Document:

Exhibit 10.42

Exhibit 10.42

EXECUTION VERSION

OPTION AGREEMENT

THIS OPTION AGREEMENT (this “Agreement”), dated as of May 13, 2011 (the “Effective Date”), by
and between (i) Mr. Chongxin Xu, an individual citizen of Australia (the “Grantor”); and (ii) Mr.
Xuchun Wang, an individual citizen of the People’s Republic of China (the “Optionee”) (each of the
foregoing, a “Party” and together, the “Parties”) with respect to shares of Xiangrui Pharmaceutical
International Limited, a company organized under the laws of the British Virgin Islands
(“Xiangrui”). Capitalized terms not otherwise defined have the meanings assigned to them in
Exhibit A to this Agreement.

RECITALS

	A.	 	The Grantor is the sole shareholder of Xiangrui.

	B.	 	Xiangrui is the sole equity holder of a wholly foreign-owned enterprise organized and
existing under the laws of the People’s Republic of China (“WFOE”).

	C.	 	The Grantor intends to enter into a share exchange agreement (the “Exchange Agreement”) with
a United States-domiciled public reporting shell company SMSA Freemont Acquisition Corp. (the
“Shell Company”) whose securities are quoted on the over-the-counter bulletin board. Upon
consummation of the transactions contemplated by the Exchange Agreement (the “Exchange
Transaction”), the Shell Company will acquire 100% of the issued and outstanding capital stock
of Xiangrui, and, indirectly, sole ownership of the WFOE, in exchange for the issuance of
12,363,885 shares of the common stock of the Shell Company to the Grantor (the “Exchange
Shares”) representing 93% of the issued and outstanding shares of the Shell Company.

	D.	 	The Grantor desires to grant to the Optionee, and the Optionee desires to accept from the
Grantor, an option to purchase certain number of shares of the Company currently held by the
Grantor, on the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by
the Parties, the Parties agree as follows:

Article I. OPTION RIGHT

	1.1	 	Option Right. The Grantor hereby grants to the Optionee the right and option (the “Option
Right”), during the Option Period (as defined below), to purchase from the Grantor, and upon
the exercise of such right and option the Grantor will have the obligation to sell to the
Optionee, Ten Million Eight Hundred Eighty Thousand Two Hundred and Nineteen (10,880,219)
 shares of the capital stock of Xiangrui currently held by the Grantor representing Eighty
Eight percent (88)% of the issued and outstanding capital stock of Xiangrui, and, upon
consummation of the share exchange under the Exchange Agreement in accordance with the
provisions of this Agreement, Ten Million Eight Hundred Eighty Thousand Two Hundred and
Nineteen (10,880,219) of the shares of the capital stock of the Shell Company in exchange
therefore (the “Option Shares”).

	1.2	 	Option Period. The Option Right will be effective during the period (the “Option Period”)
commencing on the date which is three months after the date hereof and ending on the second
anniversary of the date hereof (such date or the earlier expiration of the Option Right is
referred to herein as the “Expiration Date”).

 

 

 

	1.3	 	Exercise Process. In order to exercise its Option Right during the Option Period, the
Optionee must deliver to the Grantor a written notice of such exercise substantially in the
form attached hereto as Exhibit B (the “Exercise Notice”) to the address or facsimile
number set forth therein. Provided the Exercise Notice is delivered in accordance with
SECTION 5.2. to the Grantor on or prior to 5:00 p.m. (Hong Kong time) on a Business
Day, the date of exercise (the “Exercise Date”) of the Option Right will be the date of such
delivery of such Exercise Notice. In the event the Exercise Notice is delivered after 5:00
p.m. (Hong Kong time) on any day or on a date which is not a Business Day, the Exercise Date
will be deemed to be the first Business Day after the date of such delivery of such Exercise
Notice. The delivery of an Exercise Notice in accordance herewith will constitute a binding
obligation (a) on the part of the Optionee to purchase and (b) on the part of the Grantor to
sell, the Option Shares which are the subject of such Exercise Notice in accordance with the
terms of this Agreement. The Option Right shall be exercisable only in compliance with all
applicable Laws. The Optionee shall undertake any and all approval or registration procedures
with the relevant Governmental Bodies that may arise out of or in connection with the exercise
of the Option Right in accordance with applicable Laws.

