EXHIBIT 2.1
STOCK & NOTE RECEIVABLE FOR OWNERSHIP AGREEMENT
STOCK AND NOTE FOR OWNERSHIP AGREEMENT between Viking Capital Group,
Inc. and Beijing Property Development Company Ltd.
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For the acquisition by Beijing Property Development Company, Ltd. of
ninety six percent (96%) of the ownership of Beijing Fei Yun Viking Enterprises
Company, Ltd. a Peoples Republic of China Foreign Investment Enterprise Company
in exchange for a certain note receivable and common and preferred stock of
Viking Capital Group, Inc., a United States (US) of America corporation in the
state of Utah.
AGREEMENT, dated as of January 31, 2003 between Viking Capital Group,
Inc., (hereinafter called Viking), and Beijing Property Development Company Ltd.
(hereinafter called Property Development).
Viking either owns or has the right to sell, transfer and exchange
ninety six percent (96%) of the ownership of Beijing Fei Yun Viking Enterprises
Company, Ltd. (hereinafter called the Company or Viking Enterprises). Property
Development wishes to acquire ninety six (96%) of the ownership of Viking
Enterprises in exchange for the return of Viking's 7,500,000 Treasury shares
held at Viking Enterprises for acquisitions, 7,000,000 shares of the Common
Restricted Stock of Viking, a US $6,500,000 Hebei Kangshun Feiyun Organic Waste
Processing Company, Ltd. note to Viking and 1,800,000 Series 2001 Callable
Preferred Stock of Viking (hereinafter referred to as Viking's Stock and note)
and Property Development wishes to make said exchange.
NOW THEREFORE, in consideration of the promises and of the mutual
covenants herein contained, the parties do hereby agree as follows:
Section 1. Exchange of Shares. On the terms and
subject to the conditions set forth in this Agreement, at the time of closing
referred to in Section 3 hereof, Property Development will deliver or cause to
be delivered to Viking 14,500,000 shares of Viking's Common Restricted Stock,
1,800,000 shares of Viking's Series 2001 Callable Preferred Stock and a US
$6,500,000 note made out to Viking from Hebei Kangshun Feiyun Organic Waste
Processing Company, Ltd. which is collateralized by 40% ownership of Hebei
Kangshun Feiyun Organic Waste Processing Company, Ltd in exchange for which
Viking will deliver or cause to be delivered to Property Development Ninety Six
percent (96%) ownership of Beijing Fei Yun Viking Enterprises Company, Ltd.
Section 2. Acquired Viking Enterprises Ownership.
Viking Enterprises ownership shall be determined as follows:
(a) Amount. On the terms and subject to the conditions and adjustments set forth
in this Agreement, and in exchange for the 7.5M Viking Common Shares, 1.8M
Viking Series 2001 Callable Preferred Stock and $6.5M Hebei Kangshun Feiyun
Organic Waste Processing Company, Ltd. Note made out to Viking.
(b) Closing Balance Sheet. Viking, at its sole expense, shall cause to be
prepared and delivered to Property Development at the Closing,
(i) An unaudited most recent Closing Balance
Sheet of the Company, which shall be prepared in accordance with GAAP accounting
principles. In connection therewith Viking shall make available prior to the
Closing all financial statements, worksheets and other information concerning
the Closing Balance Sheet as Property Development may reasonably request. All
costs and expenses of preparation of the Closing Balance Sheet shall be paid by
Viking.
Section 3. - Closing Date and Materials to be
Delivered. The closing of the exchange transfer assignment and delivery of the
Acquired Shares provided for in Section I hereof and the delivery by Property
Development and Viking of the materials specified in Sections 12 and 13 hereof
(the "Closing") shall take place by telephone on December 31, 2003. Exhange of
ownership documents, stock certificates and power of attorneys for each stock
certificate and the note receivable shall all be delivered prior to closing.
