Document:

572,000
SHARES

 

SINO-GLOBAL
SHIPPING AMERICA, LTD.

 

COMMON STOCK

 

UNDERWRITING
AGREEMENT

 

June 27, 2014

 

 

National Securities Corporation

As representative of the several Underwriters

Named in Schedule VI hereto

410 Park Avenue

14th Floor

New York, NY 10022

 

Ladies and Gentlemen:

 

Sino-Global Shipping
America, Ltd., a Virginia corporation (the “Company”) proposes, subject to the terms and conditions stated herein,
to issue and sell to the Underwriters named in Schedule VI hereto (the “Underwriters”), for whom National Securities
Corporation is acting as representative (the “Representative”), an aggregate of 572,000 authorized but unissued shares
(the “Firm Shares”) and, at the election of the Underwriters, up to 85,800 additional shares (the “Additional
Shares”) of Common Stock, without par value per share (the “Common Stock”), of the Company (the Firm
Shares and the Additional Shares that the Underwriters elect to purchase pursuant to Section 3 hereof being collectively called
the “Securities”).

 

The Company and the
Underwriters hereby confirm their agreement with respect to the purchase and sale of the Securities as follows:

 

1.                 
REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared and filed with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form S-3 (File No. 333-194211) under the Securities Act of 1933,
as amended (the “Securities Act”), and the rules and regulations (the “Rules and Regulations”)
of the Commission thereunder, and such amendments to such registration statement as may have been required to the date of this
Agreement. Such registration statement has been declared effective by the Commission. Such registration statement, at any given
time, including amendments thereto to such time, the exhibits and any schedules thereto at such time, the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Securities Act at such time and the documents and information otherwise
deemed to be a part thereof or included therein by Rule 430B under the Securities Act or otherwise pursuant to the Rules and Regulations
at such time, is herein called the “Registration Statement.” The Registration Statement at the time it originally
became effective is herein called the “Original Registration Statement.”

 

    	 

    	 

    

  

The Company proposes
to file with the Commission pursuant to Rule 424 under the Securities Act a final prospectus supplement relating to the Securities
to a form of prospectus included in the Registration Statement relating to the Securities in the form heretofore delivered to the
Underwriters. Such prospectus in the form in which it appears in the Registration Statement is hereinafter called the “Base
Prospectus.” Such supplemental form of prospectus, in the form in which it shall be filed with the Commission pursuant
to Rule 424(b) (including the Base Prospectus as so supplemented) is hereinafter called the “Prospectus.” Any
preliminary form of Prospectus which is filed or used prior to filing of the Prospectus is hereinafter called a “Preliminary
Prospectus.” Any reference herein to the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed
to include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act as of the date
of such prospectus.

 

For purposes of this
Agreement, all references to the Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (“EDGAR”). All references in this Agreement to amendments or supplements
to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to mean and include
the subsequent filing of any document under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
which is deemed to be incorporated by reference therein or otherwise deemed by the Rules and Regulations to be a part thereof.

 

2.                 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

(a)               
The Company represents and warrants to, and agrees
with, the Underwriters as follows:

 

(i)                
No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission and each
Preliminary Prospectus, at the time of filing or the time of first use within the meaning of the Rules and Regulations, complied
in all material respects with the requirements of the Securities Act and the Rules and Regulations and did not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing shall not apply
to statements in or omissions from any Preliminary Prospectus in reliance upon, and in conformity with, written information furnished
to the Company by the Representative specifically for use in the preparation thereof.

 

(ii)              
The Company has complied with all requests of the Commission for additional or supplemental information, and there
are no outstanding comments from Commission staff. The Registration Statement has become and remains effective as provided in Section
12 of the Exchange Act. No stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings
for such purpose have been instituted or are pending or, to the best knowledge of the Company, are contemplated or threatened by
the Commission.

 

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(iii)            
Each part of the Registration Statement and any post-effective amendment thereto, at the time such part became effective
(including each deemed effective date with respect to the Underwriters pursuant to Rule 430B under the Securities Act), at all
other subsequent times until the expiration of the Prospectus Delivery Period (as defined below), and at the Closing Date (as hereinafter
defined), and the Prospectus (or any amendment or supplement to the Prospectus), at the time of filing or the time of first use
within the meaning of the Rules and Regulations, at all subsequent times until expiration of the Prospectus Delivery Period, and
at the Closing Date complied and will comply in all material respects with the applicable requirements and provisions of the Securities
Act, the Rules and Regulations and the Exchange Act and did not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus,
as amended or supplemented, as of its date, or the time of first use within the meaning of the Rules and Regulations, at all subsequent
times until the expiration of the Prospectus Delivery Period, and at the Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The interactive data in eXtensible Business Reporting Language included
or incorporated by reference in the Registration Statement and the Prospectus fairly presents the information called for in all
material respects and is prepared in accordance with the rules and regulations of the Commission applicable thereto. The representations
and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration
Statement or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance
upon and in conformity with written information relating to the Underwriters furnished to the Company by the Representative, specifically
for use in the preparation thereof.

 

(iv)            
Neither (A) the Issuer General Free Writing Prospectus(es) issued at or prior to the Time of Sale, the Statutory
Prospectus and the information set forth in Schedule I to this Agreement, all considered together (collectively, the “Time
of Sale Disclosure Package”), nor (B) any individual Issuer Limited-Use Free Writing Prospectus, when considered together
with the Time of Sale Disclosure Package, includes or included as of the Time of Sale any untrue statement of a material fact or
omits or omitted as of the Time of Sale to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions
from any Statutory Prospectus included in the Registration Statement or any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by the Representative specifically for use therein. As used in this paragraph
and elsewhere in this Agreement:

 

(1)              
“Time of Sale” means 4:00 p.m. (Eastern time) on the date of this Agreement.

 

(2)              
“Statutory Prospectus” as of any time means the Preliminary Prospectus that is included in the
Registration Statement immediately prior to that time. For purposes of this definition, information contained in a form of prospectus
that is deemed retroactively to be a part of the Registration Statement pursuant to Rule 430B under the Securities Act shall be
considered to be included in the Statutory Prospectus as of the actual time that form of prospectus is filed with the Commission
pursuant to Rule 424(b) under the Securities Act.

 

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(3)              
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 under the Securities Act, relating to the Securities that (A) is required to be filed with the Commission by the Company,
or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities Act because it contains a description of the Securities
or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities
Act.

 

(4)              
“Issuer General Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended
for general distribution to prospective investors, as evidenced by its being specified in Schedule II to this Agreement.

 

(5)              
“Issuer Limited-Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
not an Issuer General Free Writing Prospectus.

 

(v)              
(A)Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the Prospectus
Delivery Period or until any earlier date that the Company notified or notifies the Underwriters as described in Section 4(a)(iii)(B),
did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained
in the Registration Statement, any Statutory Prospectus or the Prospectus. The foregoing sentence does not apply to statements
in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the
Company by the Underwriters specifically for use therein.

 

(B)             
At the earliest time after the filing of the Registration Statement that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Securities and (2) at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act, including
the Company or any subsidiary in the preceding three years not having been convicted of a felony or misdemeanor or having been
made the subject of a judicial or administrative decree or order as described in Rule 405 (without taking account of any determination
by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer), nor an “excluded
issuer” as defined in Rule 164 under the Securities Act.

 

(C)             
Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all subsequent times through the Prospectus
Delivery Period, all other conditions to use thereof as set forth in Rules 164 and 433 under the Securities Act.

 

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(vi)            
The financial statements of the Company, together with the related notes, included or incorporated by reference in
the Registration Statement, the Time of Sale Disclosure Package and the Prospectus comply in all material respects with the requirements
of the Securities Act and the Exchange Act and fairly present the consolidated financial condition of the Company and its subsidiaries
as of the dates indicated and the consolidated results of operations and changes in cash flows for the periods therein specified
in conformity with generally accepted accounting principles consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information required to be stated therein. No other financial
statements or schedules are required to be included in the Registration Statement, the Time of Sale Disclosure Package or the Prospectus.
There is no pro forma or as adjusted financial information which is required to be included in the Registration Statement, the
Time of Sale Disclosure Package, or the Prospectus or a document incorporated by reference therein in accordance with the Securities
Act and the Rules and Regulations which has not been included or incorporated as so required. To the Company’s knowledge,
Friedman, LLP, which has expressed its opinion with respect to the audited financial statements and schedules filed as a part of
the Registration Statement and included in the Registration Statement, the Time of Sale Disclosure Package and the Prospectus,
is an independent public accounting firm within the meaning of the Securities Act and the Rules and Regulations and such accountant
is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

 

(vii)          
Each of the Company and its subsidiaries has been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation. Each of the Company and its subsidiaries has the corporate power
and authority to own its properties and conduct its business as currently being carried on and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Prospectus, and is duly qualified to do business as a foreign corporation
in good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would have a material adverse effect upon the business, prospects,
properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken
as a whole, or in its ability to perform its obligations under this Agreement (“Material Adverse Effect”).

 

(viii)        
Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus, subsequent to the respective
dates as of which information is given in the Time of Sale Disclosure Package, neither the Company nor any of its subsidiaries
has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, or declared
or paid any dividends or made any distribution of any kind with respect to its capital stock; and, except as to the issuance of,
(a) 200,000 shares of common stock pursuant to the Company’s incentive plan completed on June 25, 2014 and (b) 200,000 shares
of common stock in a private sale completed on June 23, 2014, there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options
or warrants), or any material change in the short-term or long-term debt, or any issuance of options, warrants, convertible securities
or other rights to purchase the capital stock, of the Company or any of its subsidiaries, or any material adverse change in the
financial condition, business, prospects, property, operations or results of operations of the Company and its subsidiaries, taken
as a whole (“Material Adverse Change”).

 

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(ix)            
Except as set forth in the Time of Sale Disclosure Package and the Prospectus, there is not pending or, to the knowledge
of the Company, threatened or contemplated, any action, suit or proceeding to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any of its subsidiaries is the subject before or by any court or governmental
agency, authority or body, or any arbitrator, which, individually or in the aggregate, might result in any Material Adverse Change.

 

(x)              
This Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and
binding obligation of the Company, enforceable in accordance with its terms, except as rights to indemnity hereunder may be limited
by federal or state securities laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally and subject to general principles of equity. The execution, delivery
and performance of this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any statute, any agreement or instrument to which the Company
is a party or by which it is bound or to which any of its property is subject, or any order, rule, regulation or decree of any
court or governmental agency or body having jurisdiction over the Company or any of its properties except for violations and defaults
which individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect. The execution, delivery
and performance of this Agreement and the consummation of the transactions herein contemplated will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, the Company’s charter or by-laws. No consent, approval,
authorization or order of, or filing with, any court or governmental agency or body is required for the execution, delivery and
performance of this Agreement or for the consummation of the transactions contemplated hereby, including the issuance or sale of
the Securities by the Company, except such as may be required under the Securities Act, state securities or blue sky laws, or the
NASDAQ Capital Market listing rules; and the Company has the power and authority to enter into this Agreement and to authorize,
issue and sell the Securities as contemplated by this Agreement.

