Document:

EMPLOYMENT
      AGREEMENT

    

     

    This
      EMPLOYMENT AGREEMENT (this “Agreement”),
      dated
      as of May 5, 2008 by and between Weibing Lu, residing at
      ____________________________ (“Executive”),
      and
      Skystar Bio-Pharmaceutical Company a Nevada corporation having its principal
      office at Room 10601, Jiezuo Plaza, No. 4, Fenghui Road South, Gaoxin District,
      Xian Province, People’s Republic of China (the “Company”).

     

    WHEREAS,
      the Company believes that Executive provides unique advisory and management
      services for the Company and wishes to retain the continued services of
      Executive as its Chief Executive Officer; and

     

    WHEREAS,
      the Company and Executive have reached an understanding with respect to
      Executive’s continuing employment with the Company for a [five year period]
      commencing as of the date of this Agreement; and

     

    WHEREAS,
      the Company and Executive desire to evidence their agreement in writing and
      to
      provide for the employment of Executive by the Company on the terms set forth
      herein.

     

    NOW,
      THEREFORE, IN CONSIDERATION of the foregoing facts, the mutual covenants and
      agreements contained herein and other good and valuable consideration, the
      parties hereby agree as follows:

     

    1.  Employment,
      Duties and Acceptance.

     

    1.1  Effective
      as of the date of this Agreement, the Company hereby agrees to the continued
      employment of Executive as its Chief Executive Officer, and Executive hereby
      accepts such employment on the terms and conditions contained in this Agreement.
      During the term of this Agreement, Executive shall make himself available to
      the
      Company and to any of its subsidiaries or affiliates as directed to pursue
      the
      business of the Company subject to the supervision and direction of the Board
      of
      Directors of the Company (the “Board”
or
      “Board
      of Directors”).

     

    1.2  The
      Board
      may assign Executive such general management and supervisory responsibilities
      and executive duties for the Company as are appropriate and commensurate with
      Executive’s position as Chief Executive Officer of the Company (“CEO”).
      

     

    1.3  Executive
      accepts such employment and agrees to devote substantially all of his business
      time, energies and attention to the performance of his duties hereunder and
      as
      an executive officer or director of subsidiaries of the Company. Nothing herein
      shall be construed as preventing Executive from making and supervising
      investments on a personal or family basis (including trusts, funds and
      investment entities in which Executive or members of his family have an
      interest); provided, however, that these activities do not materially interfere
      with the performance of his duties hereunder or violate the provisions of
      Section 4.4
      hereof.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    2.  Compensation
      and Benefits.

     

    2.1  The
      Company shall pay to Executive a salary at an annual base rate of not less
      than
      $100,000 for the term hereof, subject to increases of 5% of the prior year’s
      base annual salary each year beginning January 1, 2009. During Executive’s
      employment, salary will be paid not less frequently than every two weeks without
      the prior written consent of Executive. Executive’s annual base rate will be
      reviewed by the Compensation Committee during December 2009, for purposes of
      determining whether the new base salary should be augmented to reflect
      prevailing market conditions.

     

    2.2  The
      Company shall also pay to Executive such bonuses as may be determined from
      time
      to time by the Compensation Committee. The amount of annual bonus payable to
      Executive may vary at the discretion of the Compensation Authority; provided,
      however, that the total bonus shall not exceed 100% of Executive’s annual base
      rate under Section 2.1
      as of
      the date the bonus is awarded. In determining the annual bonus to be paid to
      Executive, the Compensation Committee may, among other factors they believe
      to
      be appropriate, consider, and give varying degrees of importance to, Executive’s
      contribution to the following:

     

    (a)  achievement
      by the Company of specific identified targets selected by the Committee from
      time to time;

     

    (b)  the
      attraction and retention of key executive personnel by the Company;

     

    (c)  satisfaction
      of the Company’s capital requirements;

     

    (d)  the
      establishment of strategic direction and significant Company goals;

     

    (e)  growth
      in
      the Company’s per share value; and

     

    (f)  such
      other criteria as the Compensation Committee deems to be relevant.

     

    2.3  Executive
      shall be entitled to such insurance and other benefits including, among others,
      medical and disability coverage and life insurance comparable to chief executive
      officers of companies similar to the Company, subject to applicable waiting
      periods and other conditions which may be generally applicable. 

     

    2.4  Executive
      shall be entitled to four weeks of vacation in each calendar year.

     

    2.5  The
      Company will pay or reimburse Executive for all reasonable or otherwise duly
      authorized transportation, hotel and other expenses incurred by Executive on
      business trips (including business or first class air travel on scheduled
      flights of more than five (5) consecutive hours) and for all other ordinary
      and
      reasonable out-of-pocket expenses actually incurred by him in the conduct of
      the
      business of the Company against itemized vouchers submitted with respect to
      any
      such expenses.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    3.  Term
      and Termination.

     

    3.1  The
      term
      of this Agreement commences as of the consummation of the Agreement and shall
      continue for five (5) years unless sooner terminated as herein
      provided.

     

    3.2  If
      Executive dies during the term of this Agreement, this Agreement shall thereupon
      terminate, except that the Company shall pay to the legal representative of
      Executive’s estate the base salary due Executive pursuant to Section 2.1 hereof
      through the first anniversary after Executive’s death (or the scheduled
      expiration under Section 3.1, if earlier than the first anniversary date) as
      well as a pro rata allocation of bonus payments under Section 2.2 based on
      the
      days of service during the year of death, and all amounts owing to Executive
      at
      the time of termination, including for previously accrued but unpaid bonuses,
      expense reimbursements and accrued but unused vacation pay.

     

    3.3  If
      Executive shall be rendered incapable by an incapacitating illness or disability
      (either physical or mental) of complying with the terms, provisions and
      conditions hereof on his part to be performed for a period in excess of 180
      consecutive days during any consecutive twelve (12) month period, then the
      Company, at its option, may terminate this Agreement by written notice to
      Executive (the “Disability
      Notice”)
      delivered prior to the date Executive resumes the rendering of services
      hereunder; provided, however, if requested by Executive (or a representative
      thereof) such termination shall not occur until after examination of Executive
      by a medical doctor (retained by the Company with the consent of Executive
      which
      consent shall not be unreasonably withheld) who certifies in a written report
      to
      the Board with a copy of such report delivered simultaneously to Executive
      that
      Executive is and shall be incapable of performing his duties for in excess
      of
      two additional months because of the continuing existence of such incapacitating
      illness or disability. Notwithstanding such termination, the Company (a) shall
      make a payment to Executive of a pro rata allocation of payments under Section
      2.2 based on the days of service during the year in which the Disability Notice
      is delivered and (b) shall pay to Executive the base salary due Executive
      pursuant to Section 2.1 hereof through the second anniversary of the date of
      such notice (the “Disability
      Period”),
      less
      any amount Executive receives for such period from any Company-sponsored or
      Company-paid for source of insurance, disability compensation or governmental
      program. The Company shall also pay to Executive all amounts owing to Executive
      at the time of termination, including for previously accrued but unpaid bonuses,
      expense reimbursements and accrued but unused vacation pay.

     

    3.4  The
      Company, by notice to Executive, may terminate this Agreement for Cause. As
      used
      herein, “Cause”
means
      (a) the refusal in bad faith by Executive to carry out specific written
      directions of the Board, (b) intentional fraud or dishonest action by Executive
      in his relations with the Company, (“dishonest” for these purposes shall mean
      Executive’s knowingly making of a material misstatement to the Board for the
      purpose of obtaining direct personal benefit); (c) the conviction of Executive
      of any crime involving an act of significant moral turpitude after appeal or
      the
      period for appeal has elapsed without an appeal being filed by Executive (d)
      any
      act (or failure to act), knowingly committed by Executive, that is in violation
      of written Company policies, this Agreement or the Company’s written agreements
      with third parties and that is materially damaging to the business or reputation
      of the Company as determined in good faith by the independent members of the
      Board. Notwithstanding the foregoing, no Cause for termination shall be deemed
      to exist with respect to Executive’s acts described in clause (a) or (b) or (d)
      above, unless the Board shall have given written notice to Executive (after
      five
      (5) days advance written notice to Executive and a reasonable opportunity to
      Executive to present his views with respect to the existence of Cause),
      specifying the Cause with particularity and, within twenty (20) business days
      after such notice, Executive shall not have disputed the Board’s determination
      or in reasonably good faith taken action to cure or eliminate prospectively
      the
      problem or thing giving rise to such Cause, provided, however, that a repeated
      breach after notice and cure, of any provision of clause (a), (b) or (d) above,
      involving the same or substantially similar actions or conduct, shall be grounds
      for termination for cause upon not less than five (5) days additional notice
      from the Company.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    3.5  Executive,
      by notice to the Company, may terminate this Agreement if a Good Reason exists.
      For purposes of this Agreement, “Good
      Reason”
means
      the occurrence of any of the following circumstances without Executive’s prior
      express written consent: (a) a material adverse change in the nature of
      Executive’s title, duties or responsibilities with the Company that represents a
      demotion from his title, duties or responsibilities as in effect immediately
      prior to such change; (b) a material breach of this Agreement by the Company;
      (c) a failure by the Company to make any payment to Executive when due, unless
      the payment is not material and is being contested by the Company, in good
      faith; (d) any person or entity other than shareholders of the Company and/or
      any officers or directors of the Company as of the date of this Agreement
      acquires securities of the Company other than from Executive or his affiliates
      (in one or more transactions) having 51% or more of the total voting power
      of
      all the Company’s securities then outstanding.

