UNDERWRITING AGREEMENT between SKYSTAR BIO-PHARMACEUTICAL COMPANY and RODMAN & RENSHAW, LLC as Representative
Exhibit
1.1
between
and
XXXXXX
& XXXXXXX, LLC
as
Representative
___________
__, 2009
Xxxxxx
& Xxxxxxx, LLC
1251
Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
The
undersigned, Skystar Bio-Pharmaceutical Company, a company formed under the laws
of Nevada (“Company”),
hereby confirms its agreement with Xxxxxx & Xxxxxxx, 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 Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP, counsel to the Underwriters (“SRFF”), 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.”
(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 SRFF 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], payable 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.
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 Agreement in
the form attached hereto as Exhibit A 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 agreement 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 Agreement 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 Agreement, 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 Agreement
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 ______________ ___, 2009] on the Effective Date
or such other time as agreed to by the Company and the
Representative.
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.
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, Xxxxx Xxxxxxxx
Xxxxx Froger and Xxxxxx 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.
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. When paid for and
issued in accordance with the Representative’s Option Agreement, 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
Agreement has been duly and validly taken.
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 Agreement 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 Agreement 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.
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 Agreement and as contemplated by the Prospectus, except
with respect to applicable federal and state securities laws and regulations 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 that is required to be
disclosed in the Registration Statement and the Prospectus 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 Nasdaq Capital Market.
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 Xxxxxx & Xxxxxx Securities Corporation, a
previously contemplated underwriter, the prior payment of $25,000 to Xxxxxx
& Xxxxxxx LLC, the Representative, and payments to the Underwriters as
provided hereunder in connection with the Offering.
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. To the Company’s knowledge, 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) except as set forth in the
Registration Statement. The Company will advise the Representative
and SRFF 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.
Skystar
Bio-Pharmaceutical Company
_______________,
2009
Page 9 of
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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 pursuant to this Agreement signed
by any duly authorized officer of the Company and delivered to you or to SRFF
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 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
and their affiliated parties 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.
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.
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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 Xxxxxxxx-Xxxxx
Act of 2002 and the rules promulgated thereunder applicable to the Company and
the rules of the Nasdaq Capital Market. At least one member of the
Board of Directors of the Company qualifies as a “financial expert” as such term
is defined under the Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated
thereunder and the rules of the Nasdaq Capital Market. 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 Nasdaq Capital
Market.
2.26. Xxxxxxxx-Xxxxx
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 Xxxxxxxx-Xxxxx 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
Xxxxxxxx-Xxxxx 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.
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.
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Bio-Pharmaceutical Company
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2009
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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 Agreement 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.
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.
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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 SRFF in connection with the Representative’s receipt of such
information. Documents filed with the Commission pursuant to its
XXXXX 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 Nasdaq Capital Market the Company shall provide to the Representative, at its
expense, such reports published by the Nasdaq Capital Market relating to price
trading of the Public Securities, as the Representative shall reasonably
request.
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 and filing of the Registration Statement, the Preliminary
and final Prospectuses and the printing 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, 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 Nasdaq Capital Market; (v) fees and
disbursements of Xxxxxxxxxx & Xxxxx as its counsel and foreign counsel to
the Company; (vi) the cost of up to 20 Lucite cubes or similar
commemorative items in a style reasonably requested by the Representative; (vii)
the cost of the investigative search firm that conducted an investigation of the
principals of the Company in an amount equal to $13,000; (viii) 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 sum of $5,000 for counsel to the
Representative with respect to the qualification and registration of the Shares
under the laws of the various states, provided, however, that the Shares are
accepted for listing on the Nasdaq Capital Market. The Representative
may 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. In the event of
termination, pursuant to Section 8.3 below, the Company shall be obligated to
pay the Underwriters their actual and accountable out of pocket expenses related
to the transactions contemplated herein then due and payable (including fees and
disbursements of SRFF up to $60,000).
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_______________,
2009
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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 Jesup and Xxxxxx Securities Corporation, which 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.