 

(xi)            
All of the issued and outstanding shares of capital stock of the Company, including the outstanding shares of Common
Stock, are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance with all federal and
state securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or
purchase securities that have not been waived in writing (a copy of which has been delivered to counsel to the Underwriters); the
Securities which may be sold hereunder by the Company have been duly authorized and, when issued, delivered and paid for in accordance
with the terms of this Agreement, will have been validly issued and will be fully paid and nonassessable; and the capital stock
of the Company, including the Common Stock, conforms to the description thereof in the Registration Statement, in the Time of Sale
Disclosure Package and in the Prospectus. Except as otherwise stated in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction
upon the voting or transfer of, any shares of Common Stock pursuant to the Company’s charter, by-laws or any agreement or
other instrument to which the Company is a party or by which the Company is bound. Neither the filing of the Registration Statement
nor the offering or sale of the Securities as contemplated by this Agreement gives rise to any rights for or relating to the registration
of any shares of Common Stock or other securities of the Company that have not been waived. All of the issued and outstanding shares
of capital stock of each of the Company’s subsidiaries have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise described in the Registration Statement, in the Time of Sale Disclosure Package and
in the Prospectus and except for any directors’ qualifying shares, the Company owns of record and beneficially, free and
clear of any security interests, claims, liens, proxies, equities or other encumbrances, all of the issued and outstanding shares
of such stock. Except as described in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus,
there are no options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company or any
subsidiary of the Company any shares of the capital stock of the Company or any subsidiary of the Company. The Company has an authorized
and outstanding capitalization as set forth in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus.

 

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(xii)          
The Company and each of its subsidiaries holds, and is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any governmental or self-regulatory
body required for the conduct of its business and all such franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect in all material respects; and the Company and each of its subsidiaries
is in compliance in all material respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees.

 

(xiii)        
The Company and its subsidiaries have good and marketable title to all property (whether real or personal) described
in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus as being owned by them which are material
to the business of the Company, in each case free and clear of all liens, claims, security interests, other encumbrances or defects
except such as are described in the Registration Statement, in the Time of Sale Disclosure Package and in the Prospectus. The property
held under lease by the Company and its subsidiaries is held by them under valid, subsisting and enforceable leases with only such
exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of
the Company or its subsidiaries.

 

(xiv)        
The Company and each of its subsidiaries owns or possesses all patents, patent applications, trademarks, service
marks, tradenames, trademark registrations, service mark registrations, copyrights, licenses, inventions, trade secrets and rights
necessary for the conduct of the business of the Company and its subsidiaries as currently carried on and as described in the Registration
Statement, in the Time of Sale Disclosure Package and in the Prospectus; except as stated in the Registration Statement, in the
Time of Sale Disclosure Package and in the Prospectus, to the knowledge of the Company, no name which the Company or any of its
subsidiaries uses and no other aspect of the business of the Company or any of its subsidiaries will involve or give rise to any
infringement of, or license or similar fees for, any patents, patent applications, trademarks, service marks, tradenames, trademark
registrations, service mark registrations, copyrights, licenses, inventions, trade secrets or other similar rights of others material
to the business or prospects of the Company and its subsidiaries and neither the Company nor any of its subsidiaries has received
any notice alleging any such infringement or fee.

 

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(xv)          
Neither the Company nor any of its subsidiaries is in violation of its respective charter or by-laws or in breach
of or otherwise in default, and no event has occurred which, with notice or lapse of time or both, would constitute such a default,
in the performance of any material obligation, agreement or condition contained in any bond, debenture, note, indenture, loan agreement
or any other material contract, lease or other instrument to which it is subject or by which any of them may be bound, or to which
any of the material property or assets of the Company or any of its subsidiaries is subject.

 

(xvi)        
The Company and its subsidiaries have timely filed all federal, state and local income tax returns required to be
filed and are not in default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect
thereto, other than any which the Company or any of its subsidiaries is contesting in good faith.

 

(xvii)      
The Company has not distributed and will not distribute any prospectus or other offering material in connection with
the offering and sale of the Securities other than any Preliminary Prospectus, the Time of Sale Disclosure Package or the Prospectus
or other materials permitted by the Securities Act to be distributed by the Company; provided, however, that, except
as set forth on Schedule II, the Company has not made and will not make any offer relating to the Securities that would
constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act, except in accordance with the
provisions of Section 4(a)(xiv) of this Agreement.

 

(xviii)    
 The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the NASDAQ Capital
Market and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act or delisting the Common Stock from the NASDAQ Capital Market nor has the Company received any notification
that the Commission or the NASDAQ Capital Market is contemplating terminating such registration or listing. The Company has complied
in all material respects with the applicable requirements of the NASDAQ Capital Market for maintenance of inclusion of the Common
Stock on the NASDAQ Capital Market.

 

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(xix)        
Other than the subsidiaries of the Company listed on Schedule III hereto, the Company, directly or indirectly,
owns no capital stock or other equity or ownership or proprietary interest in any corporation, partnership, association, trust
or other entity.

 

(xx)          
The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management’s general or specific authorization; (B) transactions are recorded
as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in accordance with management’s general or specific
authorization; and (D) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Except as described in the Registration Statement, in the Time of Sale Disclosure
Package and in the Prospectus, since September 27, 2013, there has been (i) no material weakness or significant deficiencies in
the Company’s internal control over financial reporting (whether or not remediated), (ii) no change in the Company’s
internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting and (iii) no fraud, whether or not material, that involves management or other employees
who have a significant role in the Company’s internal control over financial reporting.

 

(xxi)        
Other than as contemplated by this Agreement, the Company has not incurred any liability for any finder’s or
broker’s fee or agent’s commission in connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.

 

(xxii)      
The Company carries, or is covered by, business insurance in such amounts and covering such risks as is adequate
for the conduct of its business and the value of its properties and as is customary for companies engaged in similar businesses
in similar industries.

 

(xxiii)    
The Company is not and, after giving effect to the offering and sale of the Securities, will not be an “investment
company,” as such term is defined in the Investment Company Act of 1940, as amended.

 

(xxiv)    
As of the filing date of the Registration Statement and as of any update of the Registration Statement pursuant to
Section 10(a)(3) of the Securities Act (including the filing of any Annual Report on Form 10-K), the Company was eligible to file
a “shelf” Registration Statement on Form S-3 with the Commission.

 

(xxv)      
Pursuant to General Instruction I.B.6 of Form S-3, adopted by the Commission, the Firm Shares and the Additional
Shares are eligible to be registered pursuant to the Prospectus filed as a part of the Company’s effective Registration Statement.

 

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(xxvi)    
The documents incorporated by reference in the Time of Sale Disclosure Package, the Registration Statement and in
the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects
to the requirements of the Securities Act or the Exchange Act, as applicable, and were filed on a timely basis with the Commission
and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were made, not misleading; any further documents so
filed and incorporated by reference in the Time of Sale Disclosure Package, the Registration Statement or in the Prospectus, when
such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and
will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

 

(xxvii)  
The Company is in substantial compliance with all applicable provisions of the Sarbanes-Oxley Act and the rules and
regulations of the Commission thereunder that are effective with respect to the Company and its subsidiaries on the date of this
Agreement, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse Effect.

 

(xxviii)
 The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14
under the Exchange Act) and such controls and procedures are effective in ensuring that material information relating to the Company,
including its subsidiaries, is made known to the principal executive officer and the principal financial officer. The Company has
utilized such controls and procedures in preparing and evaluating the disclosures in the Registration Statement, in the Time of
Sale Disclosure Package and in the Prospectus.

 

(xxix)    
 Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, any of its directors, officers,
agents, employees, affiliates or other person acting on their behalf is aware of or has taken any action, directly or indirectly,
that has violated or would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or
any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the FCPA. The Company and its subsidiaries have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(xxx)      
The operations of the Company and its subsidiaries are and have been conducted at all times, in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar
applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.

 

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(xxxi)    
Neither the Company nor any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of this offering of the Securities contemplated hereby, or lend, contribute or otherwise make available such proceeds
to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.

 

(xxxii)  
No approval of the stockholders of the Company under the rules and regulations of NASDAQ Capital Market is required
for the Company to issue and deliver the Securities to the Underwriters.

 

(b)              
Any certificate signed by any officer of the Company and delivered to the Underwriters or to the Underwriters’
Counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

 

3.                 
PURCHASE, SALE AND DELIVERY OF SECURITIES.

 

(a)               
On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions
herein set forth, (i) the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at a purchase price equal to $1.76 per share or such higher price so that the underwriting
discount, following the offering of the shares and the price to the public as contemplated by the Prospectus, with respect to each
such share is 8% (the “Per Share Price”), the Firm Shares as set forth opposite the name of such Underwriter
on Schedule VI hereto and (ii) in the event and to the extent that the Underwriters shall exercise the election to purchase
Additional Shares as provided below, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the purchase price per share set forth in clause (a)(i) of
this Section 3, that portion of the number of Additional Shares as to which such election shall have been exercised (to be adjusted
so as to eliminate fractional shares) determined by multiplying such number of Additional Shares by a fraction, the numerator of
which is the maximum number of Additional Shares which such Underwriter is entitled to purchase as set forth opposite the name
of such Underwriter in Schedule VI hereto and the denominator of which is the maximum number of Additional Shares that all
of the Underwriters are entitled to purchase hereunder.

 

As referenced in Section
3(a)(ii) above, the Company hereby grants to the several Underwriters the option to purchase from the Company an aggregate of up
to fifteen percent (15%) Additional Shares, at the Per Share Price. This option may be exercised by the Representative on behalf
of the Underwriters at any time (but not more than once) on or before the date that is thirty (30) days following the date hereof,
by written notice to the Company. Such notice shall set forth the aggregate number of Additional Shares as to which the option
is being exercised, and the date and time when the Additional Shares are to be delivered (such date and time being herein referred
to as the "Option Closing Date"); provided, however, that the Option Closing Date shall not be earlier
than the Closing Date nor later than one business day after the date on which the option shall have been exercised unless the Company
and the Underwriters otherwise agree.

 

    	11

    	 

    

  

Payment of the purchase price and delivery
for the Additional Shares shall be made at the Option Closing Date in the same manner and at the same office as the payment for
the Firm Shares as set forth in subparagraph (b) below.