Faxing of signed agreements and exhibits to the agreements and delivery of such
agreements with original signatures via FedEx or other nationally recognized
courier service post closing or such earlier date or location as is mutually
agreed to by the parties (herein referred to as the "Closing" or the "Closing
Date',); provided, however, that in the event that any condition to this
Agreement referred to in Section 10 and 11 is not fulfilled or satisfied by such
date, then any extensions shall be controlled by the provisions for extension of
time set forth in Section 10 and 11.. In the event of postponement, the term
"Closing Date" shall be deemed to mean the date upon which the transactions
contemplated herein are actually consummated.
Section 4. Zhou Haiping and Wang Ping agree to resign
as officers of Viking as signified by their signatures herein below which
positions they held as Vice Presidents of Viking.
Section 5. Left Blank Intentionally.
Section 6. Representations of Viking. Viking
represents to Property Development as follows:
(a) Organization and Qualification. Viking Enterprises is a corporation duly
organized, validly existing and in good standing under the laws of the
Peoples Republic of China and possesses full powers and authorities as a
Foreign Investment Enterprise corporation under such laws, without
limitation or restriction, and has the corporate power to own its
properties and to carry on its business as it is now being conducted.
Except as described in any Schedule hereto, there is not now pending or
threatened, any dispute, controversy or proceeding that involves Viking
Enterprises, including without limitation, any proceeding to dissolve it,
to declare its corporate rights, powers, franchises or privileges, or any
of them, null or void or in bankruptcy or for an arrangement or
reorganization in any province or Central Government federal court.
(b) Certificate of Incorporation and By-Laws. Prior to closing the copies of
the Certificate of Incorporation and the By-laws of the Viking Enterprises,
as amended to date, shall have been delivered to Property Development. The
minutes of all meetings of Viking Enterprises shareholders, Board of
Directors and any committees of such Board have been delivered to Property
Development prior to Closing, and there is no corporate action requiring
approval by Viking Enterprises shareholders or Board of Directors which is
not reflected in such minutes. The unanimous board of directors resolution
agreeing to the sale contemplated herein, are attached hereto as schedule
B.
(c) Capitalization. All of the currently outstanding ownership of any kind of
Viking Enterprises proposed for this transaction are owned, or will be
acquired prior to closing by Viking free and clear of any liens, claims or
encumbrances whatsoever, and are validly issued and outstanding, fully paid
and nonassessable. There are no outstanding options, subscriptions,
warrants or other agreements of any kind obligating Viking Enterprises to
issue any ownership of Viking Enterprises or options or rights with respect
thereto; and there are no outstanding securities or instruments of any kind
which are convertible into ownership of Viking Enterprises.
(d) Subsidiaries and Partnerships. Viking Enterprises is not a party to any
partnership, joint venture or other agreement, which involves the sharing
of profits or losses other then normal shareholder dividends.
(e) Conflicting Agreements and Consents. Neither the execution and delivery of
this Agreement nor the consummation of the transactions described herein
will:
(i) conflict with the Certificate of Incorporation or
By-laws of Viking Enterprises,
(ii) conflict with or result in a breach of, or give rise
to a right, termination of, or accelerate the
performance required by, any agreement to which
Viking Enterprises, is now a party, or constitute a
default thereunder, or in the creation of any liens,
charges or encumbrances upon any property , or
(iii) other than the change to Chinese citizens owning
100% of Viking Enterprises which will cause upon the
filing of the transfer of government documents for
new ownership to cause Viking Enterprises to cease
to be a Foreign Investment Enterprise, there is no
conflict with any statute, regulation, ordinance,
writ, injunction order, judgment, decree, license,
permit or other governmental approval to Viking
Enterprises or any of its assets is subject.
(f) Suits and Controversies. Except as listed and fully described in the
financial statements or Schedule C, (waived) there are no actions, suits,
proceedings or investigations pending, threatened against or affecting
Viking Enterprises at law or in equity or before any federal, state or
local court, board or other governmental or administrative agency. There
are no controversies pending or threatened between Viking Enterprises and
its agents or employees, except as listed in Schedule C.
(g) 2001 Year to date Financial Statement. Schedule D contains a true and
complete Balance Sheet and income statement of Viking Enterprises, as of
September 30, 2002; copies of which have been delivered to Property
Development.
