Document:

Unassociated Document

     

    WAIVER

     

     

    This
waiver (the “Waiver”) to certain provisions of the Certificate of Designations,
Preferences and Rights of Series A Convertible Preferred Stock (the
“Certificate”) of QKL Stores Inc., a Delaware corporation (the “Company”), is
dated and entered into as of March ___, 2010, by and among the Company and the
undersigned holder of Series A Preferred Shares (the
“Shareholder”).  Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Certificate.

     

    WHEREAS,
the Certificate was filed with the Delaware Secretary of State on March 13,
2008; and

     

    WHEREAS,
pursuant to Section 5(e) of the Certificate, the holders of Series A Preferred
Stock had certain anti-dilution protections in the event the Company issued any
Common Stock Equivalents at a price per share less than $1.70; and

     

    WHEREAS,
the Company has requested that the Shareholder waive any rights the Shareholder
may have pursuant to Section 5(e) of the Certificate;

     

    NOW
THEREFORE, the undersigned hereby agree as follows:

     

    
      	
               
      

            	
              1.

            	
              Waiver.  The
      Shareholder hereby agrees to waive any and all rights that the Shareholder
      may have pursuant to Section 5(e) of the Certificate and agrees that the
      Shareholder shall not be entitled to any securities that would have been
      issuable pursuant to Section 5(e) of the Certificate since December 31,
      2008.

            

    

     

    
      	
               
      

            	
              2.

            	
              Effect on
      RRA.  The parties hereto acknowledge and agree that, due
      to an administrative error, the Certificate was not formally amended on
      December 31, 2008, and that, in accordance with the intention of the
      parties, this Waiver shall be retroactive from and including, December 31,
      2008.

            

    

     

    
      	
               
      

            	
              3.

            	
              Governing Law;
      Jurisdiction. This Waiver shall be governed by and construed in
      accordance with the laws of the State of New York applicable to contracts
      made and to be performed in the State of New
  York.

            

    

     

    
      	
               
      

            	
              4.

            	
              Counterparts.
      This Waiver may be executed in two or more counterparts, all of which
      shall be considered one and the same agreement and shall become effective
      when counterparts have been signed by each party and delivered to the
      other party.

            

    

     

    
      	
               
      

            	
              5.

            	
              Severability.
      If any provision of this Waiver shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the
      validity or enforceability of the remainder of this Waiver or the validity
      or enforceability of this Waiver in any other
  jurisdiction.

            

    

     

    [SIGNATURE
PAGES TO FOLLOW]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly executed
as of the date first indicated above.

     

    

     

    
      	 
      	
              The
      Company:

            
	 
      	
              QKL
      STORES INC.

              By:________________________________

              Name:
      Zhuangyi Wang

              Title:
      CEO

               

            
	 
      	
              The
      Shareholder:

            
	 
      	 
      
	 
      	
              [________]

              By:_______________________________

              Name:

              Title:

               

              No.
      of Series A Preferred Shares:
___________AMENDMENT
No. 2 TO

     

    SECURITIES
ESCROW AGREEMENT

     

    

    This
Amendment No. 2 (“Amendment No. 2”) to the Securities Escrow Agreement dated as
of March 28, 2008 (the “Securities Escrow Agreement”) (as Amended by the
Amendment to Securities Escrow Agreement dated as of October 15, 2009, by and
among QKL Stores, Inc., a Delaware corporation (the “Company”), Vision
Opportunity China LP, a closed-ended investment company incorporated in
Guernsey, as representative of the Purchasers (the “Purchaser Representative”),
Winning State Investment Limited, a company organized in the British Virgin
Islands (the “Principal Stockholder”), and Loeb & Loeb, LLP (the “Escrow
Agent”) is made and entered into as of April 1, 2009.  Capitalized
terms used but not defined herein shall have the meanings set forth in the
Securities Escrow Agreement (as defined below).

