Document:

Unassociated Document

    
      

       CHINA MEDICINE CORPORATION

      2/F,
Guangri Tower, No 9 Siyounan Road 1st Street, Yuexiu District | Guangzhou,
Guangdong Province | 510600 | China

       

       

      
        
          	
                	

                  November
      16, 2010

                

        

         

         

      

      Henry Chi
Fung Ho

      Flat
2006, Oi Hong House,

      Tsz Oi
Court Stage 3

      Kowloon,
Hong Kong SAR

      

       

      
        	
                 
      

              	
                Re:

              	
                EMPLOYMENT
      AGREEMENT

              

      

       

      Dear
Henry:

       

      On behalf
of China Medicine Corporation, a Nevada corporation (the “Company”), I am
pleased to offer you the position of  Chief Financial Officer (“CFO”)
to the Company subject to the following terms and conditions (this “Agreement”):

       

      
        	
                 
      

              	
                1.

              	
                Duties
      and Scope of Employment.

              

      

       

      (a)           Position.  For the term of
your employment under this Agreement (your “Employment”), the
Company agrees to employ you as the CFO of the Company.  You will
report to the Board of Directors and will work directly with the Company’s
CEO.  You will be working out of the Company’s office in Guangzhou,
China.  You will perform the duties and have the responsibilities and
authority customarily performed and held by an employee in your position or as
otherwise may be assigned or delegated to you by the Company’s Board of
Directors and CEO, including but not limited to the following:

       

      
        	
                 
      

              	
                (i)

              	
                Strategy

              

      

       

      (1)           Partner
with the CEO on all operational and strategic issues as they arise; provide
strategic recommendations to the CEO based on financial analysis and
projections, cost identification and allocation, and revenue/expense
analysis.

       

      (2)           Participate
in the ongoing strategic planning process as an integral member of the senior
management team.

       

      
        	
                 
      

              	
                (ii)

              	
                Financial
      Management

              

      

       

      (1)           Review
and approve preparation and finalization of monthly, quarterly and annual
financial reporting materials.

       

      (2)           Oversee
budgeting, financial forecasting, and cash flow for administration, existing
programs, and proposed new sites.

       

      (3)           Manage
full-time financial and accounting staff, including hiring and retaining
additional staff as needed in the future.

       

      (4)           Coordinate
all audit activities.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                (iii)

              	
                Administrative
      Leadership and Management

              

      

       

      (1)           Serve
as a business partner to the CEO on the organization’s financial, budgeting, and
administrative processes—including HR, payroll, and benefits functions—with an
eye to continuously developing and improving systems.

       

      (2)           Lead
technical staff to design an IT plan for the future, and implement it
successfully to meet IT needs (hardware and software) as the organization
grows.  Review all formal finance-, HR-, and IT-related procedures,
processes, and administration, recommending improvements to the systems in place
and managing the systems going forward, including the implementation of a
Western-styled ERP system.

       

      (3)           Manage
the organization’s physical infrastructure, physical plant, and system
maintenance (phone system, security, cleaning, supplies, etc.), with assistance
from office managers.

       

      
        	
                 
      

              	
                (iv)

              	
                Organizational
      Evaluation and Improvement

              

      

       

      (1)           Within
one-month after assumption of your duties as the CFO, or as agreed to by the CEO
and the Board of Directors, you will report back to the CEO and the Board of
Directors an initial analysis of the strengths and weaknesses of the finance and
accounting staff of the Company.

       

      (2)           
You will implement a detailed recommended course of action to improve and
strengthen the finance and accounting staff of the Company, including the
implementation of new electronic reporting systems as well as the hiring of
additional finance and accounting staff.

       

      (b)           Obligations
to the Company.  During your
Employment, you shall devote your full business efforts and time to the
Company.  During your Employment, without the prior written approval
of the Company’s Board of Directors, you shall not render services in any
capacity to any other person or entity and shall not act as a sole proprietor or
partner of any other person or entity or own more than five percent of the stock
of any other corporation.  Notwithstanding the foregoing, you may
serve on corporate, civic or charitable boards or committees, deliver lectures,
fulfill speaking engagements, teach at educational institutions, or manage
personal investments without such advance written consent, provided that such
activities do not individually or in the aggregate interfere with the
performance of your duties under this Agreement.  You shall comply
with the Company’s policies and rules, as they may be in effect from time to
time during your Employment.

       

      (c)           No
Conflicting Obligations.  You represent and
warrant to the Company that you are under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with your obligations under this
Agreement.  In connection with your Employment, you shall not use or
disclose any trade secrets or other proprietary information or intellectual
property in which you or any other person has any right, title or interest and
your Employment will not infringe or violate the rights of any other
person.  You represent and warrant to the Company that you have
returned all property and confidential information belonging to any prior
employer.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (d)           Term.    The
effective date of this Agreement shall be November 16, 2010 (the “Effective
Date”).  Subject to the provisions for termination as provided
herein, the term of this Agreement shall be the period beginning from the
Effective Date and ending  November 16, 2014, or may be extended as
agreed to by you and the Company.

       

      
        	
                 
      

              	
                2.

              	
                Cash
      and Other Incentive Compensation.

              

      

       

      (a)           Salary.  As compensation
for your services, you shall be paid an initial base annual salary at a gross
rate of US$120,000, with US$10,000 to be paid monthly, among which, the portion
of such annual salary equal to RMB¥180,000 shall be payable by Guangzhou Konzern
Medicine Co., Ltd. (“Konzern”), and the remainder by China Medicine
Corporation.  The annual compensation specified in this
subsection (a), together with any
modifications in such compensation that the Company may make from time to time,
is referred to in this Agreement as “Base
Salary.”  The Board or Compensation Committee of the Board
shall review your Base Salary at least annually.  Effective as of the
date of any change to your Base Salary, the Base Salary as so changed shall be
considered the new Base Salary for all purposes of this Agreement.

       

      (b)           Incentive
Bonuses.  You will be
entitled to a US$10,000 sign-on bonus if you choose to continue employment from
the Company beginning January 1, 2011.  In addition, for each full
year of employment after January 1, 2011, you will be eligible to be considered
for an annual incentive bonus each calendar year during the term of your
employment under this Agreement based upon the achievement of certain objective
or subjective criteria established by the Company’s Board of Directors (the
“Board”) or
Compensation Committee of the Board, and agreed to by you.  The
determinations of the Board with respect to such bonus shall be final and
binding.  You shall not earn an incentive bonus unless you are
employed by the Company on the date when such bonus is payable.  For
the first full calendar year of your employment with the Company, i.e. calendar
year 2011, your incentive bonuses will not be less than US$20,000.

       

      (c)           Housing.  While
you are employed by the Company and while your place of work continues to be
Guangzhou, China, the Company agrees to provide you with a housing stipend of
RMB¥2,000 per month payable in China.

       

      (d)           Restricted
Stock.  The Company
granted you one hundred twenty thousand (120,000) shares of the Company's common
stock (the “Restricted
Stock”) as of October 1, 2010 (the “Grant Date”) pursuant to the
employment agreement by and between the Company and you dated August 31, 2010
for your Vice President of Finance and Accounting position and effective October
1, 2010 (the “Old Employment Agreement”) and this Agreement affirms such grant,
subject to the terms set forth below and the Company’s 2006 Long-Term Incentive
Plan (the “2006 Plan”). To the extent there is contradictory provisions between
this Agreement and the 2006 Plan, the provisions herein shall prevail unless the
Board or Compensation Committee specifically resolves otherwise.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (i)           Issuance of
Stock.  The Company shall cause the shares of Restricted Stock
to be issued in your name upon grant.  The Restricted Stock shall be
held in the custody of the Company or its designee for your
account.  The Restricted Stock shall be subject to and shall bear
appropriate legends with respect to the restrictions described
herein.

