Second Amendment To Transfer/Assignment and Agreement to Operate Hangzhou
American Flavors Dairy Products Joint Venture Project
1. Introduction. This Agreement, which is made this 18th day of June,
1998, is the Second Amendment to a certain Transfer/Assignment Agreement,
dated the 3rd day of September, 1997, as amended by the First Amendment on
January 28, 1998 (the "Transfer Agreement") by and between American Flavors
China, Inc. (AFC), a Delaware corporation having a principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and China
Peregrine Food Corporation (CPFC), a Delaware corporation having a principal
place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ Point,
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2. Considerations. The following facts and events have been duly
considered by the parties in entering into this Agreement:
2.1 By the aforesaid Transfer Agreement, CPFC has agreed to purchase
the entire interests of AFC in and to a certain Joint Venture Contract, with
respect to a joint venture business known as Hangzhou Meilijian Dairy
Products Co., Ltd. (Hangzhou Meilijian or the Joint Venture), and AFC has
agreed to transfer and assign such interests to CPFC. [Section 3.1 of the
Transfer Agreement].
2.2 In full consideration for the aforesaid transfer and assignment,
CPFC has agreed to direct its Stock Transfer Agent to issue 816,279 shares
of the common stock of CPFC to AFC and grant options for 235,406 shares of
the common stock of CPFC to AFC at the option price of $1.00 per share
[Section 3.1 of the Transfer Agreement].
2.3 To date, the assignment and transfer of AFC's interests to the
Joint Venture Contract as provided in the Transfer Agreement has not been
approved by the Board of Directors of Hangzhou Meilijian in accordance with
Article 13 of the Joint Venture Contract, as a condition precedent to the
aforesaid Transfer Agreement. [Section 4.2.b of the Transfer Agreement]
2.4 By this Agreement, the parties wish to resolve certain
differences of opinion that have arisen between the parties concerning the
subject matter of the Transfer Agreement.
3. Basic Agreement. In consideration of the mutual promises
contained in this Second Amendment, the parties agree to the following:
3.1 Section 3.1 of the Transfer Agreement is further amended to
eliminate the consideration set forth therein paid in the form of 235,406
options and to change the consideration set forth therein from 816,279
shares of the common stock of CPFC to 1,531,685 shares of such common stock
and the sum of US $210,000. AFC agrees to return to CPFC the Option
Agreement issued to it by CPFC, and the parties agree that such Option
Agreement shall be null and void and of no further force and effect.
3.2 Section 4.2.b for the aforesaid approval of the assignment and
transfer of the interests to the Joint Venture Contract in accordance with
Article 13 thereof, shall be deleted, and the following language shall be
substituted in lieu thereof:
4.2 This Agreement shall terminate and be null and void, in the
event:
b. that the assignment and transfer of the interests to the Joint
Venture Contract as provided herein not be approved by the Board of
Directors of Hangzhou Meilijian, in accordance with Article 13 of the
Joint Venture Contract, within thirty (30) days after the proposed
assignment and transfer of the interests to the Joint Venture Contract
as provided herein is presented to said Board at a duly constituted
Board meeting for said entity which meeting is currently scheduled for
July 7, 1998, or such extended date as may be mutually agreed upon, in
writing, by the parties hereto.
3.3 As a condition to AFC's obligations to consummate the
transactions contemplated by the Agreement, CPFC agrees to deliver to AFC a
full and unconditional release of AFC by Evergreen (International Paper) on
or prior to the Board Meeting for the Joint Venture currently scheduled for
July 7, 1998, such release to be effective as of the closing.
3.4 It is understood and agreed that the obligation referenced in
Section 3.3(b) of the Agreement owed to AFC by Hangzhou Meiligian Dairy
Products Co., Ltd. in the amount of $240,000 has to been reduced, to AFC's
knowledge, to approximately US $210,000 (based upon an exchange rate of 8.3
RmB per U.S. dollar).
3.5 AFC agrees to supply to CPFC as soon as practicable financial
statements of the Joint Venture dated May 31, 1998 as presented to AFC by
the Joint Venture.
3.6 CPFC agrees to file and use its best efforts to effect a
Registration Statement of its Common Stock pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), within one year from
the date of the closing of this transaction.
In addition, for so long as any CPFC Common Stock held by AFC, American
China Enterprises, Inc. ("ACE") or its shareholders or its or their
affiliates is not freely tradeable, CPFC agrees that it (a) shall timely
file with the SEC any and all reports required to be so filed pursuant to
the Exchange Act and (b) shall not terminate its status as an issuer
required by the Exchange Act to file reports thereunder even if the Exchange
Act or the rules or regulations thereunder would permit such termination.
3.7 Section 3.3 of the First Amendment to the Agreement is hereby
deleted in its entirety.
3.8 The parties agree that the closing of the transaction
contemplated by the Agreement shall occur upon receipt by CPFC of written
evidence that the approval of the transaction by the Board of Directors of
the Joint Venture has been obtained. Upon such receipt, CPFC shall be
obligated to cause its transfer agent to issue the 1,531,685 shares to AFC
and to pay to AFC the sum of US $210,000 in immediately available funds (as
set forth in Section 3.1 hereof).
4. Counterparts. This Agreement may be executed in several and
separate counterparts which, collectively, shall constitute and operative
Agreement among the parties.
5. Law Governing. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts, without consideration of choice of law
principles.
6. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may
be amended only by a written amendment executed by both parties. The waiver
by any party of a breach of any provision of this Agreement shall not be a
waiver of any subsequent breach.
7. Ratification Of Underlying Agreement. Except as otherwise stated
herein, the Transfer/Assignment Agreement of September 3, 1997, as amended
by the January 28, 1998 First Amendment, is hereby ratified and restated in
its entirety.
8. Subject to Board Approval. This Second Amendment is subject to the
approval of the Board of Directors of CPFC, ACE and AFC prior to the close
of business on June 23, 1998.
IN WITNESS WHEREOF, the parties have signed this Agreement under seal
on the day and year first above written.
CHINA PEREGRINE FOOD CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇, President
AMERICAN FLAVORS CHINA, INC.
By: /s/ ▇▇▇▇▇▇▇▇ Sender
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▇▇▇▇▇▇▇▇ Sender
Chairman and Chief Executive Officer
