AMENDMENT,
      EXCHANGE AND WAIVER AGREEMENT

    


    THIS
      AMENDMENT, EXCHANGE AND WAIVER AGREEMENT (this “Amendment”) is made and entered
      into this as of the 9th day of November, 2007, by and among Skystar
      Bio-Pharmaceutical Company, a Nevada corporation (the “Company”), and the
      undersigned Buyers. Capitalized terms used but not defined herein shall have
      the
      meanings set forth in that certain Securities Purchase Agreement, the
      Registration Rights Agreement, the Convertible Debentures and/or the Warrants
      (defined in the Recitals below).

    


    RECITALS:

     

    WHEREAS,
      reference is made to that certain Securities Purchase Agreement dated as of
      February 26, 2007 (the “Securities Purchase Agreement”), by and among the
      Company and the Buyers, and the Registration Rights Agreement (the “Registration
      Rights Agreement”) dated as of February 26, 2007 by the same parties, and the 8%
      Convertible Debentures (the “Convertible Debentures”) and the Warrants (the
“Warrants”) issued pursuant thereto (collectively the “Transaction Documents”);


    


    WHEREAS,
      pursuant to the Registration Rights Agreement, the Company has incurred certain
      payment obligations (the “Registration Damages”) to the Buyers arising from the
      delay in the filing by the Company with the Securities and Exchange Commission
      (“SEC”) of a resale registration statement to register the Initial Number of
      Shares to Be Registered (the “Late Filing”), and the delay in having the
      Registration Statement declared effective by the SEC (the “Late Effectiveness”);


    


    WHEREAS,
      the Company has proposed that the Buyers waive the Registration Damages relating
      to both the Late Filing and the Late Effectiveness and that the Company and
      the
      Buyers exchange the Buyers’ Convertible Debentures and Warrants for new
      convertible debentures (“New Convertible Debentures”) and new warrants (“New
      Warrants”), respectively, on the terms set forth below (the “Proposal”), which
      Proposal is acceptable to the Buyers;

    


    WHEREAS,
      certain amendments to the Transaction Documents are necessary to effectuate
      the
      Proposal;

    


    WHEREAS,
      the Company and the Buyers signatory hereto are executing and delivering this
      Amendment in reliance upon the exemption from securities registration for offers
      and sales to accredited investors afforded, inter alia,
      by
      Section 3(a)(9) of the Securities Act of 1933, as amended (the “1933 Act”) and
      Rule 506 under Regulation D (“Regulation D”) as promulgated by the United States
      Securities and Exchange Commission (the “SEC”) under the 1933 Act and/or Section
      4(2) of the 1933 Act; and

    


    WHEREAS,
      the undersigned Buyers represent, in the aggregate, holders of at least
      $2,600,000 of the current outstanding principal of the Convertible Debentures;
      

    


    NOW,
      THEREFORE, in consideration of the foregoing recitals and the mutual agreements
      herein contained and for other good and valuable consideration, the parties
      hereto agree as follows:

     

    
      
        
        

      

      
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    A.
       AMENDMENT;
      EXCHANGE; WAIVER.
       

    


    (1) (a) Each
      Buyer signatory to this Amendment (i) agrees that such Buyer will make no claims
      for damages or for default under any of the Transaction Agreement on account
      of
      the Late Filing and/or the Late Effectiveness and (ii) waives any claim for
      Periodic Amounts or other Registration Damages or for default under any of
      the
      Transaction Agreements with respect to the Late Filing and/or the Late
      Effectiveness. 

    


    (b) Each
      of
      the Buyers signatory to this Amendment, if such Buyers represent a Majority
      in
      Interest of the Holders (as that term is used in the Registration Rights
      Agreement) as of the date hereof, hereby agrees that the Company shall be deemed
      to have satisfied all of its covenants under Sections 2 and 3 of the
      Registration Rights Agreement with respect to causing the registration of the
      Initial Number
      of
      Shares to Be Registered (as defined in the Registration Rights Agreement) by
      the
      Initial Required Effective Date; provided, however, that the Company’s ongoing
      obligations, such as, but not limited to, its obligation to maintain such
      registration and its indemnification obligations shall remain in full force
      and
      effect.

    


    (c) Each
      of
      the Buyers signatory to this Amendment, if such Buyers represent a Majority
      in
      Interest of the Holders as of the date hereof, hereby agrees that the exchange
      of securities referred to herein shall not constitute a New Transaction (as
      that
      term is defined in the Securities Purchase Agreement).

