UNDERWRITING AGREEMENT between SKYSTAR BIO-PHARMACEUTICAL CORP and RODMAN & RENSHAW, LLC as Representative
between
and
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
as
Representative
___________
__, 2008
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
1251
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned, Skystar Bio-Pharmaceutical Company., a company formed under the
laws of Nevada (“Company”),
hereby confirms its agreement with ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC (hereinafter
referred to as “you”
(including its correlatives) or the “Representative”)
and
with the other underwriters named on Schedule 1 hereto for which the
Representative is acting as representative (the Representative and such other
underwriters being collectively called the “Underwriters”
or,
individually, an “Underwriter”)
as
follows:
1. Purchase
and Sale of Securities.
1.1. Firm
Securities.
1.1.1. Nature
and Purchase of Firm Securities.
(i) On
the
basis of the representations and warranties herein contained, but subject to
the
terms and conditions herein set forth, the Company agrees to issue and sell,
severally and not jointly, to the several Underwriters, an aggregate of
_____________ shares (“Firm
Shares”)
of
Common Stock, par value $.001 per share (the “Shares”).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the Company
the
number of Firm Shares set forth opposite their respective names on Schedule
1
attached hereto and made a part hereof at a purchase price (net of discounts
and
commissions) of [___]
per
Share (93% of the per Share offering price). The Firm Shares are to be offered
initially to the public (the “Offering”)
at the
offering price set forth on the cover page of the Prospectus (as defined in
Section 2.1.1 hereof).
1.1.2. Shares
Payment and Delivery.
(i) Delivery
and payment for the Firm Shares shall be made at 10:00 a.m., Eastern time,
on
the third (3rd)
Business Day following the effective date (the “Effective Date”) of the
Registration Statement (as defined in Section 2.1.2 below) (or the fourth
(4th)
Business Day following the Effective Date, if the Registration Statement is
declared effective after 4:30 p.m.) or at such earlier time as shall be agreed
upon by the Representative and the Company at the offices of ▇▇▇▇▇▇ and ▇▇▇▇▇,
LLP counsel to the Underwriters (“▇▇▇▇▇▇
and ▇▇▇▇▇”),
or at
such other place (or remotely by facsimile or other electronic transmission)
as
shall be agreed upon by the Representative and the Company. The hour and date
of
delivery and payment for the Firm Shares is called the “Closing
Date.”
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2008
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(ii) Payment
for the Firm Shares shall be made on the Closing Date by wire transfer in
Federal (same day) funds, payable to the order of the Company upon delivery
of
the certificates (in form and substance satisfactory to the Underwriters)
representing the Firm Shares (or through the facilities of the Depository Trust
Company (the “DTC”))
for
the account of the Underwriters. The Firm Shares shall be registered in such
name or names and in such authorized denominations as the Representative may
request in writing at least two (2) full Business Days prior to the Closing
Date. The Company shall not be obligated to sell or deliver the Firm Shares
except upon tender of payment by the Representative for all the Firm Shares.
The
term “Business
Day”
means
any day other than a Saturday, a Sunday or a legal holiday or a day on which
banking institutions are authorized or obligated by law to close in New York
City.
1.2. Over-allotment
Option.
1.2.1. Option
Shares.
For the
purposes of covering any over-allotments in connection with the distribution
and
sale of the Firm Shares, the Underwriters are hereby granted, an option to
purchase up to [_______] Shares or fifteen (15%) percent of the Firm Shares
sold
in the offering from the Company (the “Over-allotment
Option”).
Such
additional [ ]
Shares,
the net
proceeds of which will be deposited with the Company’s account, are hereinafter
referred to as “Option
Shares.”
The
purchase price to be paid for the Option Shares will be the same price per
Option Share as the price per Firm Shares set forth in Section 1.1.1 hereof.
The
Firm Shares and the Options Share are hereinafter referred to collectively
as
the “Public Securities.”
1.2.2. Exercise
of Option.
The
Over-allotment Option granted pursuant to Section 1.2.1 hereof may be exercised
by the Representative as to all (at any time) or any part (from time to time)
of
the Option Shares within 45 days after the Effective Date. The Underwriters
will
not be under any obligation to purchase any Option Shares prior to the exercise
of the Over-allotment Option. The Over-allotment Option granted hereby may
be
exercised by the giving of oral notice to the Company from the Representative,
which must be confirmed in writing by overnight mail or facsimile or other
electronic transmission setting forth the number of Option Shares to be
purchased and the date and time for delivery of and payment for the Option
Shares (the “Option
Closing Date”),
which
will not be later than five (5) full Business Days after the date of the notice
or such other time as shall be agreed upon by the Company and the
Representative, at the offices of ▇▇▇▇▇▇ and ▇▇▇▇▇ or at such other place
(including remotely by facsimile or other electronic transmission) as shall
be
agreed upon by the Company and the Representative. If such delivery and payment
for the Option Shares does not occur on the Closing Date, the Option Closing
Date will be as set forth in the notice. Upon exercise of the Over-allotment
Option, the Company will become obligated to convey to the Underwriters, and,
subject to the terms and conditions set forth herein, the Underwriters will
become obligated to purchase, the number of Option Shares specified in such
notice.
1.2.3. Payment
and Delivery.
Payment
for the Option Shares will be made on the Option Closing Date by wire transfer
in Federal (same day) funds as follows: $[ ]
per
Option Share, [93%
of the per option Share offering price],
shall
be deposited in the Company’s account and the remaining proceeds shall be paid
to the order of the Company upon delivery to you of certificates (in form and
substance satisfactory to the Underwriters) representing the Option Shares
(or
through the facilities of DTC) for the account of the Underwriters. The Option
Shares shall be registered in such name or names and in such authorized
denominations as the Representative may request in writing at least two (2)
full
Business Days prior to the Option Closing Date. The Company shall not be
obligated to sell or deliver the Option Shares except upon tender of payment
by
the Representative for applicable Option Shares.
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1.3 Representative's
Option.
1.3.1.
Purchase Option. The Company hereby agrees to issue and sell to the
Representative (and/or its designees) on the Closing Date an option
("Representative's Option") for the purchase of an aggregate of ________ Shares
(5% of the Firm Shares) for an aggregate purchase price of $100.00. The
Representative's Option shall be exercisable, in whole or in part, commencing
on
a date which is one year from the Applicable Time and expiring on the five-year
anniversary of the Applicable Time at an initial exercise price per Share of
$____, which is equal to 125% of the initial public offering price of the Firm
Shares. The Representative's Option and the Shares issuable upon exercise
thereof are sometimes hereinafter referred to collectively as the
“Representative's Securities.” The Representative understands and agrees that
there are significant restrictions pursuant to FINRA Rule 2710 against
transferring the Representative's Option and the underlying Shares during the
first year after the Effective Date and by its acceptance thereof shall agree
that it will not, sell, transfer, assign, pledge or hypothecate the
Representative's Option, or any potion thereof, or be the subject of any
hedging, short sale, derivative, put or call transaction that would result
in
the effective economic disposition of such securities for a period of one year
following the Effective Date to anyone other than (i) an Underwriter or a
selected dealer in connection with the Offering, or (ii) a bona fide officer
or
partner of the Representative or of any such Underwriter or selected dealer;
and
only if any such transferee agrees to the foregoing lock-up
restrictions.
1.3.2.
Delivery and Payment. Delivery and payment for the Representative's Option
shall
be made on the Closing Date and shall be issued in the name or names and in
such
authorized denominations as the Representative may request.
2. Representations
and Warranties of the Company.
The
Company represents and warrants to the Underwriters as of the Applicable Time
(as defined below) and as of the Closing Date and as of the Option Closing
Date,
if any, as follows:
2.1. Filing
of Registration Statement.
2.1.1. Pursuant
to the Act.
The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a
registration statement and an amendment or amendments thereto, on Form S-1
(File
No. 333-150695), including any related prospectus or prospectuses, for the
registration of the Public Securities and the Representative’s Securities under
the Securities Act of 1933, as amended (the “Act”),
which
registration statement and amendment or amendments have been prepared by the
Company in all material respects in conformity with the requirements of the
Act
and the rules and regulations of the Commission under the Act (the “Regulations”).
Except as the context may otherwise require, such registration statement on
file
with the Commission at the time the registration statement becomes effective
(including the prospectus, financial statements, schedules, exhibits and all
other documents filed as a part thereof or incorporated therein and all
information deemed to be a part thereof as of the Effective Date pursuant to
paragraph (b) of Rule 430A of the Regulations), is referred to herein as the
“Registration
Statement.”
The
final prospectus in the form first furnished to the Underwriters for use in
the
Offering, is hereinafter called the “Prospectus.”
