CANCELLATION AGREEMENT
Exhibit
10.1
This
CANCELLATION AGREEMENT, is entered into as of June 28, 2010 (this “Agreement”),
by and among, Birch Branch, Inc., a Colorado corporation (the “Acquiror
Company”), Xxxxxx Family Partners (“BFP”),
LaMirage Trust (“LaMirage”),
Xxxxxxx Family Trust (“LFT”),
Xxxxxx Family Partners LTD (“MFP”)
and Xxxxxxx Equity Partners 401(k) Plan (the “Plan”
and collectively with BFP, LaMirage, LFT and MFP, the “Acquiror
Company Shareholders”) and Xxxx Xxxxx Holdings HongKong Limited, a Hong
Kong company (the “Company”).
BACKGROUND
WHEREAS, concurrently herewith, the Acquiror Company is consummating the transactions
contemplated by the Share
Exchange Agreement dated as
of May 14, 2010 by and among the Acquiror Company, Xxxxxxx
Xxxxxx, BFP, LaMirage, MFP, LFT, Hu Qingying, Ong Xxxx Xxxx and SCM
Capital LLC, on the one hand, and Xxxx Xxxxx Holdings Limited, Wanjinlin
International Investment Group Limited, Jinmao Investment Group Limited, USA
Wall Street Capital United Investment Group Limited, Global Chinese Alliance
Development Ltd., USA International Finance Consulting Group Ltd., Golden Hill
International Investment Group Limited, Fuhai International Investment Group
Limited, Renhe International Investment Group Limited, Fuyutai International
Investment Group Limited, and Kangchen International Investment Group Limited
(collectively, “Company
Shareholders”); and the Company (the “Share
Exchange Agreement”), on the other, as amended by the Amendment dated
June 28, 2010, pursuant to which
the Acquiror
Company will acquire from
the Company Shareholders all of the issued and outstanding capital stock of the
Company in exchange for 30,233,750 shares of the Acquiror Company’s common stock (the “Share
Exchange Transaction”).
WHEREAS, it is a condition precedent to the
consummation of the Share Exchange Transaction that the Acquiror Company Shareholders
enter into and consummate
this Agreement, which will effectuate the cancellation of 435,123 shares of the common stock,
no par value per share, of the Acquiror Company held by the respective Acquiror Company
Shareholders (the
“Subject
Shares”), as set forth on Annex
A hereto. The Acquiror Company Shareholders
are entering into this
Agreement to, among other things, induce the Company and the Company
Shareholders to enter into the Share Exchange Transaction and the Acquiror Company Shareholders
acknowledge that the
Company and the Company Shareholders would not consummate the transactions
contemplated by the Share Exchange Transaction unless the transactions
contemplated hereby are effectuated in accordance herewith.
AGREEMENT
NOW,
THEREFORE, in consideration
of the mutual promises herein contained and for other good and valuable
consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Cancellation
of Subject Shares. The Acquiror
Company Shareholders have delivered to the Acquiror Company for cancellation
stock certificates representing their respective Subject Shares along with duly
executed medallion guaranteed stock powers covering such Subject Shares (or such
other documents acceptable to the Acquiror Company’s transfer agent) and each
Acquiror Company Shareholder hereby irrevocably instructs the Acquiror Company
and the Acquiror Company’s transfer agent to cancel the Subject Shares thereof,
such that such Subject Shares will no longer be outstanding on the stock ledger
of the Acquiror Company and such that the Acquiror Company Shareholders shall no
longer have any interest in any of the Subject Shares whatsoever. The
Acquiror Company shall immediately deliver to the Acquiror Company’s transfer
agent irrevocable instructions providing for the cancellation of the Subject
Shares. Upon the closing of the “Share Exchange” (as defined in the
Share Exchange Agreement) pursuant to the Share Exchange Agreement, the Subject
Shares shall automatically be deemed cancelled.
2. Representations
by the Acquiror Company Shareholders. The Acquiror Company and the
Acquiror Company Shareholders, jointly and severally, represent and warrant to
the Company as follows:
(a) The
Acquiror Company Shareholders own, of record and beneficially, and have good,
valid and indefeasible title to and the right to transfer to Acquiror Company
pursuant to this Agreement, all of their respective Subject Shares, free and
clear of any and all liens and encumbrances. There are no options,
rights, voting trusts, shareholder agreements or any other contracts or
understandings to which any of the Acquiror Company Shareholders is a party or
by which any Acquiror Company Shareholders or the Subject Shares are bound with
respect to the issuance, sale, transfer, voting or registration of the Subject
Shares. After giving effect to the cancellation of the Subject
Shares, except for the shares referred to in Annex
B hereto, the Acquiror Company Shareholders own, of record or
beneficially, no other shares of capital stock, or convertible securities, of
the Company and no Acquiror Company Shareholder has any rights to acquire any
such capital stock or securities.
