Exhibit 10.1
 
SUBSCRIPTION AGREEMENT
BY AND AMONG
CHINA 3C GROUP
AND
THE INVESTORS LISTED ON SCHEDULE 1
Dated as of December 20, 2005
 
THE SECURITIES OFFERED BY THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED
WITH OR APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION, NOR HAS SUCH COMMISSION OR ANY STATE SECURITIES BUREAU, COMMISSION
OR OTHER REGULATORY AUTHORITY PASSED UPON OR ENDORSED THE MERITS OF THIS
OFFERING OR THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT.
ACCORDINGLY, YOU MAY NOT OFFER OR SELL THE OFFERED SECURITIES IN THE UNITED
STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN RULE 902(K) PROMULGATED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)) IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
EVIDENCE ACCEPTABLE TO US AND OUR COUNSEL, WHICH MAY INCLUDE AN OPINION OF
COUNSEL, THAT REGISTRATION IS NOT REQUIRED. HEDGING TRANSACTIONS INVOLVING THE
OFFERED SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS SUBSCRIPTION AGREEMENT MAY NOT BE SHOWN OR GIVEN TO ANY PERSON OTHER THAN
THE PERSON WHOSE NAME APPEARS ON SCHEDULE 1 AND MAY NOT BE PRINTED OR REPRODUCED
IN ANY MANNER WHATSOEVER. FAILURE TO COMPLY WITH THIS DIRECTIVE CAN RESULT IN A
VIOLATION OF THE SECURITIES ACT. ANY FURTHER DISTRIBUTION OR REPRODUCTION OF
THIS SUBSCRIPTION AGREEMENT IN WHOLE OR IN PART, OR THE DIVULGENCE OF ANY OF ITS
CONTENTS BY AN OFFEREE, IS UNAUTHORIZED. BY ACCEPTING THIS SUBSCRIPTION
AGREEMENT, YOU EXPRESSLY AGREE TO COMPLY WITH THESE AND THE OTHER RESTRICTIONS
CONTAINED HEREIN.

 

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LIST OF EXHIBITS
     EXHIBIT A Accredited Investor Questionnaire

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SUBSCRIPTION AGREEMENT
     THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered into as
of December 20, 2005 by and among China 3C Group, a Nevada corporation (the
“Company”), and the investors named on Schedule 1 attached hereto (each such
investor is referred to herein as an “Investor” and collectively as the
“Investors”). Certain terms used and not otherwise defined in the text of this
Agreement are defined in Article 7 of this Agreement.
W I T N E S S E T H
     WHEREAS, the Company desires to issue and to sell to the Investors, and the
Investors desire to purchase from the Company, an aggregate of one million
(1,000,000) shares of Common Stock at a per share purchase price of $0.10, for
an aggregate purchase price of one hundred thousand dollars ($100,000), all in
accordance with the terms and provisions of this Agreement.
     NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants herein contained, the parties hereto
hereby agree as follows:
ARTICLE I
AUTHORIZATION OF SECURITIES
          1.1 Authorization of Securities. Prior to the Closing Date, the
Company’s Board of Directors shall have taken all action necessary to authorize
the issuance and sale of 1,000,000 shares of its Common Stock (the “Securities”)
to the Investors.
ARTICLE II
SALE AND PURCHASE OF THE SECURITIES
     Subject to the terms and conditions set forth in this Agreement, each
Investor hereby subscribes for and agrees to acquire from the Company at the
Closing, and the Company hereby agrees that it shall issue to each Investor at
the Closing, free and clear of any Encumbrances, the number of shares of Common
Stock set forth opposite such Investor’s name on Schedule 1 hereto against
payment of the purchase price (the “Purchase Price”) set forth on Schedule 1
hereto. Each Investor acknowledges that the Securities acquired hereunder are
subject to restrictions on transfer under both the federal securities laws of
the U.S. and applicable state securities laws in the U.S.
ARTICLE III
CLOSING
          3.1 Closing. The closing of the sale to, and purchase by, the
Investors of the Securities (the “Closing”) shall occur at the offices of
Harter, Secrest & Emery LLP, legal counsel to the Company, in Rochester, New
York, or at such other location or by such other means as the parties hereto may
agree, on the date hereof or at such other time and place as the parties hereto
may agree (the “Closing Date”). In the event that such date is not a Business
Day, the Closing Date shall be deemed to be the first Business Day following
such date.

