Document:

AMENDMENT
TO

     

    SECURITIES
ESCROW AGREEMENT

     

    This
Amendment (“Amendment”) to the Securities Escrow Agreement dated as of March 28,
2008 (the “Securities Escrow Agreement”), by and among QKL Stores, Inc., a
Delaware corporation (the “Company”), Vision Opportunity China LP, a
closed-ended investment company incorporated in Guernsey, as representative of
the Purchasers (the “Purchaser Representative”), Winning State Investment
Limited, a company organized in the British Virgin Islands (the “Principal
Stockholder”), and Loeb & Loeb, LLP (the “Escrow Agent”) is made and entered
into as of October 15, 2009.  Capitalized terms used but not defined herein
shall have the meanings set forth in the Securities Escrow Agreement (as defined
below).

     

    WHEREAS, the Company has filed
a registration statement on Form S-1 in contemplation of a public offering (the
“Offering) of its common stock, $.001 par value (“Common Stock”);
and

     

    WHEREAS, the Company has also
filed an application to list its Common Stock on the NASDAQ stock market (the
“Listing”); and

    

    WHEREAS, as a result of the
Offering and the Listing, there will be certain cash expenses that will impact
the Company’s net income for the fiscal year ended December 31,
2009;

     

    NOW THEREFORE, in
consideration of the foregoing and for other consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:

     

    1.          
 The parties hereto agree to amend paragraph (b) on page 2 of the
Securities Escrow Agreement as follows:

     

    (b)  In 2009, without
additional financing (i) Both Net Income, as defined in accordance with US GAAP
and reported by the Company in its audited financial statements for 2009 (the
“2009 financial
statements”) and Cash from Operations, as reported by the Company in the
2009 financial statements exceed $11.15 million and (ii) Earnings Per Share
equal or exceed $0.27, such “Earnings Per Share” to be calculated by dividing
the lesser of Net Income and Cash from Operations, as reported by the Company in
the 2009 financial statements plus (a) any amounts
that may have been recorded as charges or liabilities on the 2009 financial
statements due to the application of EITF No. 00-19 that are associated with (1)
any outstanding Warrants of the Company issued in connection with the Purchase
Agreement or (2) any liabilities created as a result of the Escrow Shares being
released to any officers or directors of the Company and (b) one time
non-recurring cash expenses incurred by the Company relating to the Offering and
the Listing, including all legal and accounting fees, SEC and FINRA filing fees,
NASDAQ application and listing fees, printing fees and road show expenses
(“2009 Net
Income”) by the then Outstanding Shares; provided however that for the
purposes of this paragraph, Outstanding Shares shall exclude any shares issued
by the Company in the Offering (the performance thresholds set forth in (i) and
(ii) above shall be collectively referred to herein as the “2009 Performance
Thresholds”); and

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    2.           Except
as specifically amended hereby, the Securities Escrow Agreement shall continue
in full force and effect and the parties hereby reaffirm the same.

     

    3.           This
Amendment shall be construed in accordance with and governed by the internal
laws of the State of New York.

     

    4.           This
Amendment is entered into pursuant to Section 4.7 of the Securities Escrow
Agreement, which allows the parties to amend the Securities Escrow Agreement if
such amendment is signed by the Company, the Purchaser Representative, the
Principal Stockholder and the Escrow Agent.

     

    5.           This
Amendment may be signed in any number of counterparts, each of which shall be an
original and all of which shall be deemed to be one and the same instrument,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.  A facsimile signature shall be deemed to be an original
signature for purposes of this Supplement.

     

    [Remainder
of page intentionally left blank]

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    [SIGNATURE
PAGE TO THE SUPPLEMENT TO SECURITIES ESCROW AGREEMENT]

     

    IN WITNESS WHEREOF, the
parties hereto have duly executed this Supplement  as of the day and
year first above written.

     

    QKL
STORES, INC.

    

    
      
        
          
            	
                    By:

                  	
                     /s/
      Zhuangyi Wang

                  	 
      

          

        

      

    

    Name:
Zhuangyi Wang

    Title:
Chief Executive Officer and President

     

    PURCHASER
REPRESENTATIVE:

    

    VISION
OPPORUNITY CHINA LP

     

    
      
        
          	
                  By:

                	
                   /s/
      Adam Benowitz

                	 
      

        

      

    

    Name:
Adam Benowitz

    Title:
Authorized Signatory

    

    ESCROW
AGENT:

     

    LOEB
& LOEB, LLP

    

    
      
        
          	
                  By:

                	
                   /s/
      Mitchell Nussbaum

                	 
      

        

      

    

    Name:
Mitchell Nussbaum

    Title:
Partner

    

    PRINCIPAL
STOCKHOLDER:

     

    
      
        	
                By:

              	
                 /s/
      Chin Yoke Yap

              	 
      