 

(b)              
The Securities will be delivered by the Company to the Underwriters for the Underwriters’ accounts against
payment of the purchase price therefor by wire transfer of same day funds payable to the order of the Company, as appropriate,
at the offices of National Securities Corporation, 410 Park Avenue, 14th Floor, New York, NY 10022, or such other location
as may be mutually acceptable, (1) with respect to the Firm Shares, at 8:00 a.m. Pacific time on the third (or if the Firm Shares
are priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as the Representative and the Company determine pursuant to Rule 15c6-1(a)
under the Exchange Act (such time and date of delivery being herein referred to as the “Closing Date”) and (2)
with respect to the Additional Shares, at 8:00 a.m. Pacific time on the Option Closing Date. If the Representative so elects, delivery
of the Securities may be made by credit through full fast transfer to the account at The Depository Trust Company designated by
the Representative. Certificates representing the Securities, in definitive form and in such denominations and registered in such
names as the Representative may request upon at least two business days’ prior notice to the Company, will be made available
for checking and packaging not later than 10:30 a.m., Pacific time, on the business day next preceding the applicable closing date
at the offices of National Securities Corporation, 410 Park Avenue, 14th Floor, New York, NY 10022, or such other location
as may be mutually acceptable.

 

4.                 
COVENANTS.

 

(a)               
The Company covenants and agrees with the Underwriters as follows:

 

(i)                
During the period beginning on the date hereof and ending on the later of the Closing Date or such date, as in the
opinion of counsel for the Underwriters, the Prospectus is no longer required by law to be delivered (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act is no longer required to be provided), in connection with sales by an underwriter
or dealer (the “Prospectus Delivery Period”), prior to amending or supplementing the Registration Statement,
the Time of Sale Disclosure Package or the Prospectus, the Company shall furnish to the Underwriters for review a copy of each
such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Underwriters
reasonably object.

 

    	12

    	 

    

  

(ii)              
During the Prospectus Delivery Period, the Company shall promptly advise the Underwriters in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from, the Commission, (ii) of the time and date of any
filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any Preliminary Prospectus,
the Time of Sale Disclosure Package or the Prospectus, (iii) of the time and date that any post-effective amendment to the Registration
Statement becomes effective and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto or of any order preventing or suspending its use or the use of any Preliminary
Prospectus, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed for
trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes.
If the Commission shall enter any such stop order at any time, the Company will use its reasonable efforts to obtain the lifting
of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules
424(b), 430A and 430B, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings
made by the Company under Rule 424(b) or Rule 433 were received in a timely manner by the Commission (without reliance on Rule
424(b)(8) or Rule 164(b)).

 

(iii)            
(A)During the Prospectus Delivery Period, the Company will comply as far as it is able with all requirements
imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in
force, and by the Exchange Act so far as necessary to permit the continuance of sales of or dealings in the Securities as contemplated
by the provisions hereof, the Time of Sale Disclosure Package, and the Registration Statement and the Prospectus. If during such
period any event occurs as a result of which the Prospectus (or if the Prospectus is not yet available to prospective purchasers,
the Time of Sale Disclosure Package) would include an untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is
necessary or appropriate in the opinion of the Company or its counsel or the Underwriters or counsel to the Underwriters to amend
the Registration Statement or supplement the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the
Time of Sale Disclosure Package ) to comply with the Securities Act or to file under the Exchange Act any document which would
be deemed to be incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, the
Company will promptly notify the Underwriters and will amend the Registration Statement or supplement the Prospectus (or if the
Prospectus is not yet available to prospective purchasers, the Time of Sale Disclosure Package) or file such document (at the expense
of the Company) so as to correct such statement or omission or effect such compliance.

 

(B)             
If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration
Statement, the Statutory Prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted
or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing
at that subsequent time, not misleading, the Company has promptly notified or promptly will notify the Underwriters and has promptly
amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.

 

    	13

    	 

    

  

(iv)            
The Company shall take or cause to be taken all necessary action to qualify the Securities for sale under the securities
laws of such jurisdictions as the Underwriters reasonably designate and to continue such qualifications in effect so long as required
for the distribution of the Securities, except that the Company shall not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in any state.

 

(v)              
The Company will furnish to the Underwriters and counsel for the Underwriters copies of the Registration Statement,
each Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus, and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the Underwriters may from time to time reasonably request.

 

(vi)            
The Company will make generally available to its security holders as soon as practicable, but in any event not later
than 15 months after the end of the Company’s current fiscal quarter (plus any extension afforded the Company under Rule
12b-25 under the Exchange Act), an earnings statement (which need not be audited) covering a 12-month period that shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.

 

(vii)          
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated,
will pay or cause to be paid (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection
with the delivery to the Underwriters of the Securities, (B) all expenses and fees of the Company in connection with the preparation,
printing, filing, delivery, and shipping of the Registration Statement (including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Securities, each Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus
and any amendment thereof or supplement thereto, and the printing, delivery, and shipping of this Agreement and other underwriting
documents, including Blue Sky Memoranda (covering the states and other applicable jurisdictions), (C) all filing fees in connection
with the qualification of the Securities for offering and sale by the Underwriters or by dealers under the securities or blue sky
laws of the states and other jurisdictions which the Underwriters shall designate, (D) the fees and expenses of any transfer agent
or registrar, (E) the filing fees incident to any required review and approval by the Financial Industry Regulatory Authority (“FINRA”)
of the terms of the sale of the Securities, (F) listing fees, if any, and (G) all other costs and expenses incident to the performance
of its obligations hereunder that are not otherwise specifically provided for herein. If this Agreement is terminated by the Underwriters
pursuant to Section 8 hereof or if the sale of the Securities provided for herein is not consummated by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition
of the Underwriters’ obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse
the Underwriters for reasonable fees and disbursements of counsel not to exceed $45,000 in the aggregate (“Underwriters’
Counsel Fees”) and all other reasonable out-of-pocket disbursements (including but not limited to printing expenses,
travel expenses, postage, facsimile and telephone charges) not to exceed $15,000 in the aggregate (“Other Expenses”
and, collectively with the Underwriters’ Counsel Fees, “Underwriters’ Reimbursable Expenses”) incurred
by the Underwriters in connection with their investigation, preparing to market and marketing the Securities or in contemplation
of performing their obligations hereunder. Notwithstanding anything contained herein, the maximum amount payable by the Company
for Underwriters’ Reimbursable Expenses pursuant to the preceding sentence of this Section 4(a)(vii) shall be $60,000.

 

    	14

    	 

    

  

(viii)        
The Company will apply the net proceeds from the sale of the Securities to be sold by it hereunder for the purposes
set forth in the Time of Sale Disclosure Package and in the Prospectus.

 

(ix)            
None of the Company and its subsidiaries has taken or will take and, to the Company’s knowledge, none of its
or their employees, officers or directors has taken or will take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has constituted, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities.

 

(x)              
The Company will not incur any liability for any finder’s or broker’s fee or agent’s commission
in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

(xi)            
During the Prospectus Delivery Period, the Company will file on a timely basis with the Commission such periodic
and special reports as required by the Rules and Regulations.

 

(xii)          
The Company and its subsidiaries will maintain such controls and other procedures, including without limitation those
applicable to the Company and required by Sections 302 and 906 of the Sarbanes-Oxley Act and the applicable regulations thereunder,
that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules
and forms, including without limitation, controls and procedures designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s
management, including its principal executive officer and its principal financial officer, or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure, to ensure that material information relating to Company,
including its subsidiaries, is made known to them by others within those entities.

 

    	15

    	 

    

  

(xiii)        
The Company and its subsidiaries will substantially comply with all effective applicable provisions of the Sarbanes-Oxley
Act.

 

(xiv)        
The Company represents and agrees that, unless it obtains the prior written consent of the Representative, and the
Underwriters represent and agree that, unless they obtain the prior written consent of the Company, they have not made and will
not make any offer relating to the Securities that would constitute an “issuer free writing prospectus,” as defined
in Rule 433 under the Securities Act, or that would otherwise constitute a “free writing prospectus,” as defined in
Rule 405 under the Securities Act, required to be filed with the Commission; provided that the prior written consent of the parties
hereto shall be deemed to have been given in respect of the free writing prospectuses included in Schedule II. Any such
free writing prospectus consented to by the Company and the Underwriters is hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company represents that it has treated or agrees that it will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the
requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission filing where required,
legending and record keeping.

 

(xv)          
The Company will not, for a period of ninety (90) days from the date of the Prospectus (the “Lock-Up Period”),
without the prior written consent of the Underwriters, directly or indirectly offer, sell, assign, transfer, pledge, contract to
sell, or otherwise dispose of, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, other than (A) the Company’s sale of the Securities hereunder, (B) the issuance of Common Stock or any equity
awards (including the issuance of Common Stock upon exercise or settlement of such equity awards) pursuant to the Company’s
incentive compensation plans as such plans are in existence on the date hereof and described in the Prospectus, and (C) the issuance
of Common Stock pursuant to the vesting or exercises of options, restricted stock units, warrants or rights outstanding on the
date hereof. The Company will cause each director and executive officer listed on Schedule V to furnish to the Underwriters,
prior to the Closing Date, a letter, substantially in the form of Schedule IV hereto, pursuant to which each such person
shall agree, among other things, subject to the terms and conditions set forth in each such letter, not to directly or indirectly
offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, not to engage in any swap or other agreement or arrangement that
transfers, in whole or in part, directly or indirectly, the economic risk of ownership of Common Stock or any such securities,
during the period of ninety (90) days from the date of the Prospectus, without the prior written consent of the Underwriters. The
Company also agrees that during such ninety (90) day period, the Company will not file any registration statement, preliminary
prospectus or prospectus, or any amendment or supplement thereto, under the Securities Act for any such transaction or which registers,
or offers for sale, Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, except for
registration statements on Form S-8 relating to employee benefit plans. The Company hereby agrees that (1) if it issues an earnings
release or material news, or if a material event relating to the Company occurs, during the last seventeen days of the Lock-Up
Period, or (2) if prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during
the sixteen-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this Section 4(a)(xv) shall
continue to apply until the expiration of the eighteen-day period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.