	1.4	 	Option Price.

	 	(a)	 	The aggregate price (the “Option Price”) for all of the Option Shares will be
equal to Seventeen Thousand Six Hundred U.S. Dollars (US$ 17,600).

	 	(b)	 	The payment of any Option Price will be in accordance with written instructions
delivered by the Grantor to the Optionee within five (5) days of delivery of the
Exercise Notice.

	1.5	 	Delivery of the Shares. Upon the receipt of an Exercise Notice and the payment of the Option
Price, the Grantor will deliver, or take all steps necessary to cause to be delivered, the
Option Shares being purchased pursuant to such Exercise Notice.

Article II. ENCUMBRANCES; TRANSFERS, SET-OFF

	2.1	 	Encumbrances. Upon exercise of the Option Right, the Option Shares being purchased will be
sold, transferred and delivered to the Optionee free and clear of any claim, pledge, charge,
lien, preemptive rights, restrictions on transfers (except as required by securities laws of
the United States), proxies, voting agreements and/or any other Encumbrance.

	2.2	 	Lock-up; Transfers. Prior to the Expiration Date, the Grantor will not transfer to any other
Person and will continue to own, free and clear of any Encumbrance, the Option Shares.

	2.3	 	Legend. The certificates evidencing the Option Shares will bear a legend in substantially the
form as follows:

“THE SHARES REGISTERED IN THE NAME OF [ • ] OR REPRESENTED BY THIS CERTIFICATE, AS THE
CASE MAY BE, ARE SUBJECT TO AN OPTION RIGHT WHICH PROHIBITS THEIR TRANSFER TO ANY
PERSON OTHER THAN THE HOLDER OF THAT RIGHT PRIOR TO THE EXERCISE OF THE RIGHT OR ITS
EXPIRATION. ANY PERSON ACCEPTING ANY INTEREST IN THE SHARES WILL BE DEEMED TO AGREE TO
AND WILL BECOME BOUND BY ALL THE PROVISIONS OF THE OPTION AGREEMENT IN WHICH THAT
OPTION RIGHT IS SET FORTH, AND THE SHARES WILL REMAIN SUBJECT TO THE OPTION RIGHT AS
PROVIDED THEREIN. A COPY OF THE OPTION AGREEMENT WILL BE FURNISHED TO THE RECORD HOLDER
OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
PLACE OF BUSINESS.”

	2.4	 	Set-off. The Optionee will be absolutely entitled to receive all the Option Shares to which
it is entitled pursuant to the exercise of an Option Right, and for the purposes of this
Agreement, the Grantor hereby
waives, as against the Optionee, all rights of set-off
or counterclaim that would or might otherwise be
available to the Grantor.

 

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Article III. REPRESENTATIONS AND WARRANTIES

	3.1	 	Representations and Warranties of the Grantor. The Grantor represents and warrants to the
Optionee, that:

	 	(a)	 	Due Authorization. This Agreement, and all agreements and documents
executed and delivered pursuant to this Agreement, constitute valid and binding
obligations of the Grantor, enforceable against the Grantor in accordance with their
terms, subject to applicable Bankruptcy Laws and other laws or equitable principles of
general application affecting the rights of creditors generally.

	 	(b)	 	No Conflicts. Neither the execution or delivery of this Agreement by the
Grantor nor the fulfillment or compliance by the Grantor with or of any of the terms
hereof will, with or without the giving of notice and/or the passage of time, (i)
conflict with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract or any judgment, decree or order to which the
Grantor is subject or by which the Grantor is bound, or (ii) require any consent,
license, permit, authorization, approval or other action by any Person or Governmental
Body which has not yet been obtained or received. The execution, delivery and
performance of this Agreement by the Grantor or compliance with the provisions hereof by
the Grantor does not, and will not, violate any provision of any Law to which the
Grantor is subject or by which it is bound.

