U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
T.Z.F. INTERNATIONAL INVESTMENTS, INC.
(Name of Small Business Issuer in its charter)
Nevada 88-0404186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Unit 1, 3071 No. 5 Road
Richmond, B.C., Canada V6X 2T4
(Address of Principal Office) Zip Code
Issuer's telephone number: (604) 718-2188
Securities to be registered under Section 12(b) of the Act:
Title of each class to be so registered - N/A
Name of each exchange on which each class is to be registered - N/A
Securities to be registered under Section 12(g) of the Act:
Common Stock
(Title of class)
PART I -
Item 1. DESCRIPTION OF BUSINESS
Background
The Company was incorporated under the laws of Nevada on
September 14, 1998, as Sabai Sabai Enterprises, Corp. It was
initially formed to engage in the business of importing low-priced
quality products from Southeast Asia for distribution throughout North
America. The Company spent several months engaged in the process
of raising capital and seeking to implement its original business plan,
but never commenced any commercial operations relating to its initial
business plan.
On March 30, 2000, there was a change in control of the
Company. On that date, T.Z.F. International Herbs Investment, Inc.,
a British Columbia corporation, purchased 1,000,000 shares of the
issued and outstanding common stock of the Company, representing
62.5% of the issued and outstanding stock, for a purchase price of
$140,000. This stock purchase was completed as the first step in a
business acquisition transaction between the Company and T.Z.F.
International Herbs Investment, Inc. In conjunction with closing of
the stock purchase transaction, the then current officers and directors
of the Company resigned and successors designated by T.Z.F.
International Herbs Investment, Inc., were appointed.
The second step in the business acquisition transaction was
completed on April 30, 2000. On that date, T.Z.F. International
Herbs Investment, Inc., surrendered its 1,000,000 shares in the
Company for cancellation. At the same time, the Company acquired
all of the issued and outstanding stock of T.Z.F. International Herbs
Investment, Inc., in exchange for issuance of 18,451,843 shares of its
common stock (as adjusted to account for a subsequent 10:1 forward
split of the Company's issued and outstanding common stock).
Following these transactions, the Company had a total of 24,451,843
shares issued and outstanding, of which 18,451,843 shares, or
approximately 75.5%, were owned by the persons who had previously
been shareholders of T.Z.F. International Herbs Investment, Inc.
T.Z.F. International Herbs Investment, Inc., which is now a
wholly-owned subsidiary of the Company, is the entity through which
the Company plans to conduct its business operations. It owns the
formula and all distribution and intellectual property rights, including
trademark, patent and industry design rights, to Snow Lotus Tea
products.
On May 25, 2000, the Company changed its name to T.Z.F.
International Investments, Inc. The Company, and its wholly-owned
subsidiary, T.Z.F. International Herbs Investment, Inc., are both
based in Richmond, British Columbia, Canada.
The Product
The only product of the Company which is currently being
distributed is Snow Lotus Tea, which is primarily an extract of the
snow lotus flower which grows in high elevations in the mountains of
Tibet and neighboring Chinese provinces. In addition to the snow
lotus flower, the product also incorporates other Chinese herbal
ingredients, including Chin-Chiao (Gentiana macrophylla), Dong Quai
(Angelica sinensis), and Dang-Shen (Salvia mitiorrhiza).
The Company's wholly-owned subsidiary, T.Z.F. International
Herbs Investment, Inc., owns the formula, distribution and intellectual
property rights, including trademark, patent and industrial design
rights, in connection with the "Snow Lotus Tea" series products. It
acquired those rights from Shenzhen Hungyunda Enterprises Co. Ltd.
of China pursuant to an Assignment Agreement dated December 15,
1999. Prior to the execution of the Assignment Agreement, the
Company's wholly-owned subsidiary was licensed to develop, market,
and distribute the "Snow Lotus Tea" products in North America, but
did not own the formula rights. In consideration for the assignment,
Shenzhen Hungyunda was issued 6,000,000 Common B Shares in the
capital stock of the Company's wholly-owned subsidiary. In
conjunction with the share exchange on April 30, 2000, such shares
were converted into 6,000,000 shares of common stock in the
Company.
The Company purchases the ingredients for the product from
Chinese herbs material wholesale agents in China. The product is
manufactured for the Company in Beijing, China, by Zhong Jia Yi
Medical and Pharmaceutical Technology Company, and is then
imported into Canada by the Company for resale. Qing Liu, who is a
director of the Company, was the president of Zhong Jia Yi Medical
and Pharmaceutical Technology Company from 1996 - 1997.