The
Registration Statement has been declared effective by the Commission on the
date
hereof. “Applicable
Time”
means
[___ am/pm on December ___, 2008], on the Effective Date or such other time
as
agreed to by the Company and the Representative.
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2.1.2. Pursuant
to the Exchange Act.
The
Company has filed with the Commission a Form 8-A (File Number 000-___) providing
for the registration under the Securities Exchange Act of 1934, as amended
(the
“Exchange
Act”),
of
the Firm Shares, and the Option Shares. The registration of the Firm Shares
and
the Option Shares under the Exchange Act has been declared effective by the
Commission on the date hereof.
2.2. No
Stop Orders, etc.
Neither
the Commission nor, to the best of the Company’s knowledge, any state regulatory
authority has issued any order preventing or suspending the use of the
Prospectus or the Registration Statement or has instituted or, to the best
of
the Company’s knowledge, threatened to institute any proceedings with respect to
such an order.
2.3. Disclosures
in Registration Statement.
2.3.1. 10b-5
Representation.
At the
respective times the Registration Statement, the Prospectus and any
post-effective amendments thereto become effective (and at the Closing Date
and
the Option Closing Date, if any):
(i) The
Registration Statement, the Prospectus and any post-effective amendments thereto
did and will contain all material statements that are required to be stated
therein in accordance with the Act and the Regulations, and will in all material
respects conform to the requirements of the Act and the Regulations;
(ii) Neither
the Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, on such dates, do or will contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The representation and warranty made
in
this Section 2.3.1(ii) does not apply to statements made or statements omitted
in reliance upon and in conformity with written information furnished to the
Company with respect to the Underwriters by the Representative expressly for
use
in the Registration Statement or Prospectus or any amendment thereof or
supplement thereto. The parties acknowledge and agree that such information
provided by or on behalf of any Underwriter consists solely of the names of
the
Underwriters appearing in the “Underwriting and Plan of Distribution” section of
the Prospectus and the following additional disclosure contained in the
“Underwriting” section of the Prospectus: (i) the first paragraph under the
heading “Pricing of Securities”, (ii) the second and third paragraphs under the
heading “Other Terms” and (iii) all paragraphs under the heading “Foreign
Regulatory Restrictions on Purchase of the Common Stock (the “Underwriters’
Information”).
2.3.2. Disclosure
of Agreements.
The
agreements and documents described in the Prospectus, the Registration Statement
conform to the descriptions thereof contained therein and there are no
agreements or other documents required by the Act and the Regulations to be
described in the Prospectus, the Registration Statement or to be filed with
the
Commission as exhibits to the Registration Statement, that have not been so
described or filed. Each agreement or other instrument (however characterized
or
described) to which the Company is a party or by which it is or may be bound
or
affected and (i) that is referred to in the Prospectus, or (ii) is
material to the Company’s business, has been duly authorized and validly
executed by the Company, is in full force and effect in all material respects
and is enforceable against the Company and, to the Company’s knowledge, the
other parties thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally, (y) as enforceability
of any indemnification or contribution provision may be limited under the
federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefore may be brought. None of such agreements or instruments
has
been assigned by the Company, and neither the Company nor, to the best of the
Company’s knowledge, any other party is in default thereunder and, to the best
of the Company’s knowledge, no event has occurred that, with the lapse of time
or the giving of notice, or both, would constitute a default thereunder. To
the
best of the Company’s knowledge, performance by the Company of the material
provisions of such agreements or instruments will not result in a violation
of
any existing applicable law, rule, regulation, judgment, order or decree of
any
governmental agency or court, domestic or foreign, having jurisdiction over
the
Company or any of its assets or businesses, including, without limitation,
those
relating to environmental laws and regulations.
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2008
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2.3.3. Prior
Securities Transactions.
No
securities of the Company have been sold by the Company or by or on behalf
of,
or for the benefit of, any person or persons controlling, controlled by, or
under common control with the Company, except as disclosed in the Registration
Statement.
2.3.4. Regulations.
The
disclosures in the Registration Statement concerning the effects of Federal,
State, local and all foreign regulation on the Company’s business as currently
contemplated are correct in all material respects.
2.4. Changes
After Dates in Registration Statement.
2.4.1. No
Material Adverse Change.
Since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise specifically stated therein:
(i) there has been no material adverse change in the condition, financial
or otherwise, or business prospects of the Company; (ii) there have been no
material transactions entered into by the Company, other than as contemplated
pursuant to this Agreement; and (iii) no officer or director of the Company
has resigned from any position with the Company.
2.4.2. Recent
Securities Transactions, etc.
Subsequent to the respective dates as of which information is given in the
Registration Statement and the Prospectus, and except as may otherwise be
indicated or contemplated herein or disclosed in the Registration Statement
and
the Prospectus, the Company has not: (i) issued any securities or incurred
any liability or obligation, direct or contingent, for borrowed money; or
(ii) declared or paid any dividend or made any other distribution on or in
respect to its capital stock.
2.5. Independent
Accountants.
To the
knowledge of the Company, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Froger and ▇▇▇▇▇▇ LLP
(“MSWFT”),
whose
report is filed with the Commission as part of the Registration Statement,
are
independent registered public accountants as required by the Act and the
Regulations. MSWFT has not, during the periods covered by the financial
statements included in the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange Act.
2.6. Financial
Statements.
The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement and Prospectus fairly present the
financial position and the results of operations of the Company at the dates
and
for the periods to which they apply; and such financial statements have been
prepared in conformity with generally accepted accounting principles
(“GAAP”),
consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein. The Registration Statement discloses all material
off-balance sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with unconsolidated
entities or other persons that may have a material current or future effect
on
the Company’s financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses.
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2.7. Authorized
Capital; Options, etc.
The
Company had, at the date or dates indicated in the Prospectus, the duly
authorized, issued and outstanding capitalization as set forth in the
Registration Statement and the Prospectus. Based on the assumptions stated
in
the Registration Statement and the Prospectus, the Company will have on the
Closing Date the adjusted stock capitalization set forth therein. Except as
set
forth in, or contemplated by, the Registration Statement and the Prospectus,
on
the Effective Date and on the Closing Date, there will be no options, warrants,
or other rights to purchase or otherwise acquire any authorized, but unissued
Shares of the Company or any security convertible into Shares of the Company,
or
any contracts or commitments to issue or sell Shares or any such options,
warrants, rights or convertible securities.
2.8. Valid
Issuance of Securities, etc.
2.8.1. Outstanding
Securities.
All
issued and outstanding securities of the Company issued prior to the
transactions contemplated by this Agreement have been duly authorized and
validly issued and are fully paid and non-assessable; the holders thereof have
no rights of rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any security
of
the Company or similar contractual rights granted by the Company. The authorized
Shares conform in all material respects to all statements relating thereto
contained in the Registration Statement and the Prospectus. The offers and
sales
of the outstanding Shares were at all relevant times either registered under
the
Act and the applicable state securities or Blue Sky laws or, based in part
on
the representations and warranties of the purchasers of such Shares, exempt
from
such registration requirements.
2.8.2. Securities
Sold Pursuant to this Agreement.
The
Public Securities and Representative’s Securities have been duly authorized for
issuance and sale and, when issued and paid for, will be validly issued, fully
paid and non-assessable; the holders thereof are not and will not be subject
to
personal liability by reason of being such holders; the Public Securities are
not and will not be subject to the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by the Company;
and all corporate action required to be taken for the authorization, issuance
and sale of the Securities has been duly and validly taken. The Public
Securities and the Representative’s Securities conform in all material respects
to all statements with respect thereto contained in the Registration Statement.
The Representative’s Option constitutes a valid and binding obligation of the
Company to issue and sell, upon exercise thereof and payment of the exercise
price therefore, the number and type of securities of the Company called for
thereby in accordance with the terms thereof and such Representative’s Option is
enforceable against the Company in accordance with its respective terms, except:
(i) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally;
(ii) as enforceability of any indemnification or contribution provision may
be limited under the federal and state securities laws; and (iii) that the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefore may be brought. When paid for and
issued in accordance with the Representative’s Option, the underlying Shares
will be validly issued, fully paid and non-assessable; the holders thereof
are
not and will not be subject to personal liability by reason of being such
holders; the underlying Shares are not and will not be subject to the preemptive
rights of any holders of any security of the Company or similar contractual
rights granted by the Company; and all corporate action required to be taken
for
the authorization, issuance and sale of the Representative’s Option has been
duly and validly taken.
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2008
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2.9. Registration
Rights of Third Parties.
Except
as set forth in the Registration Statement and the Prospectus, no holders of
any
securities of the Company or any rights exercisable for or convertible or
exchangeable into securities of the Company have the right to require the
Company to register any such securities of the Company under the Act or to
include any such securities in a registration statement to be filed by the
Company.