    


    (2) The
      Company and each Buyer signatory to this Amendment hereby agree to exchange
      (a)
      such Buyer’s outstanding Convertible Debenture for a New Convertible Debenture
      having the terms specified below in the principal amount of such outstanding
      Convertible Debenture (provided, further, that accrued but unpaid interest
      on
      the outstanding Convertible Debenture will also be payable under the New
      Convertible Debenture) and (b) such Buyer’s outstanding Warrant for a New
      Warrant having the terms specified below for the purchase of the same number
      of
      shares of Common Stock as provided in the outstanding Warrant. The Buyer is
      not
      providing any other consideration for such exchange and no fees are payable
      to
      any broker in connection with such exchange. The exchange is being made under
      Section 3(a)(9) of the 1933 Act. 

    


    (3) Each
      New
      Convertible Debenture shall have the same terms as the outstanding Convertible
      Debenture, except as follows: 

    


    
      	 	
              (a)
                in Section 4(A)(iii), the definition of “Fixed Conversion Price” shall
                read in its entirety as follows:

            


    

    


    “Fixed
      Conversion Price” means the amount equal to $0.85 (such amount is subject to
      adjustment as provided herein).

    


    
      	 	
              and

            


    

    


    
      	 	
              (b)
                with respect to Section 4(G), (i) each of Sections 4(G)(ii) through
                (iv)
                are identified as “Intentionally omitted” and all references to those
                subsections are deemed deleted; (ii) the Company will have the right
                to
                issue a Mandatory Conversion Notice at any time, and (iii) if the
                Company
                issues a Mandatory Conversion Notice, the Company may designate any
                date
                on or after the date of such Mandatory Conversion Notice as the Mandatory
                Conversion Date.

            


    

     

    
      
        
        

      

      
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    The
      New
      Convertible Debenture will be deemed represented by the original Convertible
      Debenture as amended by this Amendment.

    


    (4) Each
      New
      Warrant shall have the same terms as the outstanding Warrant, except as follows:
      

    


    
      	 	
              (a)
                in Section 1, the phrase “at
                an initial exercise price per share (the ‘Exercise Price’) of $1.20 per
                share, subject to further adjustment as set forth herein” is replaced in
                its entirety to read “at
                an initial exercise price per share (the ‘Exercise Price’) of $0.95 per
                share, subject to further adjustment as set forth
                herein.”

            


    

    


    
      	 	
              and

            


    

    


    
      	 	
              (b)
                Section 2.1(b) shall read in its entirety as
                follows:

            


    

    


    
      	 	 	
              (b)
                If
                the Notice of Exercise form elects a “cashless” exercise, the Holder shall
                thereby be entitled to receive a number of shares of Common Stock
                based on
                the application of the following formula;


            


    

    


    X=Y
      (A-B)

             
      A

     

    Where X= the
      number of shares of Common Stock to be issued to the Buyer;

    


    
      	 	
              Y=

            	
              the
                number of shares of Common Stock purchasable under the Warrant or,
                if only
                a portion of the Warrant is being exercised, the portion of the Warrant
                being exercised (at the date of such
                calculation);

            


    

     

    
      	 	
              A=

            	
              the
                Fair Market Value (as defined herein) of one share of the Company’s Common
                Stock (at the date of delivery of such
                exercise).

            


    

     

    
      	 	
              B=

            	
              Exercise
                Price.

            


    

     

    “Fair
      Market Value” shall mean

     

    (a) If
      the
      Company's Common Stock is traded on an exchange or is quoted on the National
      Association of Securities Dealers, Inc. Automated Quotation
      ("NASDAQ")
      Capital,
      Global or Global Select Markets or the American Stock Exchange, LLC, then the
      closing or last sale price, respectively, reported for the Trading Day
      immediately preceding the relevant Exercise Date;

     

    (b) If
      the
      Company's Common Stock is not traded on an exchange or on the NASDAQ
Capital,
      Global or Global Select Markets or the American Stock Exchange, Inc., but is
      traded in the over-the-counter market, then the average of the closing bid
      and
      ask prices reported for the trading day immediately preceding the Exercise
      Date;
      or

     

    
      
        
        

      

      
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    (c) If
      the
      Company's Common Stock is not publicly traded, then as the Holder and the
      Company agree, or in the absence of such an agreement, by arbitration in
      accordance with the rules then standing of the American Arbitration Association,
      before a single arbitrator to be chosen from a panel of persons qualified by
      education and training to pass on the matter to be decided.

     

    The
      New
      Warrant will be deemed represented by the original Warrant as amended by this
      Amendment.