       

      (ii)           Vesting.  Your
restricted stock shall vest in the following schedule: (a) as to twenty percent
(20%) of such Restricted Stock (24,000 shares) at 12:01 a.m. on October 2, 2011,
(b) as to an additional twenty percent (20%) of such Restricted Stock (24,000
shares) at 12:01 a.m. on October 2, 2012, (c) as to an additional thirty percent
(30%) of such Restricted Stock (36,000 shares) at 12:01 a.m. on October 2, 2013,
and (d) as to the final thirty percent (30%) of such Restricted Stock (36,000
shares) at 12:01 a.m. on October 2, 2014, so as to be 100% vested at 12:01 a.m.
on October 2, 2014, conditioned upon your continued employment with the Company
as of each vesting date.

       

      
        	
                 
      

              	
                (iii)

              	
                Restrictions.

              

      

       

      (1)           You
may not sell, transfer, assign, pledge or otherwise encumber or dispose of any
portion of the Restricted Stock or rights granted hereunder until such portion
of the Restricted Stock becomes vested in accordance with Section 2(d)(ii) of
this Agreement.  The period of time between the Grant Date and the
date all Restricted Stock becomes vested is referred to herein as the “Restriction
Period.”

       

      (2)           If
your employment with the Company is terminated for any reason which does not
give rise to 100% vesting of the Restricted Stock, as provided in Section
2(d)(ii) above, you shall forfeit the balance of the Restricted Stock subject to
the provisions of this Agreement which have not vested at the time of your
termination of employment, and transfer ownership back to the Company, provided
that if your employment is not terminated for resignation or for Cause, you will
be entitled to a pro-rata portion, based upon time of employment, of the stock
that is not yet vested.

       

      (iv)           This
section is deemed to be a “Restricted Stock Award Agreement” for the purposes of
Section 7(b) of the 2006 Plan.

       

      3.           Vacation/PTO
and Employee Benefits.  During your
Employment, you shall be eligible to accrue up to 15 days of paid vacation /
paid time off, pro-rated for the remainder of this calendar year, in accordance
with the Company’s vacation / paid time off policy, as it may be amended from
time to time.  During your Employment, you shall be eligible to
participate in the employee benefit plans maintained by the Company and
generally available to similarly situated employees of the Company, subject in
each case to the generally applicable terms and conditions of the plan in
question and to the determinations of any person or committee administering such
plan.

       

      4.           Business
Expenses.  The Company will
reimburse you for your necessary and reasonable business expenses incurred in
connection with your duties hereunder upon presentation of an itemized account
and appropriate supporting documentation, all in accordance with the Company’s
generally applicable policies.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                5.

              	
                Termination.

              

      

       

      (a)           Employment
at Will.  Your Employment
shall be “at will,” meaning that either you or the Company shall be entitled to
terminate your Employment at any time and for any reason, with or without
Cause.  Any contrary representations that may have been made to you
shall be superseded by this Agreement.  This Agreement shall
constitute the full and complete agreement between you and the Company on the
“at-will” nature of your Employment, which may only be changed in an express
written agreement signed by you and a duly authorized officer of the
Company.

       

      (b)           Rights
Upon Termination.  Except as
expressly provided in Section 6, upon the
termination of your Employment, you shall only be entitled to the compensation
and benefits earned and the reimbursements described in this Agreement for the
period preceding the effective date of the termination.

       

      
        	
                 
      

              	
                6.

              	
                Termination
      Benefits.

              

      

       

      (a)           General
Release.  Any other
provision of this Agreement notwithstanding, subsections (b) shall not apply unless and until (i) you have
executed (and do not revoke) a full and complete general release of all claims
in a form provided by the Company without alteration and (ii) you have returned
all Company property.

       

      (b)           Severance
Pay.  If, during the
term of this Agreement, the Company terminates your Employment for any reason
other than Cause, death or Permanent Disability, then, in addition to the
amounts payable in accordance with Section 5(b), the Company shall pay you severance pay at a
rate equal to your Base Salary in effect at the time of termination of your
Employment for a period of 3 month(s) following the termination of your
Employment (the “Continuation
Period”).  

       

      (c)           Definition
of “Cause.”  For all purposes
under this Agreement, “Cause” shall
mean:

       

      (i)           any
breach by you of this Agreement, the Confidential Information and Invention
Assignment Agreement between you and the Company, or any other written agreement
between you and the Company, if such breach causes material harm to the
Company;

       

      (ii)           any
failure by you to comply with the Company’s written policies or rules, as they
may be in effect from time to time during your Employment, if such failure
causes material harm to the Company;

       

      (iii)           your
repeated failure to follow reasonable and lawful instructions from the Company
or the Chief Executive Officer of the Company and your failure to cure such
condition after receiving 20 days advance written notice;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      (iv)           commission,
conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws
of any jurisdiction by you;

       

      (v)           your
misappropriation of funds or property of the Company;

       

      (vi)           neglect
of your duties; or

       

      (vii)           any
gross or willful misconduct by you.

       

      (d)           Definition
of “Permanent Disability.”  For all purposes
under this Agreement, “Permanent Disability”
shall mean your inability to perform the essential functions of your position
with or without reasonable accommodation for a period of 90 consecutive days
because of your physical or mental impairment.

       

      
        	
                 
      

              	
                7.

              	
                Pre-Employment
      Conditions.

              

      

       

      (a)           Confidentiality
Agreement.  Your acceptance
of this offer and commencement of employment with the Company is contingent upon
the execution, and delivery to an officer of the Company, of the Company’s
Confidential Information and Invention Assignment Agreement, a copy of which is
enclosed for your review and execution (the “Confidentiality
Agreement”), prior to or on your Start Date.

       

      (b)           Right to
Work.  You will be
required to provide to the Company documentary evidence of your identity and
eligibility for employment in the People’s Republic of China.  Such
documentation must be provided to us within three (3) business days after your
Effective Date, or our employment relationship with you may be
terminated.

       

      (c)           Verification
of Information.  This offer of
employment is also contingent upon the successful verification of the
information you provided to the Company during your application process, as well
as a general background check performed by the Company to confirm your
suitability for employment.  By accepting this offer of employment,
you warrant that all information provided by you is true and correct to the best
of your knowledge, you agree to execute any and all documentation necessary for
the Company to conduct a background check and you expressly release the Company
from any claim or cause of action arising out of the Company’s verification of
such information.

       

      
        	
                 
      

              	
                8.

              	
                Successors.

              

      

       

      (a)           Company’s
Successors.  This Agreement
shall be binding upon any successor (whether direct or indirect and whether by
purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets.  For all
purposes under this Agreement, the term “Company” shall
include any successor to the Company’s business or assets that becomes bound by
this Agreement.

       

      (b)           Your
Successors.  This Agreement
and all of your rights hereunder shall inure to the benefit of, and be
enforceable by, your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                9.

              	
                Miscellaneous
      Provisions.

              

      

       

      (a)           Indemnification.  The Company shall
indemnify you to the maximum extent permitted by applicable law and the
Company’s Bylaws with respect to your service and you shall also be covered
under a directors and officers liability insurance policy paid for by the
Company to the extent that the Company maintains such a liability insurance
policy now or in the future.

       

      (b)           Notice.  Notices and all
other communications contemplated by this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or when mailed
by registered or certified mail.  In your case, mailed notices shall
be addressed to you at the home address that you most recently communicated to
the Company in writing.  In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.