In, October, 1998, the Canadian Food Inspection Agency
approved the sale of Snow Lotus Tea in Canada as a food product,
and the Company is currently focusing its efforts on selling the
product in two markets in Canada. One is the health food and
supplements market, in which the product is being marketed as a
health food supplement. The other market consists of local
Traditional Chinese Medicine practitioners, Naturopathic clinics and
the Chinese community throughout Canada, in which the product is
considered to be a Chinese formula natural remedy for arthritis.
In the future, the Company intends to apply to the U.S. Food
and Drug Administration for permission to sell Snow Lotus Tea as a
food product in the U.S. It is not known when, or whether, the
Company is likely to receive permission from the FDA to sell its
product in the United States. In the future, the Company may also
elect to seek approval from appropriate governmental agencies in both
Canada and the U.S. to market Snow Lotus Tea as an over-the-
counter medicine for the treatment of the symptoms of arthritis.
However, the process of obtaining approval for sale of any product as
an over-the-counter medicine is extremely time-consuming and
expensive. As a result, the Company may never have the funds or
other resources required to initiate that process.
The Company has filed trademark applications in the United
States and Canada for the tradename "Snow Lotus."
The product is sold in ready-to-drink form and is intended to
be consumed in small quantities (one or two spoonfuls at a time). To
date, approximately 35,000 bottles (500 ml/bottle) have been
produced for the Company and the Company has contracted for the
production of an additional 50,000 bottles. The total capacity of the
manufacturing facility is approximately 75,000 bottles per month.
Research and Development
The Company itself has not expended funds for research and
development regarding its Snow Lotus Tea product, and instead has
relied upon research contracted to and conducted by other
organizations. For example, various limited research studies
regarding the efficacy of Snow Lotus Tea in treating rheumatoid
arthritis have been conducted by the Society for Therapeutic
Alternatives Using Natural Chinese Healing Methods ("STAUNCH"),
of British Columbia, Reviere Consulting, Chinese Medicine and
Acupuncture Specialists of Vancouver, and the International College
of Traditional Chinese Medicine ("TCM") in Vancouver. Each of
these studies was limited in scope and may not fairly indicate the
efficacy of Snow Lotus Tea in the treatment of arthritis.
The Market
As of the date of this registration statement, the Company
remains in the development stage. It's only current market for sale of
the Snow Lotus Tea is in Canada, and for the period from January,
2000 through June, 2000, it had total sales of only approximately
$9,500. As of July 1, 2000, the Company executed a new exclusive
distribution agreement with Expediter Sales, Ltd., of Vancouver,
British Columbia, pursuant to which the distributor is obligated to sell
a minimum of one container load (approximately 25,000 bottles) per
month commencing August 1, 2000. At current prices (approximately
$15/bottle, U.S.) a full container load would result in approximately
$375,000 in gross revenue for the Company.
Competition
The Company's product is being marketed through retail
outlets in the health food and supplements market. In this market,
product knowledge is an essential part of the sale of any given product
although price is also an important factor. Other products similar to
Snow Lotus Tea are available in this market, and they are generally
sold through price point displays in retail stores. However, the
Company does not believe that there are other products which are
currently available as herbal drinks or health food supplements which
are targeted at arthritis and which have no known side effects.
Administrative Offices
The Company currently maintains a mailing address at Unit 1,
3071 No. 5 Road, Richmond, B.C., Canada V6X 2T4. The
Company's telephone number there is (604) 718-2188. Other than
this mailing address, the Company does not maintain any other office
facilities, and does not anticipate the need for maintaining office
facilities at any time in the foreseeable future. The Company pays rent
in the amount of CAD $3,300 (approximately $2,220 U.S. dollars)
per month for the use of this office space. The lease is for three
years, and commenced on July 1, 1999.
Employees
The Company has 10 full-time employees and frequently also
uses part-time assistance and contract services. Management of the
Company also expects to use consultants, attorneys, and accountants
as necessary.
Risk Factors
An investment in the outstanding securities of the Company
should be considered to be extremely risky. The following discussion
of risk factors is not intended to provide an exhaustive list of all of
the risks which may be associated with an investment in the
Company. Any person considering such an investment should
carefully consider all of the risks involved, including, but not limited
to, the risk factors discussed below, before making an investment
decision.
Limited Operating History. The Company was formed in
December, 1998, and itself has no operating history or revenues from
operations. On April 30, 2000, it acquired all of the issued and
outstanding stock of T.Z.F. International Herbs Investment, Inc., a
British Columbia corporation, which became a wholly-owned
subsidiary of the Company. The wholly-owned subsidiary was
incorporated in May, 1998, and has only a limited operating history.