     

    Notwithstanding
      the foregoing, no Good Reason shall be deemed to exist with respect to the
      Company’s acts described in clauses (a), (b) or (c) above, unless Executive
      shall have given written notice to the Company specifying the Good Reason with
      reasonable particularity and, within twenty (20) business days after such
      notice, the Company shall not have cured or eliminated the problem or thing
      giving rise to such Good Reason; provided, however, that a repeated breach
      after
      notice and cure of any provision of clauses (a), (b) or (c) above involving
      the
      same or substantially similar actions or conduct, shall be grounds for
      termination for Good Reason without any additional notice from
      Executive.

     

    3.6  In
      the
      event that Executive terminates this Agreement for Good Reason, pursuant to
      the
      provisions of paragraph 3.5, or the Company terminates this Agreement without
      Cause, as defined in paragraph 3.4, the Company shall continue to pay to
      Executive (or in the case of his/her death, the legal representative of
      Executive’s estate or such other person or persons as Executive shall have
      designated by written notice to the Company), all payments, compensation and
      benefits required under paragraph 2 hereof through the earlier of (y) two (2)
      years from the date of termination or (z) through the term of this Agreement;
      provided, however, that Executive’s insurance coverage shall terminate upon
      Executive becoming covered under a similar program by reason of employment
      elsewhere. If Executive’s employment is terminated for Good Reason or without
      Cause, Executive shall have no duty to mitigate awards paid or payable to him
      pursuant to this subsection, and any compensation paid or payable to Executive
      from sources other than the Company will not offset or terminate the Company’s
      obligation to pay to Executive the full amounts pursuant to this subsection
      3.6.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    4.  Protection
      of Confidential Information; Non-Competition, Corporate
      Opportunities.

     

    4.1  Executive
      acknowledges that:

     

    (a)  As
      a
      result of his current employment with the Company, Executive will obtain secret
      and confidential information concerning the business of the Company and its
      subsidiaries and affiliates (referred to collectively in this Article 4 as
      the
      (“Company”),
      including, without limitation, financial information, designs and other
      proprietary rights, trade secrets and know-how, customers and sources
      (“Confidential
      Information”),
      and
      that the business opportunities of which Executive becomes aware to undertake
      or
      participate in municipal and infrastructure planning projects and related
      development investments, including BT or BOT investments and financing
      opportunities related thereto, and to acquire or purchase, or, except for
      Permitted Competitive Investments, otherwise make equity or debt investments
      in,
      companies primarily involved in a Competitive Business if such opportunities
      become known to Executive while he is an employee of Company, whether in the
      course of his employment, his Approved Academic and Civic Activities or
      otherwise, are considered to be business opportunities of the Company
      (“Corporate
      Opportunities”).

     

    (b)  The
      Company will suffer substantial damage which will be difficult to compute if,
      during the period of his employment with the Company or thereafter, Executive
      should enter a business competitive with the Company or divulge Confidential
      Information.

     

    (c)  The
      provisions of this Agreement are reasonable and necessary for the protection
      of
      the business of the Company.

     

    4.2  Executive
      agrees that he will not at any time, either during the term of this Agreement
      or
      thereafter, divulge to any person or entity any Confidential Information
      obtained or learned by him as a result of his employment with the Company,
      except (i) in the course of performing his duties hereunder, (ii) to
      the extent that any such information is in the public domain other than as
      a
      result of Executive’s breach of any of his obligations hereunder,
      (iii) where required to be disclosed by court order, subpoena or other
      government process or (iv) if such disclosure is made without Executive’s
      knowing intent to cause material harm to the Company. If Executive shall be
      required to make disclosure pursuant to the provisions of clause (iii) of the
      preceding sentence, Executive promptly, but in no event more than 72 hours
      after
      learning of such subpoena, court order, or other government process, shall
      notify, by personal delivery or by electronic means, confirmed by mail, the
      Company and, at the Company’s expense, Executive shall: (a) take reasonably
      necessary and lawful steps required by the Company to defend against the
      enforcement of such subpoena, court order or other government process, and
      (b)
      permit the Company to intervene and participate with counsel of its choice
      in
      any proceeding relating to the enforcement thereof.

     

    4.3  Upon
      termination of his employment with the Company, Executive will promptly deliver
      to the Company all memoranda, notes, records, reports, manuals, drawings,
      blue-prints and other documents (and all copies thereof) relating to the
      business of the Company and all property associated therewith, which he may
      then
      possess or have under his control; provided, however, that Executive shall
      be
      entitled to retain one copy of such documents for his personal use and
      records.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    4.4  During
      the term of this Agreement and terminating three years after termination of
      employment, Executive, without the prior written permission of the Company,
      shall not for any reason whatsoever, anywhere in the People’s Republic of China,
      (i) enter into the employ of or render any services to any person, firm or
      corporation engaged in any business which is in competition with the Company’s
      principal existing business at the time of termination (“Competitive
      Business”);
      (ii)
      engage in any Competitive Business as an individual, partner, shareholder,
      creditor, director, officer, principal, agent, employee, trustee consultant,
      advisor or in any other relationship or capacity; (iii) employ, or have or
      cause
      any other person or entity to employ, any person who was employed by the Company
      at the time of termination of Executive’s employment by the Company (other than
      Executive’s personal secretary and assistant); or (iv) solicit, interfere with,
      or endeavor to entice away from the Company, for the benefit of a Competitive
      Business, any of its customers. Notwithstanding the foregoing, (i) Executive
      shall not be precluded from investing and managing the investment of, his or
      his
      family’s assets in the securities of any corporation or other business entity
      which is engaged in a Competitive Business if such securities are traded on
      a
      national stock exchange or in the over-the-counter market and if such investment
      does not result in his beneficially owning, at any time, more than 2% of any
      class of the publicly-traded equity securities of such Competitive Business
      (“Permitted Competitive
      Investment”);
      and
      (ii) during the term of this Agreement and terminating one year after
      termination of Executive’s employment (except for investments in a class of
      securities trading on public markets), Executive shall refer to the Company
      for
      consideration (before any other party) any and all Corporate Opportunities
      that
      arise during the term of this Agreement or for a period of one year thereafter.
      If the Company determines not to exploit any Corporate Opportunity, the Company
      shall determine what, if anything, should be done with such opportunity.
      Executive shall not be entitled to any compensation, as a finder or otherwise,
      if either the Company or Executive introduces such opportunity to other persons,
      it being understood that any such compensation shall be paid to the Company.
      Notwithstanding the foregoing, in the event the Company terminates this
      Agreement without cause or if Executive terminates this Agreement for Good
      Reason under Section 3.5 hereof, Executive’s obligations under this Section 4.4
      shall terminate immediately upon such event.

     

    4.5  If
      Executive commits a breach of any of the provisions of Sections 4.2 or 4.4,
      the
      Company shall have the right:

     

    (a)  to
      have
      the provisions of this Agreement specifically enforced by any court having
      equity jurisdiction, it being acknowledged and agreed by Executive that the
      services being rendered hereunder to the Company are of a special, unique and
      extraordinary character and that any breach or threatened breach will cause
      irreparable injury to the Company and that money damages will not provide an
      adequate remedy to the Company; and

     

    (b)  to
      require Executive to account for and pay over to the Company all monetary
      damages determined by a non-appealable decision by a court of law to have been
      suffered by the Company as the result of any actions constituting a breach
      of
      any of the provisions of Section 4.2 or 4.4, and Executive hereby agrees to
      account for and pay over such damages to the Company (up to the maximum of
      all
      payments made under the Agreement). 