       

      (c)           Modifications
and Waivers.  No provision of
this Agreement shall be modified, waived or discharged unless the modification,
waiver or discharge is agreed to in writing and signed by you and by an
authorized officer of the Company (other than you).  No waiver by
either party of any breach of, or of compliance with, any condition or provision
of this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another
time.

       

      (d)           Whole
Agreement.  No other
agreements, representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the subject
matter hereof.  This Agreement and the Confidentiality Agreement
contain the entire understanding of the parties with respect to the subject
matter hereof and supersedes any and all previous agreement and understanding
regarding your Employment including the Old Employment Agreement.

       

      (e)           Withholding
Taxes.  All payments made
under this Agreement shall be subject to reduction to reflect taxes or other
charges required to be withheld by laws in Hong Kong except the compensation
paid by Konzern.

       

      (f)           Choice of
Law and Severability.  This Agreement
shall be interpreted in accordance with the laws of Hong Kong without giving
effect to provisions governing the choice of law.  If any provision of
this Agreement becomes or is deemed invalid, illegal or unenforceable in any
applicable jurisdiction by reason of the scope, extent or duration of its
coverage, then such provision shall be deemed amended to the minimum extent
necessary to conform to applicable law so as to be valid and enforceable or, if
such provision cannot be so amended without materially altering the intention of
the parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect.  If any provision
of this Agreement is rendered illegal by any present or future statute, law,
ordinance or regulation (collectively, the “Law”) then that
provision shall be curtailed or limited only to the minimum extent necessary to
bring the provision into compliance with the Law.  All the other terms
and provisions of this Agreement shall continue in full force and effect without
impairment or limitation.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (g)           No
Assignment.  This Agreement
and all of your rights and obligations hereunder are personal to you and may not
be transferred or assigned by you at any time.  The Company may assign
its rights under this Agreement to any entity that assumes the Company’s
obligations hereunder in connection with any sale or transfer of all or a
substantial portion of the Company’s assets to such entity.

       

      (h)           Counterparts.  This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

       

      [Signature
Page Follows]

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      We are
all delighted to be able to extend you this offer and look forward to working
with you.  To indicate your acceptance of the Company’s offer, please
sign and date this letter in the space provided below and return it to me, along
with a signed and dated original copy of the Confidentiality Agreement, on or
before November 16, 2010.  The Company requests that you begin work in
this new position on or before November 16, 2010

       

      
        
          	 	Very truly
    yours,	 
	 	 	 
	 	CHINA MEDICINE
      CORPORATION	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Senshan
      Yang	 
	 	 	
                  (Signature)

                	 
	 	 	 	 
	 	Name: 
      	Senshan
      Yang	 
	 	Title:
      	

                  Chief
      Executive Officer

                	 

        

      

       

      
        
          	ACCEPTED
      AND AGREED:	 	 	 	 
	 	 	 	 	 
	HENRY
      CHI FUNG HO	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
                  /s/
      Henry Chi Fung Ho

                	 	 	
                   

                	 
	
                  (Signature)

                	 	 	
                   

                	 
	 	 	 	 	 
	
                  November
      16, 2010

                	 	 	
                   

                	 
	Date	 	 	 	 

        

      

       

      Attachment
A:  Confidential Information and Invention Assignment
Agreement

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
         

         

        ATTACHMENT
A

         

        CONFIDENTIAL
INFORMATION AND

        INVENTION
ASSIGNMENT AGREEMENT

         

        (See
Attached)

         

         

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        CHINA
MEDICINE CORPORATION

         

        CONFIDENTIAL INFORMATION
AND

        INVENTION ASSIGNMENT
AGREEMENT

         

        Employee Name: Henry Chi Fung
Ho

         

        Effective Date: November 16,
2010

         

        As a
condition of my becoming employed (or my employment being continued) by China
Medicine Corporation, a Nevada corporation, or any of its current or future
subsidiaries, affiliates, successors or assigns (collectively, the “Company”), and in
consideration of my employment with the Company and my receipt of the
compensation now and hereafter paid to me by the Company, I agree to the
following:

         

        1.    Relationship.  This Agreement
will apply to my employment relationship with the Company.  If that
relationship ends and the Company, within a year thereafter, either reemploys me
or engages me as a consultant, I agree that this Agreement will also apply to
such later employment or consulting relationship, unless the Company and I
otherwise agree in writing.  Any such employment or consulting
relationship between the Company and me, whether commenced prior to, upon or
after the date of this Agreement, is referred to herein as the “Relationship.”

         

        2.    Duties.  I will perform
for the Company such duties as may be designated by the Company from time to
time or that are otherwise within the scope of the Relationship and not contrary
to instructions from the Company.  During the Relationship, I will
devote my entire best business efforts to the interests of the Company and will
not engage in other employment or in any activities detrimental to the best
interests of the Company without the prior written consent of the
Company.

         

        3.    Confidential
Information.

         

        (a)    Protection
of Information.  I understand that
during the Relationship, the Company intends to provide me with information,
including Confidential Information (as defined below), without which I would not
be able to perform my duties to the Company.  I agree, at all times
during the term of the Relationship and thereafter, to hold in strictest
confidence, and not to use, except for the benefit of the Company to the extent
necessary to perform my obligations to the Company under the Relationship, and
not to disclose to any person, firm, corporation or other entity, without
written authorization from the Company in each instance, any Confidential
Information that I obtain, access or create during the term of the Relationship,
whether or not during working hours, until such Confidential Information becomes
publicly and widely known and made generally available through no wrongful act
of mine or of others who were under confidentiality obligations as to the item
or items involved.  I further agree not to make copies of such
Confidential Information except as authorized by the Company.

         

        (b)    Confidential
Information.  I understand that
“Confidential
Information” means information and physical material not generally known
or available outside the Company and information and physical material entrusted
to the Company in confidence by third parties.  Confidential
Information includes, without limitation:  (i) Company Inventions (as
defined below); (ii) technical data, trade secrets, know-how, research, product
or service ideas or plans, software codes and designs, developments, inventions,
laboratory notebooks, processes, formulas, techniques, biological materials,
mask works, engineering designs and drawings, hardware configuration
information, lists of, or information relating to, employees and consultants of
the Company (including, but not limited to, the names, contact information,
jobs, compensation, and expertise of such employees and consultants), lists of,
or information relating to, suppliers and customers (including, but not limited
to, customers of the Company on whom I called or with whom I became acquainted
during the Relationship), price lists, pricing methodologies, cost data, market
share data, marketing plans, licenses, contract information, business plans,
financial forecasts, historical financial data, budgets or other business
information disclosed to me by the Company either directly or indirectly,
whether in writing, electronically, orally, or by observation.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        (c)    Third
Party Information.  My agreements in
this Section 3 are intended to be for the benefit of the Company and any
third party that has entrusted information or physical material to the Company
in confidence.

         

        (d)    Other
Rights.  This Agreement is
intended to supplement, and not to supersede, any rights the Company may have in
law or equity with respect to the protection of trade secrets or confidential or
proprietary information.

         

        4.    Ownership of
Inventions.

         

        (a)     Inventions
Retained and Licensed.  I have attached
hereto, as Exhibit
A, a complete list describing with particularity all Inventions (as
defined below) that, as of the Effective Date, belong solely to me or belong to
me jointly with others, and that relate in any way to any of the Company’s
actual or proposed businesses, products, services, or research and development,
and which are not assigned to the Company hereunder; or, if no such list is
attached, I represent that there are no such Inventions at the time of signing
this Agreement.