	 	(c)	 	No Actions. There are no lawsuits, actions or, to the best knowledge of
the Grantor, investigations, claims or demands or other proceedings pending or, to the
best knowledge of the Grantor, threatened against the Grantor that, if resolved in a
manner adverse to the Grantor, would adversely affect the right or ability of the
Grantor to carry out its obligations set forth in this Agreement.

	 	(d)	 	Title. The Grantor owns the Option Shares free and clear of any
Encumbrance whatsoever, except as contemplated by this Agreement. The Grantor has not
entered into nor is a party to any agreement that would cause the Grantor to not own the
Option Shares free and clear of any Encumbrance, except as contemplated by this
Agreement.

	3.2	 	Representations and Warranties of the Optionee. The Optionee represents and warrants to the
Grantor, that:

	 	(a)	 	Due Authorization. This Agreement, and all agreements and documents
executed and delivered pursuant to this Agreement, constitute valid and binding
obligations of the Optionee, enforceable against the Optionee in accordance with their
terms, subject to applicable Bankruptcy Laws and other laws or equitable principles of
general application affecting the rights of creditors generally.

	 	(b)	 	No Conflicts. Neither the execution or delivery of this Agreement by the
Optionee nor the fulfillment or compliance by the Optionee with or of any of the terms
hereof will, with or without the giving of notice and/or the passage of time, (i)
conflict with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any contract or any judgment, decree or order to which the
Optionee is subject or by which the Optionee is bound, or (ii) require any consent,
license, permit, authorization, approval or other action by any Person or Governmental
Body which has not yet been obtained or received. The execution, delivery and
performance of this Agreement by the Optionee or compliance with the provisions hereof
by the Optionee does not, and will not, violate any provision of any Law to which the
Optionee is subject or by which it is bound.

	 	(c)	 	No Actions. There are no lawsuits, actions or, to the best knowledge of
the Optionee, investigations, claims or demands or other proceedings pending or, to the
best knowledge of the Optionee, threatened against the Optionee that, if resolved in a
manner adverse to the Optionee, would adversely affect the right or ability of the
Optionee to carry out its obligations set forth in this Agreement.

 

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NEGATIVE COVENANTS

	3.3	 	Covenants of the Grantor. The Grantor agrees that, prior to the termination of this
Agreement, the Grantor will not transfer, sell, or assign to any other Person, or otherwise
dispose of, pledge, encumber, or suffer any Encumbrance upon, any shares of capital stock of
Xiangrui which the Grantor owns, including the Option Shares. The Grantor further agrees that,
prior to the termination of this Agreement, the Grantor will not, without the prior written
approval of the Optionee, vote (in person, by proxy or by action by written consent, as
applicable) any of the Option Shares in favor of, or to adopt or approve any of the following
actions with regard to Xiangrui or any direct or indirect subsidiary or affiliate of Xiangrui
(referred to individually and collectively as the “Company”):

	 	(a)	 	Any increase of the number of authorized shares of capital stock of the Company;

	 	(b)	 	Any transfer, sale, assignment, or other disposition of, or pledge or encumbrance
of, any of the Company’s material assets except as contemplated by SECTION 3.1.
(e);

	 	(c)	 	Any Change of Control with regard to the Company. “Change of Control” means the
first to occur of any of the following events:

	 	(i)	 	An acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the United States Securities Exchange Act of
1934 (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13(d)(3) promulgated under the Exchange Act) of twenty percent
(20%) or more of either (A) the then outstanding shares of the common or ordinary
stock of the Company (the “Outstanding Common Stock”) or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Voting Securities”);
excluding, however, the following: (1) any acquisition directly from the Company,
other than an acquisition by virtue of the exercise of a conversion privilege
unless the security being so converted was itself acquired directly from the
Company, (2) any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
entity controlled by the Company, or (4) any acquisition pursuant to a transaction
which complies with clauses (A), (B) and (C) of paragraph (iii) of this
definition;

	 	(ii)	 	A change in the composition of the Board of Directors of the Company
(the “Board”) such that the individuals who, as of the date of this Agreement,
constitute such board of directors (such Board will be hereinafter referred to as
the “Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, for purposes of this definition any individual who
becomes a member of the Board subsequent to the date of this Agreement, whose
election, or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of those individuals who are members of the Board
and who were also members of the Incumbent Board (or deemed to be such pursuant to
this proviso) will be considered as though such individual were a member of the
Incumbent Board; and provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board will not be so
considered as a member of the Incumbent Board;

 

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	 	(iii)	 	Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or the
acquisition by the Company of assets or
stock of another entity (“Corporate Transaction”); excluding, however, such a
Corporate Transaction following which (A) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly, more than fifty
percent (50%) of, respectively, the outstanding shares of Common Stock, and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions, as their ownership immediately
prior to such Corporate Transaction, of the Outstanding Common Stock and Outstanding
Company Securities, as the case may be, (B) no Person (other than the Company, or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Corporate Transaction) beneficially owns, directly or
indirectly, twenty percent (20%) or more of, respectively, the outstanding shares of
common stock of the corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors except to the extent that
such ownership existed prior to the Corporate Transaction, and (C) individuals who
were members of the Incumbent Board at the time of the execution of the initial
agreement or of the Board action providing for such Corporate Transaction constitute
at least a majority of the members of the board of directors of the corporation
resulting from such Corporate Transaction; or

	 	(iv)	 	The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company;

	 	(d)	 	Any sale or other issuance of any equity interest, shares of capital or other
securities of the Company;

	 	(e)	 	Any declaration, accrual, set aside or payment of any dividend or other
distribution in respect of any equity interest or any shares of capital stock or other
securities of the Company or any repurchase or redemption of any equity interest or any
 shares of capital stock or other securities of the Company; or

	 	(f)	 	Any agreement, commitment or offers of the Company, whether or not in writing, to
take any of the actions prohibited by clauses (a) through (e);

provided however, that neither the consummation of the transactions contemplated by
this Agreement, the Exchange Transaction, nor any of the other transactions
contemplated hereby will be deemed to be a “Change of Control” or otherwise prohibited
by the covenants contained in this SECTION 3.3..

	3.4	 	The Grantor will cause Xiangrui and each of its subsidiaries to preserve intact the
business and management organization of Xiangrui and all of its subsidiaries.

Article IV. EVENTS OF DEFAULT AND TERMINATION

	4.1	 	Events of Default. The occurrence at any time with respect to a Party (the “Defaulting
Party”) of any of the following events will constitute an event of default (an “Event of
Default”) with respect to such Party:

	 	(a)	 	Failure to Pay or Deliver. The failure by a Party to make, when due, any
payment under this Agreement or deliver the Option Shares in accordance with this
Agreement, if such failure is not remedied on or before the third (3rd )
Business Day after notice of such failure is given to the Defaulting Party.

	 	(b)	 	Breach of Agreement. The failure by a Party to comply with or perform any
agreement, covenant or obligation (other than a failure described in SECTION 4.1.
(a), which will be governed by SECTION 4.1. (a)) to be complied with or
performed by such Party in accordance with this Agreement if such failure is
not remedied on or before the tenth (10th ) Business Day after notice of such
failure is given to the Defaulting Party.