2.10. Validity
and Binding Effect of Agreements.
This
Agreement and the Representative’s Option have been duly and validly authorized
by the Company, and, when executed and delivered, will constitute, the valid
and
binding agreements of the Company, enforceable against the Company in accordance
with their respective terms, except: (i) as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of any indemnification
or contribution provision may be limited under the federal and state securities
laws; and (iii) that the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to the equitable defenses and
to
the discretion of the court before which any proceeding therefore may be
brought.
2.11. No
Conflicts, etc.
The
execution, delivery, and performance by the Company of this Agreement, the
Representative’s Option and all ancillary documents, the consummation by the
Company of the transactions herein and therein contemplated and the compliance
by the Company with the terms hereof and thereof do not and will not, with
or
without the giving of notice or the lapse of time or both: (i) result in a
material breach of, or conflict with any of the terms and provisions of, or
constitute a material default under, or result in the creation, modification,
termination or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to the terms of any agreement or instrument
to
which the Company is a party; (ii) result in any violation of the
provisions of the Articles of Incorporation of the Company (as the same may
be
amended from time to time, the “Articles
of Incorporation”);
or
(iii) violate any existing applicable law, rule, regulation, judgment,
order or decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its properties or business constituted
as of the date hereof.
2.12. No
Defaults; Violations.
No
material default exists in the due performance and observance of any term,
covenant or condition of any material license, contract, indenture, mortgage,
deed of trust, note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its
Articles of Incorporation, or in violation of any franchise, license, permit,
applicable law, rule, regulation, judgment or decree of any governmental agency
or court, domestic or foreign, having jurisdiction over the Company or any
of
its properties or businesses.
2.13. Corporate
Power; Licenses; Consents.
2.13.1. Conduct
of Business.
Except
as described in the Registration Statement and the Prospectus, the Company
has
all requisite corporate power and authority, and has all necessary
authorizations, approvals, orders, licenses, certificates and permits of and
from all governmental regulatory officials and bodies that it needs as of the
date hereof to conduct its business purpose as described in the Prospectus.
The
disclosures in the Registration Statement concerning the effects of federal,
state, local and foreign regulation on this Offering and the Company’s business
purpose as currently contemplated are correct in all material respects.
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2008
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2.13.2. Transactions
Contemplated Herein.
The
Company has all corporate power and authority to enter into this Agreement
and
to carry out the provisions and conditions hereof, and all consents,
authorizations, approvals and orders required in connection therewith have
been
obtained. No consent, authorization or order of, and no filing with, any court,
government agency or other body is required for the valid issuance, sale and
delivery of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement and the Representative’s Option as
contemplated by the Prospectus, except with respect to applicable federal and
state securities laws and the rules and regulations of the Financial Industry
Regulatory Authority, Inc. (“FINRA”).
2.14. D&O
Questionnaires.
To the
Company’s knowledge, all information contained in the questionnaires (the
“Questionnaires”)
completed by each of the Company’s directors and officers immediately prior to
the Offering (the “Initial
Shareholders”)
as
well as in the Lock-Up Agreement provided to the Underwriters is true and
correct in all respects and the Company has not become aware of any information
which would cause the information disclosed in the questionnaires completed
by
each Initial Shareholder to become inaccurate and incorrect.
2.15. Litigation;
Governmental Proceedings.
There
is no action, suit, proceeding, inquiry, arbitration, investigation, litigation
or governmental proceeding pending or, to the Company’s knowledge, threatened
against, or involving the Company or, to the Company’s knowledge, any executive
officer or director which has not been disclosed in the Registration Statement
and the Prospectus or in connection with the Company’s listing application for
the listing of the Shares and Common Stock on the NYSE Alternext US LLC (the
“AMEX”).
2.16. Good
Standing.
The
Company has been duly organized and is validly existing as a corporation and
is
in good standing under the laws of the State of Nevada as of the date hereof,
and is duly qualified to do business and is in good standing in each
jurisdiction in which its ownership or lease of property or the conduct of
business requires such qualification, except where the failure to qualify would
not have a material adverse effect on the assets, business or operations of
the
Company.
2.17. Stop
Orders.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or any part thereof.
2.18. Transactions
Affecting Disclosure to FINRA.
2.18.1. Finder’s
Fees.
Except
as described in the Registration Statement and the Prospectus, there are no
claims, payments, arrangements, agreements or understandings relating to the
payment of a finder’s, consulting or origination fee by the Company or any
Initial Shareholder with respect to the sale of the Securities hereunder or
any
other arrangements, agreements or understandings of the Company or, to the
Company’s knowledge, any of its shareholders that may affect the Underwriters’
compensation, as determined by FINRA.
2.18.2. Payments
Within Twelve Months.
Except
as described in the Registration Statement and the Prospectus, the Company
has
not made any direct or indirect payments (in cash, securities or otherwise)
to:
(i) any person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or introducing
to
the Company persons who raised or provided capital to the Company; (ii) to
any FINRA member; or (iii) to any person or entity that has any direct or
indirect affiliation or association with any FINRA member, within the twelve
months prior to the Effective Date, other than the prior payment of $38,000
to
▇▇▇▇▇▇ & ▇▇▇▇▇▇ Securities Corporation, an Underwriter, the prior payment of
$25,000 to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC, the Representative and payments to the
Underwriters as provided hereunder in connection with the Offering.
Skystar
Bio-Pharmaceutical Company.
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2008
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2.18.3. Use
of
Proceeds.
None of
the net proceeds of the Offering will be paid by the Company to any
participating FINRA member or its affiliates, except as specifically authorized
herein.
2.18.4. FINRA
Affiliation.
No
officer, director or any beneficial owner of the Company’s unregistered
securities has any direct or indirect affiliation or association with any FINRA
member (as determined in accordance with the rules and regulations of FINRA).
The Company will advise the Representative and ▇▇▇▇▇▇ and ▇▇▇▇▇ if it learns
that any officer, director or owner of at least 5% of the Company’s outstanding
Common Stock (or securities convertible into Common Stock) is or becomes an
affiliate or associated person of a FINRA member participating in the Offering.
2.19. Foreign
Corrupt Practices Act.
Neither
the Company nor any of the directors , employees or officers of the Company
or
any other person acting on behalf of the Company has, directly or indirectly,
given or agreed to give any money, gift or similar benefit (other than legal
price concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or official
or
employee of any governmental agency or instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or any political party or candidate for office (domestic or foreign)
or other person who was, is, or may be in a position to help or hinder the
business of the Company (or assist it in connection with any actual or proposed
transaction) that (i) might subject the Company to any damage or penalty in
any civil, criminal or governmental litigation or proceeding, (ii) if not
given in the past, might have had a material adverse effect on the assets,
business or operations of the Company as reflected in any of the financial
statements contained in the Prospectus or (iii) if not continued in the
future, might adversely affect the assets, business, operations or prospects
of
the Company. The Company has taken reasonable steps to ensure that its
accounting controls and procedures are sufficient to cause the Company to comply
in all material respects with the Foreign Corrupt Practices Act of 1977, as
amended.
2.20. Officers’
Certificate.
Any
certificate signed by any duly authorized officer of the Company and delivered
to you or to ▇▇▇▇▇▇ and ▇▇▇▇▇ shall be deemed a representation and warranty
by
the Company to the Underwriters as to the matters covered thereby.
2.21. Intentionally
omitted.
2.22. Lock-up
agreements.
Each of
the Company’s officers and directors and any affiliated party of such officers
and directors holding Shares (or securities convertible into Shares of the
Company) (the “Lock-Up Parties”) have agreed that for a period of 6 months, (the
“Lock-Up Period”) from the effective date of the Prospectus, such persons shall
not sell, contract to sell, grant any option for the sale or otherwise dispose
of any of your equity securities, or any securities convertible into or
exercisable or exchangeable for our equity securities, without the consent
of
the Representative. The Representative may consent to an early release from
the
Lock-Up period if, in its opinion, the market for common stock would not be
adversely impacted by sales and in cases of financial emergency of an officer,
director or other stockholder. The Company has caused each of the Lock-Up
Parties to deliver to the Representative the agreements of each Lock-Up Parties
to the foregoing effect prior to the date that the Company requests that the
Commission declare the Registration Statement effective under the Act.
2.23. Subsidiaries.
Annex 2
to this agreement sets forth the ownership of all direct and indirect
subsidiaries of the Company (each a “Subsidiary” and together the
“Subsidiaries”). All direct and indirect subsidiaries of the Company are duly
organized and in good standing under the laws of the place of organization
or
incorporation, and each such subsidiary and is in good standing in each
jurisdiction in which its ownership or lease of property or the conduct of
business requires such qualification, except where the failure to qualify would
not have a material adverse effect on the assets, business or operations of
the
Company taken as a whole.