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.
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_______________,
2009
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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 SRFF.
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. Nasdaq
Clearance. On the Closing Date, the Company’s Common Stock,
including the Public Shares, shall have been approved for listing on the Nasdaq
Capital Market.
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.”
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 Xxxxxxxxxx and Xxxxx LLP, counsel to the
Company (“Xxxxxxxxxx
and Xxxxx”), 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.
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_______________,
2009
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(ii) Based
solely as to factual matters on representations and warranties by the Company,
all issued and outstanding securities of the Company have been duly authorized
and validly issued and, to our knowledge, 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 Xxxxxxxxxx and Xxxxx’x 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, to our knowledge, 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 in accordance with the Representative’s
Option, 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.
(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 in accordance with the Representative’s
Option, 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 and the Lock-up Agreements
by the Company 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.
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Bio-Pharmaceutical Company
_______________,
2009
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(vi) The
securities conform in all material respects to the description thereof contained
in the Registration Statement and the Prospectus. To our knowledge,
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
opinion).
(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 Xxxxxxxxxx and Xxxxx 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). The
Registration Statement and the Prospectus and any post-effective amendments or
supplements thereto (other than the financial statements including notes and
schedules, financial data, statistical data and non-United States laws, rules
and regulations included in the Registration Statement or the Prospectus,
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.
(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.
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Bio-Pharmaceutical Company
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2009
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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 Opinions
of Counsel. On the Option Closing Date, if any, the
Representative shall have received the favorable opinion of each counsel listed
in Sections 4.2.1 through 4.2.4, 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
such counsels 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 SRFF if requested. The opinion of Xxxxxxxxxx and Xxxxx
and any opinion relied upon by Xxxxxxxxxx and Xxxxx 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 SRFF 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;
(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;
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Bio-Pharmaceutical Company
_______________,
2009
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(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, 2008 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, 2008 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.
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.
Skystar
Bio-Pharmaceutical Company
_______________,
2009
Page 19 of
27
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.
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 Articles 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.
Skystar
Bio-Pharmaceutical Company
_______________,
2009
Page 20 of
27
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, Nasdaq Capital Market 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.
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.
Skystar
Bio-Pharmaceutical Company
_______________,
2009
Page 21 of
27
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
_______________,
2009
Page 22 of
27
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 affected by such party seeking contribution on account of any
settlement of any claim, action or proceeding affected 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
_______________,
2009
Page 23 of
27
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 Xxxxxxxx-Xxxxx 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
Xxxxxxxx-Xxxxx 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. The right of first
refusal, as described herein, will be terminated in the event the deal is
terminated pursuant to Section 8.2 below.
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.
Skystar
Bio-Pharmaceutical Company
_______________,
2009
Page 24 of
27
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 SRFF up to $60,000).
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
_______________,
2009
Page 25 of
27
If to the
Representative:
Xxxxxx
and Xxxxxxx, LLC
0000
Xxxxxx xx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn: General
Counsel
Fax No.:
000.000.0000
Copy
to:
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
00
Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx, Esq.
Fax:
000.000.0000
If to the
Company:
Skystar
Bio-Pharmaceutical Company.
Rm.
10601, Jiezui Plaza, No. 4, Fenghui Road South
Gaoxin
District, Xi’an, Shaanxi Province, P.R. China
Attn: Xxxxxxx
Xx
Fax:
______________
Copy
to:
Xxxxxxxxxx
and Xxxxx
00000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn:
Xxxxx X. Xxxxx
Fax:
000.000.0000
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
_______________,
2009
Page 26 of
27
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
_______________,
2009
Page 27 of
27
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:
|
||||
|
Name:
|
Xxxxxxx
Xx
|
|||
|
Title:
|
Chairman
and Chief Executive Officer
|
|||
Accepted
on the date first above written.
XXXXXX
& XXXXXXX, LLC
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
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SCHEDULE
1
EXHIBIT
A
FORM OF REPRESENTATIVE
OPTION AGREEMENT