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          3.2 Deliveries by the Company.
               (a) At the Closing, the Company shall deliver to each Investor
one or more certificates evidencing the number of Securities to be purchased by
such Investor at the Closing, each of which shall be registered in such
Investor’s name or its designee, against delivery to the Company of the Purchase
Price payable by wire transfer of immediately available fund, or such other form
of funds as the Company may chose to accept, to an account that the Company
designated in writing to the Investor prior to the Closing Date.
          3.3 Deliveries by the Investor. At the Closing, each Investor shall
deliver to the Company:
               (a) The Purchase Price payable by wire transfer of immediately
available funds to an account that the Company designated in writing to the
Investor prior to the Closing Date or such other funds as the Company may
accept; and
               (b) Such other documents as are required to be delivered by the
Investor to the Company or that are, in the opinion of legal counsel to the
Company, necessary or advisable for the completion of the transaction.
          3.4 Other Deliveries. At the Closing, the Company and the Investors
will deliver such duly executed Transaction Documents as are required to be
executed by the parties hereunder or thereunder.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR
          Each Investor acknowledges that this Agreement is made with Investor
in reliance upon Investor’s representation to the Company. Each Investor,
severally as to itself and not jointly, represents and warrants to and agrees
with the Company as follows:
          4.1 Regulation S Representations and Warranties.
               (a) US Person. Investor represents that it is not an “U.S. Person
“ as that term is defined in Rule 902(k) of Regulation S promulgated under the
Securities Act, that the Investor resides outside of the United States, and that
the Investor has accurately completed the accredited investor questionnaire set
forth as Exhibit A attached hereto.
               (b) Dealer; Distributor. Investor represents that it is not a
distributor or dealer as such term is defined in Section 2(a)(12) of the
Securities Act, or a person receiving a selling concession, fee or other
remuneration in connection with the Securities.
               (c) Resale Limitations. Investor understands that the Securities
have not been, and will not upon issuance be, registered under the Securities
Act of 1933, as amended (the “Securities Act”), and further understands that the
Securities are “restricted securities” as such term is defined in Rule 144
promulgated under the Act and may be resold without registration under the Act
and the applicable rules and regulations under the Act, only in very limited
circumstances. In this

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connection, Investor represents that it is familiar with the terms and
provisions of Regulation S (including Rule 903 and Rule 904 promulgated under
the Securities Act) and Rule 144 promulgated under the Securities Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act. Investor further agrees that all offers and sales of the
Securities prior to the expiration of the one year distribution compliance
period shall be made in accordance with the terms and provisions of the
Securities Act including without limitation Rules 144, 903 and 904 promulgated
under the Securities Act, pursuant to a registration of the Securities under the
Securities Act, or pursuant to an available exemption from the registration
requirements of the Securities Act.
               (d) Hedging Transactions. Investor agrees not to engage in
hedging transactions with regard to the Securities prior to the expiration of
the one-year distribution compliance period.
               (e) Restrictive Legends. Investor further understands that the
certificates evidencing the Securities shall bear one or more of the following
legends:
     - “These securities have not been registered under the Securities Act of
1933, as amended (the “Act”). They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with respect
to the securities under the Act unless an opinion of counsel to the Company is
delivered to the effect that such registration is not required or that the
securities are being sold pursuant to Rule 144 of the Act and therefore this
legend should be removed.”
     - “Transfer of these securities is prohibited except in accordance with the
provisions of Regulation S promulgated under the Securities Act of 1933, as
amended (the “Act”), pursuant to registration under the Act, or pursuant to an
available exemption from registration. Hedging transactions involving these
securities may not be conducted unless in compliance with the Act.”
     - Any legend required by the securities laws of any applicable
jurisdictions.
               (f) Acquisition for Own Account. Investor hereby confirms that
the Securities will be acquired for investment for Investor’s own account, not
as a nominee or agent and not with a view to the resale or distribution of any
part thereof, not for the benefit or the account of a U.S. Person, and that
Investor does not have any present intention of selling, granting any
participation in or otherwise distributing any such Securities. Investor further
represents that Investor does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, encumber, pledge, hypothecate or
grant participations to such person or to any third person, with respect to any
of the Securities.
               (g) No Public Review/ No Soliciting Materials. Investor
understands that no federal or state agency has recommended or endorsed the
purchase of the Securities or passed on the adequacy or accuracy of the
information set forth in this Agreement. Investor acknowledges that it has not
seen, received, been presented with, or been solicited by any leaflet, public
promotional