    


    (5) The
      Company and each Buyer signatory hereto hereby agrees that this Amendment shall
      be deemed to be the Company’s issuance of a Mandatory Conversion Notice with
      respect to all of the outstanding principal and all accrued but unpaid interest
      on the Buyer’s New Convertible Debenture, which amount shall be set forth next
      to the Buyer’s name on the attached Schedule
      A.
      Such
      conversion shall be effected at the Fixed Conversion Price as specified in
      the
      New Convertible Debenture. The date designated for such conversion shall be
      the
      effective date of this Amendment and such date shall be deemed a Conversion
      Date
      for purposes of the New Convertible Debenture.

    


    (6) The
      Company and each Buyer signatory hereto hereby agrees that this Amendment shall
      be deemed to be each Buyer’s Notice of Exercise with respect to all of the
      unexercised warrants of such Buyer on the Buyer’s New Warrant, which amount
      shall be set forth next to the Buyer’s name on the attached Schedule
      A.
      Such
      exercise shall be effected at the Exercise Price as specified in the New Warrant
      and on a cashless basis as described in Section 4(b) of this Amendment. The
      date
      designated for such exercise shall be the effective date of this Amendment
      and
      such date shall be deemed an Exercise Date for purposes of the New
      Warrant.

    


    (7) (a)
      The
      Company will file a Current Report on Form 8-K (or other form deemed appropriate
      by Company counsel) to reflect the changes in the terms of the debentures and
      warrants held by the Buyers and to the terms of other Transaction Agreements
      amended hereby. 

    


    (b)
      The
      Company represents that the current effective Registration Statement (in the
      form filed with the SEC on September 13, 2007) covering the registration of
      Registrable Securities (as defined in the Registration Rights Agreement)
      continues to be effective with respect to the resale of shares issued to the
      Buyers signatory hereto (i) on conversion of the Convertible Debentures
      converted prior to the effectiveness of this Amendment and (ii) on conversion
      of
      the New Convertible Debentures (in each case, including shares issued on
      conversion of interest). All such shares are “Debenture Shares” (as that term is
      used in the Registration Statement) and each Buyer may sell such shares, up
      to
      the number specified opposite such Buyer’s name under the column “Number of
      Shares Being Offered” in the Registration Statement, pursuant to such
      Registration Statement. 

    


    (8) The
      Company confirms to each Buyer signatory to this Amendment, and, in connection
      with the effectiveness of this Amendment, will deliver to each such Buyer an
      opinion of counsel to the Company, that (i) the holding period for the New
      Convertible Debentures and any shares issued on conversion of principal or
      interest thereof commenced on the Closing Date (as defined in the Securities
      Purchase Agreement) and (ii) the holding period for the shares issued to the
      holder in connection with the cashless exercise of the New Warrants commenced
      on
      the Closing Date.

     

    
      
        
        

      

      
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    (9) Anything
      herein to the contrary notwithstanding, this Amendment shall be effective only
      if it is executed by Buyers holding outstanding Convertible Debentures having,
      in the aggregate, current principal balance of at least $2,600,000 no later
      than
      October 31, 2007. 

    


    (10) Except
      as
      expressly set forth herein, this Amendment shall not be deemed to be a
      waiver, amendment or modification of any provisions of the Transaction
      Documents, or of any right, power or remedy of the Buyers, or constitute a
      waiver, amendment or modification of any provision of the Transaction
      Documents (except to the extent herein set forth), or any other document,
      instrument and/or agreement executed or delivered in connection therewith,
      in
      each case whether arising before or after the date hereof or as a result of
      performance hereunder or thereunder, all of which (except as specified herein)
      remain in full force and effect. Except as set forth herein, the Buyers
      reserve all rights, remedies, powers, or privileges.

    


    B. CONFLICTS.
      Except
      as expressly set forth in this Amendment, the terms and provisions of each
      of
      the Transaction Documents shall continue unmodified and in full force and
      effect. In the event of any conflict between this Amendment and any one of
      the
      Transaction Documents, this Amendment shall control.

    


    C. GOVERNING
      LAW.
      This
      Amendment shall be governed and construed under the laws of the State of New
      York, and shall be binding on and shall inure to the benefit of the parties
      and
      their respective successors and permitted assigns.

    


    D. COUNTERPARTS.
      This
      Amendment may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together shall constitute one instrument.
A
      facsimile or other electronic transmission of this signed Amendment shall be
      legal and binding on all parties hereto.

     

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    IN
      WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
      date
      first set forth above.

     

    COMPANY:

    


    Skystar
      Bio-Pharmaceutical Company

    


    By:     
      _____________________________

    


    Name: _____________________________

    


    Title:   _____________________________

    


    



    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
      date
      first set forth above.

     

    BUYERS:

    


    [BUYER
      NAME]

     

    By:  
         _____________________________  

    


    Name: _____________________________

    


    Title: 
       _____________________________

     


    
      
        
        

      

      
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