    	
has the same meaning as   stipulated in Article 11.1 of this Agreement.
    
	
 
    	
 
    
	
“Certificates”
    	
means any approval,   license, filing, and registration GDS Beijing shall hold for legal and   effective management of the Existing Business and all other business.
    
	
 
    	
 
    
	
“Confidential   Information”
    	
has the same meaning as   stipulated in Article 8.1 of this Agreement.
    
	
 
    	
 
    
	
“Conversion   Price”
    	
means, during each   Exercise in accordance with Article 4 of this Agreement, the total   consideration paid to the Existing Shareholders for the acquisition of the   shares transferred by the WFOE or its designated entity or natural person.
    
	
 
    	
 
    
	
“Exercise   Notice”
    	
has the same meaning as   stipulated in Article 3.5 of this Agreement.
    
	
 
    	
 
    
	
“Existing   Business of GDS Beijing”
    	
means, on the execution   date of this Agreement, the business scope of GDS Beijing as specified in its   business license.
    
	
 
    	
 
    
	
“Option   Stock”
    	
means, as to the   Existing Shareholders, the 100% equity interests held by the Existing   Shareholders in the Registered Capital of GDS Beijing (as defined below).
    
	
 
    	
 
    
	
“Principal   Agreements”
    	
means the agreements to   which GDS Beijing is a party and has material effect on the business and   assets of GDS Beijing, including but not limited to the Exclusive Technical   License and Service Agreement between GDS Beijing and the WFOE and 
    

 

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other agreements   relating to the business of GDS Beijing.
    
	
 
    	
 
    
	
“Power of   Attorney”
    	
has the same meaning as   stipulated in Article 3.7 of this Agreement.
    
	
 
    	
 
    
	
“PRC”:
    	
means, for the purpose   of this Agreement, the People’s Republic of China, excluding Hong Kong, Macau   and Taiwan.
    
	
 
    	
 
    
	
“PRC Laws   and Regulations”
    	
refers to the laws,   administrative regulations, administrative rules, local regulations, judicial   interpretations and other binding legal documents of the People’s Republic of   China that are in force at the time.
    
	
 
    	
 
    
	
“Registered   Capital of GDS Beijing”
    	
means, on the execution   date of this Agreement, the registered capital of GDS Beijing of RMB   300,100,000 Yuan, including any enlarged registered capital after future   capital increase.
    
	
 
    	
 
    
	
“Said   Party’s Rights”
    	
has the same meaning as   stipulated in Article 12.5 of this Agreement.
    
	
 
    	
 
    
	
“Transfer   of Shares”
    	
means, when the WFOE   exercises its Stock Option (the “Exercise”),   the shares of GDS Beijing of which it has the right to request the Existing   Shareholders to transfer to the WFOE or entity or individual designated by it   pursuant to Article 3.2 of this Agreement. The amount may be part or all   of the Option Stock. The specific amount shall be decided by the WFOE at is   absolute discretion in accordance with PRC Law and its business   considerations at the time.
    
	
 
    	
 
    
	
“Upper   Limit”
    	
has the same meaning as   stipulated in Article 3.2 of this Agreement.
    

 

1.2                               Any citation of PRC Laws and Regulations under this Agreement shall be deemed to:

 

(1)                     simultaneously include the citation of the content of the amendments, adjustments, complements and revisions of those PRC Laws and Regulations regardless of whether the effective date is before or after the conclusion of this Agreement; and

 

(2)                     simultaneously include the citation of other decisions, notices and rules made or taking effect pursuant to those PRC Laws and Regulations.

 

1.3                               Unless otherwise stipulated in the context of this Agreement, Article, Section, Paragraph and Subparagraph referred to in this Agreement mean relevant content in this Agreement.

 

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Article 2 Grant of Stock Option

 

2.1                               The Existing Shareholders hereby irrevocably grant, without any additional term, exclusive Stock Option to the WFOE, pursuant to which the WFOE shall have the right to require the Existing Shareholders to transfer the Option Stock to the WFOE or its designated entity or individual, to the extent permitted by PRC Laws and Regulations, in accordance with the procedures specified in this Agreement. The WFOE also agrees to accept such Stock Option.