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meeting, newspaper or magazine article or advertisement, radio or television
advertisement, or any other form of advertising or general solicitation with
respect to the sale of the Securities.
               4.2 General Representations and Warranties.
               (a) Organization. If Investor is an entity, Investor is validly
existing and in good standing under the laws of its jurisdiction of
organization, and has all requisite power and authority to enter into this
Agreement and consummate the transactions contemplated hereby.
               (b) Validity. The execution, delivery and performance of this
Agreement, and the other documents and instruments referred to herein, in each
case to which Investor is a party, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary action on the
part of Investor. This Agreement and each other Transaction Document have been
duly and validly executed and delivered by Investor and assuming their due
authorization, execution and delivery by the Company constitute a valid and
binding obligation of Investor, enforceable against it in accordance with the
terms of each Transaction Document, subject to bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors’ rights generally and the
rights of creditors of insurance companies generally.
               (c) Disclosure of Information. Investor acknowledges that it has
received or has had the opportunity to review all the information it considers
necessary or appropriate for deciding whether to purchase the Securities.
Investor further represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Securities and the business, properties, prospects and financial
condition of the Company. Investor further acknowledges that it has been advised
to carefully review the Company’s filings with the U.S. Securities and Exchange
Commission. Investor is aware of the Company’s current limited operations,
“shell company” status, and financial condition and is making this investment on
an “As Is, Where Is” basis.
               (d) Investment Experience. Investor is an investor in securities
of companies in the development stage and acknowledges that it is able to fend
for itself, can bear the economic risk of its investment and has such knowledge
and experience in financial or business matters such that it is capable of
evaluating the merits and risks of the investment in the Securities. If the
Investor is an entity, Investor represents that it has not been organized for
the purpose of acquiring the Securities.
               (e) Acknowledgment of Risk. Investor understands the risks
involved in investing in the Company and represents that it can bear the full
loss of its investment in the Company.
               (f) Tax Consequences. Investor is aware that there can be no
assurance regarding the federal, state or local tax consequences of an
investment in the Company, nor can there be any assurance that the Code or the
regulations promulgated thereunder or other applicable laws and regulations will
not be amended at some future time in such manner as to deprive the Company and
its stockholders of any tax benefits that might be received. In making this
investment, Investor is relying upon the advice of its personal tax advisor with
respect to the tax aspects of an investment in the Company and not on the
Company or any agent thereof.