As a result, in conducting operations through its wholly-owned
subsidiary, the Company faces all of the risks inherent in a new
business venture, including all the unforeseen costs, expenses,
problems, and difficulties to which such ventures are subject.
Early Stage Product Development. The Company is
conducting pre-clinical studies and research studies on Snow Lotus
Tea and other potential products. The results of research, pre-clinical
studies and clinical trials are inherently unpredictable. Furthermore,
successful completion of pre-clinical studies would justify human
testing but would not be predictive of successful human testing. To
date, the only commercially available product developed by the
Company is Snow Lotus Tea. There is no assurance that the
Company will be able to develop any other commercial products or
that it will be capable of producing Snow Lotus Tea or any other
products in commercial quantities at reasonable cost; that it will be
able to successfully market its products; or that it will be able to
generate an acceptable return on its investment in research and
development through product sales, royalties, license fees, milestone
payments or other potential sources of revenue.
No Market for Stock. At the present time, there is no public
market for the Company's common stock and there is no assurance
that a market will develop in the future. Although the Company's
outstanding shares have been approved for trading on the "Pink
Sheets" maintained by the National Quotations Bureau, there has
been no trading in such shares. Even if a market should develop in
the future, there is no assurance that it will be maintained. Thus,
persons who purchase shares of the Company may find it to be
difficult or impossible to liquidate their investment, because of the
lack of a market or the difficulty in maintaining a market. There is
currently no person or entity which is obligated to make or maintain a
market in the Company's shares.
No Assurance of Success or Profitability. There is no
assurance that the operations to be carried on by the Company's
wholly-owned subsidiary will be successful or that they will ever will
generate significant revenues or profits. From inception (May, 1998)
through December, 1999, the subsidiary corporation generated no
significant revenues and incurred losses of approximately $482,000.
The likelihood of success of such operations must be considered in
light of the problems, expenses, difficulties, complications and delays
frequently encountered in connection with development of a new
business.
Need for Additional Financing. The Company and its wholly-
owned subsidiary will require additional funds to continue research
and product development, to initiate marketing activities, and to
implement the terms of their business plan. As of July 15, 2000, the
Company and its wholly-owned subsidiary had received gross
proceeds of approximately CAD $3,858,965(approximately $2,597,083
U.S. dollars) from the private placement of securities. They believe
that their current resources, together with the additional proceeds from
the on-going private placement offering (assuming the maximum
offering is completed), will enable them to maintain their current and
planned operations through the next 24 months. However, there is no
assurance that the Company will successfully complete the private
placement offering. There is also no assurance that unforeseen
circumstances or a change in operations may not consume available
resources more rapidly than currently planned or anticipated or require
additional capital to fully implement marketing efforts and other
aspects of the business plan. To the extent that the capital resources of
the Company and its subsidiary are insufficient to meet current or
planned operating requirements, they will be required to seek
additional funds through equity or debt financing, collaborative or
other arrangements with corporate partners, licensees or others, and
from other sources, which may have the effect of diluting the holdings
of existing shareholders. No assurance can be given that additional
financing will be available when needed or that such financing will be
available on terms acceptable to the Company. If adequate funds are
not available, the Company would be required to delay, trim or
eliminate its research and product development programs or other
programs or services which are currently part of the business plan, or
may be required to alter the business plan, which is likely to have a
material adverse effect on the Company.
Dependence on Key Personnel. The success of the Company
depends upon a few key personnel. Significant disruption in the
Company's operations could be experience if one or more of these
individuals were to become unavailable. The Company does not
currently have employment contracts with any of its key personnel.
As a result, those persons could elect to terminate their employment
with the Company at any time.
Governmental Regulation. There are substantial regulations
applicable to the advertising and sale of food products or over-the-
counter medicines. In October, 1998, the Canadian Food Inspection
Agency approved the sale of Snow Lotus Tea in Canada as a food
product. The Company intends to file an application with the U.S.
Food and Drug Administration for permission to sell Snow Lotus Tea
as a food product in the U.S., but as of the date of this registration
statement, has not yet done so. Accordingly, it is not known when, or
whether, the Company is likely to receive permission from the FDA to
sell Snow Lotus Tea in the U.S. In the future, the Company could
elect to seek approval from governmental agencies in both the U.S.
and Canada to market Snow Lotus Tea as an over-the-counter
medicine for treatment of the symptoms of arthritis. However, the
process of obtaining approval for sale of any product as an over-the-
counter medicine is extremely expensive and time-consuming. There
is no assurance that the Company would ever have the resources
necessary to complete all of the necessary research and clinical trials
required prior to submission of an application for sale of Snow Lotus
Tea, or any other product, as an over the counter medicine, and even
is such an application was submitted, there is no assurance that it
would be approved.