 

2.2                               GDS Beijing hereby agrees that the Existing Shareholders grant the WFOE such Stock Option in accordance with the above Article 2.1 and other provisions in this Agreement.

 

Article 3 Exercise Procedures

 

3.1                               WFOE shall have the right to decide at its absolute discretion the specific time, procedure and number of Exercises to the extent permitted by PRC Laws and Regulations.

 

3.2                               If, at the time of the Exercise, PRC Laws and Regulations allow WFOE and/or its designated entity or individual to hold all shares of GDS Beijing, WFOE shall be entitled to exercise all the Stock Option, and all of the Transferred Shares shall be received by WFOE and/or its designated entity or individual from the Existing Shareholders; if at the time of the Exercise, PRC Laws and Regulations only allow WFOE and/or its designated entity or individual to hold part of the shares of GDS Beijing, WFOE shall be entitled to decide the amount of the Transferred Shares within the upper limit of the proportion of shares required by PRC Laws and Regulations (the “Upper Limit”), and such amount of the Transferred Shares shall be received by WFOE and/or its designated entity or individual from the Existing Shareholders. In the latter situation, WFOE is entitled to exercise the Stock Option in installments in accordance with the gradual relaxation of the Upper Limit allowed by PRC Laws and Regulations until all the Stock Option has been exercised.

 

3.3                               During each Exercise, the WFOE shall have the right to decide at its discretion the amount of shares to be transferred to itself or its designated entity or individual, the Existing Shareholders shall transfer the Transferred Shares to the WFOE and/or its designated entity or individual respectively as required by the WFOE. The WFOE and/or its designated entity or individual shall pay Conversion Price to the Existing Shareholders for the Transferred Shares upon each Exercise.

 

3.4                               During each Exercise, the WFOE may purchase the Transferred Shares by itself or may designate any third party to purchase all or part of the Transferred Shares.

 

3.5                               The WFOE shall, upon its decision to exercise the Stock Option, issue a written notice to exercise the Stock Option (the “Exercise Notice”, refer to Exhibit 2 for its format) to the Existing Shareholders. The Existing Shareholders shall, within 30 days upon the receipt

 

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of the Exercise Notice, make a one-off transfer of the Transferred Shares in whole to the WFOE and/or its designated entity or individual in accordance with the Exercise Notice and the provisions of Article 3.3 of this Agreement.

 

3.6                               The Existing Shareholders hereby represent and warrant that once the WFOE dispatches an Exercise Notice:

 

(1)                     They shall promptly pass a shareholder resolution and take all necessary actions to agree to the transfer of the Transferred Shares in whole to the WFOE and/or its designated entity or individual at the Conversion Price;

 

(2)                     They shall promptly execute an equity transfer agreement with the WFOE and/or its designated entity or individual to transfer the Transferred Shares in whole to the WFOE and/or its designated entity or individual at the Conversion Price; and

 

(3)                     They shall provide necessary support to the WFOE in accordance with the WFOE’s requirements and applicable laws and regulations (including provide and execute all relating legal documents, perform all government approval, registration, filing procedures and bear all the relevant obligations) to enable the WFOE and/or its designated entity or individual to obtain the Transferred Shares without legal flaws.

 

3.7                               The Existing Shareholders shall, upon the request of the WFOE, execute a power of attorney (the “Power of Attorney”, refer to Exhibit 3 for its format) to authorize in written form any person designated by the WFOE (the “Agent”) to represent the Existing Shareholders to execute any and all necessary legal documents to enable WFOE and/or its designated entity or individual to obtain the Transferred Shares without legal flaws. The Power of Attorney shall be kept by the WFOE upon execution, and, when necessary, the WFOE may at any time request Existing Shareholders to execute multiple duplicates of the Power of Attorney and deliver them to relevant government authorities. When and only when the WFOE issues a written notice to the Existing Shareholders to dismiss and replace the Agent shall the Existing Shareholders immediately revoke the entrustment of the existing Trustee under this Agreement and entrust another Trustee designated by WFOE at the time to execute any and all necessary legal documents on behalf of the Existing Shareholders in accordance with the stipulations of this Agreement; the new Power of Attorney shall replace the original Power of Attorney once made. Under no other circumstances shall the Existing Shareholders revoke the Power of Attorney for the Trustee.

