SERVICES AGREEMENT
This
SERVICES AGREEMENT (this “Agreement”), dated as of April 16, 2010, by and between Skystar
Bio-Pharmaceutical Company, a Nevada corporation (the “Company”), and R. Xxxxx
Xxxxxx, an individual, whose address is 0000 Xxxxx Xxxxx Xxxxxx Xxxx, Xxxxxxx
00000-0000 (the “Consultant”). The Company and the Consultant are collectively
referred to herein as the “Parties.”
RECITALS:
A. The
Consultant is currently a member of the Company’s board of directors (the
“Board”), a position he has held since October 2001, and has been separately and
additionally acting as a United States Representative of the Company (the
“Representative”) since November 2006.
B. The
Parties have previously entered into an agreement setting forth the terms for
the services of the Consultant as the Representative through March 31,
2010.
C. At
the request of the Company, the Consultant has continued to provide services to
the Company as the Representative since April 1, 2010, and the Parties now
desire to memorialize the terms and conditions for said services as set forth in
this Agreement.
NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual agreements
herein contained and for other good and valuable consideration, the parties
hereto agree as follows:
1. Continuing Services as the
Representative. Effective as of April 1, 2010, the Consultant
shall continue to act as the Representative upon the terms and conditions set
forth hereinafter, and in such capacity, shall provide such services as set
forth on attached Annex A and
such other services as may be assigned to him from time to time by the Company’s
Chief Executive Officer (collectively the “Services”). As the Representative,
the Consultant shall report to the Chief Executive Officer during the term of
this Agreement.
2. Compensation. As compensation for the
Services during the Term (as defined in Section 3.1) pursuant to this Agreement,
the Consultant shall be compensated as follows:
2.1 The
Company shall pay the Consultant a fee at an annual rate of $30,000.00, payable
in four (4) equal installments of $7,500.00 every three calendar months, with
the first installment to be paid on June 30, 2010. Payment will be made to the
Consultant via wire transfer, and the Company shall be responsible for any
applicable wire transfer fees.
2.2 Upon
execution of this Agreement, the Consultant will have the right to receive up to
10,000 shares of Common Stock under the Company’s 2010 Stock Incentive Plan
pursuant to the terms of a restricted stock award agreement in the form attached
hereto as Exhibit A (the
“Restricted Stock Agreement”).
2.3 The
Company shall reimburse the Consultant for all reasonable business expenses
incurred by the Consultant during the Term hereunder upon presentation by the
Consultant of such documentation and records as the Company shall request from
time to time require, provided that any expense in excess of $500.00 shall
require the prior written approval of the Company.
2.4 The
Consultant presently serves on the Company’s Board of Directors as a Director.
The Consultant acknowledges that while this Agreement is in effect, the
Consultant will not be entitled to any compensation as a Director.
3 Term and
Termination.
3.1 The
term of this Agreement commences as of April 1, 2010 and shall continue through
March 31, 2011 (the “Term”), unless sooner terminated as herein
provided.
3.2 If
the Consultant dies during the Term, this Agreement shall thereupon terminate,
except that the Company shall pay to the estate of the Consultant any accrued
and unpaid fee due the Consultant pursuant to Section 2.1 hereof, as well as
such number of Shares as provided under the Restricted Stock Agreement, and all
previously accrued but unpaid expense reimbursements under Section 2.3 at the
time of the Consultant’s death.
3.3 The
Company reserves the right to terminate this Agreement upon ten (10) days
written notice if, for a continuous or accumulated period of forty-five (45)
days during the Term, the Consultant is prevented from discharging the Services
due to any physical or mental disability. With the exception of the covenants
included in Section 4 below, upon such termination, the obligations of the
Consultant and the Company under this Agreement shall immediately cease. In the
event of a termination pursuant to this section, the Consultant shall be
entitled to receive any accrued and unpaid amounts earned pursuant to Section
2.1 hereof, as well as such number of Shares as provided under the Restricted
Stock Agreement, and all previously accrued but unpaid expense reimbursements
under Section 2.3 at the time of termination.