         

        (b)    Use or
Incorporation of Inventions.  If in the course
of the Relationship, I use or incorporate into a product, process or machine any
Invention not covered by Section 4(d) of this Agreement in which I have an
interest, I will promptly so inform the Company.  Whether or not I
give such notice, I hereby irrevocably grant to the Company a nonexclusive,
fully paid-up, royalty-free, assumable, perpetual, worldwide license, with right
to transfer and to sublicense, to practice and exploit such Invention and to
make, have made, copy, modify, make derivative works of, use, sell, import, and
otherwise distribute such Invention under all applicable intellectual property
laws without restriction of any kind.

         

        (c)    Inventions.  I understand that
“Inventions”
means discoveries, developments, concepts, designs, ideas, know how,
improvements, inventions, trade secrets and/or original works of authorship,
whether or not patentable, copyrightable or otherwise legally
protectable.  I understand this includes, but is not limited to, any
new product, machine, article of manufacture, biological material, method,
procedure, process, technique, use, equipment, device, apparatus, system,
compound, formulation, composition of matter, design or configuration of any
kind, or any improvement thereon.  I understand that “Company Inventions”
means any and all Inventions that I may solely or jointly author, discover,
develop, conceive, or reduce to practice during the period of the Relationship,
except as otherwise provided in Section 4(g) below.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        (d)     Assignment
of Company Inventions.  I agree that I
will promptly make full written disclosure to the Company, will hold in trust
for the sole right and benefit of the Company, and hereby assign to the Company,
or its designee, all my right, title and interest throughout the world in and to
any and all Company Inventions and all patent, copyright, trademark, trade
secret and other intellectual property rights therein.  I further
acknowledge that all Company Inventions that are made by me (solely or jointly
with others) within the scope of and during the period of the Relationship are
“works made for hire” (to the greatest extent permitted by applicable law) and
are compensated by my salary.  I hereby waive and irrevocably
quitclaim to the Company or its designee any and all claims, of any nature
whatsoever, that I now have or may hereafter have for infringement of any and
all Company Inventions.

         

        (e)    Maintenance
of Records.  I agree to keep
and maintain adequate and current written records of all Company Inventions made
or conceived by me (solely or jointly with others) during the term of the
Relationship.  The records may be in the form of notes, sketches,
drawings, flow charts, electronic data or recordings, laboratory notebooks, or
any other format.  The records will be available to and remain the
sole property of the Company at all times.  I agree not to remove such
records from the Company’s place of business except as expressly permitted by
Company policy which may, from time to time, be revised at the sole election of
the Company for the purpose of furthering the Company’s business.  I
agree to deliver all such records (including any copies thereof) to the
Company at the time
of termination of the Relationship as provided for in Sections 5
and 6.

         

        (f)    Patent
and Copyright Rights.  I agree to assist
the Company, or its designee, at its expense, in every proper way to secure the
Company’s, or its designee’s, rights in the Company
Inventions and any copyrights, patents, trademarks, mask work rights, moral
rights, or other intellectual property rights relating thereto in any and all
countries, including the disclosure to the Company or its designee of all
pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments, recordations, and all other
instruments which the Company or its designee shall deem necessary in order to
apply for, obtain, maintain and transfer such rights, or if not transferable,
waive such rights, and in order to assign and convey to the Company or its
designee, and any successors, assigns and nominees the sole and exclusive right,
title and interest in and to such Company Inventions, and any copyrights,
patents, mask work rights or other intellectual property rights relating
thereto.  I further agree that my obligation to execute or cause to be
executed, when it is in my power to do so, any such instrument or papers shall
continue during and at all times after the end of the Relationship and until the
expiration of the last such intellectual property right to expire in any country
of the world.  I hereby irrevocably designate and appoint the
Company and its
duly authorized officers and agents as my agent and attorney-in-fact, to act for
and in my behalf and stead to execute and file any such instruments and papers
and to do all other lawfully permitted acts to further the application for,
prosecution, issuance, maintenance or transfer of letters patent, copyright,
mask work and other registrations related to such Company
Inventions.  This power of attorney is coupled with an interest and
shall not be affected by my subsequent incapacity.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        (g)     Exception
to Assignments.  I understand that
the Company Inventions will not include, and the provisions of this Agreement
requiring assignment of inventions to the Company do not apply to, any
invention which qualifies fully for exclusion under the provisions of applicable
state law, if any, attached hereto as Exhibit B.  In
order to assist in the determination of which inventions qualify for such
exclusion, I will advise the Company promptly in writing, during and after the
term of the Relationship, of all Inventions solely or jointly conceived or
developed or reduced to practice by me during the period of the
Relationship.

         

        5.     Company
Property; Returning Company Documents.  I acknowledge and
agree that I have no expectation of privacy with respect to the Company’s
telecommunications, networking or information processing systems (including,
without limitation, files, e-mail messages, and voice messages) and that my
activity and any files or messages on or using any of those systems may be
monitored at any time without notice.  I further agree that any
property situated on the Company’s premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without
notice.  I agree that, at the time of termination of the Relationship,
I will deliver to the Company (and will not keep in my possession, recreate or
deliver to anyone else) any and all devices, records, data, notes, reports,
proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, laboratory notebooks, materials, flow charts, equipment, other
documents or property, or reproductions of any of the aforementioned items
developed by me pursuant to the Relationship or otherwise belonging to the
Company, its successors or assigns.

         

        6.    Termination
Certification.  In the event of
the termination of the Relationship, I agree to sign and deliver the “Termination
Certification” attached hereto as Exhibit C;
however, my failure to sign and deliver the Termination Certification shall in
no way diminish my continuing obligations under this Agreement.

         

        7.    Notice to
Third Parties.  I agree that
during the periods of time during which I am restricted in taking certain
actions by the terms of this Agreement (the “Restriction Period”),
I shall inform any entity or person with whom I may seek to enter into a
business relationship (whether as an owner, employee, independent contractor, or
otherwise) of my contractual obligations under this Agreement.  I also
understand and agree that the Company may, with or without prior notice to me
and during or after the term of the Relationship, notify third parties of my
agreements and obligations under this Agreement.  I further agree
that, upon written request by the Company, I will respond to the Company in
writing regarding the status of my employment or proposed employment with any
party during the Restriction Period.

         

        8.    Solicitation
of Employees, Consultants and Other Parties.  As described
above, I acknowledge and agree that the Company's Confidential Information
includes information relating to the Company's employees, consultants, customers
and others, and that I will not use or disclose such Confidential
Information except as authorized by the Company.  I further agree as
follows:

         

        (a)    Employees,
Consultants. I
agree that during the term of the Relationship, and for a period of twelve (12)
months immediately following the termination of the Relationship for any reason,
whether with or without cause, I shall not either directly or indirectly
solicit, induce, recruit or encourage any of the Company’s employees or
consultants to terminate their relationship with the Company, or attempt to
solicit, induce, recruit, encourage or take away employees or consultants of the
Company, either for myself or for any other person or entity.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        (b)    Other
Parties. I agree
that during the term of the Relationship, and for a period of twelve (12)
months immediately following the termination of the Relationship for any reason,
whether with or without cause, I shall not use any Confidential Information of
the Company to negatively influence any of the Company’s clients or customers
from purchasing Company products or services or to solicit or influence or
attempt to influence any client, customer or other person either directly or
indirectly, to direct any purchase of products and/or services to any person,
firm, corporation, institution or other entity in competition with the business
of the Company.

         

        9.    At-Will
Relationship.  I understand and
acknowledge that, except as may be otherwise explicitly provided in a separate
written agreement between the Company and me, my Relationship with the Company
is and shall continue to be at-will, as defined under applicable law, meaning
that either I or the Company may terminate the Relationship at any time for any
reason or no reason, without further obligation or liability, other than those
provisions of this Agreement that explicitly survive the termination of the
Relationship.