 

Article 4 Conversion Price

 

During each Exercise, the WFOE or its designated entity or individual shall pay to the Existing Shareholders RMB one (1) yuan only or any price agreed upon by the Parties in written form. If at the time of exercise any regulatory PRC laws or regulations have mandatory provisions on the Conversion Price, the WFOE or its designated entity or individual shall be entitled to exercise the

 

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option at the minimum price in accordance with the applicable PRC laws and regulations.

 

Article 5 Representations and Warranties

 

5.1                               The Existing Shareholders hereby make the following representations and warranties, which shall remain at all times in full force as in the occasion when they are made at the time of the transfer of the Option Stock.

 

5.1.1         The Existing Shareholders are PRC citizens with full capacity of action, full and independent legal status, and legal capacity to execute, deliver and perform this Agreement, and are capable of acting independently as a subject of litigation proceedings.

 

5.1.2         GDS Beijing is a limited liability company duly registered and validly existing under the PRC Laws and Regulations as an independent legal person and with complete, independent legal status and legal competence to execute, deliver and perform this Agreement, and is capable of acting as an independent subject of litigation proceedings.

 

5.1.3         The Existing Shareholders have full capacity and power to execute and deliver this Agreement and all other documents to be executed by them for the transaction referred to in this Agreement and they have full capacity and power to complete the transaction referred to in this Agreement.

 

5.1.4         This Agreement is legally and appropriately executed and delivered by the Existing Shareholders. This Agreement constitutes a legal and binding obligation on them, enforceable against them in accordance with the terms of the Agreement.

 

5.1.5         On the effective date of this Agreement, the Existing Shareholders are the registered legal owners of the Option Stock. Except for the rights provided under this Agreement, the Equity Pledge Agreement entered into by and between the Existing Shareholders and the WFOE, and the Shareholder Voting Proxy Agreement entered into by and between the Existing Shareholders, the WFOE, and GDS Beijing, the Option Stock is free and clear of any liens, pledge, claims, other security interests and other third-party rights; the WFOE and/or its designated entity or individual shall be entitled to the ownership of the Transferred Shares free of any liens, pledge, claims, other security interests and other third-party rights after the Exercise in accordance with this Agreement.

 

5.2                   GDS Beijing hereby represents and warrants that:

 

5.2.1                     GDS Beijing is a limited liability company duly registered and validly existing under PRC Laws and Regulations as an independent legal person. GDS Beijing has full and independent legal status and legal capacity to execute, deliver and perform

 

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this Agreement, and is capable of acting as an independent subject of litigation proceedings.

 

5.2.2                     GDS Beijing is vested with full internal power and authority to execute and deliver this Agreement and all other documents to be executed by it in relation to the transaction referred to in this Agreement and to complete the transaction referred to in this Agreement.

 

5.2.3                     This Agreement is legally and appropriately executed and delivered by GDS Beijing. This Agreement constitutes a legal and binding obligation on GDS Beijing.

 

5.2.4                     The Existing Shareholders are the registered legal owners of Option Stock on the effective date of this Agreement. The WFOE and/or its designated entity or individual shall be entitled to the ownership of the Transferred Stock free of any liens, pledge, claims, other security interests and other third-party rights after the Exercise in accordance with this Agreement.

 

5.2.5                     On the effective date of this Agreement, GDS Beijing has all the Certificates necessary for its operation. GDS Beijing has sufficient rights and qualifications to operate its existing business within the territory of China. GDS Beijing has been operating its business lawfully since its foundation and there is no breach or potential breach of the regulations or requirements of Industrial and Commercial Bureau, Tax Bureau, Telecommunication Administration, Administration of Quality Supervision, Inspection and Quarantine, Labor and Social Security Bureau or other government authorities. GDS Beijing is not involved in any breach-of-contract dispute.