Skystar
Bio-Pharmaceutical Company.
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2008
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2.24. Related
Party Transactions.
Except
as disclosed in the Registration Statement and the Prospectus, there are no
business relationships or related party transactions involving the Company
or
any other person required to be described in the Prospectus that have not been
described as required.
2.25. Board
of Directors.
The
Board of Directors of the Company is comprised of the persons set forth under
the heading of the Prospectus captioned “Management”. The qualifications of the
persons serving as board members and the overall composition of the board comply
with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated thereunder
applicable to the Company and the rules of the AMEX. At least one member of
the
Board of Directors of the Company qualifies as a “financial expert” as such term
is defined under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated
thereunder and the rules of the AMEX. In addition, at least a majority of the
persons serving on the Board of Directors qualify as “independent” as defined
under the rules of the AMEX.
2.26. ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Compliance.
2.26.1. Disclosure
Controls.
The
Company has developed and currently maintains disclosure controls and procedures
that will comply with Rule 13a-15 or 15d-15 of the Exchange Act, and such
controls and procedures are effective to ensure that all material information
concerning the Company will be made known on a timely basis to the individuals
responsible for the preparation of the Company’s Exchange Act filings and other
public disclosure documents.
2.26.2. Compliance.
The
Company is, or on the Effective Date will be, in material compliance with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 applicable to it, and has
implemented or will implement such programs and taken reasonable steps to ensure
the Company’s future compliance (not later than the relevant statutory and
regulatory deadlines therefore) with all the material provisions of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
3. Covenants
of the Company.
The
Company covenants and agrees as follows:
3.1. Amendments
to Registration Statement.
The
Company will deliver to the Representative, prior to filing, any amendment
or
supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and not file any such amendment or supplement to which
the Representative shall reasonably object in writing.
3.2. Federal
Securities Laws.
3.2.1. Compliance.
During
the time when a Prospectus is required to be delivered under the Act, the
Company will use its best efforts to comply with all requirements imposed upon
it by the Act, the Regulations and the Exchange Act and by the regulations
under
the Exchange Act, as from time to time in force, so far as necessary to permit
the continuance of sales of or dealings in the Public Securities in accordance
with the provisions hereof and the Prospectus. If at any time when a Prospectus
relating to the Public Securities is required to be delivered under the Act,
any
event shall have occurred as a result of which, in the opinion of counsel for
the Company or counsel for the Underwriters, the Prospectus, as then amended
or
supplemented, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the Prospectus to
comply with the Act, the Company will notify the Representative promptly and
prepare and file with the Commission, subject to Section 3.1 hereof, an
appropriate amendment or supplement in accordance with Section 10 of the Act.
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Bio-Pharmaceutical Company.
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2008
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3.2.2. Filing
of Final Prospectus.
The
Company will file the Prospectus (in form and substance satisfactory to the
Representative) with the Commission pursuant to the requirements of Rule 424
of
the Regulations.
3.2.3. Exchange
Act Registration.
For a
period of three years from the Effective Date, or until such earlier time upon
which the Company is required to be liquidated, the Company will use its best
efforts to maintain the registration of the Shares, the shares underlying the
Representative’s Option under the provisions of the Exchange Act. The Company
will not deregister the Shares under the Exchange Act without the prior written
consent of the Representative.
3.2.4. Free
Writing Prospectuses.
The
Company represents and agrees that it has not made and will not make any offer
relating to the Public Securities that would constitute an issuer free writing
prospectus, as defined in Rule 433 of the 1933 Act, without the prior consent
of
the Representative. Any such free writing prospectus consented to by the
Representative is hereinafter referred to as a “Permitted
Free Writing Prospectus.”
The
Company represents that its will treat each Permitted Free Writing Prospectus
as
an “issuer free writing prospectus” as defined in Rule 433, and has complied and
will comply with the applicable requirements of Rule 433 of the 1933 Act,
including timely Commission filing where required, legending and record keeping.
3.3. Delivery
to Underwriters of Prospectuses.
The
Company will deliver to each of the several Underwriters, without charge, from
time to time during the period when the Prospectus is required to be delivered
under the Act or the Exchange Act such number of copies of each Prospectus
as
such Underwriters may reasonably request and, as soon as the Registration
Statement or any amendment or supplement thereto becomes effective, deliver
to
you two original executed Registration Statements, including exhibits, and
all
post-effective amendments thereto and copies of all exhibits filed therewith
or
incorporated therein by reference and all original executed consents of
certified experts.
3.4. Effectiveness
and Events Requiring Notice to the Representative.
The
Company will use its best efforts to cause the Registration Statement to remain
effective with a current prospectus for at least nine (9) months from the
Applicable Time. and will notify the Representative immediately and confirm
the
notice in writing: (i) of the effectiveness of the Registration Statement
and any amendment thereto; (ii) of the issuance by the Commission of any
stop order or of the initiation, or the threatening, of any proceeding for
that
purpose; (iii) of the issuance by any state securities commission of any
proceedings for the suspension of the qualification of the Securities for
offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for that purpose; (iv) of the mailing and delivery to the
Commission for filing of any amendment or supplement to the Registration
Statement or Prospectus; (v) of the receipt of any comments or request for
any additional information from the Commission; and (vi) of the happening
of any event during the period described in this Section 3.4 hereof that, in
the
judgment of the Company, makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or that requires the making
of
any changes in the Registration Statement or the Prospectus in order to make
the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Commission or any state securities commission shall
enter
a stop order or suspend such qualification at any time, the Company will make
every reasonable effort to obtain promptly the lifting of such order.
3.5. Intentionally
omitted.
Skystar
Bio-Pharmaceutical Company.
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2008
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of 33
3.6. Intentionally
omitted.
3.7. Intentionally
omitted.
3.8. Financial
Public Relations Firm.
As of
the Effective Date, the Company shall have retained a financial public relations
firm (“I.R.”) reasonably acceptable to the Representative, and the Company shall
retain such firm or another firm for a period of not less than two years after
the Effective Date.
3.9. Reports
to the Representative.
3.9.1. Periodic
Reports, etc.
For a
period of three years from the Effective Date, or until such earlier time upon
which the Company is required to be liquidated, the Company will furnish to
the
Representative copies of such financial statements and other periodic and
special reports as the Company from time to time furnishes generally to holders
of any class of its securities and also promptly furnish to the Representative:
(i) a copy of each periodic report the Company shall be required to file
with the Commission; (ii) a copy of every press release and every news item
and article with respect to the Company or its affairs which was released by
the
Company; (iii) a copy of each Form 8-K prepared and filed by the Company;
(iv) five copies of each Registration Statement; (v) such additional
documents and information with respect to the Company and the affairs of any
future subsidiaries of the Company as the Representative may from time to time
reasonably request; provided the Representatives shall sign, if requested by
the
Company, a Regulation FD compliant confidentiality agreement which is reasonably
acceptable to the Representative and ▇▇▇▇▇▇ and ▇▇▇▇▇ in connection with the
Representative’s receipt of such information. Documents filed with the
Commission pursuant to its ▇▇▇▇▇ system shall be deemed to have been delivered
to the Representative pursuant to this Section.
3.9.2. Transfer
Sheets.
For a
period of three years from the Effective Date, the Company shall retain a
transfer and registrar agent acceptable to the Representative (the “Transfer
Agent”)
and
will furnish to the Representatives at the Company’s sole cost and expense such
transfer sheets of the Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer sheets of the
Transfer Agent and DTC. Pacific Stock Transfer and Trust Company is acceptable
to the Underwriters to act as Transfer Agent for the Company’s Shares.
3.9.3. Trading
Reports.
During
such time as the Public Securities are listed on AMEX the Company shall provide
to the Representative, at its expense, such reports published by the AMEX
relating to price trading of the Public Securities, as the Representative shall
reasonably request.
Skystar
Bio-Pharmaceutical Company.
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2008
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3.10. Payment
of Expenses.
3.10.1. General
Expenses Related to the Offering.