(h) Financial Statement. Viking has delivered to Property Development a true
copy of the GAAP balance sheet and statement of income of Viking
Enterprises for the year 2001. Such financial statements are complete and
fairly present the financial position of Viking Enterprises as of December
31, 2001, and the results of operations for Viking Enterprises for the year
then ended in conformity with GAAP accounting principles, copies of which
are attached hereto as Schedule E.
(i) Absence of Undisclosed Liabilities. As of September 30, 2002, to the best
of Viking's knowledge and belief, Viking Enterprise's had no liabilities or
obligations (whether accrued, absolute, contingent or otherwise and whether
due or to become due), which, individually or in the aggregate, were
material and were not reflected in the financial statements of Viking
Enterprises or the notes thereto as of such date or otherwise set forth in
the attached Schedules, Viking does not know of any basis for the assertion
against Viking Enterprises of any such liability or obligation arising out
of a transaction entered into or any state of facts existing on or prior to
such dates.
(j) Liabilities as of Closing. On the Closing, Viking Enterprises will have no
material liabilities or obligations (whether accrued, absolute, contingent
or otherwise and whether due or to become due) which are not fully
reflected on the face of the Closing Balance Sheet.
(k) Tax Returns and Payments. Property Development waives the following by its
signatures below as the buyers were the operating managers of Viking
Enterprises and have access to the following: True and complete copies of
all central government income tax returns relative to its operations for
the calendar years ended 2001 and Viking will make available, upon request
of Viking, copies of all central government, payroll and franchise tax
returns relative to its operation for such years, any requests for
extension of the filing of any returns currently due and copies, if any, of
report of central government tax authorities relating to examinations of
any tax returns for such years. There are no assessments of additional
taxes threatened against Viking Enterprises or its properties than those
listed in its financial statements. No waiver of any statute of limitations
or agreement for extension of time for assessment in respect of any tax
liability of Viking Enterprises is presently in effect.
(l) Title to Properties. At Closing, Beijing Fei Yun will not own or possess
any interest in any real or personal property, whether tangible or
intangible, except as set forth in the Viking Enterprise's 2001 Annual
Statement and its September 30, 2002 statement, and at such date Viking
Enterprises will have good and marketable title to all of such properties
and assets, subject to no liens, mortgages, pledges or encumbrances
'whatsoever, except for the interest of any lending institution or
individual lender as shown on the financial statement provided pursuant to
Section 4 (h) hereof.
(m) Contracts. Except as otherwise described in Schedule F, as of the Closing
Viking Enterprises will not be obligated by any commitments, contracts or
agreements of any kind or nature in accordance with Section 6(a) hereof.
Except as described in Schedule F or in the Viking Enterprise's financial
statements or the notes thereto, there has been no breach or default or
event, which with the lapse of time or notice or both, would constitute a
breach or default on the part of Viking Enterprises under any commitment,
contract or agreement of any kind or nature to which Viking Enterprises
assets are subject.
(n) Ownership Charters. This section is waived by Property Development by their
signatures below. The majority owners and officers of Property Development
are also the Chairman, President, CEO and Vice President of Viking
Enterprises and have access to these complete files. Schedule G which is
Waived by their signatures below, is the ownership charters from the
appropriate government authority which shows the following companies and
their percentages owned by Viking Enterprises: 60% Beijing Golden Horse
Great Wall Estate Construction Co., Ltd.; 100% Beijing Feiyun Chemical
Trading Co., LTD; 40% Lianyungang East Sea Highway Development & Management
Co, TTC
(p) Agreement to Amend Viking Enterprise. To be delivered and signed at
closing.
(q) INTENTIONALLY BLANK
(r) Employment. Viking Enterprises has no direct or indirect obligation or
liability under any employment agreement, collective bargaining agreement
or employee welfare or benefit plan, and Viking Enterprises has no
contracts, agreements or other obligations to any employee or any affiliate
of any employee.
(s) Investment Company. Viking is not an investment Company as defined in
Section 368(a)(2)(F)(iii) and (iv), or in any event a Company meeting the
requirements of Section 368(a)(2)(F)(ii), of the US Internal Revenue Code.