 

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(xvi)        
(A)From the date hereof until the date that is the twelve (12) month anniversary of the Closing Date, upon any
proposed issuance (“Subsequent Financing”) by the Company or any of its subsidiaries of capital stock, including Common
Stock or similar forms of capital stock as well as securities that may be convertible into or exercisable or exchangeable for such
capital stock, other than (1) the Company’s sale of Securities hereunder, (2) the issuance of Common Stock or any equity
awards, including options (including the issuance of Common Stock upon exercise or settlement of such equity awards) pursuant to
the Company’s employee benefit plans as such plans are in existence on the date hereof and described in the Prospectus, (3)
the issuance of Common Stock pursuant to the vesting or exercises of options, restricted stock units, warrants or rights outstanding
on the date hereof, (4) a 10b5-1 trading plan implemented to permit Lei Cao to sell shares of Common Stock on the terms and at
the times set forth in such plan, (5) a Form S-3 to register for resale such shares of Common Stock of Lei Cao and/or Zhong Zhang
on the terms set forth therein, (6), equity or convertible debt securities, units or other combinations or securities that include
equity or convertible debt securities issued in connection with a Merger and/or Acquisition of substantially all of the assets
of the Company, and (7) issuances of, in the aggregate, up to 250,000 unregistered shares of Common Stock in a private transaction
to one or more purchasers, each Underwriter shall have the right, but not the obligation, to participate, at a minimum, up to its
Pro Rata Portion (as defined below), and the Underwriters, together, shall have the right, but not the obligation, to participate
in up to an aggregate amount of the Subsequent Financing equal to 20% of the Subsequent Financing (the “Participation Maximum”)
on the same terms, conditions and price provided for in the Subsequent Financing, unless the Subsequent Financing is an underwritten
public offering, in which case the Company shall offer each Underwriter the right to participate in such public offering when it
is lawful for the Company to do so, subject to the reasonable approval of the Underwriter of such offering, or, in the alternative
in the Company’s sole discretion, instead of allowing the Underwriters to participate in the Subsequent Financing, the Company
may elect to pay the Underwriters a fee equal to twenty-five percent (25%) of the total underwriting fee payable on the Subsequent
Financing. The Company agrees to provide the Underwriters reasonable written notice of its intention to effect a Subsequent Financing
which shall include the terms and conditions of such Subsequent Financing. Any Underwriter which desires to participate in such
Subsequent Financing will be eligible to participate up to its Pro Rata Portion (as defined below) of the Participation Maximum
and if an Underwriter elects not to participate, such Underwriter’s Pro Rata Portion will become available to the other Underwriters.
“Pro Rata Portion” means the ratio of (X) the number of Firm Shares purchased hereunder by an Underwriter as set forth
in Schedule VI hereto and (Y) the sum of the aggregate number of Firm Shares purchased hereunder by all Underwriters hereunder.

 

    	17

    	 

    

  

(B)The
Company and each Underwriter agree that if any Underwriter elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Underwriter shall be required to agree
to any restrictions on trading as to any of the Securities purchased hereunder (for avoidance of doubt, the securities purchased
in the Subsequent Financing shall not be considered securities purchased hereunder) or be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written
consent of such Underwriter.

  

5.                 
CONDITIONS OF THE UNDERWRITERS’ OBLIGATIONS. The obligations of the Underwriters hereunder are subject to the
accuracy, as of the date hereof and at the Closing Date (as if made at the Closing Date), of and compliance with all representations,
warranties and agreements of the Company contained herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:

 

(a)               
If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, is required
under the Securities Act or the Rules and Regulations, the Company shall have filed the Prospectus (or such amendment or supplement)
or such Issuer Free Writing Prospectus with the Commission in the manner and within the time period so required (without reliance
on Rule 424(b)(8) or Rule 164(b)); the Registration Statement shall remain effective; no stop order suspending the effectiveness
of the Registration Statement or any part thereof, or any amendment thereof, nor suspending or preventing the use of the Time of
Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus shall have been issued; no proceedings for the issuance
of such an order shall have been initiated or threatened; any request of the Commission for additional information (to be included
in the Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any Issuer Free Writing Prospectus or otherwise)
shall have been complied with to the Underwriters’ satisfaction; and FINRA shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements.

 

(b)              
The Underwriters shall not have advised the Company that the Registration Statement, the Time of Sale Disclosure
Package or the Prospectus, or any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus, contains an untrue
statement of fact which, in the Underwriters’ opinion, is material, or omits to state a fact which, in the Underwriters’
opinion, is material and is required to be stated therein or necessary to make the statements therein not misleading.

 

(c)               
Except as contemplated in the Time of Sale Disclosure Package and in the Prospectus, subsequent to the respective
dates as of which information is given in the Time of Sale Disclosure Package, neither the Company nor any of its subsidiaries
shall have incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, or
declared or paid any dividends or made any distribution of any kind with respect to its capital stock; and there shall not have
been any change in the capital stock (other than a change in the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise of outstanding options or warrants), or any material change in the short-term or long-term debt of
the Company except for the extinguishment thereof, or any issuance of options, warrants, convertible securities or other rights
to purchase the capital stock of the Company or any of the Company’s subsidiaries, or any Material Adverse Change or any
development involving a prospective Material Adverse Change (whether or not arising in the ordinary course of business), or any
loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by insurance, incurred by the Company
or any of the Company’s subsidiaries, the effect of which, in any such case described above, in the Representative’s
judgment, makes it impractical or inadvisable to offer or deliver the Securities on the terms and in the manner contemplated in
the Time of Sale Disclosure Package, the Registration Statement and in the Prospectus.

 

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(d)              
On or after the Time of Sale (i) no downgrading shall have occurred in the rating accorded any of the Company’s
securities by any “nationally recognized statistical organization,” as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Securities Act, and (ii) no such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the Company’s securities.

 

(e)               
On the Closing Date, there shall have been furnished to the Underwriters the opinion of Kaufman & Canoles, P.C.,
counsel for the Company, dated the Closing Date and addressed to the Underwriters, in form and substance reasonably satisfactory
to the Underwriters.

 

In rendering such
opinion, such counsel may rely (i) as to matters of law other than New York, Virginia, Delaware (based solely on Delaware’s
General Corporation Law) and federal law, upon the opinion or opinions of local counsel provided that the extent of such reliance
is specified in such opinion and that such counsel shall state that such opinion or opinions of local counsel are satisfactory
to them and that they believe they and the Underwriters are justified in relying thereon and (ii) as to matters of fact, to the
extent such counsel deems reasonable upon certificates of officers of the Company and its subsidiaries provided that the extent
of such reliance is specified in such opinion.

 

(f)               
On the date of the Prospectus at a time prior to the execution of this Agreement, on the effective date of any post-effective
amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each of the Closing Date and
the Option Closing Date, the Underwriters shall have received a letter of Friedman LLP, dated the respective dates of delivery
thereof, and addressed to the Underwriters, in form and substance satisfactory to the Underwriters.

 

(g)              
On the Closing Date, there shall have been furnished to the Underwriters a certificate, dated the Closing Date and
addressed to the Underwriters, signed by the chief executive officer or the chief financial officer of the Company, to the effect
that:

 

(i)                
The representations and warranties of the Company in this Agreement are true and correct, in all material respects,
as if made at and as of the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Date;

 

    	19

    	 

    

  

(ii)              
No stop order or other order suspending the effectiveness of the Registration Statement or any part thereof or any
amendment thereof or the qualification of the Securities for offering or sale nor suspending or preventing the use of the Time
of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, has been issued, and no proceeding for that purpose
has been instituted or, to the best of their knowledge, is contemplated by the Commission or any state or regulatory body; and

 

(iii)            
The signers of said certificate have carefully examined the Registration Statement, the Time of Sale Disclosure Package
and the Prospectus, and any amendments thereof or supplements thereto (including any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Time of Sale Disclosure Package, the Registration Statement or the Prospectus),
and

 

(A)            
each part of the Registration Statement and the Prospectus, and any amendments thereof or supplements thereto (including
any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus) contain, and contained,
when such part of the Registration Statement (or such amendment) became effective, all statements and information required to be
included therein, each part of the Registration Statement, or any amendment thereof, does not contain, and did not contain, when
such part of the Registration Statement (or such amendment) became effective, any untrue statement of a material fact or omit to
state, and did not omit to state when such part of the Registration Statement (or such amendment) became effective, any material
fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as amended or
supplemented, does not include and did not include as of its date, or the time of first use within the meaning of the Rules and
Regulations, any untrue statement of a material fact or omit to state and did not omit to state as of its date, or the time of
first use within the meaning of the Rules and Regulations, a material fact necessary to make the statements therein, in light of
the circumstances under which they were made,

 

(B)             
neither (1) the Time of Sale Disclosure Package nor (2) any individual Issuer Limited-Use Free Writing Prospectus,
when considered together with the Time of Sale Disclosure Package, include, nor included as of the Time of Sale any untrue statement
of a material fact or omits, or omitted as of the Time of Sale, to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading,

 

(C)             
since the Time of Sale, there has occurred no event required to be set forth in an amended or supplemented prospectus
which has not been so set forth, and there has been no document required to be filed under the Exchange Act that upon such filing
would be deemed to be incorporated by reference into the Time of Sale Disclosure Package, the Registration Statement or into the
Prospectus that has not been so filed,

 

    	20

    	 

    

  

(D)            
subsequent to the respective dates as of which information is given in the Time of Sale Disclosure Package, neither
the Company nor any of its subsidiaries has incurred any material liabilities or obligations, direct or contingent, or entered
into any material transactions, not in the ordinary course of business, or declared or paid any dividends or made any distribution
of any kind with respect to its capital stock, and except as disclosed in the Time of Sale Disclosure Package and in the Prospectus,
there has not been any change in the capital stock (other than a change in the number of outstanding shares of Common Stock due
to the issuance of shares upon the exercise of outstanding options or warrants), or any material change in the short-term or long-term
debt except for the extinguishment thereof, or any issuance of options, warrants, convertible securities or other rights to purchase
the capital stock, of the Company or any of its subsidiaries, or any Material Adverse Change or any development involving a prospective
Material Adverse Change (whether or not arising in the ordinary course of business), or any loss by strike, fire, flood, earthquake,
accident or other calamity, whether or not covered by insurance, incurred by the Company or any of its subsidiaries, and

 

(E)             
except as stated in the Time of Sale Disclosure Package and in the Prospectus, there is not pending, or, to the knowledge
of the Company, threatened or contemplated, any action, suit or proceeding to which the Company or any of its subsidiaries is a
party before or by any court or governmental agency, authority or body, or any arbitrator, which might result in any Material Adverse
Change.

 

(h)              
The Company shall have furnished to the Underwriters and counsel for the Underwriters such additional documents,
certificates and evidence as the Underwriters or counsel for the Underwriters may have reasonably requested.

 

(i)                
The Underwriters shall have received the written agreements, substantially in the form of Schedule IV hereto,
of the directors and executive officers of the Company listed on Schedule V to this Agreement.

 

All such opinions,
certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form
and substance to the Underwriters and counsel for the Underwriters. The Company will furnish the Underwriters with such conformed
copies of such opinions, certificates, letters and other documents as the Underwriters shall reasonably request.

 

6.                 
INDEMNIFICATION AND CONTRIBUTION.

 

(a)               
The Company agrees to indemnify and hold harmless the Underwriters against any losses, claims, damages or liabilities
to which the Underwriters may become subject, under the Securities Act or otherwise (including in settlement of any litigation
if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, including the information deemed to be a part of the Registration Statement at the
time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, if applicable, any
Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus, or any amendment or supplement thereto (including
any documents filed under the Exchange Act and deemed to be incorporated by reference into the Prospectus), any Issuer Free Writing
Prospectus or in any materials or information provided to investors by, or with the approval of, the Company in connection with
the marketing of the offering of the Common Stock (“Marketing Materials”), including any roadshow or investor
presentations made to investors by the Company (whether in person or electronically) or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Underwriters for any legal or other expenses reasonably incurred by it in connection with
investigating or defending against such loss, claim, damage, liability or action; or (ii) in whole or in part upon any inaccuracy
in the representations and warranties of the Company contained herein; or (iii) in whole or in part upon any failure of the Company
to perform its obligations hereunder or under law; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the
Time of Sale Disclosure Package, the Prospectus, or any such amendment or supplement, any Issuer Free Writing Prospectus or in
any Marketing Materials, in reliance upon and in conformity with written information furnished to the Company by the Underwriters
specifically for use in the preparation thereof.

