Exhibit 10.1



 






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.




 









 








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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