 

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	 	(c)	 	Bankruptcy. A Party (1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its
debts or fails or admits in writing its inability generally to pay its debts as they
become due; (3) makes a general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any relief under any Bankruptcy Law,
or a petition is presented for its winding-up or liquidation, and in the case of any
such proceeding or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order
for relief or the making of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within thirty (30) days of the
institution or presentation thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); (6) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other similar
official for it or for all or substantially all of its assets; (7) has a secured party
take possession of all or substantially all of its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced or sued on or against
all or substantially all of its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or rescinded, in each case within
thirty (30) days thereafter; (8) causes or is subject to any event with respect to it
that, under applicable Law, has an analogous effect to any of the events described in
clauses (1) through (7); or (9) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts.

	4.2	 	Termination.

	 	(a)	 	If at any time an Event of Default with respect to a Party has occurred and is
continuing, the other Party may terminate this Agreement and deem the Expiration Date to
have occurred by giving written notice to the Defaulting Party specifying the relevant
Event of Default.

	 	(b)	 	Unless otherwise terminated pursuant to SECTION 4.2. (a), this Agreement
will terminate on the earlier of the Expiration Date and the date on which one hundred
percent (100%) of the Option Shares have been transferred and conveyed to the Optionee
hereunder.

Article V. MISCELLANEOUS PROVISIONS

	5.1	 	Further Assurances. Each Party will execute and/or cause to be delivered to the other Party
such instruments and other documents, and will take such other actions, as such other Party
may reasonably request for the purpose of carrying out or evidencing any of the transactions
contemplated by this Agreement.

	5.2	 	Notices. Any notice or other communication required or permitted to be delivered to any Party
will be in writing and will be deemed properly delivered, given and received upon dispatch by
hand, courier or express delivery service with receipt confirmed by signature of the
addressee, to the address set forth beneath the name of such Party below (or to such other
address as such Party may specify in a written notice given to the other Party):

	 	 	 
	If to the Grantor to:

	 	Ruixing Industry Park
	 

	 	Room 206, Building #6, Unit #3,
	 

	 	#17 Pengjizhen Guodao,
	 

	 	Dongping County, Shandong Province, 271509
	 

	 	Attention: Guangxiang Meng
	 

	 	c/o Chongxin Xu
	 
	 	 
	If to the Optionee to:

	 	Shandong Xiangrui Pharmacy Co., Ltd.
	 

	 	Pengji Town, Dongping County, Shandong Province
	 

	 	Attention: Huang Lingfa

 

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	5.3	 	Time of The Essence. Time is of the essence of this Agreement.

	5.4	 	Headings, Gender and Usage. The headings contained in this Agreement are for convenience of
reference only, will not be deemed to be a part of this Agreement and will not be referred to
in connection with the construction or interpretation of this Agreement. For purposes of this
Agreement: (a) the words “include” and “including” will be taken to include the words,
“without limitation;” and (b) whenever the context requires, the singular number will include
the plural, and vice versa; and each of the masculine, feminine and neuter genders will refer
to the others.

	5.5	 	Governing Law and Language. This Agreement, including all matters of construction, validity
and performance, will in all respects be governed by, and construed in accordance with, the
laws of the State of New York (without giving effect to principles relating to conflict of
laws). This Agreement is written in English and the English language will govern any
interpretation of this Agreement.

	5.6	 	Venue and Jurisdiction. If any legal proceeding or other legal action relating to this
Agreement is brought or otherwise initiated, the venue therefore will be in Hong Kong, which
will be deemed to be a convenient forum. Each of the Parties hereby expressly and irrevocably
consents and submits to the jurisdiction of the courts in Hong Kong.

	5.7	 	Interpretation. Each Party acknowledges that it has participated in the drafting of this
Agreement, and any applicable rule of construction to the effect that ambiguities are to be
resolved against the drafting party may not be applied in connection with the construction or
interpretation of this Agreement.

	5.8	 	Successors and Assigns. Each of the Parties may assign this Agreement or any rights or
obligations hereunder without the prior written consent of each other Party. This Agreement is
binding upon, inures to the benefit of and is enforceable by the Optionee, the Grantor and
their respective successors and assigns.