     

    WHEREAS, on January 1, 2009
the Company adopted the provisions of EITF 07-5, “Determining Whether an
Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (FASB ASC
815-40-15-5) FASB ASC Topic 815, “Derivatives and Hedging (“ASC 815”)
(collectively referred to as “ASC 815”) which will impact the Company’s net
income for 2009; and

    

     

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

     

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

     

    (b)  In 2009, without
additional financing (i) Both Net Income, as defined in accordance with US GAAP
and reported by the Company in its audited financial statements for 2009 (the
“2009 financial
statements”) and Cash from Operations, as reported by the Company in the
2009 financial statements exceed $11.15 million and (ii) Earnings Per Share
equal or exceed $0.27, such “Earnings Per Share” to be calculated by dividing
the lesser of Net Income and Cash from Operations, as reported by the Company in
the 2009 financial statements plus (a) any amounts
that may have been recorded as charges or liabilities on the 2009 financial
statements due to the application of EITF No. 00-19 or ASC 815 that are
associated with (1) any outstanding Warrants of the Company issued in connection
with the Purchase Agreement or (2) any liabilities created as a result of the
Escrow Shares being released to any officers or directors of the Company and (b)
one time non-recurring cash expenses incurred by the Company relating to the
Offering and the Listing, including all legal and accounting fees, SEC and FINRA
filing fees, NASDAQ application and listing fees, printing fees and road show
expenses (“2009 Net
Income”) by the then Outstanding Shares; provided however that for the
purposes of this paragraph, Outstanding Shares shall exclude any shares issued
by the Company in the Offering (the performance thresholds set forth in (i) and
(ii) above shall be collectively referred to herein as the “2009 Performance
Thresholds”); and

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

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

     

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

     

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

     

    [Remainder
of page intentionally left blank]

     

     

     

     

     

     

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    [SIGNATURE
PAGE TO THE SUPPLEMENT TO SECURITIES ESCROW AGREEMENT]

     

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

     

    

    QKL
STORES, INC.

    

    
      	
              By:

            	
               /s/
      Zhuangyi Wang

            	 
      

    

    Name:
Zhuangyi Wang

    Title:  
Chief Executive Officer and President

     

    PURCHASER
REPRESENTATIVE:

    

    VISION
OPPORUNITY CHINA LP

     

    

    
      	
              By:

            	
               /s/
      Adam Benowitz

            	 
      

    

    Name:
Adam Benowitz

    Title:  
Authorized Signatory

    

    ESCROW
AGENT:

     

    LOEB
& LOEB, LLP

    

    
      	
              By:

            	
               /s/
      Eric Doering

            	 
      

    

    Name:
Eric Doering

    Title:  
Partner

    

    PRINCIPAL
STOCKHOLDER:

     

    

    
      	
              By:

            	
               /s/
      Zhuangyi Wang

            	 
      

    

    Name:
Winning State Investment Limited

    Authorized
Signatory: Zhuangyi Wang

     

    
      
         

      

      
        3SIXTH AMENDMENT TO LOAN
AGREEMENT

    

    THIS
SIXTH AMENDMENT TO LOAN AGREEMENT (the “Amendment”) is entered into effective as
of the 1st day of
April, 2010, by and among FIFTH
THIRD BANK, an Ohio banking corporation, successor by merger with Fifth
Third Bank, a Michigan banking corporation with its office and principal place
of business at 250 West Main Street, Suite 100, Lexington, Kentucky 40507 (the
“Bank"); and MEDPRO SAFETY
PRODUCTS, INC., a Nevada corporation successor by merger to MEDPRO SAFETY PRODUCTS, INC.,
a Delaware corporation successor by merger to VACUMATE, LLC, a Kentucky
limited liability company with its principal place of business at 817 Winchester
Road, Suite 200, Lexington, Kentucky 40505 (“Borrower”). All capitalized terms
used herein but not otherwise defined herein shall be given the same meaning
assigned to such capitalized terms in the Loan Agreement (as defined
below).