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               (g) Tax Allocation. Investor understands that taxable income and
gain allocated to the Investor by the Company and the tax on the portion thereof
allocated to the Investor for any year may exceed the cash distributions from
the Company to the Investor and, if so, the Investor will have to look to
sources other than distributions from the Company to pay such tax.
               (h) Brokers. There is no broker, investment banker, financial
advisor, finder or other Person which has been retained by or is authorized to
act on behalf of Investor who might be entitled to any fee or commission for
which the Company will be liable in connection with the execution of this
Agreement.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE COMPANY
               The Company represents and warrants to and agrees with each
Investor as follows:
               5.1 Limitation. The Company makes no representations or
warranties other than the representations and warranties contained in this
Agreement.
               5.2 Due Issuance and Authorization of Capital Stock. All of the
outstanding shares of capital stock of the Company have been validly issued and
are fully paid and nonassessable. No shares of capital stock of the Company are
subject to any lien, claim, judgment, charge, mortgage, security interest,
pledge, escrow equity or other encumbrance of any kind (including any agreement
to give any of the foregoing, any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing
(collectively, “Encumbrances”) and the sale and delivery of the Securities to
the Investor pursuant to the terms hereof will vest in the Investor legal and
valid title to such Securities free and clear of all Encumbrances.
               5.3 Organization. The Company is a corporation validly existing
and in good standing under the laws of the State of Nevada.
               5.4 Authorization; Enforcement. The Company has all requisite
corporate power and has taken all necessary corporate action required for the
due authorization, execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby
(including, without limitation, the issuance of the Securities).
               5.5 Issuance of Shares. Upon issuance against payment of the
Purchase Price, the Securities will be duly authorized, validly issued, fully
paid and non-assessable, and such Securities will be free from all taxes, liens,
claims and Encumbrances, and will not impose personal liability upon the holder
thereof.

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ARTICLE VI
RISK FACTORS
THIS OFFERING INVOLVES AN EXTREMELY HIGH DEGREE OF RISK. IT IS POSSIBLE THAT
EACH INVESTOR MAY LOSE HIS ENTIRE INVESTMENT IN THE COMPANY. THERE CAN BE NO
ASSURANCE THAT AN ADEQUATE MARKET WILL DEVELOP IN THE SECURITIES OF THE COMPANY
NECESSARY TO SELL THE SECURITIES. THE SECURITIES ARE SUBJECT TO SUBSTANTIAL
RESTRICTIONS ON TRANSFER THAT MAY MAKE IT DIFFICULT FOR INVESTORS TO LIQUIDATE
THEIR INVESTMENT IN THE COMPANY. THESE RISK FACTORS ARE NOT, AND ARE NOT MEANT
TO BE, COMPLETE. INVESTORS SHOULD CAREFULLY CONSIDER ALL RISKS ASSOCIATED WITH
THE INVESTMENT, AND SHOULD CAREFULLY REVIEW THE COMPANY’S FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ARTICLE VII
DEFINITIONS
               7.1 Definitions. Unless the context otherwise requires, the terms
defined in this Section 7.1 shall have the meanings specified for all purposes
of this Agreement.
               Except as otherwise expressly provided, all accounting terms used
in this Agreement, whether or not defined in this Section 7.1, shall be
construed in accordance with United States generally accepted accounting
principles.
               “Affiliate” of any Person means any other Person which directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person. The term “control” (including the
terms “controlled by” and “under common control with”) as used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
               “Agreement” means this Subscription Agreement.
               “Business Day” means a day other than a Saturday, Sunday or day
on which banking institutions in Los Angeles, California are authorized or
required to remain closed.
               “By-Laws” shall mean the By-Laws of the Company as in effect on
the Closing Date and as hereafter from time to time amended, modified,
supplemented or restated.
               “Common Stock” means the shares of the Company’s common stock
with a par value of $0.001 per share authorized in, and designated as, “Common
Stock” in the Company’s Articles of Incorporation.
               “Closing” has the meaning assigned to it in Section 3.1 hereof.