	5.9	 	Waiver.

	 	(a)	 	No failure on the part of any Person to exercise any power, right, privilege or
remedy under this Agreement, and no delay on the part of any Person in exercising any
power, right, privilege or remedy under this Agreement, will operate as a waiver of such
power, right, privilege or remedy; and no single or partial exercise of any such power,
right, privilege or remedy will preclude any other or further exercise thereof or of any
other power, right, privilege or remedy.

	 	(b)	 	No Person will be deemed to have waived any claim arising out of this Agreement,
or any power, right, privilege or remedy under this Agreement, unless the waiver of such
claim, power, right, privilege or remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such Person; and any such waiver will not be
applicable or have any effect except in the specific instance in which it is given.

	5.10	 	Entire Agreement; Amendment. This Agreement sets forth the entire understanding of the
Parties relating to the subject matter hereof and supersedes all prior agreements and
understandings among or between any of the parties relating to the subject matter thereof. Any
term of this Agreement may be amended only with the written consent of each Party.

	5.11	 	Severability. In the event that any provision of this Agreement, or the application of any
such provision to any Person or set of circumstances, will be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as to which it is
determined to be invalid, unlawful, void or unenforceable, will not be impaired or otherwise
affected and will continue to be valid and enforceable to the fullest extent permitted by law.

	5.12	 	Counterparts. This Agreement may be executed in several counterparts, each of which will
constitute an original and all of which, when taken together, will constitute one agreement.

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the Parties have caused this Option Agreement to be executed and delivered
as of the date first set forth above.

	 	 	 	 	 
	“GRANTOR”

	 	“OPTIONEE”	 	 
	CHONGXIN XU

	 	XUCHUN WANG	 	 
	 
	 	 	 	 
	/s/

	 	/s/	 	 
	 

Name: Chongxin Xu

	 	 

Name: Xuchun Wang
	 	 

	 	 	 
	Attachments:
	 	 
	 
	Exhibit A

	 	Certain Definitions
	Exhibit B

	 	Form of Option Exercise Notice

 

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EXHIBIT A

CERTAIN DEFINITIONS

For purposes of this Agreement (including this Exhibit A):

“Bankruptcy Law” means any Law of any jurisdiction relating to bankruptcy, insolvency, corporate
reorganization, company arrangement, civil rehabilitation, special liquidation, moratorium,
readjustment of debt, appointment of a conservator, trustee or receiver, or similar debtor relief.

“Board” is defined in SECTION 3.3. (c)(ii).

“Business Day” means a day on which the commercial banks located in Hong Kong are open for regular
business.

“Change of Control” is defined in SECTION 3.3. (c).

“Company” is defined in SECTION 3.3.

“Corporate Transaction” is defined in SECTION 3.3. (c)(iii).

“Effective Date” is defined in the Preamble.

“Encumbrance” means any lien, pledge, hypothecation, charge, mortgage, security interest,
encumbrance, equity, trust, equitable interest, claim, preference, right of possession, lease,
tenancy, license, encroachment, covenant, infringement, interference, order, proxy, option, right
of first refusal, preemptive right, community property interest, legend, defect, impediment,
exception, reservation, limitation, impairment, imperfection of title, condition or restriction of
any nature (including any restriction on the transfer of any asset, any restriction on the receipt
of any income derived from any asset, any restriction on the use of any asset and any restriction
on the possession, exercise or transfer of any other attribute of ownership of any asset).

“Exchange Act” is defined in SECTION 3.3. (c)(i).

“Exchange Agreement” is defined in the Recitals.

“Exchange Shares” is defined in the Recitals.

“Exchange Transaction” is defined in the Recitals.

“Exercise Date” is defined in SECTION 1.3.

“Exercise Notice” is defined in SECTION 1.3.

“Expiration Date” is defined in SECTION 1.2.