         

        10.    Representations and
Covenants.

         

        (a)    Facilitation
of Agreement.  I agree to
execute promptly, both during and after the end of the Relationship, any proper
oath, and to verify any proper document, required to carry out the terms of this
Agreement, upon the Company’s written request to do so.

         

        (b)    No
Conflicts.  I represent that
my performance of all the terms of this Agreement does not and will not breach
any agreement I have entered into, or will enter into, with any third party,
including without limitation any agreement to keep in confidence proprietary
information or materials acquired by me in confidence or in trust prior to or
during the Relationship.  I will not disclose to the Company or use
any inventions, confidential or non-public proprietary information or material
belonging to any previous client, employer or any other party.  I will
not induce the Company to use any inventions, confidential or non-public
proprietary information, or material belonging to any previous client, employer
or any other party.  I acknowledge and agree that I have listed on
Exhibit A all
agreements (e.g.,
non-competition agreements, non-solicitation of customers agreements,
non-solicitation of employees agreements, confidentiality agreements, inventions
agreements, etc.), if any, with a current or former client, employer, or any
other person or entity, that may restrict my ability to accept employment with
the Company or my ability to recruit or engage customers or service providers on
behalf of the Company, or otherwise relate to or restrict my ability to perform
my duties for the Company or any obligation I may have to the
Company.  I agree not to enter into any written or oral agreement that
conflicts with the provisions of this Agreement.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        (c)    Voluntary
Execution.  I certify and
acknowledge that I have carefully read all of the provisions of this Agreement,
that I understand and have voluntarily accepted such provisions, and that I will
fully and faithfully comply with such provisions.

         

        11.    General
Provisions.

         

        (a)    Governing
Law.  The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of Hong Kong, without giving effect to the principles of conflict of
laws.

         

        (b)    Entire
Agreement.  This Agreement
sets forth the entire agreement and understanding between the Company and me
relating to its subject matter and merges all prior discussions between
us.  No amendment to this Agreement will be effective unless in
writing signed by both parties to this Agreement.  The Company shall
not be deemed hereby to have waived any rights or remedies it may have in law or
equity, nor to have given any authorizations or waived any of its rights under
this Agreement, unless, and only to the extent, it does so by a specific writing
signed by a duly authorized officer of the Company, it being understood that,
even if I am an officer of the Company, I will not have authority to give any
such authorizations or waivers for the Company under this Agreement without
specific approval by the Board of Directors.  Any subsequent change or
changes in my duties, obligations, rights or compensation will not affect the
validity or scope of this Agreement.

         

        (c)    Severability.  If one or more of
the provisions in this Agreement are deemed void or unenforceable to any extent
in any context, such provisions shall nevertheless be enforced to the fullest
extent allowed by law in that and other contexts, and the validity and force of
the remainder of this Agreement shall not be affected.  The Company
and I have attempted to limit my right to use, maintain and disclose the
Company’s Confidential Information, and to limit my right to solicit employees
and customers only to the extent necessary to protect the Company from unfair
competition.  Should a court of competent jurisdiction determine that
the scope of the covenants contained in Section 8 exceeds the
maximum restrictiveness such court deems reasonable and enforceable, the parties
intend that the court should reform, modify and enforce the provision to such
narrower scope as it determines to be reasonable and enforceable under the
circumstances existing at that time.

         

        (d)    Successors
and Assigns.  This Agreement
will be binding upon my heirs, executors, administrators and other legal
representatives, and my successors and assigns, and will be for the benefit of
the Company, its successors, and its assigns.

         

        (e)    Remedies.  I acknowledge and
agree that violation of this Agreement by me may cause the Company irreparable
harm, and therefore agree that the Company will be entitled to seek
extraordinary relief in court, including, but not limited to, temporary
restraining orders, preliminary injunctions and permanent injunctions without
the necessity of posting a bond or other security (or, where such a bond or
security is required, I agree that a $1,000 bond will be adequate), in addition to and
without prejudice to any other rights or remedies that the Company may have for
a breach of this Agreement.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        (f)    Advice
of Counsel.  I
ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO
SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL
OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.  THIS AGREEMENT SHALL
NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION
HEREOF.

         

        [Signature
Page Follows]

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        The
parties have executed this Agreement on the respective dates set forth below, to
be effective as of the Effective Date first above written.

         

        
          
            	 	THE
      COMPANY:	 
	 	 	 
	 	CHINA MEDICINE
      CORPORATION	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	  
      	 
	 	 	
                    (Signature)

                  	 
	 	 	 	 
	 	Name: 	SENSHAN
      YANG	 
	 	Title:
      	CHIEF EXECUTIVE OFFICER	 
	 	 	 	 
	 	Address:	 
	 	2/F,
      Guangri Tower, No. 9 Siyounan Road	 
	 	1st
      Street, Yuexiu District, Guangzhou, 	 
	 	China
      510600	 
	 	Fax:	86-20-8737
      3030	 
	 	 	 	 
	 	Date: 	     
       	 

          

        

        
          
             

            
              
                	 	EMPLOYEE:	 
	 	 	 
	 	HENRY CHI FUNG HO	 
	 	(PRINT
      NAME)	 
	 	 	 
	
                         

                      	
                            
      

                      	 
	 	(Signature)	 
	 	 	 	 
	 	Address:	 
	 	Flat
      2006, Oi Hong House,	 
	 	Tsz
      Oi Court Stage 3, Kowloon, Hong Kong	 
	 	Fax:	N/A	 
	 	 	 	 
	 	Date: 	November
      16, 2010	 

              

            

             

            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

          

        

         

        EXHIBIT
A

         

        LIST
OF PRIOR INVENTIONS

         

        AND
ORIGINAL WORKS OF AUTHORSHIP

         

        EXCLUDED
UNDER SECTION 4(a)

         

        
          	
                   

                          Title        

                	
                   

                     Date   

                	
                  Identifying
      Number

                  or Brief Description

                
	 
      	 
      	 
      

        

         

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        

        
          
            	
                    x

                  	No
      inventions, improvements, or original works of authorship	 	 
	 	
                     

                  	
                     

                  	 
	
                    o

                  	
                    Additional
      sheets attached

                  	
                     

                  	 

          

           

          
            	Signature
      of Employee:  	
                        
      

                  	
                     

                  	 
	 	 	 	 
	Print
      Name of Employee: 	Henry
      Chi Fung Ho  	 	 

          

           

          
            	Date:  
      	November
      16, 2010    	 	 	 	 

          

           

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        EXHIBIT
B

         

        Section
2870 of the California Labor Code is as follows:

         

        (a)           Any
provision in an employment agreement which provides that an employee shall
assign, or offer to assign, any of his or her rights in an invention to his or
her employer shall not apply to an invention that the employee developed
entirely on his or her own time without using the employer’s equipment,
supplies, facilities, or trade secret information except for those inventions
that either:

         

        (1)           Relate
at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or
development of the employer; or

         

        (2)           Result
from any work performed by the employee for the employer.

         

        (b)           To
the extent a provision in an employment agreement purports to require an
employee to assign an invention otherwise excluded from being required to be
assigned under subdivision (a), the provision is against the public policy of
this state and is unenforceable.

         

        OR

         

        RCW
49.44.140 of the Revised Code of Washington is as follows:

         

        (1)           A
provision in an employment agreement which provides that an employee shall
assign or offer to assign any of the employee’s rights in an invention to the
employer does not apply to an invention for which no equipment, supplies,
facilities, or trade secret information of the employer was used and which was
developed entirely on the employee’s own time, unless (a) the invention relates
(i) directly to the business of the employer, or (ii) to the employer's actual
or demonstrably anticipated research or development, or (b) the invention
results from any work performed by the employee for the employer. Any provision
which purports to apply to such an invention is to that extent against the
public policy of this state and is to that extent void and
unenforceable.

