Exhibit 4.
CERTIFICATE TO SET FORTH DESIGNATIONS, VOTING POWERS,
PREFERENCES, LIMITATIONS, RESTRICTIONS, AND RELATIVE
RIGHTS OF SERIES D 6% CUMULATIVE CONVERTIBLE
PREFERRED STOCK, $.001 PAR VALUE PER SHARE
It is hereby certified that:
I. The name of the corporation is China Peregrine Food Corporation
(the "Corporation"), a Delaware corporation.
II. Set forth hereinafter is a statement of the voting powers,
preferences, limitations, restrictions, and relative rights of shares of
Series D 6% Cumulative Convertible Preferred Stock hereinafter designated
as contained in a resolution of the Board of Directors of the Corporation
pursuant to a provision of the Articles of Incorporation of the Corporation
permitting the issuance of said Series D 6% Cumulative Convertible
Preferred Stock by resolution of the Board of Directors:
Series D 6% Cumulative Convertible Preferred Stock, $.001 par value.
1. Designation: Number of Shares. The designation of said series of
Preferred Stock shall be Series D 6% Cumulative Convertible Preferred Stock
(the "Series D Preferred Stock"). The number of shares of Series D
Preferred Stock shall be 115,000. Each share of Series D Preferred Stock
shall have a stated value equal to $10 (as adjusted for any stock
dividends, combinations or splits with respect to such shares) (the "Stated
Value"), and a par value of $0.001 per Series D Preferred Share.
2. Dividends.
(a) The Holders of outstanding shares of Series D Preferred
Stock shall be entitled to receive preferential dividends in cash out
of any funds of the Corporation legally available at the time for
declaration of dividends before any dividend or other distribution
will be paid or declared and set apart for payment on any shares of
any Common Stock, Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, or other class of stock presently
authorized or to be authorized (the Common Stock, Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, and such
other stock being hereinafter collectively the "Junior Stock") at the
rate of 6% simple interest per annum on the Stated Value per share
payable quarterly commencing with the quarter ending June 30, 1999
when as and if declared; provided however that dividend payments will
be made in additional fully paid and non assessable shares of Series
D Preferred Stock at a rate of one share of Series D Preferred Stock
for each $10 of such dividend not paid in cash, and the issuance of
such additional shares shall constitute full payment of such
dividend. Dividends may be paid at the Company's option with Series D
Preferred Stock only if the Common Stock deliverable upon conversion
of such Series D Preferred Stock will have been included for public
resale in an effective registration statement filed with the
Securities and Exchange Commission on the dates such dividends are
payable and paid to the Holder, otherwise the dividend will be paid
in cash.
(b) The dividends on the Series D Preferred Stock at the rates
provided above shall be cumulative whether or not earned so that if
at any time full cumulative dividends at the rate aforesaid on all
shares of the Series D Preferred Stock then outstanding from the date
from and after which dividends thereon are cumulative to the end of
the quarterly dividend period next preceding such time shall not have
been paid or declared and set apart for payment, or if the full
dividend on all such outstanding Series D Preferred Stock for the
then current dividend period shall not have been paid or declared and
set apart for payment, the amount of the deficiency shall be paid or
declared and set apart for payment (but without interest thereon)
before any sum shall be set apart for or applied by the Corporation
or a subsidiary of the Corporation to the purchase, redemption or
other acquisition of the Series D Preferred Stock or any shares of
any other class of stock ranking on a parity with the Series D
Preferred Stock ("Parity Stock") and before any dividend or other
distribution shall be paid or declared and set apart for payment on
any Junior Stock and before any sum shall be set aside for or applied
to the purchase, redemption or other acquisition of Junior Stock.
(c) Dividends on all shares of the Series D Preferred Stock
shall begin to accrue and be cumulative from and after the date of
issuance thereof. A dividend period shall be deemed to commence on
the day following a quarterly dividend payment date herein specified
and to end on the next succeeding quarterly dividend payment date
herein specified.