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               “Closing Date” has the meaning assigned to it in Section 3.1
hereof.
               “Code” means the Internal Revenue Code of 1986, as amended.
               “Encumbrances” has the meaning assigned to it in Section 5.2
hereof.
               “Indemnification Period” shall have the meaning set forth in
Section 8.3.
               “Indemnified Party” shall have the meaning set forth in
Section 8.3.
               “Indemnifying Party” shall have the meaning set forth in
Section 8.3.
               “Investor” has the meaning set forth in the recitals.
               “Losses” shall have the meaning set forth in Section 8.3.
               “Person” means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit corporation, government
(whether federal, state, country, city, municipal or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof) or other entity.
               “Purchase Price” has the meaning assigned it in Section 2.1
hereof.
               “SEC” means the Securities and Exchange Commission.
               “Securities” shall have the meaning assigned to such term in
Section 1.1 hereof.
               “Securities Act” or “Act” means the Securities Act of 1933, as
amended.
               “Third Party Claimant” shall have the meaning set forth in
Section 8.3.
               “U.S.” means the United States of America.
               7.2 “Transaction Documents” shall mean this Agreement and all
other documents as are required to be delivered by the Investor to the Company
pursuant to this Agreement.
ARTICLE VIII
MISCELLANEOUS
               8.1 Waivers and Amendments. Upon the approval of the Company, and
the written consent of the each of the Investors (a) the obligations of the
Company, and the rights of an Investor under this Agreement may be waived
(either generally or in a particular instance, either retroactively or
prospectively and either for a specified period of time or indefinitely), and
(b) the Company, may enter into a supplemental agreement for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of any supplemental agreement or modifying in
any manner the rights and obligations hereunder or thereunder of the Investors
and the Company; provided, however, that without each Investor’s written

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consent, no such amendment or waiver shall affect adversely such Investor’s
rights hereunder in a discriminatory manner inconsistent with its adverse
effects on rights of other Investors hereunder (other than as reflected by the
different number of shares held by such Investors).
          The foregoing notwithstanding, no such waiver or supplemental
agreement shall affect any of the rights of any holder of a security created by
any subsequent amendments to the Articles of Incorporation or by the Nevada
General Corporation Law without compliance with all applicable provisions of the
Articles of Incorporation as may be amended and the Nevada General Corporation
Law.
          Neither this Agreement, nor any provision hereof, may be changed,
waived, discharged or terminated orally or by course of dealing, but only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this Section.
          8.2 Notices. All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be hand delivered
or mailed postage prepaid by registered or certified mail or transmitted by
facsimile transmission (with immediate telephonic confirmation thereafter),

             
 
      (a)   If to an Investor, to the respective addresses set forth on the
counterpart signature pages of this Agreement signed by such Investor:
 
           
 
  or   (b)   If to the Company:
 
           
 
          10880 Wilshire Blvd., Suite 2250
 
          Los Angeles, CA 90024
 
          Facsimile No.: (310) 441 1883

or at such other address as the Company or an Investor each may specify by
written notice to the others, and each such notice, request, consent and other
communication shall for all purposes of the Agreement be treated as being
effective or having been given when delivered if delivered personally, upon
receipt of facsimile confirmation if transmitted by facsimile, or, if sent by
mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States
mail, addressed and postage prepaid as aforesaid.
          8.3 Indemnification of the Company.
               (a) Each Investor, severally as to itself and not jointly, hereby
indemnifies the Company against and agrees to hold the Company harmless from any
and all Losses arising out of any misrepresentation or breach of any
representation, warranty or covenant by such Investor pursuant to this
Agreement.
               (b) Claims Notice. In the event the Company wishes to assert a
claim for indemnification hereunder, (the “Indemnified Party”) it shall deliver
written notice (a “Claims