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (c)  to
      not
      perform any obligation owed to Executive under this Agreement, to the fullest
      extent permitted by law. Company shall also have the right, to the fullest
      extent permitted by law, to adjust any amount due and owing or to be due and
      owing to Executive, whether under this Agreement or any other agreement between
      Company and Executive in order to satisfy any losses to Company as a result
      of
      Executive’s breach.

     

    4.6  If
      Executive shall violate any covenant contained in Section 4.4, the duration
      of
      such covenant so violated shall be automatically extended for a period of time
      equal to the period of such violation.

     

    4.7  If
      any
      provision of Sections 4.2 or 4.4 is held to be unenforceable because of the
      scope, duration or area of its applicability, the tribunal making such
      determination shall not have the power to modify such scope, duration, or area,
      or all of them and such provision or provisions shall be void ab
      initio.

     

    5.  Miscellaneous
      Provisions.

     

    5.1  All
      notices provided for in this Agreement shall be in writing, and shall be deemed
      to have been duly given when delivered personally to the party to receive the
      same, when transmitted by electronic means, or when mailed first class postage
      prepared, by certified mail, return receipt requested, addressed to the party
      to
      receive the same at his or its address set forth below, or such other address
      as
      the party to receive the same shall have specified by written notice given
      in
      the manner provided for in this Section 5.1. All notices shall be deemed to
      have
      been given as of the date of personal delivery, transmittal or mailing
      thereof.

     

    
      	
            	If
              to Executive:	
              Weibing
                Lu

            

      	 	 	
              Room
                10601, Jiezuo Plaza, No. 4

            

      	 	 	
              Fenghui
                Road South

            

      	 	 	
              Gaoxin
                District, Xian Province, China

            

      	 	 	Fax:

      	 	 	 

      	 	If to the
              Company:	
              Skystar
                Bio-Pharmaceutical Company

            

      	 	 	
              Room
                10601, Jiezuo Plaza, No. 4

            

      	 	 	
              Fenghui
                Road South

            

      	 	 	
              Gaoxin
                District, Xian Province, China

            

      	 	 	Fax:

    

    

    5.2  In
      the
      event of any claims, litigation or other proceedings arising under this
      Agreement (including, among others, arbitration under Section 3.4), Executive
      shall be reimbursed by the Company within thirty (30) days after delivery to
      the
      Company of statements for the costs incurred by Executive in connection with
      the
      analysis, defense and prosecution thereof, including reasonable attorneys’ fees
      and expenses; provided, however, that Executive shall reimburse the Company
      for
      all such costs if it is determined by a non-appealable final decision of a
      court
      of law that Executive shall have acted in bad faith with the intent to cause
      material damage to the Company in connection with any such claim, litigation
      or
      proceeding.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    5.3  The
      Company, shall to the fullest extent permitted by law, indemnify Executive
      for
      any liability, damages, losses, costs and expenses arising out of alleged or
      actual claims (collectively, “Claims”)
      made
      against Executive for any actions or omissions as an officer and/or director
      of
      the Company or its subsidiary. To the extent that the Company obtains director
      and officers insurance coverage for any period in which Executive was an
      officer, director or consultant to the Company, Executive shall be a named
      insured and shall be entitled to coverage thereunder.

     

    5.4  The
      provision of Article 4, Sections 5.2 and 5.3 and any provisions relating to
      payments owed to Executive after termination of employment shall survive
      termination of this Agreement for any reason.

     

    5.5  This
      Agreement sets forth the entire agreement of the parties relating to the
      employment of Executive and is intended to supersede all prior negotiations,
      understandings and agreements. No provisions of this Agreement may be waived
      or
      changed except by a writing by the party against whom such waiver or change
      is
      sought to be enforced. The failure of any party to require performance of any
      provision hereof or thereof shall in no manner affect the right at a later
      time
      to enforce such provision.

     

    5.6  All
      questions with respect to the construction of this Agreement, and the rights
      and
      obligations of the parties hereunder, shall be determined in accordance with
      the
      law of the British Virgin Islands applicable to agreements made and to be
      performed entirely in the British Virgin Islands.

     

    5.7  This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      assigns of the Company. This Agreement shall not be assignable by Executive,
      but
      shall inure to the benefit of and be binding upon Executive’s heirs and legal
      representatives.

     

    5.8  Should
      any provision of this Agreement become legally unenforceable, no other provision
      of this Agreement shall be affected, and this Agreement shall continue as if
      the
      Agreement had been executed absent the unenforceable provision.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Employment Agreement as of
      the
      date first above written.

     

    
      	
              “COMPANY”

            	
              “EXECUTIVE”

            
	 	 
	
              SKYSTAR
                BIO-PHARMACEUTICAL COMPANY

            	
              WEIBING
                LU 

            
	 	 
	
              By:
                /s/
                Weibing
                Lu                                              
                

            	
              By:
                /s/
                Weibing
                Lu                                                      

            
	 	 
	
              Title:
                Chairman
                of the Board of Directors        
                

            	
               

            

    

     

    
 

    

    
      
        
        

      

      
        9WARRANT
        AGREEMENT

      

      Skystar
        Bio-Pharmaceutical Company

      

      and

      

      [_____________________]

      Warrant
        Agent

      

      [__________],
        2008

      
 

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      

      WARRANT
        AGREEMENT

      

      THIS
        AGREEMENT dated as of [__________], 2008, between Skystar Bio-Pharmaceutical
        Company, a Nevada corporation (the "Company"), and [__________], a transfer
        agency located in Glendale, California (the "Warrant Agent").

      

      WHEREAS:

      

      The
        Company proposes to issue and, along with certain selling security holders,
        sell, through a public offering (the "Public Offering"), [__________] units
        of
        the Company's securities (the "Units"), with each Unit consisting of one
        share
        of common stock of the Company, $0.001 par value per share ("Common Stock"),
        and
        a warrant to purchase one quarter of one share of Common Stock (each a "Firm
        Warrant");

      

      The
        Company also has granted the one of the two underwriters (the "Underwriters")
        of
        the Company's Public Offering pursuant to an underwriting agreement (the
        "Underwriting Agreement"), a 45-day option to purchase up to an additional
        [__________] Units consisting of in the aggregate [__________] shares of
        Common
        Stock and [__________] Warrants (the "Over-Allotment Warrants") exercisable
        to
        purchase up to an aggregate of [__________] shares of Common Stock
        (“Over-Allotment Option”); and 

      

      The
        Company desires to provide for the issuance, registration, transfer, exchange
        and exercise of certificates (the "Warrant Certificates") representing the
        Firm
        Warrants and the Over-Allotment Warrants (collectively, herein, the "Warrants")
        and for the exercise of the Warrants;

      

      NOW,
        THEREFORE, in consideration of the premises and the mutual agreements
        hereinafter set forth and for the purpose of defining the terms and provisions
        of the Warrant Certificates and the Warrants, and the respective rights and
        obligations thereunder of the Company, the registered holders of the Warrant
        Certificates and the Warrant Agent, the parties hereto agree as follows:
        

      

      1.
        Definitions.
        As used
        herein:

      

      (a)
        "Common Stock" shall mean the Common Stock of the Company, whether now or
        hereafter authorized, holders of which have the right to participate in the
        distribution of earnings and assets of the Company without limit as to amount
        or
        percentage.

      

      (b)
        "Corporate Office" shall mean the place of business of the Warrant Agent
        (or its
        successor) located in [city, state], which office is presently located at
        [__________].

      

      (c)
        "Effective Date" shall mean [__________], 2008, the date on which the Company's
        Registration Statement is declared effective by the Securities and Exchange
        Commission.

      

      (d)
        "Exercise Date" shall mean the date of surrender for exercise of any Warrant
        Certificate, provided such surrender takes place during the Exercise Period,
        the
        exercise form on the back of the Warrant Certificate or a form substantially
        similar thereto has been completed in full by the Registered Owner or a duly
        appointed attorney and the Warrant Certificate is accompanied by payment
        in full
        of the Exercise Price.

      

      (e)
        "Exercise Period" shall mean the period commencing on the Separation Date
        and
        extending to and through the Expiration Date. 