    

    RECITALS:

    

    WHEREAS,
the Borrower and the Bank are parties to that certain Loan Agreement dated as of
August 7, 2006, as amended by the First Amendment thereto dated effective as of
March 19, 2007, as further amended by the Second Amendment thereto dated
effective as of June 11, 2007, as further amended by the Third Amendment thereto
dated effective as of September 1, 2007, as further amended by the Fourth
Amendment thereto dated effective as of August 1, 2008 and as further amended by
the Fifth Amendment thereto dated effective as of June 30, 2009 (as amended, the
"Loan Agreement");

    

    WHEREAS,
pursuant to the Loan Agreement and the other Loan Documents (as such term is
defined in the Loan Agreement), the Borrower is currently indebted to the Bank
for, among other things, a term loan as evidenced by that certain Second Amended
and Restated Term Promissory Note, dated August 1, 2008, in the renewed
principal amount of Four Million Five Hundred Eighty-Three Thousand Three
Hundred Thirty-Three and 33/100 Dollars ($4,583,333.33) (the “Second Amended and
Restated Term Note”); and

    

    WHEREAS,
the Borrower has requested and Bank has agreed to modify certain covenants as
set forth herein.

    

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

    

    1.      FINANCIAL COVENANT.
(a) From and after the date hereof through and including September 30, 2010,
Borrower shall maintain in its name at all times, an account with the Bank that
contains readily available funds in an amount greater than or equal to the
lesser of (the “Minimum Balance”): (i) $750,000 and (ii) fifty percent (50%) of
the outstanding balance of the Second Amended and Restated Term Note as of the
measurement date and after giving effect to the monthly payment (assuming it is
made).  The foregoing covenant shall be tested on the 1st
Business Day of each calendar month after the monthly payment is made on the
Second Amended and Restated Term Note. An Event of Default shall automatically
occur without prior notice to the Borrower if the account balance is below the
Minimum Balance on a measurement date and the Bank shall be entitled to exercise
its rights and remedies under the Loan Documents, including but not limited to
accelerating the Second Amended and Restated Term Note.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    (b)           From
and after October 1, 2010, Borrower shall maintain in its name at all times, an
account with the Bank that contains readily available funds in an amount greater
than or equal to the outstanding balance of the Second Amended and Restated Term
Note.  The foregoing covenant shall be tested on the 1st
Business Day of each calendar month after the monthly payment is made on the
Second Amended and Restated Term Note. An Event of Default shall automatically
occur without prior notice to the Borrower if the account balance is below the
outstanding balance of the Second Amended and Restated Term Note on a
measurement date and the Bank shall be entitled to exercise its rights and
remedies under the Loan Documents, including but not limited to accelerating the
Second Amended and Restated Term Note.

    

    2.      SECURITY FOR
INDEBTEDNESS. The Indebtedness evidenced by the Second Amended and
Restated Term Note shall continue to be secured by the Security Documents and
the Collateral, as defined in the Loan Agreement, as hereby amended. In
addition, simultaneous with the execution of this Amendment, Borrower shall
execute and deliver to the Bank a Security Agreement (the “Collateral Assignment
Agreement”) pursuant to which the Borrower confirms the Bank's existing security
interest with respect to the Debtor's rights to payment under those certain
Medical Supply Manufacturing Agreements, each dated effective as of July 15,
2008, by and between the Borrower and Greiner Bio-One GmbH, an Austrian Company
(the “Pledged Contracts”).  Borrower covenants and agrees that it will
not change the payment terms set forth in the Pledged Contracts, terminate the
Pledged Contracts or otherwise make any material modifications to the Pledged
Contracts without the prior written consent of the Bank.  It shall be
deemed an immediate Event of Default under the Loan Agreement and other Loan
Documents if the Borrower violates the foregoing covenant.