3. Liquidation Rights.
(a) Upon the dissolution, liquidation or winding-up of the
Corporation, whether voluntary or involuntary, the Holders of the
Series D Preferred Stock shall be entitled to receive before any
payment or distribution shall be made on the Junior Stock
(specifically including, without limitation, Series A Preferred
Stock, Series B Preferred Stock, and Series C Preferred Stock, out of
the assets of the Corporation available for distribution to
stockholders, the Stated Value per share of Series D Preferred Stock
and all accrued and unpaid dividends to and including the date of
payment thereof. Upon the payment in full of all amounts due to
Holders of the Series D Preferred Stock the Holders of the Common
Stock of the Corporation and any other class of Junior Stock shall
receive all remaining assets of the Corporation legally available for
distribution. If the assets of the Corporation available for
distribution to the Holders of the Series D Preferred Stock shall be
insufficient to permit payment in full of the amounts payable as
aforesaid to the Holders of Series D Preferred Stock upon such
liquidation, dissolution or winding-up, whether voluntary or
involuntary, then all such assets of the Corporation shall be
distributed to the exclusion of the Holders of shares of Junior Stock
ratably among the Holders of the Series D Preferred Stock.
(b) Neither the purchase nor the redemption by the Corporation
of shares of any class of stock nor the merger or consolidation of
the Corporation with or into any other corporation or corporations
nor the sale or transfer by the Corporation of all or any part of its
assets shall be deemed to be a liquidation, dissolution or winding-up
of the Corporation for the purposes of this paragraph 3.
4. Conversion into Common Stock. Shares of Series D Preferred Stock
shall have the following conversion rights and obligations:
(a) Subject to the further provisions of this paragraph 4 each
Holder of shares of Series D Preferred Stock shall have the right at
any time commencing on the earlier of 91 days after the filing of
this Certificate of Designation with the Office of the Secretary of
State of Delaware, or the effective date of a registration statement
described in Section 10.1(iv) of the Subscription Agreement entered
into by the Corporation and Holder (or Holder's predecessor) relating
to the Series D Preferred Stock ("Subscription Agreement"), to
convert such shares into fully paid and non-assessable shares of
Common Stock of the Corporation (as defined in paragraph 4(i) below)
determined in accordance with the Conversion Price provided in
paragraph 4(b) below (the "Conversion Price"); provided, that the
aggregate Stated Value to be converted shall be at least $10,000
(unless if at the time of such conversion the aggregate Stated Value
of all shares of Series D Preferred Stock registered to the Holder is
less than $10,000, then the whole amount may be converted). All
issued or accrued but unpaid dividends may be converted at the
election of the Holder simultaneously with the conversion of
principal amount of Stated Value of Series D Preferred Stock being
converted.
(b) The number of shares of Common Stock issuable upon
conversion of each share of Series D Preferred Stock shall equal (i)
the sum of (A) the Stated Value per share and (B) at the Holder's
election accrued and unpaid dividends on such share, divided by (ii)
the Conversion Price. The Conversion Price shall be equal to the
lesser of: (i) 100% of the average of the Closing Bid Price of the
Corporation's Common Stock for the trading day immediately preceding
the date of issuance of the shares of Series D Preferred Stock to the
Holders; or (ii) at 80% of the average of the three lowest Closing
Bid Prices for the 22 trading days immediately preceding the
conversion of the respective shares of Series D Preferred Stock
(Lookback Period"). The Closing Bid Price shall mean the closing bid
price of the Corporation's Common Stock as reported by the NASD OTC
Bulletin Board or the principal exchange or market where traded.
(c) The Holder of any certificate for shares of Series D
Preferred Stock desiring to convert any of such shares may give
notice of its decision to convert the shares into common stock by
delivering or telecopying an executed and completed notice of
conversion to the Corporation or the Corporation's Transfer Agent and
delivering within three business days thereafter, the original notice
of conversion and the certificate for the Preferred Stock properly
endorsed for or accompanied by duly executed instruments of transfer
(and such other transfer papers as said Transfer Agent may reasonably
require) to the Corporation or the Corporation's Transfer Agent. Each
date on which a notice of conversion is delivered or telecopied to
the Corporation or the Corporation's Transfer Agent in accordance
with the provisions hereof shall be deemed a Conversion Date. A form
of Notice of Conversion that may be employed by a Holder is annexed
hereto as Exhibit A. The Corporation will transmit the certificates
representing the shares of common stock issuable upon conversion of
any Series D Preferred Stock (together with the Series D Preferred
Stock representing the shares not converted) to the Holder via
express courier, by electronic transfer or otherwise, within three
business days after receipt by the Corporation of the original notice
of conversion and the Series D Preferred Stock representing the
shares to be converted ("Delivery Date"). The Holder of the shares
so surrendered for conversion shall be entitled to receive on or
before the Delivery Date a certificate or certificates which shall be
expressed to be fully paid and non-assessable for the number of
shares of Common Stock to which such Holder shall be entitled upon
such conversion registered in the name of such Holder. The
Corporation is obligated to deliver to the Holder simultaneously with
the aforedescribed Common Stock, at the election of the Holder,
additional Common Stock representing the conversion at the Conversion
Price, of dividends accrued on the Series D Preferred Stock being
converted. In the case of any Series D Preferred Stock which is
converted in part only the Holder of shares of Series D Preferred
Stock shall upon delivery of the certificate or certificates
representing Common Stock also receive a new share certificate
representing the unconverted portion of the shares of Series D
Preferred Stock. Nothing herein shall be construed to give any
Holder of shares of Series D Preferred Stock surrendering the same
for conversion the right to receive any additional shares of Common
Stock or other property which results from an adjustment in
conversion rights under the provisions of paragraph (d) or (e) of
this paragraph 4 until Holders of Common Stock are entitled to
receive the shares or other property giving rise to the adjustment.