 

Article 6 Undertakings of the Existing Shareholders

 

The Existing Shareholders hereby undertake that they will:

 

6.1                   Within the term of this Agreement, take all necessary actions to ensure that GDS Beijing obtain all Certificates for its business operation in a timely manner and maintain the continuous effectiveness of the certificates at all times;

 

6.2                   During the term of the Agreement, without prior written consent by the WFOE:

 

6.2.1                     The Existing Shareholders shall not transfer or dispose of in any other means any Option Stock or create any security interests or third party rights on the Option Stock;

 

6.2.2                     The Existing Shareholders shall not increase or decrease Registered Capital of GDS Beijing;

 

6.2.3                     The Existing Shareholders shall not dispose of or cause the management personnel

 

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of GDS Beijing to dispose of any of the Assets of GDS Beijing (except in the ordinary course of business);

 

6.2.4                     The Existing Shareholders shall not terminate or cause the management personnel of GDS Beijing to terminate the Principal Agreements or enter into any contract in conflict with the existing Principal Agreements;

 

6.2.5                     The Existing Shareholders shall not appoint or dismiss any of the directors, supervisors or other management personnel of GDS Beijing that shall be appointed and dismissed by the Existing Shareholders;

 

6.2.6                     The Existing Shareholders shall not declare distribution of or actually payout any distributable profits, interests, or dividends;

 

6.2.7                     The Existing Shareholders shall ensure the continuous existence of GDS Beijing and that GDS Beijing will not be terminated, liquidated or dissolved;

 

6.2.8                     The Existing Shareholders shall not modify the Articles of Association of GDS Beijing; and

 

6.2.9                     The Existing Shareholders shall ensure that GDS Beijing do not lend or borrow any loan, or provide guarantee or provide securities in other means, or assume any material liabilities for those other than arising from ordinary business operations;

 

6.3                   During the term of this Agreement, use its best endeavor to promote GDS Beijing’s business and to ensure the legal operation of GDS Beijing, without any action or nonfeasance that might damage the Assets of GDS Beijing, its reputation, or the effectiveness of its Certificates.

 

Article 7 Undertakings of GDS Beijing

 

7.1                   If any consent, permit, waiver or authorization by any third party, or any approval, permit or exemption by any government authority, or any registration or filing formalities (if required by laws or regulations) with any government authority is required to be obtained or handled with respect to the execution and performance of this Agreement and the grant of the Stock Option under this Agreement, GDS Beijing shall endeavor to assist in satisfying the above conditions.

 

7.2                   Without WFOE’s prior written consent, GDS Beijing shall not assist or permit the Existing Shareholders to transfer or otherwise dispose of any Option Stock or create any security interests or other third party rights on any Option Stock.

 

7.3                   GDS Beijing shall not behave in a way or allow behavior or action that may adversely affect the interests of the WFOE under this Agreement.

 

8

 

 

Article 8 Confidentiality

 

8.1                               Regardless of whether this Agreement is terminated or not, the Existing Shareholders shall be under the obligation to keep strictly confidential the following information (collectively the “Confidential Information”):

 

(i)                         The execution, performance and content of this Agreement;

(ii)                      The WFOE’s business secrets, proprietary information and client information of which the Existing Shareholders may become aware of or received in connection with the execution and performance of this Agreement; and

(iii)                   Business secrets, proprietary information and client information of GDS Beijing, of which the Existing Shareholders may become aware of or received as the shareholders of GDS Beijing.

 

The Existing Shareholders may use the Confidential Information solely in connection with the performance of their obligations under the agreement. Without the WFOE’s written consent, the Existing Shareholders shall not disclose such Confidential Information to any third party. Otherwise, the Existing Shareholders shall be held liable for their breaching this Agreement and shall indemnify the WFOE against all losses.

 

8.2                               Following the termination of this Agreement, the Existing Shareholders shall return, destroy or dispose of properly with other means all documents, data or software and shall stop using such Confidential Information upon the request of the WFOE.

 

8.3                               Notwithstanding any other provisions herein, the effect of this Article shall survive the suspension or termination of this Agreement.

 

Article 9 Term of Agreement

 

This Agreement comes into effect as of its execution date, and shall terminate after all the Option Stock under this Agreement has been transferred to the WFOE or its designated entity or individual.

 

Article 10 Notification

 

10.1                        All notices to be made by the Parties in connection with the performance of the rights and obligations under this Agreement shall be in written form and be delivered in person, by registered mail, postage prepaid mail, recognized express mail, or facsimile to the address of the party concerned or to the addresses of all parties of the agreement listed hereafter.