(s) Bank Accounts and Depositories. Waived by Buyer, Property Development, by
their signatures below.
(t) Non-competition Agreements. Viking Enterprises is not subject to any
agreement limiting or imposing any condition upon its freedom to compete in
any line of business or with any person or to utilize any information in
its possession.
(u) Compliance with Law. To the best of Viking Enterprise's knowledge and
belief, Viking Enterprises is not in violation of any law, regulation or
rule or any writ, judgment, injunction, order or decree of any court or
governmental authority whatsoever relating to conduct of its business and
the ownership of its assets.
(v) Viking. Viking is a corporation duly organized and validly existing under
the laws of the US and has full power and authority under its Certificate
of Incorporation and By-Laws (Charter) and has the right to enter into and
carry out the provisions of this Agreement for the sale of its 96%
ownership of its subsidiary Beijing Fei Yun Viking Enterprise Company, Ltd.
Viking has obtained all necessary approvals of the execution and delivery
of this Agreement and the consummation of the transactions contemplated
herein, and Viking is not subject to any contract or agreement which
prevents the consummation hereof or as to which the consummation of this
Agreement would constitute a breach or default. This agreement has been
duly executed and delivered by Viking and constitutes the legal, valid and
binding obligation of Viking.
(w) Disclosure. No representation by Viking contained in this Agreement or in
any Schedule, certificate, list or other document furnished or to be
furnished by or on behalf of Viking pursuant to or in connection with this
Agreement contains or shall contain any untrue statement of a material fact
or omits or shall omit to state a material fact necessary to make the
statements made, in light of the circumstances under which they are or were
made, not misleading.
(x) Intentionally left Blank.
Section 7. Representations of Property Development.
Property Development represents to Viking as follows:
(a) Organization and Qualification. Property Development is a corporation duly
organized and validly existing under the laws of Peoples Republic of China
and has full power and authority under its Certificate of Incorporation and
By-Laws to enter into and carry out the provisions of this Agreement.
Property Development has obtained all necessary approvals of the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein on its part to be obtained, and Property Development is
not subject to any contract or agreement which prevents the consummation
hereof or as to which the consummation of this Agreement would constitute a
breach or default or would result in the creation of any liens, charges or
encumbrances upon the property of Viking Enterprises. No other consent is
required to be obtained by Property Development to permit Property
Development to acquire and exchange Viking common and preferred shares and
a note receivable from Hebei Kangshun Feiyun Organic Waste Processing
Company, Ltd. for Viking Enterprises ownership as contemplated herein which
will be made out directly to Viking.
(b) Disclosure. No representation by Property Development contained in this
Agreement or in any document furnished or to be furnished by or on behalf
of Property Development pursuant to or in connection with this Agreement
contains or shall contain any untrue statement of a material fact or omits
or shall omit to state a material fact necessary to make the statements
made, in light of the circumstances under which they are or were made, not
misleading.
(c) Acquired for Investment. Property Development is acquiring the Acquired
Viking Enterprises ownership for its own account and not with a view to any
public distribution thereof.
Section 8. Actions in Preparing for Closing and
Conduct of Business Prior to Closing:
(a) Prior to Closing, Property Development agrees to take or cause the
following actions to be taken:
(i) Upon reasonable advance notice, authorized
representatives of Property Development shall, during normal business hours, be
permitted to confer with the Viking Enterprise's personnel and shall be given
full and complete access to all properties, books, records, contracts and
documents of Viking Enterprises. Viking Enterprises shall furnish to Property
Development all information with respect to the affairs and business of Viking
Enterprises as Property Development may reasonably request. Said inspection
shall be completed by Property Development not later than January 19, 2003.
(ii) Viking Enterprises and Viking will operate the
Viking Enterprises business and properties only in the ordinary and regular
conduct of its business; will not issue or grant options, interests or rights of
any nature whatsoever in respect of any of its capital stock or declare or pay
any dividend or make any distribution of any kind, except as shall be disclosed
to Property Development prior to Closing; will not create or permit to be
created any lien, charge or encumbrance on any of its properties.