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      (f)
        "Exercise Price" shall mean a purchase price of $[__________] per one quarter
        share of Common Stock; provided, however, that in the event the Company reduces
        the Exercise Price in accordance with Section 9(i) hereof, the Exercise Price
        shall be as established by the Company in accordance with such Section; and
        provided further, however, that
        Warrants may only be exercised in whole numbers for whole shares of Common
        Stock,
        so that
        the Exercise Price per whole share of Common Stock shall be
        $[__________].

      

      (g)
        "Expiration Date" shall mean 5:00 P.M. Eastern Time on the last day of the
        [_____]th month period commencing on the Effective Date, subject to the terms
        provided in Section 5 herein for redemption and subject to extension by the
        Board of Directors of the Company; provided however, if such date shall be
        a
        holiday or a day on which banks are authorized to close, then Expiration
        Date
        shall mean 5:00 p.m., Eastern Time on the next following day which in the
        State
        of [New York] is not a holiday or a day on which banks are authorized to
        close.
        The Expiration Date may be extended from time to time, by resolution of the
        Board of Directors of the Company, to a later date upon giving notice to
        the
        Warrant Agent and the Registered Owners; provided, however, that notice to
        the
        Registered Owners of an extension of the Expiration Date may be made by
        publication or by release to [Dow Jones, P.R. Newswire] or other means of
        general distribution. If the Company redeems the Warrants as provided in
        Section
        5 of this agreement, the Expiration Date shall be the date fixed for
        redemption.

      

      (h)
        "Firm
        Warrants" shall mean [__________] Warrants to purchase [__________] shares
        of
        Common Stock, all of which will be purchased as part of the Units by the
        Underwriters from the Company and sold in the Public Offering in accordance
        with
        the Underwriting Agreement. 

      

      (i)
        "Over-Allotment Warrants" shall mean [__________] Warrants to purchase
        [__________] shares of Common Stock, any or all of which may be purchased
        as
        part of the Units by the Representative for the Underwriters from the Company
        in
        accordance with the Underwriting Agreement. The Over-Allotment Warrants shall
        have identical terms and conditions to those established for the Firm Warrants,
        subject to their issuance in accordance with Section 2 hereof.

      

      (j)
        "Representative" shall mean Jesup & Lamont Securities Corporation, the
        representative of the Underwriters.

      

      (k)
        "Registered Owner" shall mean the person in whose name any Warrant Certificate
        shall be registered on the books maintained by the Warrant Agent pursuant
        to
        Section 6 of this Agreement.

      

      (l)
        "Registration Statement" shall mean the Company's Registration Statement
        on Form
        S-1 (S.E.C. File No. [__________]), as amended. 

      

      (m)
        "Separation
        Date" shall mean a date on which the Units shall separate into their component
        Common Stock and Warrants, such date to be 6 months following the Effective
        Date
        unless separate trading is authorized earlier by the Representative, whereupon
        the Company will issue a press release announcing that separate trading will
        begin. Prior to the Separation Date, the Warrants may not be exercised and
        the
        shares of Common Stock and the Warrants comprising the Units may not be detached
        or separately traded.

      

      (n)
        "Subsidiary" shall mean any corporation of which shares having ordinary voting
        power to elect a majority of the Board of Directors of such corporation
        (regardless of whether the shares of any other class or classes of such
        corporation shall have or may have voting power by reason of the happening
        of
        any contingency) is at the time directly or indirectly owned by the Company
        or
        one or more subsidiaries of the Company.

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (o)
        "Warrant" or the "Warrants" shall mean and include up to [__________] Warrants
        to purchase [__________] authorized and unissued Shares of Common Stock of
        the
        Company and, unless otherwise noted, shall include [__________] Firm Warrants
        and [__________] Over-Allotment Warrants. 

      

      (p)
        "Warrant Agent" shall mean [__________], or its successor, as the transfer
        agent
        and registrar of the Warrants. 

      

      (q)
        "Warrant Shares" shall mean and include up to [__________] authorized and
        unissued shares of Common Stock reserved for issuance on exercise of the
        Warrants, and unless otherwise noted, shall include [__________] shares of
        Common Stock issuable upon exercise of the Firm Warrants and [__________]
        shares
        of Common Stock issuable upon exercise of the Over-Allotment Warrants and
        any
        additional shares of Common Stock or other property which may hereafter be
        issuable or deliverable on exercise of the 

      Warrants
        pursuant to Section 9 of this Agreement.

      

      2.
        Warrants
        and Issuance of Warrant Certificates.
        Each
        Warrant shall initially entitle the Registered Owner of the Warrant Certificates
        representing such Warrant to purchase one quarter of one share of Common
        Stock
        on exercise thereof, subject to modification and adjustment as hereinafter
        provided in Section 9; and provided that Warrants may only be exercised in
        whole
        numbers for whole shares of Common Stock. Warrant Certificates representing
        [__________] Firm Warrants and evidencing the right to purchase an aggregate
        of
        [__________] shares of Common Stock of the Company shall be executed by the
        proper officers of the Company and delivered to the Warrant Agent for
        countersignature. Certificates representing the Firm Warrants to be delivered
        to
        the Warrant Agent shall be in direct relation to the Firm Shares sold as
        a Unit
        in the Company's Public Offering and shall be attached to certificates
        representing such corresponding number of Firm Shares. The Warrant Certificates
        representing the Firm Warrants will be issued and delivered on written order
        of
        the Company signed by its President and attested by its Secretary or Assistant
        Secretary. The Warrant Agent shall deliver Warrant Certificates in required
        whole number denominations to the persons entitled thereto in connection
        with
        any transfer or exchange permitted under this Agreement.

      

      The
        Over-Allotment Warrants shall be identical to the Firm Warrants, as described
        herein. Up to [__________] Over-Allotment Warrants may be issued and such
        Over-Allotment Warrants shall evidence the right of the Registered Owners
        thereof to purchase an aggregate of up to [__________] shares of Common Stock
        of
        the Company. Any Warrant Certificates for Over-Allotment Warrants to be issued
        will be executed by the proper officers of the Company and delivered to the
        Warrant Agent for countersignature on exercise of the option to purchase
        Over-Allotment Warrants by the Underwriters in accordance with the Underwriting
        Agreement. 

      

      Except
        as
        provided in Section 8 hereof, share certificates representing the Warrant
        Shares
        shall be issued only on or after the Separation Date on exercise of the Warrants
        or on transfer or exchange of the Warrant Shares. The Warrant Agent, if other
        than the Company's Transfer Agent, shall arrange with the Transfer Agent
        for the
        issuance and registration of all Warrant Shares. 

      

      The
        Warrants are exercisable in even numbers, for whole shares of the Company’s
        Common Stock. In the case of the exercise of less than all the Warrants
        represented in a Certificate, the Warrant Agent shall cancel the Certificate
        upon the surrender thereof and shall deliver a new Warrant Certificate or
        Warrant Certificates of like tenor, which the Warrant Agent shall countersign,
        for the balance of such Warrants. In the case that the attempted exercise
        of all
        of the Warrants represented thereby would require the issuance of a fractional
        share of Common Stock, the Warrants shall be deemed to have been exercised
        for
        the nearest whole number of shares of Common Stock into which the Warrants
        may
        be exercised. No half shares or fractional shares will be issued by the Company.
        The Warrant Agent shall not permit the exercise of any Warrants for fractional
        share of Common Stock. 

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      3.
        Form
        and Execution of Warrant Certificates.
        The
        Warrant Certificates shall be substantially in the form attached as Exhibit
        "A"
        and may have such letters, numbers or other marks of identification and such
        legends, summaries or endorsements printed, lithographed or engraved thereon
        as
        the Company may deem appropriate and as are not inconsistent with the provisions
        of this Agreement. The Warrant Certificates shall be dated as of the date
        of
        issuance, whether on initial issuance, transfer, exchange or in lieu of
        mutilated, lost, stolen or destroyed Warrant Certificates.

      

      Each
        Warrant Certificate for Firm Warrants shall be initially issued only when
        attached to a certificate representing the corresponding number of Firm Shares
        of Common Stock sold as per Unit and shall be separately transferable from
        the
        certificate representing Firm Shares only on and after the Separation Date.
        Warrant Certificates issued for Over-Allotment Warrants shall be issued together
        with certificates representing the corresponding number of shares of Common
        Stock sold as per Unit and shall be separately transferable only on and after
        the Separation Date. 