Patent or Copyright Protection. The Company's success will
depend upon its ability to obtain patents, obtain exclusive rights to
patents, maintain trade secret protection and operate without infringing
upon the proprietary rights of third parties. The Company has
attempted to protect its products and technologies through a
combination of patent and trade secret laws. There can be no
assurance that pending patent applications will be successful or that
others will not develop functionally equivalent or superior products or
technology that does not infringe the Company's patents. Accordingly,
the Company may be vulnerable to competitors which develop
competing products or competing technology, whether independently,
or as a result of acquiring access to the Company's trade secrets.
Sources of Raw Materials. The Company's Snow Lotus Tea product
is primarily an extract of the snow lotus flower which grows in high
elevations in the mountains of Tibet and neighboring Chinese
provinces, and also incorporates other Chinese herbal ingredients. The
Company currently purchases these herbs from Chinese herbs material
wholesale agents in China. The possibility that the Company may be
unable, from time to time, to obtain sufficient quantities of necessary
herbs is a significant risk, and in many respects this risk is beyond the
control of the Company. In addition, even if the necessary herbs are
available, their quality may vary or the Company may be unable to
purchase them at prices which are low enough to allow it to produce
its Snow Lotus Tea product at a competitive price. Even temporary
changes in the availability, price or quality of the herbal ingredients
would have a material effect on the operations and potential
profitability of the Company.
Competition. Many of the Company's competitors have
significantly greater resources and greater experience in the industry.
However, the Company is not currently aware of other similar
products with the same curative effects which are also free from side
effect. The Company's future is dependent on securing technological
superiority in its products, and maintaining such superiority in the face
of new developments. The Company plans to form strategic
partnerships to accelerate the development and distribution of its
products, conduct multi-dimensional marketing, and continue its
research and development. The Company also plans to acquire
manufacturing and research and development facilities in China.
There can, however, be no assurance that the Company will be
successful in these enterprises.
Dependence on Key Personnel. In the early stages of its
operations, the success of the Company's will be dependent upon a
few key personnel. Significant disruption in the Company's operations
could be experienced if one or more of these individuals were to
become unavailable.
Dependence on Strategic Partners and Others. The Company's
strategy is to establish collaborative arrangements to conduct later
stage development and commercialization of its products. There can
be no assurance, however, that the Company will be able to establish
future collaborations on favorable terms, if at all, or that its current or
future collaborative arrangements will be successful. Furthermore,
once a collaborative arrangement is established and the Company
becomes dependent upon the arrangement for development and
commercialization of its products, a collaborative partner may delay or
abandon development of the Company's product for a variety of
reasons which may invalidate the product's commercial value, and
which may also adversely affect the Company's business.
Market Acceptance. As of the date of this registration
statement, the Company's Snow Lotus Tea product has been approved
for sale in Canada as a food product. It has not been approved for
sale in the U.S. or any other countries as a food product, nor has it
been approved for sale in any country as an over-the-counter medicine.
There is no assurance that the Company's products, if approved for
sale in other countries as either a food product or an over-the-counter
medicine, will achieve market acceptance. The extent of acceptance of
the Company's products by consumers and by persons in the
healthcare industry will depend upon a number of factors, including,
but not limited to, recognition of the efficacy of the product, product
availability, brand name recognition, the availability and cost of
competitive products, relative safety and efficacy of competitive
products, and the like. There is no assurance that the Company's
products will be successful in achieving market acceptance as either a
food product or as an over-the-counter medicine.
Potential Product Liability. Testing and proposed
commercialization of food products and human therapeutic products
involves inherent risk of product liability claims and associated adverse
publicity. There can be no assurance that the Company will be able to
obtain or maintain sufficient insurance coverage on acceptable terms
with coverage which is adequate to provide necessary protection. Such
insurance is expensive, difficult to obtain and may not be available in
the future on acceptable terms, or at all. An inability to obtain
sufficient insurance coverage on reasonable terms or to otherwise
protect against potential product liability claims, could prevent or
inhibit the commercialization of the Company's potential products.
Manufacturing Uncertainties. The Company's ability to
commercialize its products will depend upon its ability to manufacture
such products, either directly or through third parties, at a competitive
cost and in accordance with any applicable regulatory requirements.