         

        (2)           An
employer shall not require a provision made void and unenforceable by subsection
(1) of this section as a condition of employment or continuing
employment.

         

        (3)           If
an employment agreement entered into after September 1, 1979, contains a
provision requiring the employee to assign any of the employee’s rights in any
invention to the employer, the employer must also, at the time the agreement is
made, provide a written notification to the employee that the agreement does not
apply to an invention for which no equipment, supplies, facility, or trade
secret information of the employer was used and which was developed entirely on
the employee’s own time, unless (a) the invention relates (i) directly to the
business of the employer, or (ii) to the employer's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by the employee for the employer.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        EXHIBIT
C

         

        TERMINATION
CERTIFICATION

         

        This is
to certify that I do not have in my possession, nor have I failed to return, any
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, laboratory notebooks, flow
charts, materials, equipment, other documents or property, or copies or
reproductions of any aforementioned items belonging to
[                        ],
a
[                      ]
corporation, its subsidiaries, affiliates, successors or assigns (collectively,
the “Company”).

         

        I further
certify that I have complied with all the terms of the Company’s Confidential
Information and Invention Assignment Agreement signed by me, including the
reporting of any Inventions (as defined therein), conceived or made by me
(solely or jointly with others) covered by that agreement, and I acknowledge my
continuing obligations under that agreement.

         

        I further
agree that, in compliance with the Confidential Information and Invention
Assignment Agreement, I will preserve as confidential all trade secrets,
confidential knowledge, data or other proprietary information relating to
products, processes, know-how, designs, formulas, developmental or experimental
work, computer programs, data bases, other original works of authorship,
customer lists, business plans, financial information or other subject matter
pertaining to any business of the Company or any of its employees, clients,
consultants or licensees.

         

        I further
agree that for twelve (12) months from the date of this Certification, I shall
not either directly or indirectly solicit, induce, recruit or encourage any of
the Company’s employees or consultants to terminate their relationship with the
Company, or attempt to solicit, induce, recruit, encourage or take away
employees or consultants of the Company, either for myself or for any other
person or entity.

         

        Further,
I agree that for twelve (12) months from the date of this Certification, I shall
not use any Confidential Information of the Company to negatively influence any
of the Company’s clients or customers from purchasing Company products or
services or to solicit or influence or attempt to influence any client, customer
or other person either directly or indirectly, to direct any purchase of
products and/or services to any person, firm, corporation, institution or other
entity in competition with the business of the Company.

         

        
          
            	Date: 
      	November 16,
      2010   	 	EMPLOYEE:	 
	 	 	 	 	 	 
	 	
                     

                  	 	Henry Chi Fung Ho	 
	 	 	 	(Print
      Employee’s Name)	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	        
       	 
	 	 	 	(Signature)EMPLOYMENT
AGREEMENT

    

    THIS EMPLOYMENT AGREEMENT
(this "Agreement") is entered into this 15th day of November, 2010, by and
between Birch Branch Inc. (the "Company"), and Wang Lei at 203 2# 43 ShuiTun
Road, TianQiao district, Jinan City, Shandong Province, China  250101
(the "Executive") (collectively, the “Parties”).

    

    WHEREAS, the Company is a
publicly traded company with its shares of common stock quoted on the OTC
Bulletin Board under the trading symbol “BRBH”; and

    

    WHEREAS, the Company wishes to
employ the Executive as Chief Financial Officer upon the terms and conditions
set forth in this Agreement and the Executive is willing to accept such
employment subject to the terms and conditions set forth below.

    

    NOW, THEREFORE, in
consideration of the foregoing, of the mutual promises contained herein and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:

    

    1.        Employment.

    

    (a)   Position and
Duties.

    

    (i)       Subject
to the terms and conditions hereof, the Company hereby employs the Executive
during the term of employment set forth in Section 2 to serve as Chief Financial
Officer of the Company and perform the duties and services as are normally and
customarily associated with such position, including assisting the Company with
(A) financing through a private and/or public offering and (B) application for
listing on a senior exchange (the “Senior Exchange”), including the New York
Stock Exchange, NYSE-Amex, NASDAQ Global Select, NASDAQ Global Market and NASDAQ
Capital Market, as well as such other associated duties as the board of
directors of the Company (the “Board”) shall reasonably determine. The Executive
shall report directly to the Chief Executive Officer of the Company. The
Executive shall obey the lawful direction of the Chief Executive Officer and
shall use his diligent efforts to promote the interests of the Company and to
maintain and promote the reputation thereof.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    (ii)      During
the Employment Term set forth in Section 2 hereof, the Executive shall use his
best efforts to perform his duties under this Agreement and shall devote such
time, energy and skill as is necessary in the performance of his duties with the
Company. The Executive will not, unless as a representative of the Company or
with consent in writing of the Board, be directly or indirectly engaged or
concerned in any other business activities. Notwithstanding the foregoing
provisions, the Executive is not prohibited from (A) participating in
charitable, civic, educational, professional or community affairs or serving on
the board of directors or advisory committees of non-profit entities; and (B)
managing his and his family’s personal investments, in each case, provided that such activities
in the aggregate do not materially interfere with his duties
hereunder.  Company agrees that the Executive’s other activities will
not and do not impede his ability to perform his role under this
Agreement.

    

    2.        Employment
Term. Subject to Section 4 herein, the term of employment of the
Executive under this Agreement shall start on November 15, 2010 and expire on
November 14, 2013 (the “Employment Term”).

    

    3.        Compensation.

    

    (a)      Base
Salary.  In consideration of the services to be rendered
hereunder, the Company hereby agrees to pay the Executive an annual base salary
of Three Hundred Thousand RMB (300,000 RMB) (the “Base Salary”) payable in equal
monthly installments.

    

    (b)    Stock Option. Subject
to other provisions hereof and the terms and conditions set forth in the Stock
Option Agreement between the Company and the Executive, the Company agrees to
grant the Executive a four-year stock option (the “Stock Option”) to purchase a
total of 318,250 shares of the Company’s common stock (the “Common Stock”) at an
exercise price of $4.00 per share, equal to the closing bid price of the
Company’s common stock as of the date hereof. The Stock Option shall vest and
become exercisable on November 14, 2013 (the “Vesting Date”) , provided that the Executive
has served the full Employment Term and the Company is listed on the Senior
Exchange on the Vesting Date.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    4.        Termination. Executive’s employment
and the Employment Term shall terminate on the first of the following to
occur:

    (a)  Disability. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Term (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 7 of this Agreement of its intention to terminate the Executive
Employment. In such event, the Executive’s employment shall terminate effective
on the thirtieth (30th) day
following receipt of such notice by the Executive, provided that within 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this Agreement,
"Disability" shall mean a determination  by the Company in accordance
with applicable law that due to a physical or mental injury, infirmity or
incapacity, the Executive is unable to perform the essential functions of his
job with or without accommodation for 180 days (whether or not consecutive)
during any 12-month period.

    

    (b)  Death.  The
Executive’s employment shall automatically terminate on the date of death of the
Executive during the Employment Term.

    

    (c)  Cause.  The
Company may immediately terminate the Executive’s employment upon written notice
of termination by the Company to the Executive for Cause. "Cause" shall mean, as
determined by the Board (or its designee) (1) conduct by the Executive in
connection with his employment duties or responsibilities that is fraudulent,
unlawful or grossly negligent; (2) the willful misconduct of the Executive; (3)
the willful and continued failure of the Executive to perform the Executive's
duties with the Company (other than any such failure resulting from incapacity
due to physical or mental illness); (4) the commission by the Executive of any
felony or any crime involving moral turpitude; (5) violation of any material
policy of the Company or any material provision of the Company's code of
conduct, employee handbook or similar documents; or (6) any material breach by
the Executive of any provision of this Agreement or any other written agreement
entered into by the Executive with the Company.