    

    3.      REPRESENTATIONS AND
WARRANTIES.  Borrower reiterates as of this date all
representations and warranties contained in the Loan Agreement, each of which
shall be deemed to be continuing warranties and representations until such time
as all Debt evidenced by the Loan Agreement and other Loan Documents, as hereby
amended, shall have been paid in full and Borrower has no further liability to
Bank.

    

    4.      COVENANTS.  Borrower
agrees that all covenants contained in the Loan Agreement and the other Loan
Documents, as hereby amended, are and hereafter shall be binding upon Borrower
until payment in full of all obligations to Bank under the Loan Documents,
unless otherwise consented to in writing by Bank.

    

    5.      NO DEFENSES OR SETOFFS;
RELEASE.  There are no defenses, credits, or setoffs to the
payment of the Debt evidenced by the Second Amended and Restated Term Note or
the other Loan Documents or the enforceability of the Second Amended and
Restated Term Note or the other Loan Documents against Borrower, nor are there
any claims, actions or causes of action which could be asserted against the Bank
relating to the transactions evidenced by the Second Amended and Restated Term
Note, the Loan Agreement, this Amendment, the other Loan Documents or the
transactions relating thereto. The obligations described herein, in the Second
Amended and Restated Term Note and in the other Loan Documents are absolute and
non-contingent. Borrower acknowledges and agrees that: (a) such Borrower has no
claim or cause of action against the Bank or any Affiliate of Fifth Third
Bancorp (or any of their directors, officers, employees, or agents)
(collectively, the “Bank Released Parties”); and (b) each Bank Released Party
has heretofore properly performed and satisfied in a timely manner all of such
party’s obligations to Borrower.  Bank wishes, and Borrower agrees, to
eliminate any possibility that any past conditions, acts, omissions, events,
circumstances, or matters would impair or otherwise adversely affect Bank’s
rights, interests, collateral security, or remedies.  Therefore,
Borrower, on behalf of itself and all of its successors, heirs and assigns and
any and all other entities and persons claiming rights through such Borrower,
unconditionally releases, acquits, and forever discharges each Bank Released
Party and their successors and assigns, (collectively, the “Dischargees”) from
(i) any and all liabilities, obligations, duties, or indebtedness of any of the
Dischargees to Borrower, whether known or unknown, arising prior to the date
hereof, and (ii) any and all claims, offsets, causes of action, suits, or
defenses, whether known or unknown, which Borrower might otherwise have against
any of the Dischargees on account of any condition, act, omission, event,
contract, liability, obligation, indebtedness, claim, cause of action, defense,
circumstance, or matter of any kind which existed, arose or occurred at any time
prior to the date hereof.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    6.      GOVERNING
LAW.  This Amendment shall be governed by and construed and
enforced in accordance with the substantive law of the Commonwealth of
Kentucky.

    

    7.      COUNTERPART
EXECUTION.  This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if all
signatures were upon the same instrument.  Delivery of an executed
counterpart of the signature page to this Amendment by facsimile shall be
effective as delivery of a manually executed counterpart of this Amendment, and
any party delivering such an executed counterpart of the signature page to this
Amendment by facsimile to any other party shall thereafter also promptly deliver
a manually executed counterpart of this Amendment to such other party, provided
that the failure to deliver such manually executed counterpart shall not affect
the validity, enforceability, or binding effect of this Amendment.

    

    8.      FUTURE
NEGOTIATIONS.  The Borrower acknowledges and agrees that (i)
the Bank has no obligation whatsoever to discuss, negotiate or to agree to any
restructuring of the Second Amended and Restated Term Note, or any modification,
amendment, restructuring or reinstatement of the other Loan Documents; (ii) that
if there are any future discussions among the Bank and the Borrower concerning
any such restructuring, modification, amendment or reinstatement, then no
restructuring, modification, amendment, reinstatement, compromise, settlement,
agreement or understanding with respect to the Second Amended and Restated Term
Note, the other Loan Documents, the Collateral or any aspect thereof, shall
constitute a legally binding agreement or contract or have any force or effect
whatsoever unless and until reduced in writing and signed by authorized
representatives of the parties to be bound, and that none of the parties hereto
shall assert or claim in any legal proceedings or otherwise that any such
agreement exists except in accordance with the terms of this
Section.