In the case of the exercise of the conversion rights set forth
in paragraph 4(a) the conversion privilege shall be deemed to have
been exercised and the shares of Common Stock issuable upon such
conversion shall be deemed to have been issued upon the date of
receipt by the Corporation or Transfer Agent of the Notice of
Conversion. The person or entity entitled to receive Common Stock
issuable upon such conversion shall, on the date such conversion
privilege is deemed to have been exercised and thereafter, be treated
for all purposes as the record Holder of such Common Stock and shall
on the same date cease to be treated for any purpose as the record
Holder of such shares of Series D Preferred Stock so converted.
Upon the conversion of any shares of Series D Preferred Stock
no adjustment or payment shall be made with respect to such converted
shares on account of any dividend on the Common Stock, except that
the Holder of such converted shares shall be entitled to be paid any
dividends declared on shares of Common Stock after conversion
thereof.
The Corporation shall not be required, in connection with any
conversion of Series D Preferred Stock, and payment of dividends on
Series D Preferred Stock to issue a fraction of a share of its Series
D Preferred Stock and shall instead deliver a stock certificate
representing the next whole number.
The Corporation and Holder may not convert that amount of the
Series D Preferred Stock on a Conversion Date in connection with that
number of shares of Common Stock which would be in excess of the sum
of (i) the number of shares of Common Stock beneficially owned by the
Subscriber and its affiliates on such Conversion Date, and (ii) the
number of shares of Common Stock issuable upon the conversion of the
Series D Preferred Stock with respect to which the determination of
this proviso is being made on such Conversion Date, which would
result in beneficial ownership by the Holder and its affiliates of
more than 9.99% of the outstanding shares of Common Stock of the
Corporation. For the purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934,
as amended, and Regulation 13d-3 thereunder.
(d) The Conversion Price shall be subject to adjustment from
time to time as follows:
(i) In case the Corporation shall at any time (A)
declare any dividend or distribution on its Common Stock or
other securities of the Corporation other than the Series D
Preferred Stock, (B) split or subdivide the outstanding Common
Stock, (C) combine the outstanding Common Stock into a smaller
number of shares, or (D) issue by reclassification of its
Common Stock any shares or other securities of the Corporation,
then in each such event the Conversion Price shall be adjusted
proportionately so that the Holders of Series D Preferred Stock
shall be entitled to receive the kind and number of shares or
other securities of the Corporation which such Holders would
have owned or have been entitled to receive after the happening
of any of the events described above had such shares of Series
D Preferred Stock been converted immediately prior to the
happening of such event (or any record date with respect
thereto). Such adjustment shall be made whenever any of the
events listed above shall occur. An adjustment made to the
Conversion pursuant to this paragraph 4(d)(i) shall become
effective immediately after the effective date of the event
retroactive to the record date, if any, for the event.
(e) (i) In case of any merger of the Corporation with or into
any other corporation (other than a merger in which the Corporation
is the surviving or continuing corporation and which does not result
in any reclassification, conversion, or change of the outstanding
shares of Common Stock) then unless the right to convert shares of
Series D Preferred Stock shall have terminated, as part of such
merger lawful provision shall be made so that Holders of Series D
Preferred Stock shall thereafter have the right to convert each share
of Series D Preferred Stock into the kind and amount of shares of
stock and/or other securities or property receivable upon such merger
by a Holder of the number of shares of Common Stock into which such
shares of Series D Preferred Stock might have been converted
immediately prior to such consolidation or merger. Such provision
shall also provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in
paragraph (d) of this paragraph 4. The foregoing provisions of this
paragraph 4(e) shall similarly apply to successive mergers.