The Company's products must be manufactured in commercial
quantities at an acceptable cost and with sufficient quality, consistency,
purity and stability to make them marketable. If the Company is
unable to make adequate arrangements for manufacture of its products,
either through ownership of a manufacturing facility or through
contracting with third parties, it would have a material adverse affect
upon the Company's business and potential profitability.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS
Plan of Operation
During the fiscal year ending December 31, 2000, and during
the twelve months following the date hereof, the Company plans to
complete its registration under the Securities Exchange Act of 1934 in
order to voluntarily become a fully-reporting company, expand the
marketing of its product in Canada, raise additional capital, and
complete the acquisition of a pharmaceutical manufacturing business in
China. There is no assurance as to when or whether the Company will
be successful in doing so.
During the period from September 14, 1998 (inception) through
the date of this registration statement, the Company has engaged in no
significant operations other than organizational activities and
acquisition of capital as noted above. On April 30, 2000, the
Company acquired 100% of the issued shares of TZF International
Herbs Investment, Inc. by the issuance of 18,451,843 shares of
common stock in exchange for all issued and outstanding stock of TZF
International Herbs Investment, Inc.
As a result of the acquisition of all of the issued and
outstanding stock of TZF International Herbs Investment, Inc., as of
April 30, 2000 (the date of Pro Forma Consolidated Financial
Statements included in this registration statement), the Company had
total assets of $5,796,893, including current assets of $1,693,690, of
which $1,094,013 was in the form of cash and short-term deposits.
Included in the Company's assets are technology rights valued at
$4,038,229 which is the value assigned to the acquisition of the
formula, distribution and intellectual property rights, including
trademark, patent and industrial design rights, for the "Snow Lotus
Tea" series products. The Company's wholly-owned subsidiary, TZF
International Herbs Investment, Inc., acquired these assets from
Shenzhen Hungyunda Enterprises Co. Ltd. of China pursuant to an
Assignment Agreement dated December 15, 1999. The consideration
consisted of issuance of 6,000,000 Common B Shares in the capital
stock of the Company's wholly-owned subsidiary. Upon completion
of the share exchange on April 30, 2000, the Common B shares held
by Shenzhen Hungyunda Enterprises Co Ltd were exchanged for
6,000,000 shares of common stock of the Company.
Between January 10, 2000 and March 16, 2000, the Company's
wholly-owned subsidiary raised a total of CAD $537,000
(approximately $361,401 U.S. dollars) through the offering and sale at
a price of CAD $1.00 (approximately $0.6730 U.S. dollars) per unit,
of units consisting of one Class B common stock and one warrant to
purchase an additional share of common stock at a price of CAD
$1.50 per share (approximately $1.0096 U.S. dollars). Beginning on
or about March 17 and continuing until the date of completion of the
share exchange on April 30, 2000, the Company's wholly-owned
subsidiary, TZF International Herbs Investment, Inc., was actively
engaged in a private placement offering of up to 6,600,000 units, each
of which consisted of one Class B Preferred Share and one purchase
warrant to acquire one Class B Preferred Share at a price of CAD
$1.50 per share (approximately $1.0096 U.S. dollars). As of April
30, 2000, the subsidiary had sold a total of 2,214,643 such units and
received gross offering proceeds of CAD $3,321,964.50
(approximately $2,235,682 U.S. dollars). In the event all such units
were sold, the gross offering proceeds would be CAD $9,900,000
(approximately $6,662,700 U.S. dollars).
As part of the share exchange on April 30, 2000, all of the
outstanding Class B Shares of the subsidiary, including those sold in
the private offering, were converted, on a one-to-one basis, into
shares of common stock of the Company, and the warrants were
converted into warrants representing the right to acquire one share of
common stock of the Company at a price of CAD $1.50
(approximately $1.0096 U.S. dollars). Since completion of the share
exchange, the subsidiary has not actively continued with the private
placement offering. However, on or about July 4, 2000, the subsidiary
received subscription proceeds totaling CAD $510,000 (approximately
$343,230 U.S. dollars) for the purchase of an additional 340,000 units.
In lieu of issuing shares and warrants in the subsidiary to the
purchasers of those units, the Company issued them 340,000 of its
own shares, together with warrants to acquire an additional 340,000
shares at a price of CAD $1.50 per share (approximately $1.0096
U.S. dollars).
The Company intends to modify and continue the offering
during the fiscal year ending December 31, 2000. As modified, it is
expected that the offering will be for units priced at CAD $1.50
(approximately $1.0096 U.S. dollars) per unit, with each unit
consisting of one share of common stock in the Company and one
warrant to purchase an additional share of common stock in the
Company at a price of CAD $1.50 (approximately $1.0096 U.S.
dollars).