    

    (d) 
Termination other than
for Cause. The Company shall have the right to terminate the Executive's
employment hereunder for any reason at any time, including for any reason that
does not constitute Cause, subject to the consequences of such termination as
set forth in this Agreement.

    

    (a)  Resignation for Good
Reason. The Executive may voluntarily terminate his employment hereunder
for Good Reason on the 60th day after the delivery of a written notice to the
Company. For the purpose of this Agreement, “Good Reason” shall
mean:

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (i)  the
assignment of the Executive to a position in which the Executive’s authority,
duties and responsibilities are materially diminished from the authority, duties
or responsibilities as contemplated by Section 1 of this Agreement or any
other  action taken by the Company or its affiliated companies which
results in a material , diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated and insubstantial
action not taken in bad faith and which is remedies by the Company promptly
after receipt of notice thereof given by the Executive;

    

    (ii) any
failure by the Company or its affiliated companies to comply with any of the
provisions of Section 3 of this Agreement, other than an isolated, insubstantial
and inadvertent  failure not occurring in bad faith and which is
remedies by the Company promptly after receipt of notice thereof given by the
Executive; or

    

    (iii)
any   material    change   in   the    Executive's    reporting   responsibilities;

    

    However,
in no event shall the Executive be considered to have terminated his employment
for "Good Reason" unless and until the Company receives written notice from the
Executive identifying in reasonable detail the acts or omissions constituting
"Good Reason" and the provision of this Agreement relied upon, and such acts or
omissions are not cured by the Company to the reasonable satisfaction of the
Executive within 30 days of the Company's receipt of such notice.

    

    (f) Resignation other than for
Good Reason. The Executive may voluntarily terminate his employment
hereunder for any reason other than Good Reason on the 60th day after the
delivery a written notice to the Company.

    

    5.      
 Consequence
of Termination; Change of Control. In the event of termination of
Executive’s employment or service with the Company or Change of Control (defined
below) during the Employment Term, the Executive shall be entitled to (i) all
accrued and unpaid Base Salary pursuant to Section 2(a), and (ii) reimbursement
for any unreimbursed expenses properly incurred through the date of
termination.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    For the
purpose of this Agreement, a “Change in Control" shall be
deemed to have occurred if, during the term of this Agreement: (i) the
beneficial ownership of at least 50% of the Company's voting securities or all
or substantially all of the assets of the Company shall have been acquired,
directly or indirectly by a single person or a group of affiliated persons,
other than the Executive or a group in which the Executive is a member, or (ii)
as the result of or in connection with any cash tender offer, exchange offer,
sale of assets, merger, consolidation or other business combination of the
Company with another corporation or entity and the new Board is comprised of
majority directors chosen or elected by the members of the new/combined entity
who were not members of the Company before such cash tender offer, exchange
offer, sale of assets, merger, consolidation or other business combination of
the Company with another corporation or entity.

    

    6.     
  No
Assignment. This
Agreement is personal to each of the Parties.  Except as provided
below, no Party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other Party hereto; provided, however, that the
Company may assign this Agreement to any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company.

    

    7.      
 Notices. For the purpose of this
Agreement, notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given (1) on the date
of delivery if delivered by hand, (2) on the date of transmission, if delivered
by confirmed facsimile, (3) on the first business day following the date of
deposit if delivered by guaranteed overnight delivery service, or (4) on the
fourth business day following the date delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

    

    If to the
Executive:

    

    Wang  Lei

    c/o Henan
Shuncheng Group Coal Coke Co., Ltd.

    Cai Cun
Road Intersection, Henan Shuncheng

    Group
Coal Coke Co., Ltd. (New Building)

    Henan
Province, Anyang County, China 455141

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    If to the
Company:

    

    Birch
Branch Inc.

    Attn.:
Wang Feng

    c/o Henan
Shuncheng Group Coal Coke Co., Ltd.

    Cai Cun
Road Intersection, Henan Shuncheng

    Group
Coal Coke Co., Ltd. (New Building)

    Henan
Province, Anyang County, China 455141

    

    With a
copy (which does not constitute a notice) to:

    

    Anslow
& Jaclin, LLP

    195 Route
9 South, Suite 204

    Manalapan,
New Jersey, 07726

    Attention:
Richard I. Anslow, Esq.

    Tel.:
732-409-1212

    Fax: 732-
577-1188

    

    or to
such other address as either Party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      8.
   
   Protection of the Company’s
Business.

    

    

    (a)  Confidentiality. The
Executive acknowledges that during the course of his employment by the Company
(prior to and during the Employment Term) he has and will occupy a position of
trust and confidence. The Executive shall hold in a fiduciary capacity for the
benefit of the Company and shall not disclose to others or use, whether directly
or indirectly, any Confidential Information regarding the Company, except (i) as
in good faith deemed necessary by the Executive to perform his duties hereunder,
(ii) to enforce any rights or defend any claims hereunder or under any other
agreement to which the Executive is a party, provided that such disclosure
is relevant to the enforcement of such rights or defense of such claims and is
only disclosed in the formal proceedings related thereto, (iii) when required to
do so by a court of law, by any governmental agency having supervisory authority
over the business of the Company or by any administrative or legislative body
(including a committee thereof) with jurisdiction to order him to divulge,
disclose or make accessible such information, provided that the Executive
shall give prompt written notice to the Company of such requirement, disclose no
more information than is so required, and cooperate with any attempts by the
Company to obtain a protective order or similar treatment, (iv) as to such
Confidential Information that shall have become public or known in the Company's
industry other than by the Executive's unauthorized disclosure, or (v) to the
Executive's spouse, attorney and/or his personal tax and financial advisors as
reasonably necessary or appropriate to advance the Executive's tax, financial
and other personal planning (each an "Exempt Person"), provided, however, any
disclosure or use of Confidential Information by an Exempt Person shall be
deemed to be a breach of this Section 8 by the Executive. The Executive shall
take all reasonable steps to safeguard the Confidential Information and to
protect it against disclosure, misuse, espionage, loss and theft.  The
Executive understands and agrees that the Executive shall acquire no rights to
any such Confidential Information. "Confidential Information" shall mean
information about the Company, its subsidiaries and affiliates, and their
respective clients and customers that is not disclosed by the Company and that
was learned by the Executive in the course of his employment by the Company,
including, but not limited to, any proprietary knowledge, trade secrets, data
and databases, formulae, sales, financial, marketing, training and technical
information, client, customer, supplier and vendor lists, competitive
strategies, computer programs and all papers, resumes, and records (including
computer records) of the documents containing such Confidential
Information.