(ii) In case of any sale or conveyance to another person or
entity of the property of the Corporation as an entirety, or
substantially as an entirety, in connection with which shares or
other securities or cash or other property shall be issuable,
distributable, payable, or deliverable for outstanding shares of
Common Stock, then, unless the right to convert such shares shall
have terminated, lawful provision shall be made so that the Holders
of Series D Preferred Stock shall thereafter have the right to
convert each share of the Series D Preferred Stock into the kind and
amount of shares of stock or other securities or property that shall
be issuable, distributable, payable, or deliverable upon such sale or
conveyance with respect to each share of Common Stock immediately
prior to such conveyance.
(f) Whenever the number of shares to be issued upon conversion
of the Series D Preferred Stock is required to be adjusted as
provided in this paragraph 4, the Corporation shall forthwith compute
the adjusted number of shares to be so issued and prepare a
certificate setting forth such adjusted conversion amount and the
facts upon which such adjustment is based, and such certificate shall
forthwith be filed with the Transfer Agent for the Series D Preferred
Stock and the Common Stock; and the Corporation shall mail to each
Holder of record of Series D Preferred Stock notice of such adjusted
conversion price.
(g) In case at any time the Corporation shall propose:
(i) to pay any dividend or distribution payable in
shares upon its Common Stock or make any distribution (other
than cash dividends) to the Holders of its Common Stock; or
(ii) to offer for subscription to the Holders of its
Common Stock any additional shares of any class or any other
rights; or
(iii) any capital reorganization or reclassification of
its shares or the merger of the Corporation with another
corporation (other than a merger in which the Corporation is
the surviving or continuing corporation and which does not
result in any reclassification, conversion, or change of the
outstanding shares of Common Stock); or
(iv) the voluntary dissolution, liquidation or winding-
up of the Corporation;
then, and in any one or more of said cases, the Corporation shall
cause at least fifteen (15) days prior notice of the date on which
(A) the books of the Corporation shall close or a record be taken for
such stock dividend, distribution, or subscription rights, or (B)
such capital reorganization, reclassification, merger, dissolution,
liquidation or winding-up shall take place, as the case may be, to be
mailed to the Transfer Agent for the Series D Preferred Stock and for
the Common Stock and to the Holders of record of the Series D
Preferred Stock.
(h) So long as any shares of Series D Preferred Stock shall
remain outstanding and the Holders thereof shall have the right to
convert the same in accordance with provisions of this paragraph 4
the Corporation shall at all times reserve from the authorized and
unissued shares of its Common Stock a sufficient number of shares to
provide for such conversions.
(i) The term Common Stock as used in this paragraph 4 shall
mean the $.001 par value Common Stock of the Corporation as such
stock is constituted at the date of issuance thereof or as it may
from time to time be changed or shares of stock of any class of other
securities and/or property into which the shares of Series D
Preferred Stock shall at any time become convertible pursuant to the
provisions of this paragraph 4.
(j) The Corporation shall pay the amount of any and all issue
taxes (but not income taxes) which may be imposed in respect of any
issue or delivery of stock upon the conversion of any shares of
Series D Preferred Stock, but all transfer taxes and income taxes
that may be payable in respect of any change of ownership of Series D
Preferred Stock or any rights represented thereby or of stock
receivable upon conversion thereof shall be paid by the person or
persons surrendering such stock for conversion.
(k) In the event a Holder shall elect to convert any shares of
Series D Preferred Stock as provided herein, the Corporation cannot
refuse conversion based on any claim that such Holder or any one
associated or affiliated with such Holder has been engaged in any
violation of law, unless, an injunction from a court, on notice,
restraining and or enjoining conversion of all or part of said shares
of Series D Preferred Stock shall have been issued and the
Corporation posts a surety bond for the benefit of such Holder in the
amount of 126% of the Stated Value of the Series D Preferred Stock
and dividends sought to be converted, which is subject to the
injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall
be payable to such Holder in the event it obtains judgment.
(l) In addition to any other rights available to the Holder,
if the Corporation fails to deliver to the Holder such certificate or
certificates pursuant to Section 4(c) by the Delivery Date and if
after the Delivery Date the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by such Holder of the Common Stock which the
Holder anticipated receiving upon such conversion (a "Buy-In"), then
the Corporation shall pay in cash to the Holder (in addition to any
remedies available to or elected by the Holder) the amount by which
(A) the Holder's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased
exceeds (B) the aggregate Stated Value of the shares of Series D
Preferred Stock for which such conversion was not timely honored,
together with interest thereon at a rate of 16% per annum, accruing
until such amount and any accrued interest thereon is paid in full
(which amount shall be paid as liquidated damages and not as a
penalty). For example, if the Holder purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted conversion of $10,000 of Stated Value of
Series D Preferred Stock, the Corporation shall be required to pay
the Holder $1,000, plus interest. The Holder shall provide the
Corporation written notice indicating the amounts payable to the
Holder in respect of the Buy-In.