The proceeds of the offering are intended to be used primarily
for working capital, implementation of a marketing program and for
acquisition of certain fixed assets, including a manufacturing facility.
The Company has signed an agreement to acquire all of the
issued and outstanding stock of Tian An Investments Limited, a
British Virgin Islands company with an office in Hong Kong. Tian
An's only asset is its 100% ownership of Tian An (Xiamen)
Pharmaceuticals Ltd., a manufacturer of Chinese traditional and herbal
medicine and other drugs. On or about July 5, 2000, the Company
forward HK $6,600,000 (approximately $740,300 U.S. dollars) as an
installment towards payment of the total purchase price of
approximately HK $22,000,000 (approximately $2,961,200 U.S.
dollars). The Company is currently conducting its due diligence
investigation with respect to the proposed acquisition. In the event
the Company is satisfied with the results of its due diligence
investigation, a second payment of HK $6,400,000.00 (approximately
$740,300 U.S. dollars) required to be made on or before August 30,
2000. The purchase transaction is scheduled to close October 31,
2000, and payment of the balance of the purchase price will be due at
closing.
Need for Additional Capital
The Company's existing capital in conjunction with the gross
proceeds from the sale of its Units, is expected to be sufficient to
enable it to meet its cash needs, including completing its registration
under the Securities Exchange Act of 1934, compliance with its
reporting obligations under such Act following completion of its
registration, and costs expected to be incurred for normal business
operations. The Company estimates that its funds are sufficient to run
its currently defined programs through February 2001.
Item 3. Description of Property.
The Company currently maintains a mailing address at Unit 1,
3071 No. 5 Road, Richmond, B.C., Canada V6X 2T4. The Company's
telephone number there is (604) 718-2188. Other than this mailing
address, the Company does not maintain any other office facilities, and
does not anticipate the need for maintaining office facilities at any
time in the foreseeable future. The Company pays rent in the amount
of CAD $3,300 (approximately $2,220 U.S. dollars) per month for the
use of this office space. The lease is for three years, and commenced
on July 1, 1999.
Item 4. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of the date of this
Registration Statement, the stock ownership of each executive officer
and director of T.Z.F. International Investments, Inc., of all executive
officers and directors as a group, and of each person known by T.Z.F.
International Investments, Inc. to be a beneficial owner of 5% or more
of its Common Stock. Except as otherwise noted, each person listed
below is the sole beneficial owner of the shares and has sole
investment and voting power as such shares. No person listed below
has any options, warrants or other rights to acquire additional
securities of T.Z.F. International Investments, Inc., except as may be
otherwise noted.
<TABLE>
<CAPTION>
Number of of
Name and Shares Owned Class
Address Beneficially Owned
<S> <C> <C>
Xin Chen
3381 Fleming Street
Vancouver, B.C. V5N 3V6 5,100,000<F1> 27.14%
Chung Yu
3381 Fleming Street
Vancouver, B.C. V5N 3V6 2,450,000<F1> 13.04%
Qing Liu
#308 - 8625 Logan Street
Vancouver, B.C. V6P 3T3 2,450,000<F1> 13.04%
Robert L. Hallam
5501 Nancy Greene Way
North Vancouver, B.C.
V7R 4R6 0<F1> 0%
Hong Li
3381 Fleming Street
Vancouver, B.C. V5N 3V6 0<F1> 0%
Chun Sheng Guo
3381 Fleming Street
Vancouver, B.C. V5N 3V6 0<F1> 0%
Shenzhen Hengyunda Enterprises
Co. Ltd.
Shenzhen, China 6,000,000 31.93%
All directors and executive
officers (6 persons) 10,000,000 53.21%
<FN>
<F1> The person listed is an officer, a director, or both, of the Company.
</FN>
</TABLE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
The directors and executive officers currently serving the Company are
as follows:
<TABLE>
<CAPTION>
Positions Held and
Name Age Tenure
<S> <C> <C>
Chung Yu 40 CEO, President and a
Director since February 1999
Qing Liu 45 Vice President and a
Director since February 1999
Xin Chen 37 Chairman and a Director
since February 1999
Robert L. Hallam 55 Director since
February 2000
Hong Li 39 Director since
February 2000
Chun Sheng Guo 35 Director since
February 2000
</TABLE>
The directors named above will serve until the next annual
meeting of the Company's stockholders. Thereafter, directors will be
elected for one-year terms at the annual stockholders' meeting.