      

      The
        Warrant Certificates shall be executed on behalf of the Company by its President
        and Secretary, by manual signatures or by facsimile signatures printed thereon,
        and shall have imprinted thereon a facsimile of the Company's seal. The Warrant
        Certificates shall be manually countersigned by the Warrant Agent and shall
        not
        be valid for any purpose unless so countersigned. In the event any officer
        of
        the Company who executed the Warrant Certificates shall cease to be an officer
        of the Company before the date of issuance of the Warrant Certificates or
        before
        countersignature and delivery by the Warrant Agent, such Warrant Certificates
        may be countersigned, issued and delivered by the Warrant Agent with the
        same
        force and effect as though the person who signed such Warrant Certificates
        had
        not ceased to be an officer of the Company. 

      

      4.
        Exercise.
        The
        exercise of Warrants in accordance with this Agreement shall only be permitted
        during the Exercise Period. 

      

      Warrants
        shall be deemed to have been exercised immediately prior to the close of
        business on the Exercise Date. The exercise form shall be executed by the
        Registered Owner thereof or his attorney duly authorized in writing and shall
        be
        delivered together with payment to the Warrant Agent, in cash or by official
        bank or certified check, of an amount in lawful money of the United States
        of
        America. Such payment shall be in an amount equal to the Exercise Price as
        hereinabove defined.

      

      The
        person entitled to receive the number of Warrant Shares deliverable on such
        exercise shall be treated for all purposes as the Registered Owner of such
        Warrant Shares as of the close of business on the Exercise Date. The Company
        shall not be obligated to issue any fractional share interests in Warrant
        Shares. If Warrants represented by more than one Warrant Certificate shall
        be
        exercised at one time by the same Registered Owner, the number of full Warrant
        Shares which shall be issuable on exercise thereof shall be computed on the
        basis of the aggregate number of full Warrant Shares issuable on such exercise.
        

      

      As
        soon
        as practicable on or after the Exercise Date and in any event within 30 days
        after such date, the Warrant Agent shall cause to be issued and delivered
        by the
        Transfer Agent to the person or persons entitled to receive the same, a
        certificate or certificates for the number of Warrant Shares deliverable
        on such
        exercise. No adjustment shall be made in respect of cash dividends on Warrant
        Shares deliverable on exercise of any Warrant. The Warrant Agent shall promptly
        notify the Company, in writing, of any exercise and of the number of Warrant
        Shares caused to be delivered, and shall cause payment of an amount in cash
        equal to the Exercise Price to be made promptly to the order of the Company.
        The
        parties contemplate such payments will be made by the Warrant Agent to the
        Company on a weekly basis and will consist of collected funds only. The Warrant
        Agent shall hold any proceeds collected and not yet paid to the Company in
        a
        Federally-insured account at a commercial bank selected by agreement of the
        Company and the Warrant Agent, at all times relevant hereto. Following a
        determination by the Warrant Agent that collected funds have been received,
        the
        Warrant Agent shall cause the Transfer Agent to issue share certificates
        representing the number of Warrant Shares purchased by the Registered Owner.
        

      

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      Expenses
        incurred by the Warrant Agent, including administrative costs, costs of
        maintaining records and other expenses, shall be paid by the Company according
        to the standard fees imposed by the Warrant Agent for such services. All
        expenses incurred by the Warrant Agent shall be invoiced to the Company.
        

      

      A
        detailed accounting statement setting forth the number of Warrants exercised,
        the number of Warrant Shares issued, the net amount of exercised funds and
        all
        expenses incurred by the Warrant Agent shall be transmitted to the Company
        on
        payment of each exercise amount. Such accounting statement shall serve as
        an
        interim accounting for the Company during the Exercise Period. The Warrant
        Agent
        shall render to the Company, at the completion of the Exercise Period, a
        complete accounting setting forth the number of Warrants exercised, the identity
        of persons exercising such Warrants, the number of Warrant Shares issued,
        the
        amounts distributed to the Company, and all expenses incurred by the Warrant
        Agent.

      

      [At
        any
        time upon exercise of Warrants commencing one (1) year following the Effective
        Date and during the Exercise Period, if (i) the Market Price (as hereinafter
        defined) of the Company’s Common Stock is equal to or greater than the Exercise
        Price, (ii) the exercise of the Warrant is solicited by an Underwriter at
        a time
        when such Underwriter is a member of the National Association of Securities
        Dealers, Inc., (iii) the Warrant is not held in a discretionary account,
        and
        (iv) the solicitation of the Warrant is not in violation of Regulation M
        promulgated under the Securities Exchange Act of 1934, then the soliciting
        Underwriter shall be entitled to receive from the Company upon exercise of
        each
        Warrant so exercised, a fee of five percent (5%) of the aggregate price of
        the
        Warrants so exercised (the “Exercise Fee”). Within five (5) days after the end
        of each month commencing one (1) year following the Effective Date, the Warrant
        Agent shall notify the Representative of each Warrant Certificate which has
        been
        properly completed for exercise by holders of Warrants during the preceding
        month. The Warrant Agent will provide the Representative with the following
        information in connection with the exercise of each Warrant: the Exercise
        Date;
        the name of the soliciting Underwriter and such other information as the
        Representative shall reasonably request that is available from the records
        of
        the Warrant Agent. The Company hereby authorizes and instructs the Warrant
        Agent
        to deliver to the soliciting Underwriter(s), if known to the Warrant Agent,
        or
        to the Representative if not so known, the Exercise Fee, prior to payment
        to the
        Company of the net proceeds of the exercise of such Warrant. The Representative
        may, at any time commencing one (1) year following the Effective Date and
        continuing until six (6) months following expiration of the Exercise Period,
        during business hours, examine the records of the Warrant Agent, including
        its
        ledger of original Warrant Certificates returned to the Warrant Agent upon
        the
        exercise of Warrants, in order to allow the Representative to confirm the
        aggregate Exercise Fee to which it is entitled hereunder. Notwithstanding
        any
        provision of this Agreement to the contrary, the provisions of this paragraph
        may not be amended, modified or deleted without the prior written consent
        of the
        Representative.] 

      

      The
        Company may be required to deliver a prospectus that satisfies the requirements
        of Section 10 of the Securities Act of 1933, as amended (the "1933 Act")
        with
        delivery of the Warrant Shares and must have a registration statement (or
        a
        post-effective amendment to an existing registration statement) effective
        under
        the 1933 Act in order for the Company to comply with any such prospectus
        delivery requirements. The Company will advise the Warrant Agent of the status
        of any such registration statement under the 1933 Act and of the effectiveness
        of the Company's registration statement or lapse of effectiveness. 

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      No
        issuance of Warrant Shares shall be made unless there is an effective
        registration statement under the 1933 Act, and registration or qualification
        of
        the Warrant Shares, or an exemption therefrom, has been obtained from state
        or
        other regulatory authorities in the jurisdiction in which such Warrant Shares
        are sold. The Company will provide to the Warrant Agent written confirmation
        of
        all such registration or qualification, or an exemption therefrom, when
        requested by the Warrant Agent.

      

      5.
        Redemption.
        Commencing from the Effective Date, the Company may, at its sole discretion,
        redeem the Warrants in whole, but not in part, for a redemption price of
        $0.01
        per Warrant, on not less than 30 days' notice to the Registered Owners. The
        right to redeem the Warrants may be exercised by the Company during the Exercise
        Period only in the event (i) the closing sale price for the Company's shares
        of
        Common Stock has equaled or exceeded $[__________] per share for 20 consecutive
        trading days within a 30 trading day period ending on the third business
        day
        prior to a 30-day notice of redemption is sent to the Registered Owners,
        (ii)
        the Company has a registration statement (or a post-effective amendment to
        an
        existing registration statement) pertaining to the Warrant Shares effective
        with
        the Securities and Exchange Commission, which registration statement would
        enable a Registered Owner to receive upon exercise, one or more certificates
        evidencing the Warrant Shares, without legend restricting the transferability
        of
        such Warrant Shares, and (iii) the expiration of the 30-day notice period
        is
        within the Exercise Period. In the event the Company exercises its right
        to
        redeem the Warrants, the Expiration Date will be deemed to be, and the Warrants
        will be exercisable until the close of business on, the date fixed for
        redemption in such notice. If any Warrant called for redemption is not exercised
        by such time, it will cease to be exercisable and the Registered Owner thereof
        will be entitled only to the redemption price. 