5. Mandatory Conversion.
(a) The shares of Series D Preferred Stock and dividends not
previously converted into shares of Common Stock shall be converted
into shares of Common Stock without further action of the Holder on
the date that is two years from the date of issuance thereof
("Mandatory Conversion Date"), at the Conversion Price and on the
conversion terms specified in paragraph 4(b). Deliveries of Common
Stock upon Mandatory Conversion shall be made as if the Mandatory
Conversion Date were a Conversion Date.
(b) Notice of conversion of Series D Preferred Stock by the
Corporation pursuant to this paragraph 5 shall be given by mail or in
such other manner as may be prescribed by resolution of the Board not
less than thirty (30) days prior to the Mandatory Conversion Date.
As applicable, the notice shall specify the number of shares to be
converted, the date fixed for conversion, and the conversion price
per share.
(c) The Holder of any certificate for shares of Series D
Preferred Stock that is converted pursuant to this Section 5 shall
surrender such certificate at the principal office of any transfer
agent for said stock (the "Transfer Agent") properly endorsed for or
accompanied by duly executed instruments of transfer (and such other
transfer papers as said Transfer Agent may reasonably require). The
Holder of the shares so surrendered for conversion shall be entitled
to receive (except as otherwise provided herein) a certificate or
certificates which shall be expressed to be fully paid and non-
assessable for the number of shares of Common Stock to which such
Holder shall be entitled upon such conversion registered in the name
of such Holder.
(d) On and after the Mandatory Conversion Date and
notwithstanding that any certificate for shares of Series D Preferred
Stock so called for conversion shall not have been surrendered for
cancellation, all dividends on the Series D Preferred Stock called
for conversion shall cease to accrue and the shares represented
thereby shall no longer be deemed outstanding and all rights of the
Holders thereof as Holders of the Corporation shall cease and
terminate, except the right to receive the shares of Common Stock
upon conversion as provided herein.
(e) In no event shall a Mandatory Conversion occur without the
consent of the Holder of Series D Preferred Stock at any time unless
the Common Stock to be delivered upon conversion will be upon
delivery and thereafter immediately resalable, without restrictive
legend and upon such resale freely transferable on the transfer books
of the Corporation. Nor may the Corporation effect a Mandatory
Conversion without the consent of the Holder after the occurrence
(whether continuing or not) of an Event of Default as defined in
Paragraph 2 hereof.
6. Voting Rights. The shares of Series D Preferred Stock shall not
have voting rights.
7. Redemption. From and after 40 days after the Effective Date of
the Registration Statement as defined in Section 10.1(iv) of the
Subscription Agreement, the Corporation will have the option of redeeming
the Series D Preferred Stock ("Optional Redemption") by paying to the
Holder a sum of money equal to the Closing Bid Price of the Common Stock on
the date notice of redemption ("Notice of Redemption) is given to a Holder
("Redemption Date") multiplied by the number of shares of Common Stock that
would be issued upon conversion of the designated amount of Stated Value of
Series D Preferred Stock being redeemed and the dividends accrued thereon,
at the Conversion Price that would be in effect on the Redemption Date
("Redemption Amount") but in no event may the Redemption Amount be less
than 120% of the Stated Value of the Series D Preferred Stock being
redeemed plus the dollar amount of accrued dividends on the Series D
Preferred Stock being redeemed. A Notice of Redemption may not be given in
connection with any Series D Preferred Stock for which notice of conversion
has been given by the Holder either before or after receipt by the Holder
of a Notice of Redemption except that after receipt by the Holder of a
Notice of Redemption the Holder may elect by giving written notice to the
Corporation within two (2) business days of a Redemption Date to convert no
more than twenty (20%) percent of the Series D Preferred Stock noticed in
the Notice of Redemption. A Notice of Redemption must be accompanied by a
certificate signed by the chief executive officer or chief financial
officer of the Corporation stating that the Corporation has on deposit and
segregated ready funds equal to the Redemption Amount. The Redemption
Amount (less any amount that may be converted by a Holder) must be paid in
good funds to the Holder no later than the fifth business day after the
Redemption Date. In the event the Corporation fails to pay the Redemption
Amount by such date, then the Redemption Notice will be null and void and
the Corporation will thereafter have no further right to effect an Optional
Redemption. Any Notice of Redemption must be given to all Holders of
Series D Preferred Stock in proportion to their holdings of Series D
Preferred Stock on a Redemption Date. The minimum Redemption Amount must
be no less than the sum that would be realized by the Holder on the
Redemption Date of a sale of the amount of Common Stock receivable upon
conversion of the amount of Series D Preferred Stock being redeemed plus
the dollar amount of accrued dividends on the Series D Preferred Stock
being redeemed but in no event may the Redemption Amount be less than 120%
of the Stated Value of the Series D Preferred Stock being redeemed plus the
dollar amount of accrued dividends on the Series D Preferred Stock being
redeemed.