3.4 The
Company reserves the right to declare the Consultant in default of this
Agreement if the Consultant willfully breaches or habitually neglects the
Services which he is required to perform under the terms of this Agreement, or
if the Consultant commits such acts of dishonesty, fraud, misrepresentation,
gross negligence or willful misconduct as would prevent the effective
performance of the Services or which results in material harm to the Company or
its business. The Company may terminate this Agreement for cause by giving
written notice of termination to the Consultant. With the exception of the
covenants included in Sections 4 and 5 below, upon the date of delivery of the
written notice of such termination, the obligations of the Consultant and the
Company under this Agreement shall immediately cease. Such termination shall be
without prejudice to any other remedy to which the Company may be entitled
either at law, in equity, or under this Agreement. In the event of a termination
pursuant to this section, the Consultant shall be entitled to receive any
accrued and unpaid amounts earned pursuant to Section 2.1 hereof. The Company
shall also pay to the Consultant all previously accrued but unpaid expense
reimbursements under Section 2.3 at the time of termination.
3.5 The
Company may terminate the Consultant’s employment upon not less than thirty (30)
days written notice by the Company to the Consultant. With the exception of the
covenants included in Sections 4 and 5 below, upon such termination the
obligations of the Consultant and the Company under this Agreement shall
immediately cease. In the event of a termination pursuant to this section, the
Consultant shall be entitled to receive any accrued and unpaid amounts earned
pursuant to Section 2.1 hereof, as well as such number of Shares as provided
under the Restricted Stock Agreement, and all previously accrued but unpaid
expense reimbursements under Section 2.3 at the time of
termination.
4 Protection of Confidential
Information.
4.1 The
Consultant acknowledges that:
(a) As
a result of his association with the Company pursuant to this Agreement and
otherwise, the Consultant may obtain secret and confidential information
concerning the business of the Company and its subsidiaries and affiliates
(referred to collectively in this Section 4.1 as the “Group”), including,
without limitation, trade secrets and any information concerning products,
processes, formulas, designs, inventions (whether or not patentable or
registrable under copyright or similar laws, and whether or not reduced to
practice), discoveries, concepts, ideas, improvements, techniques, methods,
research, development and test results, specifications, data, know-how,
software, formats, marketing plans, and analyses, business plans and analyses,
strategies, forecasts, customer and supplier identities, characteristics and
agreement (“Confidential Information”). In addition, the Consultant may become
aware of business opportunities that may be beneficial to the Group including,
but not limited, opportunities to acquire or purchase, or, except for Permitted
Competitive Investments (as defined in Section 4.4), otherwise make equity or
debt investments in, companies primarily involved in a Competitive Business
(“Corporate Opportunities”), during the Term, whether in the course of
performing the Services or otherwise, and that such Corporate Opportunities
shall considered to be business opportunities of the Group.
(b) The
Group will suffer substantial damage which will be difficult to compute if,
during the Term or thereafter, the Consultant should divulge Confidential
Information.
(c)
The provisions of this Agreement are reasonable and necessary for the protection
of the business of the Group.
4.2 The
Consultant agrees that he will not at any time, either during the term of this
Agreement or thereafter, divulge to any person or entity any Confidential
Information obtained or learned by him as a result of his employment with the
Group, except (i) in the course of performing the Services, (ii) to the extent
that any such information is in the public domain other than as a result of the
Consultant’s breach of any of his obligations hereunder, (iii) where required to
be disclosed by court order, subpoena or other government process, or (iv) if
such disclosure is made without Consultant’s knowing intent to cause material
harm to the Group. If the Consultant shall be required to make disclosure
pursuant to the provisions of clause (iii) of the preceding sentence, the
Consultant promptly, but in no event more than 24 hours after learning of such
subpoena, court order, or other government process, shall notify, by personal
delivery or by electronic means, confirmed by mail, the Company and, at the
Company’s expense, the Consultant shall: (a) take reasonably necessary and
lawful steps required by the Group to defend against the enforcement of such
subpoena, court order or other government process, and (b) permit the Group to
intervene and participate with counsel of its choice in any proceeding relating
to the enforcement thereof.
4.3 Upon
termination of this Agreement, the Consultant will promptly deliver to the Group
all memoranda, correspondence, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof) relating to the business
of the Group and all property associated therewith, which he may then possess or
have under his control during the course of performing the Services, whether
prepared by the Consultant or others.