 

    	21

    	 

    

  

In addition to their
other obligations under this Section 6(a), the Company agrees that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged statement or
omission, described in this Section 6(a), it will reimburse the Underwriters on a monthly basis for all reasonable legal fees or
other expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and enforceability of the Company’s obligation
to reimburse the Underwriters for such expenses and the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such interim reimbursement payment is so held to have been improper,
the Underwriters shall promptly return it to the Company, together with interest, compounded daily, determined on the basis of
the prime rate (or other commercial lending rate for borrowers of the highest credit standing) announced from time to time by Wells
Fargo Bank, N.A. (the “Prime Rate”). Any such interim reimbursement payments which are not made to the Underwriters
within 30 days of a request for reimbursement shall bear interest at the Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities which they may otherwise have.

 

(b)              
Each of the Underwriters will severally and not jointly indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become subject, under the Securities Act or otherwise (including in settlement
of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure Package, the
Prospectus, or any amendment or supplement thereto or any Issuer Free Writing Prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Time of Sale Disclosure
Package, the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus in reliance upon and in
conformity with written information furnished to the Company by an Underwriter with respect to such Underwriter specifically for
use in the preparation thereof, and will reimburse the Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending against any such loss, claim, damage, liability or action.

 

    	22

    	 

    

  

(c)               
Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying
party shall not relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent
such indemnifying party has been materially prejudiced by such failure. In case any such action shall be brought against any indemnified
party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified
party of the indemnifying party’s election so to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation; provided, however, that if, in the sole judgment
of the Underwriters, it is advisable for the Underwriters to be represented by separate counsel, the Underwriters shall have the
right to employ a single counsel to represent the Underwriters in any claim in respect of which indemnity may be sought by the
Underwriters under subsection (a) of this Section 6, in which event the reasonable fees and expenses of such separate counsel shall
be borne by the indemnifying party or parties and reimbursed to the Underwriters as incurred (in accordance with the provisions
of the second paragraph in subsection (a) above).

 

The indemnifying party
under this Section 6 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by this Section 6, the indemnifying party agrees that it shall be liable for any settlement
of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by
such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been
sought hereunder by such indemnified party, unless such settlement, compromise or consent (a) includes an unconditional release
of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (b) does
not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

 

    	23

    	 

    

  

(d)              
If the indemnification provided for in this Section 6 is unavailable or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on the one hand and the respective Underwriter on the
other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the respective Underwriter on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the respective Underwriter on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the respective Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
supplied by the Company or the respective Underwriter and the parties’ relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The Company and the respective Underwriter agree that
it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation
or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence
of this subsection (d). The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred
to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending against any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), the respective Underwriter shall not be required to contribute any
amount in excess of the amount by which the total price at which the Securities were offered to the public exceeds the amount of
any damages that the respective Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

(e)               
The obligations of the Company under this Section 6 shall be in addition to any liability which the Company may otherwise
have and the benefits of such obligations shall extend, upon the same terms and conditions, to each person, if any, who controls
the respective Underwriter within the meaning of the Securities Act; and the obligations of the respective Underwriter under this
Section 6 shall be in addition to any liability that the respective Underwriter may otherwise have and the benefits of such obligations
shall extend, upon the same terms and conditions, to each director of the Company (including any person who, with his consent,
is named in the Registration Statement as about to become a director of the Company), to each officer of the Company who has signed
the Registration Statement and to each person, if any, who controls the Company within the meaning of the Securities Act.

 

    	24

    	 

    

  

(f)               
Each Underwriter confirms severally and not jointly and the Company acknowledges that there is no information concerning
the Underwriters furnished in writing to the Company by the Underwriters specifically for inclusion in the Registration Statement,
any Preliminary Prospectus, the Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus.

 

7.                 
REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All representations, warranties, and agreements of the Company
herein or in certificates delivered pursuant hereto, including but not limited to the agreements of the Underwriters and the Company
contained in Section 6 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on
behalf of the Underwriters or any controlling person thereof, or the Company or any of its officers, directors, or controlling
persons, and shall survive delivery of, and payment for, the Securities to and by the Underwriters hereunder.

 

8.                 
TERMINATION OF THIS AGREEMENT.

 

(a)               
The Underwriters shall have the right to terminate this Agreement by giving notice to the Company as hereinafter
specified at any time at or prior to the Closing Date, if (i) the Company shall have failed, refused or been unable, at or prior
to the Closing Date, to perform any material agreement on its part to be performed hereunder, (ii) any condition of the Underwriters’
obligations hereunder is not fulfilled, (iii) trading in the Company’s Common Stock shall have been suspended by the Commission
or the NASDAQ Capital Market or trading in securities generally on the NASDAQ Capital Market shall have been suspended, (iv) minimum
or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the
NASDAQ Capital Market, by such Exchange or by order of the Commission or any other governmental authority having jurisdiction (which
includes the Company’s Common Stock), or (v) a banking moratorium shall have been declared by federal or state authorities
which prevents payment by an Underwriter pursuant to Section 3. Any such termination shall be without liability of any party to
any other party except that the provisions of Section 4(a)(vii) and Section 6 hereof shall at all times be effective and shall
survive such termination.

 

(b)              
If the Representative elects to terminate this Agreement as provided in this Section, the Company shall be notified
promptly by the Representative by telephone, confirmed by letter.

 

9.                       
DEFAULT THE COMPANY. If the Company shall fail at the Closing Date or at the Option Closing Date to sell and deliver
the Securities which it is obligated to sell hereunder, then this Agreement shall terminate without any liability on the part of
the Underwriters or, except as provided in Section 4(a)(vii), any non-defaulting party. No action taken pursuant to this Section
shall relieve the Company from liability, if any, in respect of such default.

 

    	25

    	 

    

  

10.                   
NOTICES. Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Underwriters,
shall be mailed, delivered or telecopied to National Securities Corporation, 410 Park Avenue, 14th Floor, New York,
NY 10022, fax: (212) 380-2828 Attention: Jonathan Rich; if to the Company, shall be mailed, delivered or telecopied to it at 136-56
39th Avenue, Suite 305, Flushing, NY 11354, Attention: Lei Cao (with a copy sent to Kaufman & Canoles, P.C., Two
James Center, 14th Floor, 1021 E. Cary St., Richmond, VA 23219 (attention Anthony W. Basch, Esq.); or in each case to such other
address as the person to be notified may have requested in writing. Any party to this Agreement may change such address for notices
by sending to the parties to this Agreement written notice of a new address for such purpose.

 

11.             
PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Section 6.
Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable
remedy or claim under or in respect of this Agreement or any provision herein contained. The term “successors and assigns”
as herein used shall not include any purchaser, as such purchaser, of any of the Securities from the Underwriters.

 

12.                   
ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees that: (a) the Underwriters have been retained
solely to act as underwriters in connection with the sale of the Securities and that no fiduciary, advisory or agency relationship
between the Company and the Underwriters has been created in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Underwriters have advised or are advising the Company on other matters; (b) the price and other terms
of the Securities set forth in this Agreement were established by the Company following discussions and arms-length negotiations
with the Underwriters and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Underwriters and their affiliates
are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Underwriters
have no obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship;
and (d) it has been advised that the Underwriters are acting, in respect of the transactions contemplated by this Agreement, solely
for the benefit of the Underwriters, and not on behalf of the Company.

 

    	26

    	 

    

  

13.                   
GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New
York, without reference to its conflict of laws provisions. The parties hereby irrevocably
and unconditionally: submit to the jurisdiction of the federal and state courts located in the State of New York, for any dispute
related to this Agreement or any of the matters contemplated hereby; consent to service of process by registered or certified mail
return receipt requested or by any other manner provided by applicable law; and waive any right to claim that any action, proceeding
or litigation so commenced has been commenced in an inconvenient forum.

 

14.                   
COUNTERPARTS. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart,
the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the
same instrument.

 

[Signature Page Follows]

 

    	27

    	 

    

   

Please sign and return
to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement between the Company
and the Underwriters in accordance with its terms.

 

	 	
        Very truly yours,

         

	 	SINO-GLOBAL SHIPPING AMERICA, LTD.
	 	 
	 	By:	/s/ Lei Cao
	 	 	
        Name:Lei Cao

        Title: Chief Executive Officer

 

 

 

Confirmed as of the date first above mentioned by the
Underwriters.

 

	 
	By:	/s/ Jonathan C. Rich
	 	Name:Jonathan C. Rich
	 	Title:Executive Vice President

 

On behalf of each of the Underwriters

 

    	28

    	 

    

  

Schedule I

 

Time of Sale Disclosure Package

 

None.

 

    	 

    	 

    

 

Schedule II

 

Issuer General Free Writing Prospectuses

 

None.

 

    	 

    	 

    

 

Schedule III

 

Subsidiaries

 

1. Registrant (Virginia):

 

Sino-Global Shipping America, Ltd. (known as 美国中环球船务有限公司
in China)

 

2. Subsidiary (China):

 

Trans Pacific Shipping Limited (known as 北京盛海船务技术有限公司
in China)

 

3. Subsidiary of Trans Pacific Shipping Ltd. (China):

Trans Pacific Logistics Shanghai Limited (known as 上海盛海物流有限公司
in China)

 

4. Subsidiary (Australia):

 

Sino-Global Shipping Australia Pty Ltd. (known as 澳大利亚中环球船务有限公司
in China)

 

5. Subsidiary (Hong Kong):

 

Sino-Global Shipping (HK) Limited (known as 香港中环球船务有限公司
in China)

 

6. Subsidiary (Canada)

 

Sino-Global Shipping Canada Inc.

 

7. Subsidiary (New York)

 

Sino-Global Shipping New York Inc.

