Exhibit 10.1
 
CANCELLATION AGREEMENT
 
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”), Brasel Family Partners (“BFP”), LaMirage Trust
(“LaMirage”), Lazzeri Family Trust (“LFT”), Mathis Family Partners LTD (“MFP”)
and Lazzeri Equity Partners 401(k) Plan (the “Plan” and collectively with BFP,
LaMirage, LFT and MFP, the “Acquiror Company Shareholders”) and Shun Cheng
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, Timothy Brasel, BFP, LaMirage, MFP, LFT,
Hu Qingying, Ong Hock Seng and SCM Capital LLC, on the one hand, and Shun Cheng
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.
 
 
 

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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.
 
 
 

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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]

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Cancellation Agreement
as of the date first above written.
 
BIRCH BRANCH, INC
 
By:  /s/ Timothy Jay
Brasel                                                                                
Name:  Timothy Jay Brasel
Title:  President
 
SHUN CHENG HOLDINGS HONGKONG LIMITED
 
By:  /s/ Wang
Feng                                                                                
Name:  Wang Feng
Title:  Director
 
MATHIS FAMILY PARTNERS LTD

By:  /s/ Earnest
Mathis                                                                                
Name:  Earnest Mathis
Title:  General Partner
 
BRASEL FAMILY PARTNERS

By:  /s/ Timothy Jay
Brasel                                                                                
Name:  Timothy Jay Brasel
Title:  General Partner
 
LAMIRAGE TRUST

By:  /s/ Timothy Jay
Brasel                                                                                
Name:  Timothy Jay Brasel
Title:  Trustee
 
LAZZERI FAMILY TRUST

By:  /s/ Robert
Lazzeri                                                                                
Name:  Robert Lazzeri
Title:  Trustee
 
LAZZERI EQUITY PARTNERS 401(K) PLAN

By:  /s/ Robert
Lazzeri                                                                                
Name:  Robert Lazzeri
Title:  Trustee
 
 
 

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ANNEX A
 

Name
Number
Brasel Family Partners
108,780 shares restricted
La Mirage Trust
108,780 shares restricted
Lazzeri Family Trust
  78,781 shares restricted
Mathis Family Partners
108,782 shares restricted
Lazzeri Equity Partners 401K Plan
30,000 shares restricted
 
435,123 shares restricted

 
 

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ANNEX B
 

Name
Number
Brasel Family Partners
None
La Mirage Trust
8,750
Lazzeri Family Trust
40,000
Mathis Family Partners
40,000
Lazzeri Equity Partners 401K Plan
None