(iii) The "Company's" Board of Directors will cause
Viking Enterprises to take such action as may be necessary to maintain,
preserve, renew and keep in full force and effect its corporate existence,
rights and franchises.
(iv) Unless otherwise consented to by Property
Development, Viking Enterprises will use its best efforts not to violate, or
commit a breach of or a default under any commitment, contract or other
agreement to which it is a party or to which any of its assets are subject or
violate any applicable statute, regulation, ordinance, writ, injunction, order,
judgment of decree of any court or other governmental agency.
(v) Except for those transactions contemplated by or
referred to in this Agreement, Viking Enterprises will not enter into any
borrowing or any other agreement or amendment to any existing agreement, except
as shall be disclosed to Property Development prior to Closing.
(vi) Viking will use, and cause to use, its good
faith best efforts to assist Property Development in obtaining the approval of
any regulatory agency that may be required involving a transaction of this
nature and size for the transfer of the Acquired Shares and note, as well as any
other regulatory approvals the parties determine to be necessary.
(vii) Viking Enterprises will continue to file all
tax returns in a timely manner (including any valid extensions) and to pay all
taxes shown as due thereon, and Viking Enterprises will promptly furnish
Property Development with a copy of all returns as filed.
(b) Prior to the Closing, Viking agrees to use its good faith and best efforts
to obtain the approval of any state regulatory authority for the transfer
of the Acquired Shares, as well as any other regulatory approvals which may
be necessary to effectuate this Agreement and the transfer of assets and
business contemplated by the parties. Property Development agrees to be
responsible for handling all filings for change of ownership.
Section 9. Conditions Precedent to the Obligations of
Viking and Property Development.
All obligations of Viking and Property Development to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions on or before the Closing, which are in addition to the
conditions specified in Sections 10 and 11 of this Agreement:
(a) All regulatory, board of directors and shareholders approvals determined to
be necessary by either of the parties shall have been obtained.
(b) Agreement to Amend Viking Enterprises' Charter and Delivery of Viking's
shares with appropriate stock powers received by Viking Representatives. To
be delivered and signed at closing or prior to closing.
Section 10. Conditions of Termination by Property
Development
(a) If, at the Closing, any of the following conditions shall exist:
(i) Any regulator whose consent is necessary for this
Agreement shall have withdrawn any approval;
(ii) Any suit, action or other proceeding before any
court or governmental agency shall have been instituted or threatened in which
it is sought to restrain, prohibit, invalidate or set aside the transactions
contemplated by this Agreement;
(iii) Any of Viking Enterprise's representations
shall be inaccurate in any material respect as of the date they were made, and,
except as to representations which are expressly limited to a state of facts
existing at a time prior to the Closing, as of the Closing as if made on the
Closing.
(iv) Viking shall have failed in any material way
with respect to perform or comply with any of its covenants, agreements or
conditions required by this Agreement to be performed or complied with by it
prior to the Closing; or
(v) Viking shall have failed to deliver at the
Closing any of the items required by Section 12 to be delivered by it at such
time;
(vi) In the event of termination of this Agreement
pursuant to Section B (a)(ii), 10(a)(iii),10(a)(iv), 10(a)(v), 10(a)(vi), or
10(a)(vii), Property Development shall promptly return all Viking's documents
pertaining to this exchange.
Section 11. Conditions of Termination by Viking.
(a) If at the Closing, any of the following conditions shall exist:
(i) Any of Property Development's representations
shall be inaccurate in any material respect as of the date they were made, and,
except as to representations and warranties which are expressly limited to a
state of facts existing at a time prior to the Closing, at and as of the Closing
as if made on the Closing; or
(ii) Property Development shall fail to deliver at
the Closing any of the items required by Section 13 to be delivered by Property
Development at such time; then, the closing Date shall be postponed at Vikings
election, but in no event to later than February 31, 2003 at which time Viking
may elect to terminate this Agreement.