    

    9.      FEES AND EXPENSES OF
BANK.  Borrower agrees to pay, or cause to be paid, and save
Bank harmless against liability for the payment of, all reasonable out-of-pocket
expenses, including reasonable counsel and attorneys fees, incurred by Bank (a)
relating to the negotiation, preparation and administration of this Amendment,
any requested amendments, waivers, consents or other matters with respect to the
Loan or any future transactions between Borrower and the Bank; (b) in defending
against or otherwise responding to any claims by Borrower against Bank or any
dispute between Borrower and Bank with respect to this Agreement or in any way
connected with or related or incidental to the dealings of the parties hereto or
any of them with respect hereto, in each case whether sounding in contract or
tort or otherwise; and (c) in connection with the enforcement of this Amendment
or any of the other Loan Documents and in the collection of the obligations
evidenced thereby.

    

    10.   
JURY
WAIVER. IN RECOGNITION OF THE HIGHER COSTS AND DELAY WHICH MAY RESULT FROM A
JURY TRIAL, THE PARTIES HERETO WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING HEREUNDER OR IN CONNECTION WITH
THE LOAN DOCUMENTS, OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT HERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    11.    VENUE; JURISDICTION.
The parties agree that the sole proper venue for the determination of any
litigation commenced by Bank against Borrower or by Borrower against Bank on any
basis shall be in a court of competent jurisdiction which is located in Fayette
County, Kentucky, and the parties hereby expressly declare that any other venue
shall be improper and Borrower expressly waives any right to a determination of
any such litigation against Bank by a court in any other
venue.  Borrower further agrees that service of process by any
judicial officer or by registered or certified U.S. mail shall establish
personal jurisdiction over such Borrower, who waives any rights under the laws
of any state to object to jurisdiction within the Commonwealth of
Kentucky.  Provided, however, nothing contained in this section shall
prevent Bank from bringing any action or exercising any rights against any
security or against Borrower within any other state, where proper jurisdiction
exists.  Initiating such proceedings or taking such action in any
other state shall in no event constitute a waiver of the agreement contained
herein that the laws of the Commonwealth of Kentucky shall govern the rights and
obligations of the parties hereunder or of the submission herein made by
Borrower to personal jurisdiction within the Commonwealth of
Kentucky.  The aforesaid means of obtaining personal jurisdiction and
perfecting service of process are not intended to be exclusive, but are
cumulative and in addition to all other means of obtaining personal jurisdiction
and perfecting service of process now or hereafter provided by the laws of the
Commonwealth of Kentucky or by any other state in an action brought by Bank in
such state

    

    12.    LIMITED EFFECT OF
AMENDMENT.  Except as specifically amended herein or in the
other documents executed in connection with this Amendment, the terms and
conditions of the Loan Agreement, the Loan Documents, and all other existing
agreements between the parties are unaffected by this Amendment and shall
continue to be binding upon Borrower and Bank.

    

    [Signature
Page Follows]

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties have executed this Amendment to Loan Agreement as
of the day, month and year first above written.

    

     

    
      FIFTH
THIRD BANK

      an Ohio
banking corporation

       

      By: /s/
Patrick Bunting

      Name:
Patrick Bunting

      Title:
Vice President

       

      MEDPRO SAFETY PRODUCTS,
INC.,

      a Nevada
corporation

       

      By: /s/
Marc T. Ray

      Name:
Marc T. Ray

      Title:
Vice President Finance and Chief Financial Officer

    

     

    
      
        
          
            
            

          

          
            5

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