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Notice”) to the applicable Investor (the “Indemnifying Party”), specifying the
facts constituting the basis for, and the amount (if known) of the claim
asserted.
               (c) Third Party Claims. Upon making any indemnification payment,
the Indemnifying Party will, to the extent of such payment, be subrogated to all
rights of the Indemnified Party against any third party in respect of the Loss
to which the payment relates; provided, however, that until the Indemnified
Party recovers full payment of its Loss, any and all claims of the Indemnifying
Party against any such third party on account of the payment are hereby made
expressly subordinated and subjected in right of payment to the Indemnified
Party’s rights against such third party. Without limiting the generality of any
other provision hereof, the Indemnified Party and Indemnifying Party will duly
execute upon request all instruments reasonably necessary to evidence and
perfect the above-described subrogation and subordination rights.
               (d) Right to Contest Claims of Third Parties.
                    (i) If an Indemnified Party asserts, or may in the future
seek to assert, a claim for indemnification hereunder because of any action,
cause of action or suit brought by any Person not a party to this Agreement (a
“Third Party Claimant”) that may result in a Loss with respect to which the
Indemnified Party would be entitled to indemnification pursuant to this
Section 8.3 (an “Asserted Liability”), the Indemnified Party shall deliver to
the Indemnifying Party a Claims Notice with respect thereto, which Claims Notice
shall, in accordance with the provisions of Section 8.2 hereof, be delivered as
promptly as practicable after an action in connection with such Asserted
Liability is commenced against the Indemnified Party.
                    (ii) The Indemnifying Party shall have the right, upon
written notice to the Indemnified Party, to investigate, contest, defend or
settle any Asserted Liability that may result in a Loss with respect to which
the Indemnified Party is entitled to indemnification pursuant to this Section
8.3; provided that (A) the counsel for the Indemnifying Party who conducts the
defense of such claim or litigation is reasonably satisfactory to the
Indemnified Party, and (B) the Indemnified Party may, at its option and at its
own expense, participate in the investigation, contesting, defense or settlement
of any such Asserted Liability through representatives and counsel of its own
choosing (it being understood that the Indemnifying Party shall bear the cost of
such counsel if the Indemnified Party in good faith determines that it may have
one or more defenses or counterclaims that are inconsistent with one or more of
those of the Indemnifying Party in respect of the Asserted Liability); and,
provided further, that the Indemnifying Party shall not settle any Asserted
Liability unless (i) such settlement is on exclusively monetary terms and
provides as an unconditional term an immediate release of the Indemnified Party
for all liability with respect to such Asserted Liability or (ii) the
Indemnified Party has consented to the terms of such settlement. If requested by
the Indemnifying Party, the Indemnified Party will, at the sole cost and expense
of the Indemnifying Party, cooperate with reasonable requests of the
Indemnifying Party and its counsel in contesting any Asserted Liability,
including, if appropriate and related to the Asserted Liability in question, in
making any counterclaim against the Third Party Claimant, or any cross-complaint
against any Person (other than the Indemnified Party or its Affiliates). If the
Indemnifying Party fails to undertake the defense of the Asserted Liability
reasonably promptly, the Indemnified Party may, at its option and at the
Indemnifying Party’s expense, to do so in such manner as it deems appropriate;

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provided, however, that the Indemnified Party shall not settle or compromise any
Asserted Liability for which it seeks indemnification hereunder without the
prior written consent of the Indemnifying Party (which shall not be unreasonably
withheld or delayed).
                    (iii) The Indemnifying Party may participate in (but not
control) the defense of any Asserted Liability that it has not elected to defend
with its own counsel and at its own expense.
                    (iv) The Indemnifying Party and the Indemnified Party shall
make mutually available to each other all relevant information in their
possession relating to any Asserted Liability (except to the extent that such
action would result in a loss of attorney-client privilege or would violate any
applicable law) and shall cooperate with each other in the defense thereof.
               (e) No Duplication; Sole Remedy.
                    (i) Any liability for indemnification hereunder shall be
determined without duplication of recovery by reason of the state of facts
giving rise to such liability constituting a breach of more than one
representation or warranty.
                    (ii) The parties’ respective rights to indemnification
provided for in this Section 8.3 shall be the exclusive remedy for any Losses
for which indemnification is provided hereunder; provided, however, that nothing
contained herein shall prevent an Indemnified Party from pursuing remedies that
may be available to such party under applicable law in the event of an
Indemnifying Party’s failure to comply with its indemnification obligations
under this Section 8.3 or in the case of fraud.
          8.4 Survival of Representations, Warranties and Covenants. The
representations and warranties of the parties hereto made pursuant to this
Agreement shall survive the Closing until two (2) years after the Closing Date,
provided that the representations and warranties contained in Sections 4.1, 4.2,
5.2, and 5.3 shall survive indefinitely.
          8.5 No Implied Waivers. No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
          8.6 Successors and Assigns. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective parties hereto, the successors and assigns of the respective
Investors and the successors of the Company whether so expressed or not. None of
the parties hereto may assign any of its rights or obligations hereunder without
the prior written consent of the other parties hereto, except that an Investor
may, without the prior consent of the Company, assign its rights hereunder to
any of its Affiliates. This Agreement shall not inure to the benefit of or be
enforceable by any other Person.
          8.7 Headings. The headings of the Sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.