Section 12. To be Delivered at Closing by Viking. The
following shall be delivered by Viking to Property Development at Closing:
(a) A certificate of the Chief Executive Officer of Viking certifying that each
of the following attached items are true, correct and complete to the best
of his knowledge and belief:
(i) Certificate of the Secretary of Viking dated as
of the Closing, setting forth the resolutions of its Board of Directors
authorizing the execution and delivery of this Agreement and the consummation of
the transactions herein provided for, and stating that none of such resolutions
have been ended or rescinded;
(h) Such other documents and instruments as have been reasonably requested by
Property Development or its counsel, including, without limitation, minute
books, stock record books and any and all corporate and accounting books
and records.
(i) The Closing Balance Sheet provided for in Section 2(b).
Section 13. To be Delivered by Property Development
at the Closing. The Following shall be delivered by Property Development at the
Closing:
a) Viking's 14,500,000 common restricted stock certificates
made out to Viking
b) Viking's 1,800,000 Series 2001 Callable Preferred Stock
made out to Viking
c) A note made out to the benefit of Viking in the amount of
$6,500,000. directly from Hebei Kangshun Feiyun Organic Waste Processing
Company, Ltd. collateralized by 40% ownership of Hebei Kangshun Feiyun Organic
Waste Processing Company, Ltd.
d) A favorable opinion of counsel for Property Development, in
form reasonably satisfactory to Viking and its counsel, to the effect:
(i) that this Agreement has been duly executed by
Property Development and constitutes a legally valid and binding obligation of
Property Development; and (ii) that such corporation does not know of any
regulatory or corporate approvals necessary to the consummation of the
transaction contemplated by the definitive contract herein other than the normal
filing of the change of ownership documents with the appropriate government
agencies. In the event said regulations or corporate approvals become necessary,
Property Development will take reasonable steps to obtain same.
Section 14. Intentionally left Blank.
15. Intentionally left Blank.
Section 14. Survival of the Representations. The
representations and agreements made by each of the parties to this Agreement
shall survive the Closing and shall remain in full force and effect; provided,
however, that one party shall make no claim for a breach of any representation
unless it has given notice to the other party of the claim on or before the
first anniversary of the Closing.
Section 15. Intentionally Left Blank.
Section 16. Property Development shall obtain all PRC
required approvals and copies of such approvals will be sent to Viking upon
receipt of approval from each government department post closing.
Section 17. Expenses. Viking and Property Development
shall pay their own expenses in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby.
Property Development shall bear the cost of obtaining the regulatory approvals,
if any, provided for in this Agreement.
Section 18. Complete Agreement. This Agreement
contains the entire agreement among the parties hereto with respect to the
transactions described herein and may be amended, modified and supplemented only
by a written instrument duly signed by the parties. This Agreement may be
executed simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which shall constitute but one and the same
instrument.
Section 19. Waiver. Any term or condition of this
Agreement may be waived at any time by the party, which is entitled to the
benefit thereof. Such waiver shall be in writing and shall be executed by the
President or Vice President of such party. A waiver on one occasion shall not be
deemed to be a waiver of the same or any other breach on another occasion.
Section 20. Notices. All notices and other
communications hereunder shall be in writing and shall, until contrary written
instructions are given, be delivered personally to, by International Couriers or
mailed first class, postage prepaid, registered or certified mail return receipt
requested, addressed to:
If to Viking: Viking Capital Group, Inc.
Two Lincoln Centre Suite 300
5420 LBJ Freeway
Dallas, TX 75240
Attn: William J. Fossen
If to Property Development: Beijing Property Development Company, Ltd
No. 50 Dajuehutong Xicheng District
Beijing, China
Attn: Zhou Haiping
Section 21. Governing Law. This Agreement shall be
construed and enforced in accordance with the laws of the State of Texas and
China.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be
duly executed as of the date first above written.
BEIJING PROPERTY DEVELOPMENT COMPANY, LTD.
ZHOU HAIPING WANG PING
/s/ Zhou Haiping /s/ Wang Ping
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Chairman & President Vice Chairman
VIKING CAPITAL GROUP, INC.
WILLIAM FOSSEN JOHN LU
/s/ William Fossen /s/ John Lu
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Chairman & CEO Executive Director/Asian
Pacific Operations