8. Event of Default. The occurrence of any of the following events
of default ("Event of Default") shall, after the applicable period to cure
the Event of Default, cause the dividend rate of 6% described in paragraph
2 hereof to become 12% from and after the occurrence of such event, and the
Holder shall have the option to require the Corporation to redeem the
Series D Preferred Stock held by such Holder by the immediate payment to
the Holder by the Corporation of a sum of money equal to the number of
shares that would be issuable upon conversion of an amount of Stated Valued
and accrued dividends designated by the Holder, at the Conversion Price in
effect as of the trading day prior to the date notice is given to the
Corporation multiplied by the average closing ask price of the
Corporation's Common Stock on such date:
(a) The Corporation fails to pay any dividend payment required
to be paid pursuant to the terms of paragraph 2 hereof or the failure
to timely pay any other sum of money due to the Holder from the
Company and such failure continues for a period of ten (10) days
after written notice to the Corporation from the Holder.
(b) The Corporation breaches any material covenant, term or
condition of the Subscription Agreement entered into between the
Corporation and Holder relating to Series D Preferred Stock or in
this Certificate of Designation, and such breach continues for a
period of seven (7) days after written notice to the Corporation from
the Holder.
(c) Any material representation or warranty of the Corporation
made in the Subscription Agreement, or in any agreement, statement or
certificate given in writing pursuant thereto shall be false or
misleading.
(d) The Corporation shall make an assignment of a substantial
part of its property or business for the benefit of creditors, or
apply for or consent to the appointment of a receiver or trustee for
it or for a substantial part of its property or business, or such a
receiver or trustee shall otherwise be appointed.
(e) Any money judgment, confession of judgment, writ or
similar process shall be entered against the Corporation or its
property or other assets for more than $100,000, and is not vacated,
satisfied, bonded or stayed within 45 days.
(f) Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or
against the Corporation.
(g) The failure to maintain a listing of the Common Stock on
the NASD OTC Bulletin Board (or successor market, if any).
(h) An order entered by a court of competent jurisdiction, or
by the Securities and Exchange Commission, or by the National
Association of Securities Dealers, preventing purchase and sale
transactions in the Corporation's Common Stock.
(i) The Corporation's failure to timely deliver Common Stock
to the Holder pursuant to paragraph 4 hereof or the Subscription
Agreement.
(j) The occurrence of a Non-Registration Event as described in
Section 10.4 of the Subscription Agreement.
9. Status of Converted or Redeemed Stock. In case any shares of
Series D Preferred Stock shall be redeemed or otherwise repurchased or
reacquired, the shares so redeemed, converted, or reacquired shall resume
the status of authorized but unissued shares of Preferred Stock and shall
no longer be designated as Series D Preferred Stock.
10. Additional Restrictions. Until 180 days after the Effective
Date, as defined in Section 10.1(iv) of the Subscription Agreement and
provided that shares of the Series D Preferred Stock are then outstanding,
the Corporation will not issue any preferred stock that will be senior to
the Series D Preferred Stock except that the Corporation may issue such
preferred stock provided such preferred stock is not senior to the Series D
Preferred Stock during the 180 day period commencing on the Effective Date
of the above described Registration Statement. For so long as any shares
of Series D Preferred Stock are outstanding, the Corporation will not amend
the terms of any outstanding class of Preferred Stock of the Company, and
will not amend the terms of the Series D Preferred Stock without the
written consent of the Holder of the Series D Preferred Stock.
CHINA PEREGRINE FOOD CORPORATION
Dated: March 8, 1999 By: /s/ Roy G. Warren
------------- -----------------
Roy G. Warren, President