      

      6.
        Reservation
        of Shares and Payment of Taxes.
        The
        Company covenants that it will at all times reserve and have available from
        its
        authorized shares of Common Stock such number of shares of Common Stock as
        shall
        then be issuable on exercise of all outstanding Warrants. The Company covenants
        that all Warrant Shares issuable shall be duly and validly issued, fully
        paid
        and nonassessable, and free from all taxes, liens and charges with respect
        to
        the issue thereof.

      

      The
        Registered Owner shall pay all documentary, stamp or similar taxes and other
        government charges that may be imposed with respect to the issuance of the
        Warrants, or the issuance, transfer or delivery of any Warrant Shares on
        exercise of the Warrants. In the event the Warrant Shares are to be delivered
        in
        a name other than the name of the Registered Owner of the Warrant Certificates,
        no such delivery shall be made unless the person requesting the same has
        paid to
        the Warrant Agent or Transfer Agent the amount of any such taxes or charges
        incident thereto.

      

      The
        Company will supply the Warrant Agent with blank Warrant Certificates, so
        as to
        maintain an inventory satisfactory to the Warrant Agent. The Company will
        file
        with the Warrant Agent a statement setting forth the name and address of
        its
        Transfer Agent for Warrant Shares and of each successor Transfer Agent, if
        any.

      

      7.
        Registration
        of Transfer.
        The
        Warrant Certificates may be transferred in whole or in part and may be
        separately transferred from the Common Stock share certificate to which such
        Warrant Certificate is attached only following the Separation Date and during
        the Exercise Period. Warrant Certificates to be exchanged shall be surrendered
        to the Warrant Agent at its corporate office. The Company shall execute and
        the
        Warrant Agent shall countersign, issue and deliver in exchange therefor,
        the
        Warrant Certificate or Certificates that the holder making the transfer shall
        be
        entitled to receive.

      

      The
        Warrant Agent shall keep transfer books at its corporate office on which
        Warrant
        Certificates and the transfer thereof shall be registered. On due presentment
        for registration of transfer of any Warrant Certificate at such office, the
        Company shall execute and the Warrant Agent shall issue and deliver to the
        transferee or transferees a new Warrant Certificate or Certificates representing
        an equal aggregate number of Warrants.

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      All
        Warrant Certificates presented for registration of transfer or exercise shall
        be
        duly endorsed or be accompanied by a written instrument or instruments of
        transfer in form satisfactory to the Company and the Warrant Agent.

      

      Prior
        to
        due presentment for registration of transfer thereof, the Company and the
        Warrant Agent may treat the Registered Owner of any Warrant Certificate as
        the
        absolute owner thereof (notwithstanding any notations of ownership or writing
        thereon made by anyone other than the Company or the Warrant Agent) and the
        parties hereto shall not be affected by any notice to the contrary.

      

      8.
        Loss;
        Mutilation or Exchange.
        On
        receipt by the Company and the Warrant Agent of evidence satisfactory as
        to the
        ownership of and the loss, theft, destruction or mutilation of any Warrant
        Certificate, the Company shall execute and the Warrant Agent shall countersign
        and deliver in lieu thereof, a new Warrant Certificate representing an equal
        aggregate number of Warrants. In the case of loss, theft or destruction of
        any
        Warrant Certificate, the Registered Owner requesting issuance of a new Warrant
        Certificate shall be required to secure an indemnity bond in favor of the
        Company and Warrant Agent in an amount satisfactory to each of them. In the
        event a Warrant Certificate is mutilated, such Certificate shall be surrendered
        and cancelled by the Warrant Agent prior to delivery of a new Warrant
        Certificate. Applicants for a substitute Warrant Certificate shall also comply
        with such other regulations and pay such other reasonable charges as the
        Company
        may prescribe.

      

      If,
        at
        any time and from time to time following the Separation Date, a holder of
        Units
        shall tender his, her or its Unit certificate(s) and request that the Unit
        certificate(s) be replaced by certificates evidencing the number of shares
        of
        Common Stock and the number of Warrants comprising the Unit(s) so tendered,
        then
        the Warrant Agent shall cause the Transfer Agent to cancel the Unit
        certificate(s) so tendered and, in the place and stead of such Unit
        certificate(s), the Warrant Agent (a) shall cause the Transfer Agent to issue
        and deliver to such holder, a share certificate registered in the name of
        the
        holder evidencing the number of shares of Common Stock included in the Units
        tendered by the holder and (b) shall issue and deliver to such holder, a
        Warrant
        Certificate registered in the name of the holder evidencing the number of
        Warrants included in the Units tendered by the holder.

      

      9.
        Adjustment
        of Exercise Price and Shares.

      

      (a)
        If at
        any time prior to the expiration of the Warrants by their terms or by exercise,
        the Company increases or decreases the number of its issued and outstanding
        shares of Common Stock, or changes in any way the rights and privileges of
        such
        shares of Common Stock, by means of (i) the payment of a share dividend or
        the
        making of any other distribution on such shares of Common Stock payable in
        its
        shares of Common Stock, (ii) a split or subdivision of shares of Common Stock,
        or (iii) a consolidation or combination of shares of Common Stock, then the
        Exercise Price in effect at the time of such action and the number of Warrants
        required to purchase each Warrant Share at that time shall be proportionately
        adjusted so that the numbers, rights and privileges relating to the Warrant
        Shares then purchasable upon the exercise of the Warrants shall be increased,
        decreased or changed in like manner, for the same aggregate purchase price
        set
        forth in the Warrants, as if the Warrant Shares purchasable upon the exercise
        of
        the Warrants immediately prior to the event had been issued, outstanding,
        fully
        paid and nonassessable at the time of that event. Any dividend paid or
        distributed on the shares of Common Stock in shares of any other class of
        shares
        of the Company or securities convertible into shares of Common Stock shall
        be
        treated as a dividend paid in shares of Common Stock to the extent shares
        of
        Common Stock are issuable on the payment or conversion thereof. 

      

      (b)
        In
        the event, prior to the expiration of the Warrants by exercise or by their
        terms, the Company shall be recapitalized by reclassifying its outstanding
        shares of Common Stock into shares with a different par value, or by changing
        its outstanding shares of Common Stock to shares without par value or in
        the
        event of any other material change in the capital structure of the Company
        or of
        any successor corporation by reason of any reclassification, recapitalization
        or
        conveyance, prompt, proportionate, equitable, lawful and adequate provision
        shall be made whereby any Registered Owner of the Warrants shall thereafter
        have
        the right to purchase, on the basis and the terms and conditions specified
        in
        this Agreement, in lieu of the Warrant Shares theretofore purchasable on
        the
        exercise of any Warrant, such securities or assets as may be issued or payable
        with respect to or in exchange for the number of Warrant Shares theretofore
        purchasable on exercise of the Warrants had such reclassification,
        recapitalization or conveyance not taken place; and in any such event, the
        rights of any Registered Owner of a Warrant to any adjustment in the number
        of
        Warrant Shares purchasable on exercise of such Warrant, as set forth above,
        shall continue and be preserved in respect of any stock, securities or assets
        which the Registered Owner becomes entitled to purchase.

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      (c)
        In
        the event the Company, at any time while the Warrants shall remain unexpired
        and
        unexercised, shall sell all or substantially all of its property, or dissolves,
        liquidates or winds up its affairs, prompt, proportionate, equitable, lawful
        and
        adequate provision shall be made as part of the terms of such sale, dissolution,
        liquidation or winding up such that the Registered Owner of a Warrant may
        thereafter receive, on exercise thereof, in lieu of each Warrant Share which
        he
        would have been entitled to receive, the same kind and amount of any stock,
        securities or assets as may be issuable, distributable or payable on any
        such
        sale, dissolution, liquidation or winding up with respect to each share of
        Common Stock of the Company; provided, however, that in the event of any
        such
        sale, dissolution, liquidation or winding up, the right to exercise the Warrants
        shall terminate on a date fixed by the Company, such date to be not earlier
        than
        [5:00 P.M., Eastern Time, on the 30th]
        day
        next succeeding the date on which notice of such termination of the right
        to
        exercise the Warrants has been given by mail to the Registered Owners thereof
        at
        such addresses as may appear on the books of the Company.