 

8. Non-Subsidiary Affiliated Company (China):

 

Sino-Global Shipping Agency Ltd. (known as 北京中环球船务代理有限公司
in China)

 

    	 

    	 

    

 

Schedule IV

 

Form of Lockup Agreement

 

 

National Securities Corporation

410 Park Avenue

14th Floor

New York, NY 10022

June 27, 2014

 

Re: Sino-Global Shipping America, Ltd.– Public Offering
of Shares

 

Dear Sirs:

 

In order to induce
National Securities Corporation (the “Underwriter”) to enter into an underwriting agreement with Sino-Global
Shipping America, Ltd., a Virginia corporation (the “Company”), with respect to the public offering (the “Offering”)
of shares of the Company’s Common Stock, without par value per share (“Common Stock”), the undersigned
hereby agrees that for a period (the “lock-up period”) of ninety (90) days following the date of the final prospectus
supplement filed by the Company with the Securities and Exchange Commission in connection with such Offering (the “Prospectus
Supplement”), the undersigned will not, without the prior written consent of the Underwriters, directly or indirectly,
(i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock (including, without limitation, shares of Common Stock or any
such securities which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations promulgated
under the Securities Exchange Act of 1934, as the same may be amended or supplemented from time to time (such shares or securities,
the “Beneficially Owned Shares”)), (ii) enter into any swap, hedge or other agreement or arrangement that transfers,
in whole or in part, the economic risk of ownership of any Beneficially Owned Shares, Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock, or (iii) engage in any short selling of any Beneficially Owned Shares, Common
Stock or securities convertible into or exercisable or exchangeable for Common Stock. The foregoing sentence shall not apply to
(a) transfers of any Beneficially Owned Shares, Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock as a bona fide gift, (b) in the case of a natural person, transfers of any Beneficially Owned Shares, Common Stock
or securities convertible into or exercisable or exchangeable for Common Stock by will or intestate succession or to any trust
or partnership for the direct or indirect benefit of the undersigned or any member of the immediate family of the undersigned or
(c) the distribution of shares of Common Stock to limited partners in the ordinary course of business of a fund owned or controlled
by the undersigned; provided that in the case of any transfer or distribution pursuant to clause (a) or (b), each donee
shall agree to be bound by the terms of this Agreement.

 

    	 

    	 

    

  

For the purposes of
the immediately preceding paragraph, “immediate family” shall mean spouse, domestic partner, lineal descendant
(including adopted children), father, mother, brother or sister of the transferor.

 

If (i) the Company
issues an earnings release or material news or a material event relating to the Company occurs during the last seventeen 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 sixteen-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 eighteen-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.

 

In addition, the undersigned
hereby waives, from the date hereof until the expiration of the one hundred and ninety (90) day period following the date of the
Prospectus Supplement, any and all rights, if any, to request or demand registration pursuant to the Securities Act of 1933, as
amended, of any shares of Common Stock or securities convertible into or exercisable or exchangeable for Common Stock that are
registered in the name of the undersigned or that are Beneficially Owned Shares. In order to enable the aforesaid covenants to
be enforced, the undersigned hereby consents to the placing of legends and/or stop transfer orders with the transfer agent of the
Common Stock with respect to any shares of Common Stock, securities convertible into or exercisable or exchangeable for Common
Stock or Beneficially Owned Shares.

 

If (i) the Company
notifies the Underwriter in writing that it does not intend to proceed with the Offering, (ii) for any reason the Offering is terminated
prior to the payment for and delivery of the Common Stock or (iii) the Offering shall not have been completed by July 31, 2014,
then upon the occurrence of any such event, this Agreement shall immediately be terminated and the undersigned shall be released
from its obligations hereunder.

 

 

[Signatory]

 

	By:	 	 
	 	 	 
	Name:	 	 
	 	 	 
	Its:	 	 

 

    	 

    	 

    

 

Schedule V

Directors and Executive Officers

 

	1.	Lei Cao	CEO and Director
	2.	Anthony S. Chan	Acting Chief Financial Officer and
Director 
	3.	Zhikang Huang	Chief Operating Officer
	4.	Jing Wang	Director
	5.	Dennis O. Laing	Director
	6.	Tielang Liu	Director

 

    	 

    	 

    

   

Schedule VI

 

Underwriters

 

	Underwriter	Firm Shares	Additional Shares
	 	 	 
	National Securities Corporation	572,000	85,800Exhibit 10.1

 

Execution Version

 

FORBEARANCE AND MODIFICATION AGREEMENT

 

THIS FORBEARANCE AND MODIFICATION AGREEMENT (this “Agreement”), is dated as of June 23, 2014 by and among (i) Body Central Stores, Inc. (the “Lead Borrower”), (ii) the other Borrowers party hereto (together with the Lead Borrower, the “Borrowers”), (iii) the Guarantors party hereto (the “Guarantors” and together with the Borrowers, the “Loan Parties”), (iv) the lenders party hereto (the “Lenders”), and (v) Crystal Financial LLC, in its capacities as administrative agent and collateral agent (in such capacities, the “Agent”) under the Credit Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, the Loan Parties, the Lenders and the Agent are party to a certain Credit Agreement dated as of February 6, 2014 (as confirmed, amended or otherwise modified and in effect on the date hereof, the “Credit Agreement”); and

 

WHEREAS, the Credit Parties assert that the following Events of Default (“Asserted Events of Default”) under the Credit Agreement have occurred and are continuing:

 

1.                                      The Loan Parties have failed to comply with the covenant set forth in Section 6.17, which constitutes an Event of Default under Section 8.01(b);

 

2.                                      The Loan Parties have failed to comply with the covenants set forth in Section 6.04, which constitutes an Event of Default under Section 8.01(c);

 

3.                                      The Loan Parties have made determinations and taken action to suspend the operation of their business in the ordinary course, which constitutes an Event of Default under Section 8.01(l); and

 

4.                                      The Loan Parties have failed to pay certain obligations timely, which constitutes an Event of Default under Section 8.01(g);

 

WHEREAS, to the extent that the conditions giving rise to the foregoing potential Asserted Events of Default could be deemed to constitute an “event of default” under any Material Indebtedness, such “event of default” could be deemed to constitute an Event of Default under Section 8.01(e) (the “Potential Default”; and together with the Asserted Events of Default, the “Specified Potential Events of Default”);

 

WHEREAS, the Loan Parties acknowledge that the Asserted Event of Default arising under Section 8.01(b) with respect to Section 6.17 (the “Specified Default”) has occurred and is continuing as of the date hereof and that the events giving rise to the other Specified Potential Events of Default could become, on or before June 27, 2014, one or more Defaults;

 

WHEREAS, the Agent and the Lenders assert that as a consequence of the occurrence and continuation of the Asserted Events of Default, the Agent and the Lenders would be entitled to exercise certain rights and remedies under and pursuant to the Loan Documents; and

 

 

WHEREAS, the Loan Parties have requested that the Agent and the Lenders agree, on the terms and conditions set forth herein, to forbear from exercising certain remedies available to the Agent and the Lenders under the Credit Agreement and other Loan Documents with respect to the Specified Potential Events of Default, to modify the Credit Agreement as provided herein, and to continue to make extensions of credit to the Borrowers pursuant to the Credit Agreement, on the terms and subject to satisfaction of the conditions set forth in the Credit Agreement and this Agreement;

 

NOW, THEREFORE, in consideration of the premises, the covenants and agreements contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Loan Parties, the Lenders and the Agent hereby agree as follows:

 

1.                                      DEFINED TERMS.  Capitalized terms used but not otherwise defined in this Agreement shall have the same meanings ascribed thereto in the Credit Agreement. References to “Section”, “Schedule” or “Exhibit” herein shall mean a Section, Schedule or Exhibit to the Credit Agreement unless otherwise specified.

 

2.                                      ACKNOWLEDGEMENTS AND STIPULATIONS. In order to induce the Agent and the Lenders to enter into this Agreement, each Loan Party acknowledges, stipulates and agrees that:

 

a)                                     as of the close of business on June 20, 2014, excluding fees, costs and expenses payable by the Loan Parties pursuant to the terms of the Credit Agreement, (i) the aggregate principal balance of Term Loans outstanding under the Credit Agreement totaled $12,000,000, and (ii) accrued and unpaid interest on the Obligations totaled $54,866.67;

 

b)                                     all of the Loans and other Obligations are absolutely due and owing by the Loan Parties to the Lenders without any defense, deduction, offset or counterclaim (and, to the extent any Loan Party had any defense, deduction, offset or counterclaim on the date hereof, the same is hereby waived by each such Loan Party);

 

c)                                      the Loan Documents executed by the Loan Parties are legal, valid and binding obligations enforceable against the Loan Parties in accordance with their respective terms;

 

d)                                     the liens granted by the Loan Parties to the Agent in the Collateral are valid and duly perfected, first-priority liens, subject only to Permitted Encumbrances having priority under applicable Law; and

 

e)                                      prior to executing this Agreement, the Loan Parties consulted with and had the benefit of advice of legal counsel of their own selection and have relied upon the advice of such counsel, and in no part upon the representation of the Agent and/or any Lender, or any counsel to the Agent and/or any Lender concerning the legal effects of this Agreement or any provision hereof.

 

3.                                      AGREEMENT TO FORBEAR.  If and for so long as each of the Forbearance Conditions (as defined below) is satisfied (or waived by the Agent and the Lenders), and

 

2

 

in reliance upon the representations, warranties, agreements and covenants of the Loan Parties set forth herein, the Agent and each Lender agree that during the Forbearance Period they will not, solely by reason of any Specified Potential Events of Default being or becoming Events of Default, exercise any remedy they have not already exercised that is available to them under the Credit Agreement, any of the other Loan Documents or applicable Law.  “Forbearance Period” means the period commencing on the date hereof through and including 6:00 p.m. EST on June 27, 2014 or such later date as the Agent and the Lenders may agree, in their sole discretion, with the Borrowers.  Neither this Agreement nor Agent’s or Lenders’ forbearance hereunder shall be deemed to be a waiver of any Default or Event of Default, now existing or hereafter arising. Each Loan Party agrees and acknowledges that neither the Agent nor any Lender has agreed, or is agreeing herein, to forbear from exercising their rights and remedies under the Loan Documents or applicable Law with respect to any Event of Default other than with respect to the Potential Specified Events of Default, whether presently existing or occurring hereafter (all of which rights and remedies are hereby reserved by the Agent and the Lenders). During the Forbearance Period, the Agent and the Lenders will continue to make extensions of credit to the Borrowers pursuant to the Credit Agreement, on the terms and subject to satisfaction of the conditions set forth in the Credit Agreement (as amended hereby) and this Agreement.

 

4.                                      PREPAYMENT OF TERM LOAN; INCREASE IN REVOLVING AGGREGATE COMMITMENTS.  On the Forbearance Effective Date, notwithstanding the provisions of Section 2.06(a), the aggregate Revolving Commitments shall increase from $5,000,000 to $17,000,000 and each Revolving Lender’s Revolving Commitment shall be as set forth on Annex A hereto, and, on the Forbearance Effective Date, the Borrowers shall irrevocably prepay the Term Loan in full in cash, which prepayment shall be made from (i) the cash on hand of the Borrowers in excess of the amounts permitted to be maintained by the Loan Parties in their DDAs pursuant to Section 6.12(c) (as amended by this Agreement), plus (ii) the proceeds of a Revolving Loan to be made on the Forbearance Effective Date.  The respective amounts of such cash on hand and such proceeds of a Revolving Loan shall be specified in the Revolving Loan Notice delivered on the Forbearance Effective Date.  On the Forbearance Effective Date, as a result of the making of the Revolving Loan contemplated herein, an Accelerated Borrowing Base Delivery Event and a Cash Dominion Event shall have occurred.  On the Forbearance Effective Date, the Borrowers shall deliver an updated Borrowing Base Certificate (with eligible asset information as of the date of the Borrowing Base Certificate most recently otherwise required under the Credit Agreement but with information regarding the Obligations as of such date) that reflects that, after giving effect to the funding of the Revolving Loans to be made on the Forbearance Effective Date and the use of the proceeds thereof, Availability would not be less than zero.