The
Company hereby agrees to pay on each of the Closing Date and the Option Closing
Date, if any, to the extent not paid at the Closing Date, all expenses incident
to the performance of the obligations of the Company under this Agreement,
including, but not limited to: (i) the preparation, printing, filing and
mailing (including the payment of postage with respect to such mailing) of
the
Registration Statement, the Preliminary and final Prospectuses and the printing
and mailing of this Agreement and related documents, including the cost of
all
copies thereof and any amendments thereof or supplements thereto supplied to
the
Underwriters in quantities as may be required by the Underwriters; (ii) the
printing, engraving, issuance and delivery of certificates for the Shares and
the Option Shares (and their component securities) included in the Firm Shares,
including any transfer or other taxes payable thereon; (iii) filing fees,
costs and expenses incurred in registering the Offering with FINRA and the
SEC;
(iv) filing fees, costs and expenses incurred in listing the Shares
included therein on the AMEX; (v) fees and disbursements of ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ as its counsel; (vi) the cost of up to 20 Lucite cubes or similar
commemorative items in a style reasonably requested by the Representative;
(vii)
the cost (up to $5,000 per individual of the investigative search firm that
conducted an investigation of the principals of the Company (viii) all other
costs and expenses incident to the performance by the Company of its obligations
hereunder which are not otherwise specifically provided for in this Section
3.10.1 including, without limitation, the Company’s “road-show” expenses (ix)
the costs and expenses of post closing advertising of the Offering in the
national editions of the Wall Street Journal and the New York Times and (x)
the
reasonable costs and expenses of counsel to the Representative with respect
to
the qualification and registration of the Shares under the laws of the various
states, as well as associated filing fees; provided, however, in the event
that
the Company’s Shares are accepted for listing on the AMEX, such fees shall be
limited to $5,000. The Representative may also deduct from the net proceeds
of
the Offering payable to the Company on the Closing Date, or the Option Closing
Date, if any, the expenses set forth herein to be paid by the Company to the
Representative.
3.10.2. Non-accountable
Expenses.
The
Company further agrees that, in addition to the expenses payable pursuant to
Section 3.10.1, on the Closing Date it will pay to the Representative a
non-accountable expense allowance equal to one percent (1.00%) of the gross
proceeds received by the Company from the sale of the Firm Shares by deduction
from the proceeds of the Offering contemplated herein; provided
however,
that
$63,000 in the aggregate was previously paid by the Company to the
Representative and ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Securities Corporation shall be deducted
from the non-accountable expense allowance payable to the Representative on
the
Closing Date.
3.11. Application
of Net Proceeds.
The
Company will apply the net proceeds from the Offering received by it in a manner
consistent with the application described under the caption “Use Of Proceeds” in
the Prospectus.
3.12. Delivery
of Earnings Statements to Security Holders.
The
Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month following the Effective Date, an earnings statement (which need not be
certified by independent public or independent certified public accountants
unless required by the Act or the Regulations, but which shall satisfy the
provisions of Rule 158(a) under Section 11(a) of the Act) covering a period
of
at least twelve consecutive months beginning after the Effective Date.
3.13. Stabilization.
Neither
the Company, nor, to its knowledge, any of its employees, directors or
shareholders (without the consent of the Representative) has taken or will
take,
directly or indirectly, any action designed to or that has constituted or that
might reasonably be expected to cause or result in, under the Exchange Act,
or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
3.14. Internal
Controls.
The
Company will maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: (i) transactions are executed in
accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary in order to permit preparation
of financial statements in accordance with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
3.15. Accountants.
As of
the Effective Date, the Company shall retain MSWFT or other independent public
accountants reasonably acceptable to the Representative, and the Company shall
continue to retain a nationally recognized independent certified public
accounting firm for a period of at least three years after the Effective Date.
Skystar
Bio-Pharmaceutical Company.
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2008
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3.16. FINRA.
The
Company shall advise the Representative (who shall make an appropriate filing
with FINRA) if it is aware that any 5% or greater shareholder of the Company
becomes an affiliate or associated person of an FINRA member participating
in
the distribution of the Company’s Public Securities.
3.17. No
Fiduciary Duties.
The
Company acknowledges and agrees that the Underwriters’ responsibility to the
Company is solely contractual in nature and that none of the Underwriters or
their affiliates or any Selling Agent shall be deemed to be acting in a
fiduciary capacity, or otherwise owes any fiduciary duty to the Company or
any
of its affiliates in connection with the Offering and the other transactions
contemplated by this Agreement.
4. Conditions
of Underwriters’ Obligations.
The
obligations of the several Underwriters to purchase and pay for the Shares,
as
provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company as of the date hereof and as
of
each of the Closing Date and the Option Closing Date, if any, to the accuracy
of
the statements of officers of the Company made pursuant to the provisions hereof
and to the performance by the Company of its obligations hereunder and to the
following conditions:
4.1. Regulatory
Matters.
4.1.1. Effectiveness
of Registration Statement.
The
Registration Statement shall have become effective not later than 5:00 P.M.,
Eastern time, on the date of this Agreement or such later date and time as
shall
be consented to in writing by you, and, at each of the Closing Date and the
Option Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or contemplated by the
Commission and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
▇▇▇▇▇▇ and ▇▇▇▇▇.
4.1.2. FINRA
Clearance.
By the
Effective Date, the Representative shall have received clearance from FINRA
as
to the amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3. American
Stock Exchange Clearance.
On the
Closing Date, the Company’s Common Stock, including the Public Shares shall have
been approved for listing on the AMEX.
4.1.4. Free
Writing Prospectuses.
The
Representative covenants with the Company that the Underwriters will not use,
authorize the use of, refer to, or participate in the planning for the use
of a
“free writing prospectus” as defined in Rule 405 under the 1933 Act, which term
includes use of any written information furnished by the Commission to the
Company and not incorporated by reference into the Registration Statement,
without the prior written consent of the Company. Any such free writing
prospectus consented to by the Company is hereinafter referred to as an
“Underwriter
Free Writing Prospectus.”
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
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4.2. Company
Counsel Matters.
4.2.1. Closing
Date Opinion of Counsel.
On the
Closing Date, the Representative shall have received the favorable opinion
of
▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ LLP,
counsel
to the Company (“▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇”),
dated
the Closing Date, addressed to the Representative:
(i) Based
solely on a certificate of good standing dated within 5 days of the Closing
Date, the Company has been duly organized and is validly existing as a
corporation and is in good standing under the laws of the State of
Nevada.
(ii) All
issued and outstanding securities of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable; the holders thereof are
not subject to personal liability by reason of being such holders; and none
of
such securities were issued in violation of the preemptive rights of any
stockholder of the Company arising by operation of law or under the Articles
of
Incorporation. The offers and sales of the outstanding securities were at all
relevant times either registered under the Act or exempt from such registration
requirements. The authorized, and to the extent of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇’▇
knowledge, outstanding capital stock of the Company is as set forth in the
Prospectus.
(iii) The
Shares have been duly authorized and, when issued and paid for, will be validly
issued, fully paid and non-assessable; the holders thereof are not and will
not
be subject to personal liability solely by reason of being such holders. The
Shares included in the Shares are not and will not be subject to the preemptive
rights of any holders of any security of the Company arising by operation of
law
or under the Articles of Incorporation. When issued, the Option Shares will
constitute valid and binding obligations of the Company to issue and sell,
upon
exercise thereof and payment therefore, the number and type of securities of
the
Company called for thereby and the Option Shares, when issued, in each case,
are
enforceable against the Company in accordance with their respective terms,
except (a) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights generally, (b) as
enforceability of any indemnification or contribution provision may be limited
under the Federal and state securities laws, and (c) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefore may be brought. The certificates representing the
Securities are in due and proper form.
(iv) This
Agreement and the Representative’s Option have each been duly and validly
authorized and, when executed and delivered by the Company, constitute, and
the
Representative’s Option Shares has been duly and validly authorized by the
Company and, when executed and delivered, will constitute, the valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except (a) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally, (b) as enforceability of any indemnification or contribution
provisions may be limited under the Federal and state securities laws, and
(c)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefore may be brought.
(v) The
execution, delivery and performance of this Agreement and the Representative’s
Option Shares and the Lock-up Agreements and compliance by the Company with
the
terms and provisions thereof and the consummation of the transactions
contemplated thereby, and the issuance and sale of the securities, do not and
will not, with or without the giving of notice or the lapse of time, or both,
(a) to such counsel’s knowledge, based on representations of the Company
made to such counsel and contained in a certificate provided by an executive
officer of the Company, conflict with, or result in a breach of, any of the
terms or provisions of, or constitute a default under, or result in the creation
or modification of any lien, security interest, charge or encumbrance upon
any
of the properties or assets of the Company pursuant to the terms of, any
mortgage, deed of trust, note, indenture, loan, contract, commitment or other
agreement or instrument filed as an exhibit to the Registration Statement,
(b) result in any violation of the provisions of the Articles of
Incorporation, or (c) to such counsel’s knowledge, violate any statute or
any judgment, order or decree, rule or regulation applicable to the Company
of
any court, domestic or foreign, or of any federal, state or other regulatory
authority or other governmental body having jurisdiction over the Company,
its
properties or assets.
Skystar
Bio-Pharmaceutical Company.