(b) Each
of the Acquiror Company Shareholders has full right, power and authority to
execute, deliver and perform this Agreement and to carry out the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Acquiror Company Shareholders and constitutes a
valid, binding obligation of the Acquiror Company Shareholders, enforceable
against the Acquiror Company Shareholders in accordance with its terms (except
as such enforceability may be limited by laws affecting creditor's rights
generally).
3. Further
Assurances. Each party to
this Agreement will use his or its best efforts to take all actions and to do
all things necessary, proper, or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including the
execution and delivery of such other documents and agreements as may be
necessary to effectuate the cancellation of the Subject Shares).
4. Amendment
and Waiver. Any term, covenant, agreement or condition of this
Agreement may be amended, with the written consent of the Acquiror Company, the
Company and the Acquiror Company Shareholders, or compliance therewith may be
waived (either generally or in a particular instance and either retroactively or
prospectively), by one or more written instruments signed by the Acquiror
Company, the Company and the Acquiror Company Shareholders.
5. Survival
of Agreements, Representations and Warranties, etc. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement.
6. Successors
and Assigns. This Agreement
shall bind and inure to the benefit of and been enforceable by the Acquiror
Company, the Company and the Acquiror Company Shareholders, and their respective
successors and permitted assigns. No party may assign any of its
right under this Agreement without the prior consent of the other
party.
7. Governing
Law. This Agreement
(including the validity thereof and the rights and obligations of the parties
hereunder and thereunder) and all amendments and supplements hereof and thereof
and all waivers and consents hereunder and thereunder shall be construed in
accordance with and governed by the internal laws of the State of New York
without regard to its conflict of laws rules, except to the extent the laws of
Colorado are mandatorily applicable.
8. Miscellaneous. This Agreement,
together with the Share Exchange Agreement, embodies the entire agreement and
understanding between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. This Agreement may be executed in any number of
counterparts and by the parties hereto on separate counterparts but all such
counterparts shall together constitute but one and the same instrument. This
Agreement may be reproduced by any electronic, photographic, photostatic,
magnetic, microfilm, microfiche, microcard, miniature photographic, facsimile or
other similar process and the original thereof may be destroyed. The parties
agree that any such reproduction shall, to the extent permitted by law, be as
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not the
reproduction was made in the regular course of business) and that any
enlargement, facsimile or further reproduction shall likewise be admissible in
evidence. Facsimile execution and delivery of this Agreement is legal, valid and
binding execution and delivery for all purposes.
[Signature Page
Follows]
IN
WITNESS WHEREOF, the parties hereto have executed this Cancellation Agreement as
of the date first above written.
BIRCH
BRANCH, INC
By: /s/ Xxxxxxx Xxx
Xxxxxx
Name: Xxxxxxx
Xxx Xxxxxx
Title: President
XXXX
XXXXX HOLDINGS HONGKONG LIMITED
By: /s/ Wang
Feng
Name: Wang
Feng
Title: Director
XXXXXX
FAMILY PARTNERS LTD
By: /s/ Xxxxxxx
Xxxxxx
Name: Xxxxxxx
Xxxxxx
Title: General
Partner
XXXXXX
FAMILY PARTNERS
By: /s/ Xxxxxxx Xxx
Xxxxxx
Name: Xxxxxxx
Xxx Xxxxxx
Title: General
Partner
LAMIRAGE
TRUST
By: /s/ Xxxxxxx Xxx
Xxxxxx
Name: Xxxxxxx
Xxx Xxxxxx
Title: Trustee
XXXXXXX
FAMILY TRUST
By: /s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Trustee
XXXXXXX
EQUITY PARTNERS 401(K) PLAN
By: /s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Trustee
ANNEX
A
|
Name
|
Number
|
|
Xxxxxx
Family Partners
|
108,780
shares restricted
|
|
La
Mirage Trust
|
108,780
shares restricted
|
|
Xxxxxxx
Family Trust
|
78,781
shares restricted
|
|
Xxxxxx
Family Partners
|
108,782
shares restricted
|
|
Xxxxxxx
Equity Partners 401K Plan
|
30,000 shares
restricted
|
|
435,123
shares restricted
|
ANNEX
B
|
Name
|
Number
|
|
Xxxxxx
Family Partners
|
None
|
|
La
Mirage Trust
|
8,750
|
|
Xxxxxxx
Family Trust
|
40,000
|
|
Xxxxxx
Family Partners
|
40,000
|
|
Xxxxxxx
Equity Partners 401K Plan
|
None
|