4.4 During
the Term and terminating one year after the Consultant ceases to serve on the
Company’s Board of Directors, the Consultant, without the prior written
permission of the Company, shall not for any reason whatsoever, (i) enter into
the employ of or render any services to any person, firm or corporation engaged
in any business which is in competition with the Group’s principal existing
business at the time of termination (“Competitive Business”); (ii) engage in any
Competitive Business as an individual, partner, shareholder, creditor, director,
officer, principal, agent, employee, trustee consultant, advisor or in any other
relationship or capacity; (iii) employ, or have or cause any other person or
entity to employ, any person who was employed by the Group at the time of
termination of the Consultant’s employment by the Company; or (iv) solicit,
interfere with, or endeavor to entice away from the Group, for the benefit of a
Competitive Business, any of its customers. Notwithstanding the foregoing, (i)
the Consultant shall not be precluded from investing and managing the investment
of, his or his family’s assets in the securities of any corporation or other
business entity which is engaged in a Competitive Business if such securities
are traded on a national stock exchange or in the over-the-counter market and if
such investment does not result in his beneficially owning, at any time, more
than 2% of any class of the publicly-traded equity securities of such
Competitive Business (“Permitted Competitive Investment”); and (ii) during the
term of this Agreement and terminating one year after the Consultant ceases to
serve on the Company’s Board of Directors (except for investments in a class of
securities trading on public markets), the Consultant: (a) shall be prohibited
from taking for himself personally any Corporate Opportunities, and (b) shall
refer to the Company for consideration (before any other party) any and all
Corporate Opportunities that arise during the term of this Agreement or for a
period of one year thereafter. If the Company determines not to exploit any
Corporate Opportunity, the Company shall determine what, if anything, should be
done with such opportunity. The Consultant shall not be entitled to any
compensation, as a finder or otherwise, if either the Company or the Consultant
introduces such opportunity to other persons, it being understood that any such
compensation shall be paid to the Company.
4.5 If
the Consultant commits a breach of any of the provisions of Section 4.2 or 4.4,
the Company shall have the right:
(a) to
have the provisions of this Agreement specifically enforced by any court having
equity jurisdiction, it being acknowledged and agreed by the Consultant that the
services being rendered hereunder to the Company are of a special, unique and
extraordinary character and that any breach or threatened breach will cause
irreparable injury to the Group and that money damages will not provide an
adequate remedy to the Group;
(b) to
require the Consultant to account for and pay over to the Company all monetary
damages determined by a non-appealable decision by a court of law to have been
suffered by the Group as the result of any actions constituting a breach of any
of the provisions of Section 4.2 or 4.4, and the Consultant hereby agrees to
account for and pay over such damages to the Company; and
(c) to
not perform any obligation owed to the Consultant under this Agreement, to the
fullest extent permitted by law. The Company shall also have the right, to the
fullest extent permitted by law, to adjust any amount due and owing or to be due
and owing to the Consultant, whether under this Agreement or any other agreement
between the Company and the Consultant in order to satisfy any losses to the
Group as a result of Consultant’s breach.
4.6 If
the Consultant shall violate any covenant contained in Section 4.4, the duration
of such covenant so violated shall be automatically extended for a period of
time equal to the period of such violation.
5. Consultant’s
Representations. The Consultant represents that the entering
into and performance of this Agreement by will not violate any law, rule,
regulation, order, contract or agreement to which the Consultant is a party or
is bound or affected.
6. Miscellaneous
Provisions.
6.1 The
Parties acknowledge and agree that the relationship between the Company and the
Consultant is that of independent contractors and not that of employer and
employee. Nothing in this Agreement is intended to create or will be deemed to
create or constitute a joint venture or partnership between the Company and the
Consultant.
6.2 The
Consultant will be responsible for the payment of all withholding, payroll and
other taxes payable in respect of the payments received by the Consultant under
this Agreement and hereby agrees to indemnify and hold the Company harmless from
any obligation or penalty arising from the failure to pay such
taxes.
6.3 All
notices provided for in this Agreement shall be in writing, and shall be deemed
to have been duly given when delivered personally to the party to receive the
same, when delivered via overnight courier providing for next day delivery
service (“Overnight Courier”), when transmitted by facsimile (electronic receipt
confirmed), or when mailed first class postage prepaid, by certified mail,
return receipt requested, addressed to the party to receive the same at his or
its address set forth below, or such other address as the party to receive the
same shall have specified by written notice given in the manner provided for in
this Section 6.3. All notices shall be deemed to have been given: (a) as of the
date of personal delivery, (b) the first business day after delivery via
Overnight Courier, (c) on the electronically confirmed date of receipt during
business hours of the facsimile transmittal (or the following business day if
the facsimile is received after 5:30 p.m. PDT), or (d) three calendar days after
the date of deposit (postage pre-paid) with the U.S. Postal Service if delivered
via first class or certified mail.