      

    

    Name:
Winning State Investment Limited

    Authorized
Signatory: Chin Yoke Yap

     

    
      
         

      

      
        3LOCK-UP
LETTER

     

    October
15, 2009

     

    Roth
Capital Partners, LLC

    24
Corporate Plaza

    Newport
Beach, California 92660

     

    Ladies
and Gentlemen:

     

    The
undersigned understands that Roth Capital Partners, LLC (“Roth”) proposes to
enter into an Underwriting Agreement (the “Underwriting
Agreement”) with QKL Stores, Inc., a Delaware corporation (the “Company”) providing
for the public offering (the “Public Offering”) by
Roth of shares of the Company’s common stock, $0.001 par value per share (the
“Common
Stock”).

     

    To induce
Roth to continue its efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Roth, it
will not, during the period commencing on the date hereof and ending 180 days
after the date of the final prospectus supplement relating to the Public
Offering (the “Prospectus”) (the
“Lock-Up
Period”), (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise.  The
foregoing sentence shall not apply to (a) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the Public Offering, provided that no filing
under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)
shall be required or shall be voluntarily made in connection with subsequent
sales of Common Stock or other securities acquired in such open market
transactions, or (b) transfers of shares of Common Stock or any security
convertible into Common Stock as a bona fide gift, by will or intestacy or to a
family member or trust for the benefit of a family member; provided that in the case of
any transfer or distribution pursuant to clause (b), (i) each donee or
distributee shall sign and deliver a lock-up letter substantially in the form of
this letter and (ii) no filing under Section 16(a) of the Exchange Act,
reporting a reduction in beneficial ownership of shares of Common Stock, shall
be required or shall be voluntarily made during the Lock-up
Period.  In addition, the undersigned agrees that, without the prior
written consent of Roth, it will not, during the period commencing on the date
hereof and ending 180 days after the date of the Prospectus, make any demand for
or exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.  The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company’s transfer agent and registrar against
the transfer of the undersigned’s shares of Common Stock except in compliance
with the foregoing restrictions.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    If (i)
the Company issues an earnings release or material news, or a material event
relating to the Company occurs, during the last 17 days of the Lock-Up Period,
or (ii) prior to the expiration of the Lock-Up Period, the Company announces
that it will release earnings results during the 16-day period beginning on the
last day of the Lock-Up Period, the restrictions imposed by this agreement shall
continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or
material event, unless Roth waives such extension.

     

    No
provision in this agreement shall be deemed to restrict or prohibit the exercise
or exchange by the undersigned of any option or warrant to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
Common Stock, provided
that the undersigned does not transfer the Common Stock acquired on such
exercise or exchange during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this agreement.  In addition, no provision
herein shall be deemed to restrict or prohibit the entry into or modification of
a so-called “10b5-1” plan at any time (other than the entry into or modification
of such a plan in such a manner as to cause the sale of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock within the Lock-Up Period).

     

    The
undersigned understands that the Company and Roth are relying upon this
agreement in proceeding toward consummation of the Public
Offering.  The undersigned further understands that this agreement is
irrevocable and shall be binding upon the undersigned’s heirs, legal
representatives, successors and assigns.

     

    The
undersigned understands that, if the Underwriting Agreement is not executed by
December 1, 2009, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Common Stock to be sold thereunder, the
undersigned shall be released from all obligations under this letter
agreement.

     

    Whether
or not the Public Offering actually occurs depends on a number of factors,
including market conditions.  Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and Roth.

     

    (Signature
pages follow.)

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                Winning
      State International Ltd.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Chin YokeYap

              	 
      
	 
      	 
      	
                Name:
      Chin Yoke Yap

              
	 
      	 
      	
                Title:
      Director

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                /s/
      Zhuangyi Wang

              
	 
      	
                Zhuangyi
      Wang

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

              

      

    

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                /s/
      Alan Stewart

              
	 
      	
                Alan
      Stewart

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                /s/
      Crystal L. Chen

              
	 
      	
                Crystal
      L. Chen

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                /s/
      Limin Zheng

              
	 
      	
                Limin
      Zheng

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                /s/
      Gary Crook

              
	 
      	
                Gary
      Crook

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                /s/
      Zhiguo Jin

              
	 
      	
                Zhiguo
      Jin

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    
      
        	 
      	
                Very
      truly yours,

              
	 
      	 
      
	 
      	
                /s/
      Chaoying Li

              
	 
      	
                Chaoying
      Li

              
	 
      	 
      
	 
      	
                Address:

              
	 
      	 
      
	 
      	
                c/o
      QKL Stores Inc.

              
	 
      	
                44
      Jingqi Street

              
	 
      	
                Dongfeng
      Xincun

              
	 
      	
                Sartu
      District

              
	 
      	
                163311
      Daqing, P.R. China

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