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          8.8 Governing Law. This Agreement will be governed by and construed
under the laws of the State of New York without regard to its conflicts of laws
rules.
          8.9 Expenses. Except as otherwise specifically provided in this
Agreement, the parties to this Agreement shall bear their respective costs and
expenses incurred in connection with the preparation and execution of this
Agreement and the transactions contemplated hereby.
          8.10 Jurisdiction. Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby may be brought in any
federal or state court located in the County of New York and State of New York,
and each of the parties hereby consents to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.2 shall be deemed
effective service of process on such party.
          8.11 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
          8.12 Counterparts; Effectiveness. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, with the same effect as if all parties had signed the same
document. All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument. This Agreement shall
become effective when each party hereto has received counterparts hereof signed
by all of the other parties hereto.
          8.13 Entire Agreement. This Agreement and the other Transaction
Documents contain the entire agreement among the parties hereto with respect to
the subject matter hereof and such Agreement supersedes and replaces all other
prior agreements, written or oral, among the parties hereto with respect to the
subject matter hereof.
          8.14 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.

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          8.15 No Further Obligation. Following the Closing, except for the
payment by each Investor of the Purchase Price in accordance with the terms
hereof, no Investor has any further obligation to invest in the Company under
this Agreement, the other Transaction Documents, or any of the transactions
contemplated hereby or thereby.

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     IN WITNESS WHEREOF, the Investors hereto have caused this Subscription
Agreement to be duly executed as of the day and year first above written.

         
 
    /s/ HUIQI XU    
 
 
 
  HUIQI XU    

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EXHIBIT A
ACCREDITED INVESTOR QUESTIONNAIRE
To: China 3C Group (the “Company”)
     The undersigned hereby represents and warrants that the information
contained in this accredited investor questionnaire is true and accurate and
acknowledges that the Company is relying thereon.
Status as an “Accredited Investor”. Investor is (check ALL that apply):
_X_(i) A natural person whose individual net worth (assets less liabilities), or
joint net worth with his or her spouse, exceeds $1,000,000.
___(ii) A natural person whose individual income was in excess of $200,000, or
whose joint income with his or her spouse was in excess of $300,000, in each of
the two most recent years, and who has a reasonable expectation of reaching the
same income level for the current year.
___(iii) A director or an executive officer of the Company.
___(iv) A bank, insurance company, registered investment business development
company, small business investment company or employee benefit plan.
___(v) A savings and loan association, credit union, or similar financial
institution, or a registered broker or dealer.
___(vi) A private business development company.
___(vii) An organization described in Section 501(c)(3) of the Internal Revenue
Code with assets in excess of $5,000,000.
___(viii) A corporation, Massachusetts or similar business trust, or partnership
with assets in excess of $5,000,000.
___(ix) A trust with assets in excess of $5,000,000.
___(x) An entity in which all of the equity owners are accredited investors.
Also check the item(s) [(i)-(ix)] that apply to the equity owners. [This item is
not available to an irrevocable trust.]
___(xi) A self-directed IRA, Keogh, or similar plan of which the individual
directing the investments qualifies as an “accredited investor” in one or more
of items (i)-(x) above. Also check the item(s) [(i)-(x)] that apply to the
individual.
___(xii) None of the above.
The undersigned submits this accredited investor questionnaire as of the date
written below.

         
 
    /s/ HUIQI XU    
 
 
 
  HUIQI XU    

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SCHEDULE 1

                          Number of             Shares of             Common
Stock   Purchase Investors   Address   Acquired   Price
HUIQI XU
        1,000,000     USD 100,000

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