      

      (d)
        In
        the event prior to the expiration of the Warrants by exercise or by their
        terms,
        the Company shall take a record of the holders of its Common Stock for the
        purpose of entitling them to purchase its shares of Common Stock at a price
        per
        share more than 10% below the then-current market price per share (as defined
        below) at the date of taking such record, then, (i) the number of Warrant
        Shares
        purchasable pursuant to the Warrants shall be redetermined as follows: the
        number of Warrant Shares purchasable pursuant to a Warrant immediately prior
        to
        such adjustment (taking into account fractional interests to the nearest
        1,000th
        of a share) shall be multiplied by a fraction, the numerator of which shall
        be
        the number of shares of Common Stock of the Company outstanding (excluding
        shares of Common Stock then owned by the Company) immediately prior to the
        taking of such record, plus the number of additional shares offered for
        purchase, and the denominator of which shall be the number of shares of Common
        Stock of the Company outstanding (excluding shares of Common Stock owned
        by the
        Company) immediately prior to the taking of such record, plus the number
        of
        shares which the aggregate offering price of the total number of additional
        shares so offered would purchase at such current market price; and (ii) the
        Exercise Price per Warrant Share purchasable pursuant to a Warrant shall
        be
        redetermined as follows: the Exercise Price in effect immediately prior to
        the
        taking of such record shall be multiplied by a fraction, the numerator of
        which
        is the number of Warrant Shares purchasable immediately prior to the taking
        of
        such record, and the denominator of which is the number of Warrant Shares
        purchasable immediately after the taking of such record as determined pursuant
        to clause (i) above; provided, however, (i) that any adjustment in the number
        of
        shares issuable as set forth above shall be effective only to the extent
        sufficient shares of Common Stock have been registered through a registration
        statement effective under the 1933 Act, and (ii) that any adjustment in the
        Exercise Price does not cause the Company to receive proceeds in excess of
        the
        amount authorized by any such registration statement. For the purposes of
        any
        computation hereunder, the "Current Market Price" at any date shall be the
        closing price of the Common Stock on the business day next preceding the
        event
        requiring an adjustment hereunder. If the principal trading market for such
        securities is an exchange, the closing price shall be the reported last sale
        price on such exchange on such day provided if trading of such Common Stock
        is
        listed on any consolidated tape, the closing price shall be the reported
        last
        sale price set forth on such consolidated tape. If the principal trading
        market
        for such securities is the over-the-counter market, the closing price shall
        be
        the last reported sale price on such date as set forth by The Nasdaq Stock
        Market, Inc., or, if the security is not quoted on such market, the average
        closing bid and asked prices as set forth in the National Quotation Bureau
        pink
        sheet or the Electronic Bulletin Board System for such day. Notwithstanding
        the
        foregoing, if there is no reported last sale price or average closing bid
        and
        asked prices, as the case may be, on a date prior to the event requiring
        an
        adjustment hereunder, then the Current Market Price shall be determined as
        of
        the latest date prior to such day for which such last sale price or average
        closing bid and asked price is available. 

      

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      (e)
        The
        Warrants are exercisable in even numbers at the option of the holder for
        whole
        shares of the Company’s Common Stock. No fractional interests will be issued. In
        the case of the exercise of less than all the Warrants represented in a
        Certificate, the Warrant Agent shall cancel the Certificate upon the surrender
        thereof and shall deliver a new Warrant Certificate or Warrant Certificates
        of
        like tenor, which the Warrant Agent shall countersign, for the balance of
        such
        Warrants. In the case that the attempted exercise of all of the Warrants
        represented thereby would require the issuance of a fractional share of Common
        Stock, the Warrants shall be deemed to have been exercised for the nearest
        whole
        number of shares of Common Stock into which the Warrants may be exercised.
        No
        half shares or fractional shares will be issued by the Company. The Warrant
        Agent shall not provide for the exercise of any Warrants for fractional share
        of
        Common Stock. 

      

      (f)
        In
        the event, prior to expiration of the Warrants by exercise or by their terms,
        the Company shall determine to take a record of the holders of its shares
        of
        Common Stock for the purpose of determining shareholders entitled to receive
        any
        stock dividend, distribution or other right which will cause any change or
        adjustment in the number, amount, price or nature of the shares of Common
        Stock
        or other stock, securities or assets deliverable on exercise of the Warrants
        pursuant to the foregoing provisions, the Company shall give to the Registered
        Owners of the Warrants at the addresses as may appear on the books of the
        Company at least 30 days' prior written notice to the effect that it intends
        to
        take such a record provided, however, that notice to the Registered Owners
        of an
        extension of the Expiration Date may be made by publication or by release
        to
        [Dow Jones, P.R. Newswire] or other means of general distribution. Such notice
        shall specify the date as of which such record is to be taken; the purpose
        for
        which such record is to be taken; and the number, amount, price and nature
        of
        the shares of Common Stock or other stock, securities or assets which will
        be
        deliverable on exercise of the Warrants after the action for which such record
        will be taken has been completed. Without limiting the obligation of the
        Company
        to provide notice to the Registered Owners of the Warrants of any corporate
        action hereunder, the failure of the Company to give notice shall not invalidate
        such corporate action of the Company. 

      

      (g)
        The
        Warrants shall not entitle the Registered Owner thereof to any of the rights
        of
        shareholders or to any dividend declared on the shares of Common Stock unless
        the Warrant is exercised and the Warrant Shares purchased prior to the record
        date fixed by the Board of Directors of the Company for the determination
        of
        holders of shares of Common Stock entitled to such dividend or other
        right.

      

      (h)
        No
        adjustment of the Exercise Price shall be made as a result of or in connection
        with (i) the issuance of shares of Common Stock of the Company pursuant to
        options, warrants, employee stock ownership plans and share purchase agreements
        outstanding or in effect on the date hereof, (ii) the establishment of
        additional option plans of the Company, the modification, renewal or extension
        of any plan now in effect or hereafter created, or the issuance of shares
        of
        Common Stock on exercise of any options pursuant to such plans, and (iii)
        the
        issuance of shares of Common Stock in connection with compensation arrangements
        for officers, employees or agents of the Company or any subsidiary, and the
        like. 

      

      (i)
        The
        Company shall be empowered, in the sole and unconditional discretion of the
        Board of Directors, at any time during the Exercise Period, to reduce the
        applicable Exercise Price of all but not part of the Warrants then outstanding.
        Any such reduction in the applicable Exercise Price shall be effective upon
        written notice to the Warrant Agent, which notice shall be given pursuant
        to a
        duly and validly authorized resolution of the Board of Directors of the Company.
        Any such reduction in the Exercise Price shall not entitle the Registered
        Owners
        to issuance of any additional Common Shares pursuant to the adjustment
        provisions set forth elsewhere herein, regardless of whether the reduction
        in
        the Exercise Price was effected either prior to or following exercise of
        Warrants by the Registered Owners thereof. A nonexercising Registered Owner
        shall have no remedy or rights to receive any additional Warrant Shares as
        a
        result of any reduction in any applicable Exercise Price pursuant to this
        subsection. Any reduction in the Exercise Price shall be effective for minimum
        periods of not less than ten (10) business days.

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      10.
        Duties,
        Compensation and Termination of Warrant Agent.
        The
        Warrant Agent shall act hereunder as agent and in a ministerial capacity
        for the
        Company, and its duties shall be determined solely by the provisions hereof.
        The
        Warrant Agent shall not, by issuing and delivering Warrant Certificates or
        by
        any other act hereunder, be deemed to make any representations as to the
        validity, value or authorization of the Warrant Certificate or the Warrants
        represented thereby or of the Warrant Shares or other property delivered
        on
        exercise of any Warrant. The Warrant Agent shall not be under any duty or
        responsibility to any holder of the Warrant Certificates to make or cause
        to be
        made any adjustment of the Exercise Price or to determine whether any fact
        exists which may require any such adjustments.

      

      The
        Warrant Agent shall not (i) be liable for any recital or statement of fact
        contained herein or for any action taken or omitted by it in reliance on
        any
        Warrant Certificate or other document or instrument believed by it in good
        faith
        to be genuine and to have been signed or presented by the proper party or
        parties, (ii) be responsible for any failure on the part of the Company to
        comply with any of its covenants and obligations contained in this Agreement
        or
        in the Warrant Certificates, or (iii) be liable for any act or omission in
        connection with this Agreement except for its own negligence or willful
        misconduct.

      

      The
        Warrant Agent may at any time consult with counsel satisfactory to it (who
        may
        be counsel for the Company) and shall incur no liability or responsibility
        for
        any action taken or omitted by it in good faith in accordance with the opinion
        or advice of such counsel.