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If
to the Consultant:
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R.
Xxxxx Xxxxxx
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0000
Xxxxx Xxxxx
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Xxxxxx
Xxxx, XX 00000-0000
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If
to the Company:
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Xxxx
00000, Xxxxxx Xxxxx
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Xx.
0, Xxxxxxx Xxxx Xxxxx
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Xxxxxx
Xxxxxxxx, Xxxx Xxxxxxxx, PRC
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Attn:
Xxxxxxx Xx
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With
a copy (which
will
not constitute
notice)
to:
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Xxxxxxxxxx
& Xxxxx, LLP
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, XX 00000
Attn:
Xxxxx X. Xxxxx, Esq.
Fax:
(000)
000-0000
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6.4 The
provisions of Sections 4 and 5, and any provisions relating to payments owed to
the Consultant after termination of this Agreement, shall survive termination of
this Agreement for any reason.
6.5 This
Agreement sets forth the entire agreement of the Parties relating to the
Services of the Consultant and is intended to supersede all prior negotiations,
understandings and agreements. No provisions of this Agreement may be waived or
changed except by writing by the party against whom such waiver or change is
sought to be enforced. The failure of any party to require performance of any
provision hereof or thereof shall in no manner affect the right at a later time
to enforce such provision.
6.6 All
questions with respect to the construction of this Agreement, and the rights and
obligations of the parties hereunder, shall be determined in accordance with the
law of the State of Nevada applicable to agreements made and to be performed
entirely in the State of Nevada. Any disputes, claims or causes of action by one
party against the other arising out of, in related to or concerning this
Agreement shall be commenced and maintained in any state or federal court
located in Xxxxx County of the State of Nevada, and the Consultant hereby
submits to the jurisdiction and venue of any such court.
6.7 This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company. This Agreement shall not be assignable by the
Consultant, but shall inure to the benefit of and be binding upon the
Consultant’s heirs and legal representatives.
6.8 It
is the desire and intent of the parties that the terms, provisions, covenants
and remedies contained in this Agreement shall be enforceable to the fullest
extent permitted by law. If any such term, provision, covenant or remedy of this
Agreement or the application thereof to any person or circumstances shall, to
any extent, be construed to be invalid or unenforceable in whole or in part,
then such term, provision, covenant or remedy shall be construed in a manner so
as to permit its enforceability under the applicable law, to the fullest extent
permitted by law. In any case, the remaining provisions of the Agreement and the
application thereof to any person or circumstance other than those to which they
have been held invalid or unenforceable, shall remain valid and in full force
and effect.
[Remainder
of Page Intentionally Blank]
IN WITNESS WHEREOF, the parties have
executed this Consulting Services Agreement as of the date first above
written.
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“COMPANY”
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“CONSULTANT”
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SKYSTAR
BIO-PHARMACEUTICAL
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COMPANY
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R.
Xxxxx Xxxxxx
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By:
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/s/ Xxxxxxx Xx
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/s/ R. Xxxxx Xxxxxx
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R.
Xxxxx Xxxxxx
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Title:
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Chief
Executive Officer
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ADDENDUM
A TO CONSULTING SERVICES AGREEMENT
During
the Term, the Consultant shall perform the following services, in addition to
such other services as may be assigned to him by the Company’s Chief Executive
Officer from time to time during the Term:
a. Answer
inquiries from Company shareholders;
b. When
required by the Company, attend and present at investor conferences or
meetings;
c. Maintain
a bank account on behalf of the Company for the purpose of paying any
obligations of the Company; however, any payment from such bank account must
have the prior written consent of the Company’s Chief Executive Officer and
Chief Financial Officer;
d. Review,
research, recommend investor relations firms and agreements with any such firms,
and manage communications with such firms;
e. Review
the Company’s press releases and the content of the Company’s
website;
f. Assist
the Company with fee negotiations for any U.S.-based services;
g. Serve
as a Company contact person in the U.S.; and
h. Assist
the Company with any financing efforts.