 

5.                                      AMENDMENTS TO CREDIT AGREEMENT.

 

On the Forbearance Effective Date,

 

a.                                      The provisions of Section 1.01 are hereby amended by:

 

3

 

i.                                          Deleting the last sentence in the definition of “Aggregate Commitments” in its entirety and substituting the following in its stead:

 

As of the Forbearance Effective Date, the Aggregate Commitments are $17,000,000.

 

ii.                                       Deleting the last sentence in the definition of “Revolving Commitments” in its entirety and substituting the following in its stead:

 

As of the Forbearance Effective Date, the aggregate amount of all Lenders’ Revolving Commitments is $17,000,000.

 

iii.                                    Inserting the following new definition in appropriate alphabetical order:

 

“Forbearance Effective Date” means June 23, 2014.

 

b.                                      Section 2.02(a) is hereby amended to insert the phrase “(with eligible asset information as of the date of the Borrowing Base Certificate most recently otherwise required to be delivered under the Credit Agreement but with information regarding the Obligations as of such date)” in the first sentence thereof, immediately after the phrase “and an updated Borrowing Base Certificate”.

 

c.                                       Section 4.02(a) is hereby amended by adding the following phrase at the end thereof immediately before the “.”:

 

; provided that, from and after the Forbearance Effective Date until the Forbearance Termination Date, the foregoing reference to representations and warranties of each Loan Party contained in Article V shall be deemed to exclude Sections 5.05(c), 5.20 and 5.23

 

d.                                      Section 4.02(b) is hereby amended by adding the following phrase at the end thereof immediately before the “,”:

 

; provided from and after the Forbearance Effective Date until the Forbearance Termination Date, no Default or Event of Default other than a Default or Event of Default that is a Specified Potential Event of Default shall exist, or would result from such proposed Credit Extension

 

e.                                       Section 5.07 is hereby amended by adding the phrase “, except, from and after the Forbearance Effective Date until the Forbearance Termination Date, with respect to the Specified Potential Events of Default” at the end thereof immediately before the “.”.

 

f.                                        Section 5.24 is hereby amended by adding the phrase “, except, from and after the Forbearance Effective Date until the Forbearance Termination Date, with respect to the Specified Potential Events of Default” at the end of the third sentence, immediately before the “,”, of such Section.

 

4

 

g.                                       Section 6.12(c) is hereby amended by inserting the phrase “Subject to the terms of Sections 6.12(d) and 6.12(e),” at the beginning of such Section, immediately before “Each”, which shall be lowercased.

 

h.                                      Section 6.12(d) is hereby amended by inserting the following phrase at the end of the last sentence thereof, immediately prior to the “.”:

 

; provided that from and after the Forbearance Effective Date until the Forbearance Termination Date, Borrowers shall be permitted to have (measured at the close of business each day after all disbursements have been made) (a) in the Operating Account cash in an amount not to exceed (i) $3,000,000 at any time during the period commencing on the Forbearance Effective Date and terminating on June 27, 2014 and (ii) $750,000 at any other time and (b) in the payroll account identified to Agent in writing, $2,300,000 at any time

 

i.                                          Section 6.12(e) is hereby amended (i) by inserting the phrase “Subject to the following sentence,” at the beginning of the first sentence thereof , immediately prior to the word “So”, which shall be lowercased, and (ii) by inserting the following phrase at the end of the last sentence thereof, immediately prior to the “.”:

 

; provided that from and after the Forbearance Effective Date until the Forbearance Termination Date, Borrowers shall be permitted to have (measured at the close of business each day after all disbursements have been made) (a) in the Operating Account, cash in an amount not to exceed (i) $3,000,000 at any time during the period commencing on the Forbearance Effective Date and terminating on June 27, 2104 and (ii) $750,000 at any other time, and to use any cash in the Operating Account in accordance with the provisions hereof, and (b)  in the payroll account identified to Agent in writing, $2,300,000 at any time, which cash shall only be used to pay salaries, wages, taxes and other amounts payable as payroll expenditures

 

j.                                         Schedule 2.01 is hereby amended and restated in its entirety as set forth on Annex A hereto.

 

6.                                      CONDITIONS TO FORBEARANCE.  The following covenants and conditions shall constitute “Forbearance Conditions”:

 

(a)                                 The Loan Parties shall duly and punctually observe, perform and discharge each and every obligation and covenant on their part to be performed under this Agreement;

 

(b)                                 No Event of Default shall occur or be continuing other than with respect to the Specified Potential Events of Default;

 

5

 

(c)                                  No Guarantor shall revoke or attempt to revoke or terminate his, her, or its Guaranty;

 

(d)                                 No payment shall be made by any Loan Party on or in respect of any Subordinated Indebtedness, if any;

 

(e)                                  No representation or warranty made by any Loan Party in this Agreement shall prove to have been incorrect or materially misleading as of the date when made in any material respect;

 

(f)                                   Except with respect to no more than 25 Stores, none of the following shall occur:

 

(i)                           The Loan Parties have (x) received notice(s) of default under any of its Store leases as to which Store leases the Loan Parties have exhausted any applicable grace or other similar periods (whether such period is as stated in the lease or in the applicable notice(s) of default), and/or (y) prior to the Forbearance Effective Date received a notice(s) of default and the applicable grace or other similar period (whether such period is as stated in the Store lease or in the applicable notice(s) of default) under a Store lease has expired after the Forbearance Effective Date and no timely cure has been made; and/or

 

(ii)                        the applicable lessor under a Store lease(s) has commenced pursuing its default rights or remedies under such lease and/or applicable law, including, without limitation, commencement of legal action or service of process upon the Loan Parties/lessee in any local, state or federal court to, inter alia, evict the Loan Parties and/or terminate the subject lease;

 

provided that, for purposes of the calculations provided for in this subclause (f) and determining Loan Parties’ compliance with this subclause (f), the Forbearance Termination Date shall be deemed to have occurred if at any time hereunder there are more than ten (10) store leases that fit the criteria set forth in subclause (ii) hereof. For the avoidance of doubt or confusion, in determining Borrower’s compliance with this subclause (f) as contemplated under the proviso clause thereto, a lease(s) that qualifies for inclusion in the calculation in (i) above may also be included in (ii) above but shall not be counted twice for any purpose.

 

(g)                                  The Loan Parties shall not fail to pay, when due, rent or any other amounts due under the Lease with respect to their corporate headquarters and distribution centers located at 6225 Powers Avenue, Jacksonville, Florida and One Imeson Park Boulevard, Jacksonville, Florida.

 

(h)                                 The Loan Parties shall deliver Borrowing Base Certificates weekly, in accordance with Section 6.02(b) of the Credit Agreement.

 

7.                                      PAYMENT OF EARLY TERMINATION FEE.  The Specified Default has occurred and is continuing and the Credit Parties assert that the other Asserted Events of Default have occurred and are continuing.  As a consequence of the Specified Default and, the Credit Parties assert, the other Asserted Events of Default, the Termination Date would

 

6

 

have occurred but for this Agreement as of the Forbearance Effective Date and the Early Termination Fee, in an amount equal to $775,480 (the “6/23 Prepayment Fee Amount”), is due and payable as of the date hereof.  Notwithstanding that the Early Termination Fee is due and payable, as an accommodation to the Loan Parties and without thereby waiving their right to the Early Termination Fee, the Credit Parties agree that, during the Forbearance Period, they will not demand payment of the Early Termination Fee in a manner other than as contemplated herein.  The Loan Parties, the Agent and the Lenders acknowledge and agree that, upon the occurrence of the Forbearance Termination Date (as defined below), if any Event of Default then exists in accordance with the terms of the Credit Agreement, the Agent will be entitled to declare the Termination Date as of the Forbearance Effective Date, whereupon the Early Termination Fee will be due and payable and shall be paid in full in cash upon demand by the Agent in an amount equal to the 6/23 Prepayment Fee Amount, reduced for any interest payable and paid to the Lenders following June 23, 2014, whether such interest is paid under the Credit Agreement or under any refinancing thereof by the Lenders; provided, that (i) in no event shall the amount of the Early Termination Fee be less than $510,000 after giving effect to all credit for interest paid after June 23, 2014 and (ii) the 6/23 Prepayment Fee Amount shall not be reduced for any interest accrued or paid on and after June 23, 2014 if, at any time, any Loan Party, or any of its Affiliates, or agents, or any other person acting on its behalf threatens in writing or asserts in writing any claim or commences any legal action, suit, or proceeding against the Agent or any Lender or contesting or challenging the validity or enforceability of this Agreement, the Credit Agreement, or any of the other Loan Documents, or the Obligations (including the Early Termination Fee) or the amount thereof, or the validity, perfection, or priority of any Lien granted to the Agent, for the benefit of the Credit Parties, and in any such case, the Early Termination Fee shall be due and payable in the 6/23 Prepayment Fee Amount but if, after the Early Termination Fee is paid in full in the 6/23 Prepayment Amount, each such challenge, action, suit, or proceeding is denied by final order of a court of competent jurisdiction, the Agent will credit the amount of any interest accrued or paid on and after June 23, 2014 until the date that the Early Termination Fee was paid.  The Agent is hereby authorized by the Loan Parties to make an advance and charge the Loan Account to pay such Early Termination Fee on such date, if the Agent elects, in its sole discretion, to cause such payment to be made.  The parties acknowledge and agree that payment of the Prepayment Fee as contemplated under this Section 7 shall constitute full performance and satisfaction of the Loan Parties’ obligations under Section 2.10(b), and thereafter no prepayment premium or fee shall be due or payable with respect to the Loans or any refinancing of the Loans by the Agent or the Lenders.

 

8.                                      TERMINATION OF FORBEARANCE.  Upon the expiration of the Forbearance Period (including any extension thereof as provided in Section 3 hereof), or upon written notice to the Lead Borrower by the Agent during the Forbearance Period (including any extension thereof as provided in Section 3 hereof) that one or more of the Forbearance Conditions is not satisfied or waived by the Agent and the Lenders , the Agent’s and the Lenders’ agreement to forbear as set forth in Section 3 of this Agreement shall terminate (the date of such termination shall be referred to as the “Forbearance Termination Date”), and the Agent and the Lenders shall thereupon have and may exercise from time to time all of the rights and remedies available to them under the Loan Documents and applicable

 

7

 

Law as a consequence of any Events of Default arising with respect to the Specified Potential Events of Default and of any other Event of Default then existing (all of which rights and remedies are hereby reserved by the Agent and the Lenders).  On or after the Forbearance Termination Date, the Agent and the Lenders shall be authorized, at any time and without further notice to or demand upon the Borrowers, any Guarantor or any other person, to enforce all of their rights and remedies under the Loan Documents and applicable Law.