      

      Any
        notice, statement, instruction, request, direction, order or demand of the
        Company shall be sufficiently evidenced by an instrument signed by its President
        and attested by its Secretary or Assistant Secretary. The Warrant Agent shall
        not be liable for any action taken or omitted by it in accordance with such
        notice, statement, instruction, request, direction, order or demand.

      

      The
        Company agrees to pay the Warrant Agent reasonable compensation for its services
        hereunder and to reimburse the Warrant Agent for its reasonable expenses.
        The
        Company further agrees to indemnify the Warrant Agent against any and all
        losses, expenses and liabilities, including judgments, costs and counsel
        fees,
        for any action taken or omitted by the Warrant Agent in the execution of
        its
        duties and powers hereunder, excepting losses, expenses and liabilities arising
        as a result of the Warrant Agent's negligence or willful misconduct.

      

      The
        Warrant Agent may resign its duties or the Company may terminate the Warrant
        Agent and the Warrant Agent shall be discharged from all further duties and
        liabilities hereunder (except liabilities arising as a result of the Warrant
        Agent's own negligence or willful misconduct) on [30 days'] prior written
        notice
        to the other party. At least [12 days] prior to the date such resignation
        is to
        become effective, the Warrant Agent shall cause a copy of such notice of
        resignation to be mailed to the Registered Owner of each Warrant Certificate.
        On
        such resignation or termination, the Company shall appoint a new Warrant
        Agent.
        If the Company shall fail to make such appointment within a period of [30
        days]
        after it has been notified in writing of the resignation by the Warrant Agent,
        then the Registered Owner of any Warrant Certificate may apply to any court
        of
        competent jurisdiction for the appointment of a new Warrant Agent. Any new
        Warrant Agent, whether appointed by the Company or by such court, shall be
        a
        bank or trust company having a capital and surplus, as shown by its last
        published report to its shareholders, of not less than [$1,000,000], and
        having
        its principal office in the United States.

      

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      After
        acceptance in writing of an appointment of a new Warrant Agent is received
        by
        the Company, such new Warrant Agent shall be vested with the same powers,
        rights, duties and responsibilities as if it had been originally named herein
        as
        the Warrant Agent, without any further assurance, conveyance, act or deed;
        provided, however, if it shall be necessary or expedient to execute and deliver
        any further assurance, conveyance, act or deed, the same shall be done at
        the
        expense of the Company and shall be legally and validly executed. The Company
        shall file a notice of appointment of a new Warrant Agent with the resigning
        Warrant Agent and shall forthwith cause a copy of such notice to be mailed
        to
        the Registered Owner of each Warrant Certificate.

      

      Any
        corporation into which the Warrant Agent or any new Warrant Agent may be
        converted or merged, or any corporation resulting from any consolidation
        to
        which the Warrant Agent or any new Warrant Agent shall be a party, or any
        corporation succeeding to the corporate trust business of the Warrant Agent
        shall be a successor Warrant Agent under this Agreement, provided that such
        corporation is eligible for appointment as a successor to the Warrant Agent.
        Any
        such successor Warrant Agent shall promptly cause notice of its succession
        as
        Warrant Agent to be mailed to the Company and to the Registered Owner of
        each
        Warrant Certificate. No further action shall be required for establishment
        and
        authorization of such successor Warrant Agent.

      

      The
        Warrant Agent, its officers or directors and it subsidiaries or affiliates
        may
        buy, hold or sell Warrants or other securities of the Company and otherwise
        deal
        with the Company in the same manner and to the same extent and with like
        effect
        as though it were not the Warrant Agent. Nothing herein shall preclude the
        Warrant Agent from acting in any other capacity for the Company. 

      

      11.
        Modification
        of Agreement.
        The
        Warrant Agent and the Company may by supplemental agreement make any changes
        or
        corrections in this Agreement they shall deem appropriate to cure any ambiguity
        or to correct any defective or inconsistent provision or mistake or error
        herein
        contained. Additionally, the parties may make any changes or corrections
        deemed
        necessary which shall not adversely affect the interests of the Registered
        Owners of Warrant Certificates; provided, however, this Agreement shall not
        otherwise be modified, supplemented or altered in any respect except with
        the
        consent in writing of the Registered Owners of Warrant Certificates representing
        not less than a majority of the Warrants outstanding. Additionally, no change
        in
        the number or nature of the Warrant Shares purchasable on exercise of a Warrant
        or the Exercise Price therefore shall be made without the consent in writing
        of
        the Registered Owner of the Warrant Certificate representing such Warrant,
        other
        than such changes as are specifically prescribed by this Agreement.

      

      12.
        Notices.
        All
        notices, demands, elections, opinions or requests (however characterized
        or
        described) required or authorized hereunder shall be deemed given sufficiently
        in writing and sent by registered or certified mail, return receipt requested
        and postage prepaid, or by tested telex, telegram or cable to, in the case
        of
        the Company:

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      COMPANY:

      

      Skystar
        Bio-Pharmaceutical Company

      Rm.
        10601, Jiezuo Plaza, No.4, Fenghui Road South,

      Gaoxin
        District, Xian Province, P.R. China

      Fax:
        [__________]

      Attention:
        President  

      

      with
        a
        copy to:

      

      Richardson
        & Patel LLP

      10900
        Wilshire Boulevard, Suite 500

      Los
        Angeles, California 90024

      Fax:
        310-208-1154

      Attention:
        Kevin K. Leung, Esq.

      

      

      and
        in
        the case of the Warrant Agent:

      

      [name]

      [address]

      Fax:
        [__________]

      

      and
        if to
        the Registered Owner of a Warrant Certificate, at the address of such Registered
        Owner as set forth on the books maintained by the Warrant Agent.

      

      13.
        Persons
        Benefiting.
        This
        Agreement shall be binding upon and inure to the benefit of the Company,
        the
        Warrant Agent and their respective successors and assigns, and the Registered
        Owners and beneficial owners from time to time of the Warrant Certificates.
        Nothing in this Agreement is intended or shall be construed to confer on
        any
        other person any right, remedy or claim or to impose on any other person
        any
        duty, liability or obligation. 

      

      14.
        Further
        Instruments.
        The
        parties shall execute and deliver any and all such other instruments and
        shall
        take any and all such other actions as may be reasonable or necessary to
        carry
        out the intention of this Agreement. 

      

      15.
        Severability.
        If any
        provision of this Agreement shall be held, declared or pronounced void,
        voidable, invalid, unenforceable or inoperative for any reason by any court
        of
        competent jurisdiction, government authority or otherwise, such holding,
        declaration or pronouncement shall not affect adversely any other provision
        of
        this Agreement, which shall otherwise remain in full force and effect and
        be
        enforced in accordance with its terms, and the effect of such holding,
        declaration or pronouncement shall be limited to the territory or jurisdiction
        in which made.

      

      16.
        Waiver.
        All the
        rights and remedies of either party under this Agreement are cumulative and
        not
        exclusive of any other rights and remedies as provided by law. No delay or
        failure on the part of either party in the exercise of any right or remedy
        arising from a breach of this Agreement shall operate as a waiver of any
        subsequent right or remedy arising from a subsequent breach of this Agreement.
        The consent of any party where required hereunder to any act or occurrence
        shall
        not be deemed to be a consent to any other action or occurrence.

      

      17.
        General
        Provisions.
        This
        Agreement shall be construed and enforced in accordance with, and governed
        by,
        the laws of the State of California. Except as otherwise expressly stated
        herein, time is of the essence in performing hereunder. This Agreement embodies
        the entire agreement and understanding between the parties and supersedes
        all
        prior agreements and understandings relating to the subject matter hereof,
        and
        this Agreement may not be modified or amended or any term or provision hereof
        waived or discharged except in writing signed by the party against whom such
        amendment, modification, waiver or discharge is sought to be enforced. The
        headings of this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning thereof. This Agreement may be executed
        in
        any number of counterparts, each of which shall be deemed an original, but
        all
        of which taken together shall constitute one and the same
        instrument.

      

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
        executed as of the date first above mentioned.

       

       

      THE
        COMPANY:

      

      SKYSTAR
        BIO-PHARMACEUTICAL COMPANY

      

      By:

      Name:

      Title:

      

      THE
        WARRANT AGENT:

      

      [NAME]

      

      By:

      Name:

      Title:

       

       

      14

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