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2008
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(vi) The
Registration Statement and the Prospectus and any post-effective amendments
or
supplements thereto (other than the financial statements included therein,
as to
which no opinion need be rendered) each as of their respective dates complied
as
to form in all material respects with the requirements of the Act and
Regulations. The securities conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus. No United
States or state statute or regulation required to be described in the Prospectus
is not described as required (except as to the Blue Sky laws of the various
states, as to which such counsel expresses no opinions), nor are any contracts
or documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement not so described or filed as required (except for the contracts and
documents described in the “Underwriting” section of the Registration Statement,
as to which such counsel expresses no opinions).
(vii) Based
solely on a notice of effectiveness received from the Commission, the
Registration Statement is effective under the Act. To such counsel’s knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or threatened under the Act or applicable state securities
laws.
(viii) The
Company is not and, after giving effect to the Offering and sale of the
Securities and the application of the proceeds thereof as described in the
Registration Statement and the Prospectus, will not be, an “investment company”
as defined in the Investment Company Act of 1940, as amended.
(ix) The
opinion of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall further include a statement to the effect
that such counsel has participated in conferences with officers and other
representatives of the Company, the Underwriters and the independent registered
public accounting firm of the Company, at which conferences the contents of
the
Registration Statement and the Prospectus contained therein and related matters
were discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus contained
therein, solely on the basis of the foregoing without independent check and
verification, no facts have come to the attention of such counsel which lead
them to believe that the Registration Statement or any amendment thereto, at
the
time the Registration Statement or amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or the Prospectus or any amendment or supplement thereto, at the time they
were
filed pursuant to Rule 424(b) or at the date of such counsel’s opinion,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statement therein,
in light of the circumstances under which they were made, not misleading (except
that such counsel need express no view and shall not be deemed to have rendered
an opinion with respect to the financial information, statistical data and
information and matters regarding non-United States laws, rules and regulations
included in the Registration Statement or the Prospectus).
Skystar
Bio-Pharmaceutical Company.
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2008
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(x) The
Company has taken all necessary corporate action to authorize and approve a
reverse stock split of its Common Stock on the basis of one share of Common
Stock for each and every [ten] shares of Common Stock issued and outstanding
prior to the Applicable Time and the reverse stock split has become effective
under the laws of the State of Nevada.
4.2.2
On
the
Closing Date, the Representative shall have received the favorable opinion
of
[_______________] counsel to the Company, reasonably acceptable to the
Representative, related to, among other things, the descriptions of laws of
the
People’s Republic of China and the organization of the Company’s PRC affiliates
and ownership structure, dated the Closing Date and addressed to the
Representative.
4.2.3 On
the
Closing Date, the Representative shall have received the favorable opinion
of
[_______________] counsel to the Company, reasonably acceptable to the
Representative, related to, among other things, the descriptions of laws of
the
Cayman Islands and the organization of the Company’s Cayman affiliates and
ownership structure, dated the Closing Date and addressed to the
Representative.
4.2.4 On
the
Closing Date, the Representative shall have received the favorable opinion
of
[_______________] counsel to the Company, reasonably acceptable to the
Representative, related to, among other things, the descriptions of laws of
Hong
Kong and the organization of the Company’s Hong Kong affiliates and ownership
structure, dated the Closing Date and addressed to the
Representative.
4.2.5. Option
Closing Date Opinion of Counsel.
On the
Option Closing Date, if any, the Representative shall have received the
favorable opinion of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP, dated the Option Closing Date,
addressed to the Representative and in form and substance reasonably
satisfactory to the Representative, confirming as of the Option Closing Date,
the statements made by ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ in their respective opinions
delivered on the Closing Date.
4.2.6. Reliance.
In
rendering such opinions, such counsel may rely: (i) as to matters involving
the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance reasonably satisfactory to the
Representative) of other counsel reasonably acceptable to the Representative,
familiar with the applicable laws; and (ii) as to matters of fact, to the
extent they deem proper, on certificates or other written statements of officers
of the Company and officers of departments of various jurisdiction having
custody of documents respecting the corporate existence or good standing of
the
Company, provided that copies of any such statements or certificates shall
be
delivered to ▇▇▇▇▇▇ and ▇▇▇▇▇ if requested. The opinion of ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
and any opinion relied upon by ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall include a statement
to
the effect that it may be relied upon by counsel for the Underwriters in its
opinion delivered to the Underwriters.
4.3. Cold
Comfort Letter.
At the
time this Agreement is executed, and at each of the Closing Date and the Option
Closing Date, if any, you shall have received a letter, addressed to the
Representative and in form and substance satisfactory in all respects (including
the non-material nature of the changes or decreases, if any, referred to in
clause (iii) below) to you and to ▇▇▇▇▇▇ and ▇▇▇▇▇ from MSWFT dated,
respectively, as of the date of this Agreement and as of the Closing Date and
the Option Closing Date, if any:
(i) Confirming
that they are independent public accountants with respect to the Company within
the meaning of the Act and the applicable Regulations and that they have not,
during the periods covered by the financial statements included in the
Prospectus, provided to the Company any non-audit services, as such term is
used
in Section 10A(g) of the Exchange Act;
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
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of 33
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement and Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act and the published
Regulations thereunder;
(iii) Stating
that, on the basis of a limited review which included a reading of the latest
available unaudited interim financial statements of the Company (with an
indication of the date of the latest available unaudited interim financial
statements), a reading of the latest available minutes of the shareholders
and
board of directors and the various committees of the board of directors,
consultations with officers and other employees of the Company responsible
for
financial and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe that:
(a) the unaudited financial statements of the Company included in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the Regulations or are
not
fairly presented in conformity with GAAP applied on a basis substantially
consistent with that of the audited financial statements of the Company included
in the Registration Statement; (b) at a date not later than five days prior
to the Effective Date, Closing Date or Option Closing Date, as the case may
be,
there was any change in the capital stock or long-term debt of the Company,
or
any decrease in the shareholders’ equity of the Company as compared with amounts
shown in the December 31, 2007 balance sheet included in the Registration
Statement, other than as set forth in or contemplated by the Registration
Statement, or, if there was any decrease, setting forth the amount of such
decrease, and (c) during the period from December 31, 2007 to a specified
date not later than five days prior to the Effective Date, Closing Date or
Option Closing Date, as the case may be, there was any decrease in revenues,
net
earnings or net earnings per share, in each case as compared with the
corresponding period in the preceding year and as compared with the
corresponding period in the preceding quarter, other than as set forth in or
contemplated by the Registration Statement, or, if there was any such decrease,
setting forth the amount of such decrease;
(iv) Setting
forth, at a date not later than five days prior to the Effective Date, the
amount of liabilities of the Company (including a breakdown of commercial paper
and notes payable to banks and related parties);
(v) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Prospectus in each case to the extent that
such
amounts, numbers, percentages, statements and information may be derived from
the general accounting records, including work sheets, of the Company and
excluding any questions requiring an interpretation by legal counsel, with
the
results obtained from the application of specified readings, inquiries and
other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(vi) Stating
that they have not since the Company’s formation brought to the attention of the
Company’s management any reportable condition related to internal structure,
design or operation as defined in the Statement on Auditing Standards No. 60
“Communication of Internal Control Structure Related Matters Noted in an Audit,”
in the Company’s internal controls; and
(vii) Statements
as to such other matters incident to the transaction contemplated hereby as
you
may reasonably request.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
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of 33
4.4. Officers’
Certificates.
4.4.1. Officers’
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Chairman of
the
Board and Chief Executive Officer of the Company, dated the Closing Date or
the
Option Closing Date, as the case may be, respectively, to the effect that the
Company has performed all covenants and complied with all conditions required
by
this Agreement to be performed or complied with by the Company prior to and
as
of the Closing Date, or the Option Closing Date, as the case may be, and that
the conditions set forth in Section 4.5 hereof have been satisfied as of such
date and that, as of the Closing Date and the Option Closing Date, as the case
may be, the representations and warranties of the Company set forth in Section
2
hereof are true and correct. In addition, the Representative will have received
such other and further certificates of officers of the Company as the
Representative may reasonably request.
4.4.2. Secretary’s
Certificate.
At each
of the Closing Date and the Option Closing Date, if any, the Representative
shall have received a certificate of the Company signed by the Secretary or
Assistant Secretary of the Company, dated the Closing Date or the Option Date,
as the case may be, respectively, certifying: (i) that the Articles of
Incorporation are true and complete, have not been modified and are in full
force and effect; (ii) that the resolutions of the Company’s Board of
Directors relating to the public offering contemplated by this Agreement are
in
full force and effect and have not been modified; (iii) all correspondence
between the Company or its counsel and the Commission; and (iv) as to the
incumbency of the officers of the Company. The documents referred to in such
certificate shall be attached to such certificate.
4.5. No
Material Changes.
