WARRANT AMENDMENT
This
WARRANT AMENDMENT (this “Amendment”) is dated as of March 24, 2010 by and among
QKL Stores Inc., a Delaware corporation (the “Company”), and Vision Opportunity
China LP. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Warrant (as defined
below).
R E C I T
A L S
WHEREAS,
the Company entered into a Securities Purchase Agreement (the
“Securities Purchase Agreement”), dated as of March 28, 2008, pursuant to which
the Company conducted a private offering solely to accredited investors pursuant
to Rule 506 of Regulation D of the Securities Act of 1933, as amended, of its
series A preferred stock and series A and series B warrants; and
WHEREAS,
pursuant to Sections 4(d), (e) and (f) of the Series B Warrant to Purchase
Shares of Common Stock of the Company that were delivered to the Purchasers (as
defined in the Securities Purchase Agreement) pursuant to the Securities
Purchase Agreement (the “Warrant”), the investors had certain anti-dilution
protection in the event the Company issues any Additional Shares of Common Stock
or Common Stock Equivalents at a price per share less than the Warrant Price
then in effect; and
WHEREAS,
the Company has requested that the Majority Holders amend the Warrant to delete
Sections 4(d), (e) and (f) thereof; and agree that in lieu of such provisions
the Majority Holders of the Warrant shall have a right to pre-approve any
issuance of Additional Shares of Common Stock and Common Stock Equivalents at a
price less than the Warrant Price then in effect and give retroactive effect to
such amendment; and
WHEREAS,
pursuant to Section 11 of the Warrant, no provision of the Warrant may be
amended without the written consent of the Company and the Majority Holders;
and
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Amendment. Pursuant
to Section 11 of the Warrant, the parties hereto hereby amend the Warrant, as of
the date hereof, by:
(a) deleting Sections 4(d) and
(e);
(b) deleting the text of Section 4(f)
and replacing it with the following:
“Issuance of Additional
Shares of Common Stock and Common Stock Equivalents.
Until
March 27, 2013, the Issuer shall not issue any Additional Shares of Common Stock
or Common Stock Equivalents (otherwise than as provided in the foregoing subsections
(a) through (c) of this Section 4), at a price per share less than the
Warrant Price then in effect or without consideration, without the prior written
consent of the Majority Holders.”
2. Effective
Time. The parties hereto acknowledge and agree that, due to an
administrative error, the Warrant was not formally amended on December 31, 2008,
and that, in accordance with the intention of the parties, this Amendment shall
be retroactive from and including, December 31, 2008.
3. Effect on Transaction
Documents. Except as set forth above, the Securities Purchase
Agreement, the Warrant and any other documents related thereto, shall remain in
full force and effect and are hereby ratified and confirmed.
4. Governing Law;
Jurisdiction. This Amendment 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.
5. Counterparts. This
Amendment 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.
A facsimile signature shall be
deemed to be an original signature for purposes of this
Amendment.
6. Severability. If any
provision of this Amendment shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Amendment or the validity or
enforceability of this Amendment in any other jurisdiction.
[REMAINDER
OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
[SIGNATURE
PAGES TO FOLLOW]
IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
first written above.
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By: /s/ ▇▇▇▇▇▇▇▇
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Name:
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Title: Chief
Executive Officer
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IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the date
first written above.
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VISION
OPPORTUNITY CHINA LP
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By: /s/ ▇▇▇▇
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Name:
▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Authorized
Signatory
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