Officers will hold their positions at the pleasure of the board of
directors, absent any employment agreement, of which none currently
exists or is contemplated. There is no arrangement, plan or
understanding between any of the directors or officers of the Company
and any other person pursuant to which any director or officer was or
is to be selected as a director or officer, and there is no arrangement,
plan or understanding as to whether non-management shareholders will
exercise their voting rights to continue to elect the current directors to
the Company's board. There are also no arrangements, agreements or
understandings between non-management shareholders and
management under which non-management shareholders may directly
or indirectly participate in or influence the management of the
Company's affairs.
Biographical Information
Chung Yu.
Mr. Chung Yu is President and CEO of the Company, as well
as a director. Mr. Chung Yu is the honorary president of the Canadian
Chinese Herbal Professional & Merchants Association, Vice-Chairman
of the Canadian Chinese Chamber of Commerce, and a member of the
Chinese Entrepreneurial Society of Canada. Mr. Chung Yu was the
former director and vice-president of Hong Kong KunZe Enterprise
Ltd., president of China Hua Pu Group, and a director of RoRo
International Trading, Ltd. With over 12 years as the president of
China Hua Pu Group, Mr. Yu will contribute his expertise to the
startup and management of the Company.
Qing Liu.
Mr. Liu is the Vice President for North America & Asia and is
Vice President and a director of the Company. From 1995 to 1999,
Mr. Liu was the Chairman and President of Beijing T.Z.F. Commerce
and Trade Group, Chairman of the Board of Directors of Beijing
YoungHeng Advertising Company, President of Beijing Kai Huan
medicine manufacturing company, and the President of Beijing Zhong
Jia Yi Medical and Pharmaceutical Technology Development
Company. Mr. Liu is the honorary Chairman of the S.T.A.U.N.C.H.
(The Society for Therapeutic Alternatives Using Natural Chinese
Healing Methods) Foundation in Canada and a committee member of
the Chinese Business Association of Canada.
Xin Chen
Mr. Chen is Chairman of the board of directors of the
Company. He is the president and Chief Executive Officer of the
XinHai Group, the honorary Dean of the Finance Faculty and visiting
professor at JiangXi Finance University and a visiting professor at the
Beijing Commerce University. Mr. Chen is also Chairman of the
board of directors of the Ning Bo Success Industry Inc., which is listed
on the Shen Zhen Stock Exchange in China.
Robert L. Hallam.
Mr. Hallam is a director of the Company. He was the
President and Director of Robert L. Hallam Environmental
Management, Ltd., Director of Knight Piesold, Ltd., and President,
Director and CEO of Hallam Knight Piesold, Ltd. Mr. Hallam
recently became Director of Tai Li Environment Engineering, Ltd., a
firm based in Kumming, Yunnan, China. In 1995, Mr. Hallam
established a new company, Oriental Express Trading Corporation, of
which he is a Director and 50% owner. This new company has been
involved in the export of Canadian products, primarily
telecommunications equipment, to the People's Republic of China and
the importing of Chinese herbal medicines for the treatment of AIDS
patients.
Hong Li.
Mr. Li is a director of the Company, and is involved with
introducing investors from Asia. Mr. Li was the Secretary of the
Board of Directors of Shenzhen Tianyuan Industry, Inc., and was
responsible for raising capital. Mr. Li was also the Vice President of
Hainan Heng Tai Group, Ltd. Presently, Mr. Li is the director of
ShenZhen Xinhai Industrial & Trading, Ltd., and is a director and
CEO of NingBo Success Industry, Inc.
Chung Sheng Guo.
Mr. Guo is a director of the Company. Since 1994, he has
worked for ShenZhen Xinhai Industrial & Trading, Ltd. as the
manager. In this capacity, he specialized in import and export, and
projects for overseas investment. Mr. Guo will be responsible for the
production of Snow Lotus Tea in China.
Indemnification of Officers and Directors
As permitted by Nevada law, the Company's Articles of
Incorporation provide that the Company will indemnify its directors
and officers against expenses and liabilities they incur to defend, settle,
or satisfy any civil, criminal, administrative or investigative proceeding
brought against them on account of their being or having been
Company directors or officers to the fullest extent permitted by
Nevada law unless, in any such action, they are adjudged not to have
met the standard of conduct required by Nevada law to make it
permissible for the Company to provide indemnification. Insofar as
indemnification for liabilities arising under the Securities Act of 1933
may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been
informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed
in that Act and is, therefore, unenforceable.