 

9.                                      COSTS AND EXPENSES.  Each Loan Party absolutely and unconditionally agrees to reimburse the Agent for all reasonable fees, costs and expenses incurred by the Agent in connection with this Agreement or otherwise related to the Loan Documents or the transactions contemplated hereby and thereby, including, without limitation, reasonable legal fees and costs, professional and consultant fees, recording fees, search fees and filing fees.

 

10.                               CONDITIONS TO EFFECTIVENESS.  This Agreement shall become effective as of the date (the “Forbearance Effective Date”) upon which each of the conditions specified below have been satisfied as determined in the Agent’s discretion:

 

a.                                      The Agent shall have received one or more counterparts of this Agreement, duly executed, completed and delivered by the Agent, each Lender and each Loan Party;

 

b.                                      The Agent shall have received evidence satisfactory to it that the Loan Parties have taken all corporate action required for the execution and delivery of this Agreement;

 

c.                                       The Agent shall have received an updated Borrowing Base Certificate dated as of the Forbearance Effective Date (with eligible asset information as of the date of the Borrowing Base Certificate most recently otherwise required to be delivered under the Credit Agreement but with information regarding the Obligations as of such date);

 

d.                                      The Borrowers shall have paid all unpaid fees, charges and disbursements of counsel and other fees, costs and expenses required to be paid to the Agent and the Lenders under the Credit Agreement.  The Agent is hereby authorized to make one or more advances and charge the Loan Account from time to time to pay each and all of the foregoing amounts due; and

 

e.                                       After giving effect to this Agreement, no Default or Event of Default (other than with respect to any Specified Potential Events of Default) shall have occurred and be continuing.

 

11.                               NO OTHER AMENDMENTS; ACKNOWLEDGMENT OF OBLIGATIONS. Except for the amendments set forth in Section 5 of this Agreement, the Credit Agreement and the other Loan Documents shall remain unchanged and in full force and effect.  Nothing in this Agreement is intended, or shall be construed, to constitute a novation or an accord and satisfaction of any Loan Party’s Obligations under or in

 

8

 

connection with the Credit Agreement and any other Loan Document or to modify, affect or impair the perfection or continuity of the Agent’s security interest in, (on behalf of itself and Lenders) security titles to or other Liens on any Collateral for the Obligations.  Each Loan Party hereby ratifies and reaffirms the Loan Documents and all of its obligations and liabilities thereunder, including all of the Obligations.

 

12.                               NON-WAIVER OF DEFAULT; LIMITED NATURE OF FORBEARANCE.  None of this Agreement, the Agent’s and the Lenders’ forbearance hereunder or the Agent and the Lenders’ continued making of loans or other extensions of credit at any time extended to the Borrowers in accordance with this Agreement, the Credit Agreement, and the Loan Documents shall be deemed a waiver of or consent to the Specified Potential Events of Default or any other Event of Default.  Each Loan Party agrees that such Events of Default shall not be deemed to have been waived, released or cured by virtue of Loans or other extensions of credit at any time extended to the Borrowers, or by the Agent and the Lenders’ agreement to forbear pursuant to the terms of this Agreement or the execution of this Agreement.  Nothing in this Agreement shall restrict the Agent and the Lenders’ ability to take or refrain from taking or exercise any right with respect to any Subordinated Indebtedness that they are otherwise entitled to take, refrain from taking or exercise, as the case may be.

 

13.                               APPLICATION OF PROCEEDS.  Each Loan Party hereby waives the right, if any, to direct the manner in which the Agent applies any payments, collections or Collateral proceeds to the Obligations and agrees that the Agent may apply and reapply all such payments, collections or proceeds to the Obligations as the Agent, in its sole and absolute discretion, elects from time to time in accordance with the terms of the Credit Agreement and the other Loan Documents.

 

14.                               REPRESENTATIONS AND WARRANTIES.  Each Loan Party hereby represents and warrants to the Agent and the Lenders as follows:

 

a.                                      Binding Effect of Documents.  This Agreement and the other Loan Documents have been duly executed and delivered to the Agent and the Lenders by such Loan Party and are in full force and effect, as modified hereby. This Agreement constitutes the legal, valid and binding obligation of each Loan Party enforceable in accordance with its terms.  Each Guarantor hereby confirms that the Guaranty to which it is a party will continue to guarantee to the fullest extent possible, the Guaranteed Obligations (as defined in such Guaranty) and ratifies all the provisions of the Guaranty and all other Loan Documents to which it is a party.

 

b.                                      No Event of Default.  As of, and after giving effect to this Agreement, on the Forbearance Effective Date, no Event of Default has occurred and is continuing.

 

c.                                       Representation and Warranties.  On and as of the date hereof, except with respect to the Specified Potential Events of Default, all representations and warranties of each Loan Party set forth in the Credit Agreement (as amended by this Agreement) and the other Loan Documents are true, correct and complete in all respects as though made on and as of such date, except to the extent that such

 

9

 

representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties (as amended by this Agreement) shall have been true, correct and complete on and as of such earlier date).

 

d.                                      Authority.  Each Loan Party has the corporate power and authority (i) to enter into this Agreement and (ii) to do all acts and things as are required or contemplated hereunder to be done, observed and performed by it.

 

e.                                       Authorization. Each Loan Party has the power and has taken all necessary action, corporate or otherwise, to authorize it to execute, deliver, and perform this Agreement in accordance with the terms hereof and to consummate any transactions contemplated hereby.

 

f.                                        No Conflict.   The execution and delivery by each Loan Party of this Agreement and the performance of the obligations of it hereunder and the consummation by it of any transactions contemplated hereby: (i) are not in contravention of the terms of the organizational documents of such Loan Party or of any material agreement or undertaking to which it is a party or by which such Loan Party or its property is bound; (ii) do not require the consent, registration or approval of any Governmental Authority or any other Person (except such as have been duly obtained, made or given, and are in full force and effect and except for consents of Persons (other than a Governmental Authority) that are not material); (iii) do not contravene in any material respect any statute, law, ordinance regulation, rule, order or other governmental restriction applicable to or binding upon such Loan Party; and (iv) will not result in the imposition of any liens upon any property of such Loan Party except Permitted Encumbrances;

 

15.                               ADVICE OF COUNSEL.    Each of the parties represents to each other party hereto that it has discussed this Agreement with its counsel.

 

16.                               SEVERABILITY OF PROVISIONS.  In case any provision of or obligation under this Agreement shall be invalid, illegal or unenforceable in any applicable jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

17.                               COUNTERPARTS.  This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same instrument.  Delivery of an executed signature page of this Agreement by facsimile transmission or electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.

 

18.                               RELEASE.

 

a.                                      In consideration of the agreements of the Agent and the Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely,

 

10

 

unconditionally and irrevocably releases, remises and forever discharges the Agent and each Lender and each of their respective successors and assigns, and respective present and former Related Parties (the Agent, the Lenders and all such other persons being hereinafter referred to collectively as the “Releasees” and individually as a “Releasee”), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a “Claim” and collectively, “Claims”) of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which either Loan Party or any of its respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever which arises at any time on or prior to the Forbearance Effective Date, including, without limitation, for or on account of, or in relation to, or in any way in connection with the Credit Agreement or any of the other Loan Documents or transactions thereunder or related thereto.

 

b.                                      Each Loan Party understands, acknowledges and agrees that its release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.

 

c.                                       Each Loan Party agrees that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

 

19.                               GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

20.                               ENTIRE AGREEMENT; LOAN DOCUMENT.  The Credit Agreement and the other Loan Documents as and when confirmed, amended or otherwise modified through this Agreement embodies the entire agreement between the parties hereto relating to the subject matter thereof and supersedes all prior agreements, representations and understandings, if any, relating to the subject matter thereof.  This Agreement shall constitute a Loan Document for all purposes.

 

21.                               NO STRICT CONSTRUCTION, ETC.  The parties hereto have participated jointly in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.  Time is of the essence for this Agreement.

 

11

 

22.                               RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARIES.  Nothing in this Agreement shall be construed to, nor is this Agreement intended to, alter, change or affect in any way the relationship among the Agent, the Lenders and the Loan Parties to one other than a debtor-creditor relationship.  This Agreement is not intended, nor shall it be construed, to create a partnership or joint venture relationship between or among any of the parties hereto.  No Person other than a party hereto is intended to be a beneficiary hereof and no Person other than a party hereto shall be authorized to rely upon or enforce the contents of this Agreement.

 

23.                               SECTION TITLES.  The section titles contained in this Agreement are included for the sake of convenience only, shall be without substantive meaning or content of any kind whatsoever, and are not a part of the agreement between the parties.

 

24.                               ENTIRE AGREEMENT.  This Agreement and the other Loan Documents constitute the entire agreement and understanding between the parties hereto with respect to the transactions contemplated hereby and thereby and supersede all prior negotiations, understandings and agreements between such parties with respect to such transactions.

 

[Signature Pages Follow]

 

12

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year specified at the beginning hereof.

 

	
 
    	
AGENT AND LENDERS:
    
	
 
    	
 
    
	
 
    	
CRYSTAL FINANCIAL LLC, as Agent and a Revolving Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CRYSTAL FINANCIAL SPV LLC, as a Term Loan Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Forbearance and Modification Agreement]

 

 

	
 
    	
SOLAR CAPITAL LTD., as a Revolving Lender and a Term Loan Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Forbearance and Modification Agreement]

 

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
BODY CENTRAL STORES, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BODY CENTRAL SERVICES, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BODY CENTRAL DIRECT, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GUARANTOR:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BODY CENTRAL CORP.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Forbearance and Modification Agreement]

 

 

Annex A

 

Schedule 2.01

Commitment and Applicable Percentages

 

	
Lender 
    	
 
    	
Revolving Commitment
    	
 
    	
Term Loan Commitment
    	
 
    	
Delayed Draw
   Term Loan
   Commitment
    	
 
    
	
Crystal Financial LLC
    	
 
    	
$7,000,000.00 (41.17647%)
    	
 
    	
$0.00 (0.0%)
    	
 
    	
$0.00 (0.0%)
    	
 
    
	
Crystal Financial SPV LLC
    	
 
    	
$0.00 (0.0%)
    	
 
    	
$0.00 (0.0%)
    	
 
    	
$0.00 (0.0%)
    	
 
    
	
Solar Capital Ltd.
    	
 
    	
$10,000,000 (58.82353%)
    	
 
    	
$0.00 (0.0%)
    	
 
    	
$0.00 (0.0%)
    	
 
    
	
TOTAL
    	
 
    	
$17,000,000.00
    	
 
    	
$0.00
    	
 
    	
$0.00

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