 

10.2                        If any of such notices or other correspondences is transmitted by facsimile or telex, it shall be deemed delivered immediately upon transmission; if delivered in person, it shall be deemed delivered at the time of delivery; if sent by post, it shall be deemed delivered

 

9

 

five (5) days after dispatch.

 

Article 11 Breach of Agreement

 

11.1                        The Parties agree and acknowledge that, any material breach of any provision of this Agreement, or substantial non-performance of any obligation under this Agreement by any party (the “Breaching Party”) constitutes a breach of the Agreement (the “Breach”). Any of the non-breaching parties (the “Non-breaching Parties”) shall be entitled to require the Breaching Party to correct or take remedial measures within a reasonable time. Where the Breaching Party does not take any remedy measures in a reasonable time or within ten (10) days after the written notice from the Non-breaching Parties to request for remedial measures, if the breaching party is any of the Existing Shareholders or GDS Beijing, then the Non-breaching Parties, at their discretion, shall have the right to: (1) terminate this Agreement and require full compensation from the Breaching Party; or (2) request for compulsory performance of the obligations of the Breaching Party under this Agreement and request for full compensation from the Breaching Party under this Agreement; if the breaching party is the WFOE, then the Non-breaching Parties shall have the right to request for compulsory performance of the obligations of the Breaching Party under this Agreement and request for full compensation from the Breaching Party under this Agreement .

 

11.2                        The Parties agree and acknowledge that the Existing Shareholders or GDS Beijing shall under no circumstances prematurely terminate this agreement for whatever reasons.

 

11.3                        The rights and remedies stipulated in this Agreement are accumulative, and do not preclude other rights or remedies as prescribed by laws and regulations.

 

11.4                        Notwithstanding any other provisions herein, the effect of this Article shall survive the suspension or termination of this Agreement.

 

Article 12 Miscellaneous

 

12.1                       This Agreement is made in quadruplicate (4 copies), with each Party holding one (1) copy.

 

12.2                       The conclusion, validity, performance, amendment, interpretation and termination of this Agreement shall be governed by PRC Laws and Regulations.

 

12.3                       The Parties shall settle any dispute arising out of or relating to this Agreement through amicable negotiation. If any dispute cannot be resolved through negotiations within 30 days, the dispute shall be referred to Beijing Arbitration Commission for arbitration in accordance with the commission’s arbitration rules. The seat of arbitration shall be Beijing. The arbitration award shall be final and binding upon the Parties. The Existing Shareholders hereby authorize the arbitrator the right to deliver remedies for the equity

 

10

 

shares of GDS Beijing, issue injunctions, or arbitration award requiring the liquidation of GDS Beijing. After the arbitration award takes effect, any Party shall have the right to submit an application to a court with jurisdiction for enforcement of the arbitration award. The competent court shall have the right to grant a provisional remedy on request by the disputing party, such as a judgment or an order to seize or freeze the Breaching Party’s properties or equity shares.

 

12.4                       Any right, power or remedy granted to a Party by any provision of this Agreement does not preclude the Party from any right, power or remedy granted by laws and regulations or other provisions of this Agreement; any party’s exercise of its rights, powers and remedies by a Party shall not preclude the Party from exercising its other rights, powers and remedies.

 

12.5                       No failure or delay by any Party in exercising any right, power or remedy (the “Said Party’s Rights”) provided by law or under this Agreement shall constitute a waiver of the Said Party’s Rights and no single or partial waiver of any Said Party’s Rights shall preclude the exercise of any Said Party’s Rights in other means or the exercise of any other Said Party’s Rights.

 

12.6                       The headings hereof have been inserted for convenience of reference only. Under no circumstances shall such headings be construed to affect the construction of any provision of this Agreement.

 

12.7                       The provisions of this Agreement are severable and independent to one another. If at any time one or several articles herein shall be deemed invalid, illegal or unenforceable, the validity, legality or enforceability of other provisions herein shall not be affected thereby.

 

12.8                       This Agreement upon execution shall supersede any other legal documents on the same subject matter entered into by the Parties hereto. Any amendment or supplement of this Agreement shall be made in written form and duly executed by all parties herein before taking effect.

 

12.9                       The Existing Shareholders shall not transfer any rights and/or obligations hereunder to any third party without the prior written consent of the WFOE, while the WFOE may transfer any rights and/or obligations hereunder to its designated third party upon notifying the Existing Shareholders and GDS Beijing.