Prior
to and on each of the Closing Date and the Option Closing Date, if any:
(i) there shall have been no material adverse change or development
involving a prospective material adverse change in the condition or prospects
or
the business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement
and
Prospectus; (ii) no action suit or proceeding, at law or in equity, shall
have been pending or threatened against the Company or any Initial Shareholder
before or by any court or federal or state commission, board or other
administrative agency wherein an unfavorable decision, ruling or finding may
materially adversely affect the business, operations, prospects or financial
condition or income of the Company, except as set forth in the Registration
Statement and Prospectus; (iii) no stop order shall have been issued under
the Act and no proceedings therefore shall have been initiated or threatened
by
the Commission; and (iv) the Registration Statement and the Prospectus and
any amendments or supplements thereto shall contain all material statements
which are required to be stated therein in accordance with the Act and the
Regulations and shall conform in all material respects to the requirements
of
the Act and the Regulations, and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto shall contain any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.6. Delivery
of Agreements.
4.6.1. Effective
Date Deliveries.
On the
Effective Date, the Company shall have delivered to the Representative executed
copies of this Agreement and the Lock-Up Agreement.
4.6.2. Closing
Date Deliveries.
On the
Closing Date, the Company shall have delivered to the Representative executed
copies of the Representative’s Options and the Shares.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
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4.7 Completion
of Reverse Stock Split.
Prior
to the Applicable Time, the Company shall have completed all necessary corporate
action and filed all necessary certificates or amendments to its Certificate
of
Incorporation with the Secretary of State of the State of Nevada, to effectuate
a reverse stock split on the basis of one share of Common Stock for each 10
shares of Common Stock issued and outstanding prior to the Applicable
Time.
5. Indemnification.
5.1. Indemnification
of Underwriters.
5.1.1
General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters, and each dealer selected by the
Representative that participates in the offer and sale of the Securities (each
a
"Selected Dealer") and each of their respective directors, officers and
employees and each person, if any, who controls any such Underwriter
("Controlling Person") within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all loss, liability, claim, damage
and expense whatsoever (including but not limited to any and all legal or other
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, whether
arising out of any action between any of the Underwriters and the Company or
between any of the Underwriters and any third party or otherwise) to which
they
or any of them may become subject under the Act, the Exchange Act or any other
statute or at common law or otherwise or under the laws of foreign countries,
arising out of or based upon any untrue statement or alleged untrue statement
of
a material fact contained in (i) any Preliminary Prospectus, the Registration
Statement or the Prospectus (as from time to time each may be amended and
supplemented); (ii) any materials or information provided to investors by,
or
with the approval of, the Company in connection with the marketing of the
offering of the Securities, including any "road show" or investor presentations
made to investors by the Company (whether in person or electronically); or
(iii)
any application or other document or written communication (in this Section
5,
collectively called "application") executed by the Company or based upon written
information furnished by the Company in any jurisdiction in order to qualify the
Public Shares under the securities laws thereof or filed with the Commission,
any state securities commission or agency, AMEX or any securities exchange;
or
the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the
circumstances under which they were made, not misleading, unless such statement
or omission was made in reliance upon and in conformity with written information
furnished to the Company with respect to an Underwriter by or on behalf of
such
Underwriter expressly for use in any Preliminary Prospectus, the Registration
Statement or Prospectus, or any amendment or supplement thereof, or in any
application, as the case may be.. With respect to any untrue statement or
omission or alleged untrue statement or omission made in the Preliminary
Prospectus, the indemnity agreement contained in this paragraph shall not inure
to the benefit of any Underwriter to the extent that any loss, liability, claim,
damage or expense of such Underwriter results from the fact that a copy of
the
Prospectus was not given or sent to the person asserting any such loss,
liability, claim or damage at or prior to the written confirmation of sale
of
the Securities to such person as required by the Act and the Regulations, and
if
the untrue statement or omission has been corrected in the Prospectus, unless
such failure to deliver the Prospectus was a result of non-compliance by the
Company with its obligations under Section 3.3 hereof. The Company agrees
promptly to notify the Representative of the commencement of any litigation
or
proceedings against the Company or any of its officers, directors or controlling
persons in connection with the issue and sale of the Public Securities or in
connection with the Registration Statement or Prospectus.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
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of 33
5.1.2. Procedure.
If any action is brought against an Underwriter, a Selected Dealer or a
Controlling Person in respect of which indemnity may be sought against the
Company pursuant to Section 5.1.1, such Underwriter or such Selected Dealer
shall promptly notify the Company in writing of the institution of such action
and the Company shall assume the defense of such action, including the
employment and fees of counsel (subject to the reasonable approval of such
Underwriter or such Selected Dealer, as the case may be) and payment of actual
expenses. Such Underwriter, such Selected Dealer or Controlling Person shall
have the right to employ its or their own counsel in any such case, but the
fees
and expenses of such counsel shall be at the expense of such Underwriter, such
Selected Dealer or controlling person unless (i) the employment of such counsel
at the expense of the Company shall have been authorized in writing by the
Company in connection with the defense of such action, or (ii) the Company
shall
not have employed counsel to have charge of the defense of such action, or
(iii)
such indemnified party or parties shall have reasonably concluded that there
may
be defenses available to it or them which are different from or additional
to
those available to the Company (in which case the Company shall not have the
right to direct the defense of such action on behalf of the indemnified party
or
parties), in any of which events the reasonable fees and expenses of not more
than one additional firm of attorneys selected by the Underwriter, Selected
Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding
anything to the contrary contained herein, if any Underwriter, Selected Dealer
or controlling person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of
such
action which approval shall not be unreasonably withheld.
5.2. Indemnification
of the Company. Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless the Company, its directors, officers and employees and agents
who control the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any and all loss, liability, claim, damage and
expense described in the foregoing indemnity from the Company to the several
Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment or
supplement thereto or in any application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect
to
such Underwriter by or on behalf of the Underwriter expressly for use in such
Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any such application. In case any action
shall be brought against the Company or any other person so indemnified based
on
any Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
|
5.3
|
Contribution.
|
5.3.1. Contribution
Rights. In order to provide for just and equitable contribution under the Act
in
any case in which (i) any person entitled to indemnification under this Section
5 makes claim for indemnification pursuant hereto but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for indemnification in
such case, or (ii) contribution under the Act, the Exchange Act or otherwise
may
be required on the part of any such person in circumstances for which
indemnification is provided under this Section 5, then, and in each such case,
the Company and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Underwriters, as incurred,
in such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial offering price appearing
thereon and the Company is responsible for the balance; provided, that, no
person guilty of a fraudulent misrepresentation (within the meaning of Section
ll (f) of the Act) shall be entitled to contribution from any person who was
not
guilty of such fraudulent misrepresentation. Notwithstanding the provisions
of
this Section 5.3.1, no Underwriter shall be required to contribute any amount
in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay in respect of such losses, liabilities, claims, damages and
expenses. For purposes of this Section, each director, officer and employee
of
an Underwriter or the Company, as applicable, and each person, if any, who
controls an Underwriter or the Company, as applicable, within the meaning of
Section 15 of the Act shall have the same rights to contribution as such
Underwriter or the Company, as applicable.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
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5.3.2. Contribution
Procedure. Within fifteen days after receipt by any party to this Agreement
(or
its representative) of notice of the commencement of any action, suit or
proceeding, such party will, if a claim for contribution in respect thereof
is
to be made against another party ("contributing party1'), notify the
contributing party of the commencement thereof, but the omission to so notify
the contributing party will not relieve it from any liability which it may
have
to any other party other than for contribution hereunder. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a contributing party or its representative of the commencement thereof within
the aforesaid fifteen days, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party
similarly notified. Any such contributing party shall not be liable to any
party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing party. The
contribution provisions contained in this Section are intended to supersede,
to
the extent permitted by law, any right to contribution under the Act, the
Exchange Act or otherwise available. Each Underwriter's obligations to
contribute pursuant to this Section 5.3 are several and not joint.
6. Default
by an Underwriter.
6.1. Default
Not Exceeding 10% of Firm Shares or Option Shares.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Shares or the Option Shares, if the Over-allotment Option
is
exercised, hereunder, and if the number of the Firm Shares or Option Shares
with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Shares or Option Shares that all Underwriters have agreed
to
purchase hereunder, then such Firm Shares or Option Shares to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
6.2. Default
Exceeding 10% of Firm Shares or Option Shares.