“Governmental Body” means any: (a) nation, principality, state, commonwealth, province, territory,
county, municipality, district or other jurisdiction of any nature; (b) federal, state, local,
municipal, foreign or other government; (c) governmental or quasi-Governmental Body of any nature
(including any governmental division, subdivision, department, agency, bureau, branch, office,
commission, council, board, instrumentality, officer, official, representative, organization, unit,
body or Entity and any court or other tribunal); (d) multi-national organization or body; or (e)
individual, Entity or body exercising, or entitled to exercise, any executive, legislative,
judicial, administrative, regulatory, police, military or taxing authority or power of any nature.

 

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“Grantor” is defined in the Preamble.

“Incumbent Board” is defined in SECTION 3.3. (c)(ii).

“Law” means any national, federal, state, local, municipal, foreign or other law, statute,
legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement,
specification, determination, decision, opinion or interpretation issued, enacted, adopted, passed,
approved, promulgated, made, implemented or otherwise put into effect by or under the authority of
any Governmental Body.

“Option Period” is defined in SECTION 1.2.

“Option Price” is defined in SECTION 1.4. (a).

“Option Right” is defined in SECTION 1.1.

“Option Shares” is defined in SECTION 1.1.

“Optionee” is defined in the Preamble.

“Outstanding Common Stock” is defined in SECTION 3.3. (c)(i).

“Outstanding Voting Securities” is defined in SECTION 3.3. (c)(i).

“Party” and “Parties” are defined in the Preamble.

“Person” means an individual, a corporation, a partnership, an association, a trust or other entity
or organization, including a government or political subdivision or an agency or instrumentality
thereof, except as used in SECTION 3.3(c)(i), (ii) and (iii), where its meaning is defined
in SECTION 3.3. (c)(i).

“Shell Company” is defined in the Recitals.

“WFOE” is defined in the Recitals.

“Xiangrui” is defined in the Preamble.

 

10

 

EXHIBIT B

FORM OF OPTION EXERCISE NOTICE

[Date]

Ruixing Industry Park

Room 206, Building #6, Unit #3,

#17 Pengjizhen Guodao,

Dongping County, Shandong Province, 271509

Attention: Guangxiang Meng

	 	 	 
	Re:

	 	Option Agreement dated May 13, 2011 (the “Option Agreement”), between
Xuchun Wang (the “Optionee”) and Chongxin Xu (the “Grantor”)

Dear Sir:

In accordance with SECTION 1.3 of the Option Agreement, the Optionee hereby provides this
notice of exercise of the Option Right in the manner specified below:

	 	(a)	 	The Optionee hereby exercises his Option Right with respect to the Option Shares
pursuant to the Option Agreement.

	 	(b)	 	The Optionee will pay the sum of US$ 17,600 to the Grantor.

	 	(d)	 	Pursuant to this exercise, the Grantor will deliver to                      the Option
Shares in accordance with the instructions attached hereto.

Dated:                     , ______

	 	 	 
	 

	 	 
	 

	 	[Optionee]

 

11Exhibit 10.43

Exhibit 10.43

10.43 Trademark License Agreement between Xiangrui Pharmacy and Ruixing Group Co., Ltd.

Party A: Ruixing Group Co., Ltd.

Party B: Shandong Xiangrui Pharmacy Co., Ltd. 

	•	 	General Information

	 	•	 	Pursuant to the contract entered on January 1, 2008, Ruixing Group licensed
the Company to use the trademark owned by Ruixing Group with Trademark Numbers of
3481175, 4505548, name of Ruixing Pinghu and trademark logo of
, from January 1, 2008
to January 1, 2018.

	 
	 	•	 	The term shall be from January 1st, 2008 to January 1st, 2018.

	 
	 	•	 	The price for the patent license is free of charge.

	•	 	Headlines of the articles omitted

	 	•	 	Dispute Settlement

	 
	 	•	 	Breach of the Agreement

	 
	 	•	 	Miscellaneous

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