 

12.10                This Agreement is binding on the lawful successors and assignees of the Parties.

 

[Remainder of this page intentionally left blank]

 

11

 

In witness whereof, this Exclusive Call Option Agreement is executed by and between the following parties on the date and at the place first above written.

 

 

	
William Wei Huang
    
	
 
    	
 
    
	
Signature:
    	
/s/ William  Huang   Wei
    
	
 
    	
 
    
	
 
    	
 
    
	
Qiuping Huang
    
	
 
    	
 
    
	
Signature:
    	
/s/ Qiuping Huang
    
	
 
    	
 
    
	
 
    
	
Shanghai Free Trade Zone GDS Management   Co., Ltd.
    
	
(Seal)
    	
 
    
	
 
    	
 
    
	
Signature:
    	
/s/ William Huang Wei
    
	
Name: William Wei Huang
    
	
Title: Authorized Representative
    
	
 
    	
 
    
	
 
    	
 
    
	
Beijing Wanguo Chang’an Science &   Technology Co., Ltd.
    
	
(Seal)
    	
 
    
	
 
    	
 
    
	
Signature:
    	
/s/ William Huang Wei
    
	
Name: William Wei Huang
    
	
Title: Authorized Representative
    

 

Signature page of Exclusive Call Option Agreement

 

 

Exhibit 1:

 

Basic information of GDS Beijing

 

	
Company Name:
    	
Beijing Wanguo Chang’an Science &   Technology Co., Ltd.
    
	
 
    	
 
    
	
Registered Address:
    	
Room A-0155, 2nd Floor, Building 3, Compound 30, Shixing   Avenue, Shijingshan Park, Zhongguancun Science Park, Beijing
    
	
 
    	
 
    
	
Registered Capital:
    	
RMB 300,100,000
    
	
 
    	
 
    
	
Legal Representative:
    	
William Wei Huang
    

 

Share Structure:

 

	
Name of Shareholder
    	
 
    	
Share of Registered
   Capital
    	
 
    	
Proportion of
   Capital
   Contribution
    	
 
    
	
William Wei Huang
    	
 
    	
RMB
    	
300,000,000
    	
 
    	
99.9667
    	
%
    
	
Qiuping Huang
    	
 
    	
RMB
    	
100,000
    	
 
    	
0.0333
    	
%
    

 

Fiscal Year: January 1 to December 31

 

Exhibit 1 of Exclusive Call Option Agreement

 

 

Exhibit 2:

 

Format of Exercise Notice

 

To:

 

Whereas, our company has entered into an Exclusive Call Option Agreement (“Call Option Agreement”) with you and Beijing Wanguo Chang’an Science & Technology Co., Ltd. (“GDS Beijing”) on [Insert the date], 2016, which designated that under circumstances permitted by PRC Laws and Regulations, you shall transfer your equity interests in GDS Beijing to our company or any third party designated by our company upon our request.

 

Now, therefore, our company hereby issue the notice to you as follows:

 

Our company hereby request to exercise the Stock Option under the Call Option Agreement and require you to transfer        % of the equity interests held by you in GDS Beijing (the “Assigned Shares”) to our company/[insert entity or individual’s name] designated by our company. Please immediately transfer all of the Assigned Shares to our company/[insert entity or individual’s name] pursuant to the Call Option Agreement within [insert days] days upon receipt of this notice.

 

Sincerely,

 

 

Shanghai Free Trade Zone GDS Management Co., Ltd.

 

(Seal)

 

Authorized representative:

Date:

 

Exhibit 2 of Exclusive Call Option Agreement

 

 

Exhibit 3:

 

Format of Power of Attorney

 

I,                       , hereby irrevocably entrust                        [ID Card No.:                                     ], as my entrusted agent, to execute the legal documents among Beijing Wanguo Chang’an Science & Technology Co., Ltd., Shanghai Free Trade Zone GDS Management Co., Ltd. and me on the transfer of equity shares of Beijing Wanguo Chang’an Science & Technology Co., Ltd..

 

 

	
 
    	
Signature:
    
	
 
    	
 
    
	
 
    	
Date:
    

 

Exhibit 3 of Exclusive Call Option Agreement

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