In the
event that the default addressed in Section 6.1 relates to more than 10% of
the
Firm Shares or Option Shares, you may in your discretion arrange for yourself
or
for another party or parties to purchase such Firm Shares or Option Shares
to
which such default relates on the terms contained herein. If, within one (1)
Business Day after such default relating to more than 10% of the Firm Shares
or
Option Shares, you do not arrange for the purchase of such Firm Shares or Option
Shares, then the Company shall be entitled to a further period of one (1)
Business Day within which to procure another party or parties satisfactory
to
you to purchase said Firm Shares or Option Shares on such terms. In the event
that neither you nor the Company arrange for the purchase of the Firm Shares
or
Option Shares to which a default relates as provided in this Section 6, this
Agreement will automatically be terminated by you or the Company without
liability on the part of the Company (except as provided in Sections 3.10 and
5
hereof) or the several Underwriters (except as provided in Section 5 hereof);
provided,
however,
that if
such default occurs with respect to the Option Shares, this Agreement will
not
terminate as to the Firm Shares; and provided further that nothing herein shall
relieve a defaulting Underwriter of its liability, if any, to the other
Underwriters and to the Company for damages occasioned by its default hereunder.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
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of 33
6.3. Postponement
of Closing Date.
In the
event that the Firm Shares or Option Shares to which the default relates are
to
be purchased by the non-defaulting Underwriters, or are to be purchased by
another party or parties as aforesaid, you or the Company shall have the right
to postpone the Closing Date or Option Closing Date for a reasonable period,
but
not in any event exceeding five (5) Business Days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus or in any other documents and arrangements, and the Company agrees
to
file promptly any amendment to the Registration Statement or the Prospectus
that
in the opinion of counsel for the Underwriter may thereby be made necessary.
The
term “Underwriter” as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party
to
this Agreement with respect to such Securities.
7. Additional
Covenants.
7.1. Board
Composition and Board Designations.
The
Company shall ensure that: (i) the qualifications of the persons serving as
board members and the overall composition of the board comply with the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated thereunder and with the
listing requirements of the AMEX, NASDAQ or any other national securities
exchange or national securities association, as the case may be, in the event
the Company seeks to have its Public Securities listed on another exchange
or
quoted on an automated quotation system, and (ii) if applicable, at least
one member of the board of directors qualifies as a “financial expert” as such
term is defined under the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules promulgated
thereunder.
7.2. Right
of First Refusal.
The
Company agrees that if the Shares are sold in accordance with the terms of
this
Underwriting Agreement, the Representative shall have an irrevocable
preferential right for a period of twelve (12) months from the date the Offering
is completed to purchase for its account or to sell for the account of the
Company, or any subsidiary of or successor to the Company any securities
(whether debt or equity or any combination thereof) of the Company or any such
subsidiary or successor which the Company or any such subsidiary or successor
may seek to sell whether with or without or through an underwriter, placement
agent or broker-dealer and whether pursuant to registration under the Act or
otherwise. The Company and any such subsidiary or successor will consult the
Representative with regard to any such proposed financing and will offer the
Representative the opportunity to purchase or sell any such securities on terms
not more favorable to the Company or any such subsidiary or successor, as the
case may be, than it or they can secure elsewhere. If the Representative fails
to accept such offer within 10 business days after the mailing of a notice
containing the material terms of the proposed financing proposal by registered
mail or overnight courier service addressed to the Representative, then the
Representative shall have no further claim or right with respect to the
financing proposal contained in such notice. If, however, the terms of such
financing proposal are subsequently modified in any material respect, the
preferential right referred to herein shall apply to such modified proposal
as
if the original proposal had not been made. The Representative's failure to
exercise its preferential right with respect to any particular proposal shall
not affect its preferential rights relative to future proposals. The Company
shall have the right, at its option, to designate the Representative as lead
underwriter or co-manager of any underwriting group or co-placement agent of
any
proposed financing in satisfaction of its obligations hereunder, and the
Representative shall be entitled to receive as its compensation 50% of the
compensation payable to the underwriting or placement agent group when serving
as co-manager or co-placement agent and 33% of the compensation payable to
the
underwriting or placement agent group when serving as co-manager or co-placement
agent with respect to a proposed financing in which there are three co-managing
or lead underwriters or co-placement agents.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
24
of 33
7.3. Prohibition
on Press Releases and Public Announcements.
The
Company will not issue press releases or engage in any other publicity, without
the Representative's prior written consent, for a period ending at 5:00 p.m.
Eastern time on the first business day following the 40th day following the
Closing Date, other than normal and customary releases issued in the ordinary
course of the Company’s business.
8. Effective
Date of this Agreement and Termination Thereof.
8.1. Effective
Date.
This
Agreement shall become effective when both the Company and the Representative
have executed the same and delivered counterparts of such signatures to the
other party.
8.2. Termination.
You
shall have the right to terminate this Agreement at any time prior to any
Closing Date, (i) if any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, general securities markets in the United States;
or
(ii) if trading on the New York Stock Exchange, the AMEX, the NASDAQ Global
Market or the NASDAQ Capital Market shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been fixed, or
maximum ranges for prices for securities shall have been required by FINRA
or by
order of the Commission or any other government authority having jurisdiction,
or (iii) if the United States shall have become involved in a new war or an
increase in major hostilities, or (iv) if a banking moratorium has been
declared by a New York State or federal authority, or (v) if a moratorium
on foreign exchange trading has been declared which materially adversely impacts
the United States securities markets, or (vi) if the Company shall have
sustained a material loss by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or not such
loss shall have been insured, will, in your opinion, make it inadvisable to
proceed with the delivery of the Firm Shares or Option Shares, or (vii) if
the Company is in material breach of any of its representations, warranties
or
covenants hereunder, or (viii) if the Representative shall have become
aware after the date hereof of such a material adverse change in the conditions
or prospects of the Company, or such adverse material change in general market
conditions as in the Representative’s judgment would make it impracticable to
proceed with the offering, sale and/or delivery of the securities or to enforce
contracts made by the Underwriters for the sale of the securities.
8.3. Expenses.
Except
in the case of a default by the Underwriters, pursuant to Section 6.2 above,
in
the event that this Agreement shall not be carried out for any reason
whatsoever, within the time specified herein or any extensions thereof pursuant
to the terms herein, the Company shall be obligated to pay to the Underwriters
their actual and accountable out of pocket expenses related to the transactions
contemplated herein then due and payable (including the fees and disbursements
of ▇▇▇▇▇▇ and ▇▇▇▇▇ up to $85,000).
8.4. Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be
in
any way effected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
9. Miscellaneous.
9.1. Notices.
All
communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed (registered or certified mail, return
receipt requested), personally delivered or sent by facsimile transmission
and
confirmed and shall be deemed given when so delivered or faxed and confirmed
or
if mailed, two days after such mailing.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
25
of 33
If
to the
Representative:
▇▇▇▇▇▇
and ▇▇▇▇▇▇▇, LLC
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Fax
No.:
▇▇▇.▇▇▇.▇▇▇▇
Copy
to:
▇▇▇▇▇▇
and ▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
If
to the
Company:
Skystar
Bio-Pharmaceutical Company.
[_____________________________]
[_____________________________]
Copy
to:
▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ LLP
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇▇
9.2. Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Agreement.
9.3. Amendment.
This
Agreement may only be amended by a written instrument executed by each of the
parties hereto.
9.4. Entire
Agreement.
This
Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof, and supersedes all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
9.5. Binding
Effect.
This
Agreement shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their respective
successors, legal representatives and assigns, and no other person shall have
or
be construed to have any legal or equitable right, remedy or claim under or
in
respect of or by virtue of this Agreement or any provisions herein contained.
The term “successors and assigns” shall not include a purchaser, in its capacity
as such, of securities from any of the Underwriters.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
26
of 33
9.6. Governing
Law.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflict of laws. The
Company hereby agrees that any action, proceeding or claim against it arising
out of, or relating in any way to this Agreement shall be brought and enforced
in the courts of the State of New York of the United States of America for
the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any such process or summons to be served upon the Company may be served
by transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
11 hereof. Such mailing shall be deemed personal service and shall be legal
and
binding upon the Company in any action, proceeding or claim. The Company agrees
that the prevailing party(ies) in any such action shall be entitled to recover
from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the
preparation therefor.
9.7. Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to be
an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto. Delivery of a signed counterpart of this Agreement by facsimile or
email/pdf transmission shall constitute valid and sufficient delivery
thereof.
9.8. Waiver,
etc.
The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way effect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought;
and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
Skystar
Bio-Pharmaceutical Company.
_______________,
2008
Page
27
of 33
If
the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
|
Very
truly yours,
|
||||
|
SKYSTAR
BIO-PHARMACEUTICAL COMPANY
|
||||
|
By:
|
|
|||
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Name:
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▇▇▇▇▇▇▇
▇▇
|
|||
|
Title:
|
Chairman
and Chief Executive Officer
|
|||
|
Accepted
on the date first above written.
|
||||
|
▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, LLC
|
||||
|
By:
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|
|||
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Name:
|
||||
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Title:
|
||||
SCHEDULE
1
EXHIBIT
A
EXHIBIT
B