    

    (b)  Non-Competition.  During
the Employment Term and for the one-year period following the termination of the
Executive's employment for any reason (the "Restricted Period"), the Executive
shall not, directly or indirectly, without the prior written consent of the
Company, provide employment (including self-employment), directorship,
consultative or other services to any business, individual, partner, firm,
corporation, or other entity that competes with any business conducted by the
Company or any of its subsidiaries or affiliates on the date of the Executive's
termination of employment or within one year of the Executive's termination of
employment in the geographic locations where the Company and its subsidiaries or
affiliates engage or propose to engage in such business (the "Business").
Nothing herein shall prevent the Executive from having a passive ownership
interest of not more than 2% of the outstanding securities of any entity engaged
in the Business whose securities are traded on a national securities
exchange.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    (c)  Non-Solicitation of
Employees. The Executive recognizes that he possesses and will possess
confidential information about other employees of the Company and its
subsidiaries and affiliates relating to their education, experience, skills,
abilities, compensation and benefits, and inter-personal relationships with
customers of the Company and its subsidiaries and affiliates. The Executive
recognizes that the information he possesses and will possess about these other
employees is not generally known, is of substantial value to the Company and its
subsidiaries and affiliates in developing their business and in securing and
retaining customers, and has been and will be acquired by him because of his
business position with the Company. The Executive agrees that, during the
Restricted Period, he will not, directly or indirectly, (i) solicit or
recruit any employee of the Company or any of its subsidiaries or affiliates (a
"Current Employee") or any person who was an employee of the Company or any of
its subsidiaries or affiliates during the twelve (12) month period immediately
prior to the date the Executive's employment terminates (a "Former Employee")
for the purpose of being employed by him or any other entity, or (ii) hire any
Current Employee or Former Employee.

    

    (d)  Non-Solicitation of
Customers.  The Executive agrees that, during the Restricted
Period, he will not, directly or indirectly, solicit or attempt to solicit (i)
any party who is a customer or client of the Company or its subsidiaries, who
was a customer or client of the Company or its subsidiaries at any time during
the twelve (12) month period immediately prior to the date the Executive's
employment terminates or who is a prospective customer or client that has been
identified and targeted by the Company or its subsidiaries for the purpose of
marketing, selling or providing to any such party any services or products
offered by or available from the Company or its subsidiaries, or (ii) any
supplier or vendor to the Company or any subsidiary to terminate, reduce or
alter negatively its relationship with the Company or any subsidiary or in any
manner interfere with any agreement or contract between the Company or any
subsidiary and such supplier or vendor.

    

    (e)  Property.  The
Executive acknowledges that all originals and copies of materials, records and
documents generated by him or coming into his possession during his employment
by the Company or its subsidiaries are the sole property of the Company and its
subsidiaries ("Company Property").  During the Employment Term, and at
all times thereafter, the Executive shall not remove, or cause to be removed,
from the premises of the Company or its subsidiaries, copies of any record,
file, memorandum, document, computer related information or equipment, or any
other item relating to the business of the Company or its subsidiaries, except
in furtherance of his duties under this Agreement. When the Executive's
employment with the Company terminates, or upon request of the Company at any
time, the Executive shall promptly deliver to the Company all copies of Company
Property in his possession or control.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

    (f)   Non-Disparagement.  Executive
shall not, and shall not induce others to, disparage the Company or its
subsidiaries or affiliates or their past and present officers, directors,
employees or products. "Disparage" shall mean making comments or statements to
the press, the Company's or its subsidiaries' or affiliates' employees or any
individual or entity with whom the Company or its subsidiaries or affiliates has
a business relationship which would adversely affect in any manner (1) the
business of the Company or its subsidiaries or affiliates (including any
products or business plans or prospects), or (2) the business reputation of the
Company or its subsidiaries or affiliates, or any of their products, or their
past or present officers, directors or employees.

    

    (g)  Cooperation. Subject
to the Executive's other reasonable business commitments, following the
Employment Term, the Executive shall be available to cooperate with the Company
and its outside counsel and provide information with regard to any past,
present, or future legal matters which relate to or arise out of the business
the Executive conducted on behalf of the Company and its subsidiaries and
affiliates, and, upon presentation of appropriate documentation, the Company
shall compensate the Executive for any out-of-pocket expenses reasonably
incurred by the Executive in connection therewith.

    

    (h)  Equitable Relief and Other
Remedies.  The Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of the
provisions of this Section 8 would be inadequate and, in recognition of this
fact, the Executive agrees that, in the event of such a breach or threatened or
attempted breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available. In
addition, without limiting the Company's remedies for any breach of any
restriction on the Executive set forth in this Section 8, except as required by
law, the Executive shall not be entitled to any payments set forth in Section 5
hereof if the Executive has breached the covenants applicable to the Executive
contained in this Section 8, the Executive will immediately return to the
Company any such payments previously received under Section 5 upon such a
breach, and, in the event of such breach, the Company will have no obligation to
pay any of the amounts that remain payable by the Company under Section
5.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    (i)   Reformation.  If
it is determined by a court of competent jurisdiction in any state that any
restriction in this Section 8 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that
state.  The Executive acknowledges that the restrictive covenants
contained in this Section 8 are a condition of this Agreement and are reasonable
and valid in temporal scope and in all other respects.

    

    (j)   Liability. Notwithstanding the
provisions in this Section 8, the Executive shall not be liable for any mistakes
of fact, errors of judgment, for losses sustained by the Company or any
subsidiary or for any acts or omissions of any kind, unless caused by the
negligence or willful or intentional misconduct of the Executive or any person
or entity acting for or on behalf of the Executive.

    

    (k)  Survival of
Provisions. The obligations contained in this Section 8 shall survive in
accordance with their terms the termination or expiration of the Executive's
employment with the Company and shall be fully enforceable
thereafter.

    

    9.        Indemnification. The Executive shall be
indemnified to the extent permitted by the Company's organizational documents
and to the extent allowed by law.  The Company shall continue to carry
Director’s and Officer’s Liability Insurance in accordance with that which has
been approved by the Company’s Board in such amounts and at limits no less than
the current policy limits and amounts now in effect.

    

    10.      Section
Headings and Interpretation. The section headings
used in this Agreement are included solely for convenience and shall not affect,
or be used in connection with, the interpretation of this Agreement. Expressions
of inclusion used in this agreement are to be understood as being without
limitation.

    

    11.      Severability. The provisions of this
Agreement shall be deemed severable and the invalidity of unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.

    

    12.      Counterparts. This Agreement may be
executed in several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the same
Agreement.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    13.      Arbitration.  Any dispute or
controversy under this Agreement shall be settled exclusively by arbitration in
the City of New York, County of New York in accordance with the rules of the
American Arbitration Association then in effect.  Judgment may be
entered on the arbitration award in any court having jurisdiction.

    

    14.      Governing
Law.  This Agreement will be governed by the laws of the State
of New York without regard to conflicts of laws principles.

    

    15.      Entire
Agreement. This
Agreement contains the entire agreement between the Parties with respect to the
subject matter hereof and supersedes all prior agreements, written or oral, with
respect thereto. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which is not expressly set forth in this Agreement.

    

    16.      Waiver
and Amendment. No provision of this
Agreement may be modified, amended, waived or discharged unless such waiver,
modification, amendment or discharge is agreed to in writing and signed by the
Executive and such officer or director as may be designated by the Board. No
waiver by either Party at any time of any breach by the other Party hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other Party shall be deemed a waiver or similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time.

    

    17.      Withholding. The Company may withhold
from any and all amounts payable under this Agreement such federal, state, local
and foreign taxes as may be required to be withheld pursuant to any applicable
law or regulation.

    

    18.      Authority
and Non-Contravention. The Executive represents and warrants to the
Company that he has the legal right to enter into this Agreement and to perform
all of the obligations on his part to be performed hereunder in accordance with
its terms and that he is not a party to any agreement or understanding, written
or oral, which could prevent him from entering into this Agreement or performing
all of his obligations hereunder.

    

    19.      Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

    IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written
above.

    

    
      
        	
                BIRCH
      BRANCH INC.

              
	 
      
	
                Wang Feng

              
	
                By:  Wang
      Feng

              
	
                Title:
      Chief Executive Officer

              
	 
      
	
                EXECUTIVE

              
	 
      
	
                Wang Lei

              
	
                By:  Wang
      Lei

              

      

    

     

    
      
         

      

      
        12

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