Exclusion of Liability
Pursuant to the Nevada General Corporation Law, the
Company's Articles of Incorporation exclude personal liability for its
directors for monetary damages based upon any violation of their
fiduciary duties as directors, except as to liability for any breach of the
duty of loyalty, acts or omissions not in good faith or which involve
intentional misconduct or any transaction from which a director
receives an improper personal benefit. This exclusion of liability does
not limit any right which a director may have to be indemnified and
does not affect any director's liability under federal or applicable state
securities laws.
Item 6. Executive Compensation.
By directors' resolution dated December 1, 1998, Mr. Chung
Yu, Mr. Xin Chen, and Mr. Qing Liu will each be paid a director's fee
of CAD $8,000 (approximately $5,384 U.S. dollars) per month
effective as of the date of the resolution. Payment of such director's
fees may be deferred until such time as the Company has had a public
offering, or as the Board of Directors decides in view of the
Company's financial resources.
As at April 30, 2000, detailed unpaid director's fees are as follows:
<TABLE>
<CAPTION>
Total fees
incurred Xin Chen Chung Yu Eric Liu Total
<S> <C> <C> <C> <C>
$91,533 $91,533 $91,533 $274,599
Total fees
paid (42,573) (40,938) (83,511)
Taxes accrued (22,883) (22,883)
Amount
unpaid $91,533 $48,960 $27,712 $168,205
</TABLE>
Item 7. Certain Relationships and Related Transactions.
The amount of $167,354 was payable by the Company to Mr.
Yong Wang representing 10% of $1,673,543 he helped raised in
the subsidiary's offering. The fee was paid by Mr. Xin Chen on
behalf of the Company, of which $106,599 was reimbursed to
Mr. Xin Chen. The amount of $60,755 is still owing to Mr. Xin
Chen as at April 30, 2000.
Item 8. Description of Securities.
Common Stock
The Company's Articles of Incorporation authorize the issuance
of 100,000,000 shares of Common Stock. Each record holder of
Common Stock is entitled to one vote for each share held on all
matters properly submitted to the stockholders for their vote.
Cumulative voting for the election of directors is not permitted
by the Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to
such dividends as may be declared from time to time by the
Board of Directors out of legally available funds; and, in the
event of liquidation, dissolution or winding up of the affairs of
the Company, holders are entitled to receive, ratably, the net
assets of the Company available to stockholders after distribution
is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares
of Common Stock have no preemptive, conversion or redemptive
rights. All of the issued and outstanding shares of Common
Stock are, and all unissued shares when offered and sold will be,
duly authorized, validly issued, fully paid, and nonassessable.
To the extent that additional shares of the Company's Common
Stock are issued, the relative interests of then existing
stockholders may be diluted.
Transfer Agent
The Company's transfer agent is Signature Stock
Transfer, 14675 Midway Road, Suite 221, Dallas, Texas 75244.
The telephone number of the transfer agent is (972) 788-4193.
Reports to Stockholders
The Company plans to furnish its stockholders with an
annual report for each fiscal year ending December 31 containing
financial statements audited by its independent certified public
accountants. In the event the Company enters into a business
combination with another company, it is the present intention of
management to continue furnishing annual reports to
stockholders. Additionally, the Company may, in its sole
discretion, issue unaudited quarterly or other interim reports to
its stockholders when it deems appropriate. The Company
intends to comply with the periodic reporting requirements of the
Securities Exchange Act of 1934.
PART II
Item 1. Market Price and Dividends on the Registrant's
Common Equity and Other Shareholder Matters
The Company's common stock is currently approved for
trading on the "Pink Sheets" of the National Quotation's Bureau
under the symbol SBAI. However, there is currently no trading
activity in such securities. It is expected that the Company will
change its trading symbol as a result of its recent name change.
As of the date of this registration statement, there are
approximately 40 holders of record of the Company's common
stock. No dividends have been paid to date and the Company's
Board of Directors does not anticipate paying dividends in the
foreseeable future.
Item 2. Legal Proceedings
The Company is not a party to any pending legal
proceedings, and no such proceedings are known to be
contemplated.
No director, officer or affiliate of the Company, and no
owner of record or beneficial owner of more than 5.0% of the
securities of the Company, or any associate of any such director,
officer or security holder is a party adverse to the Company or
has a material interest adverse to the Company in reference to
pending litigation.
Item 3. Changes in and Disagreements with Accountants.
On May 1, 2000, the Company appointed Moen &
Company, Chartered Accountants, 1400 IBM Tower, 701 West
Georgia Street, Vancouver, B.C. as their independent auditor.
Prior to Moen & Company, the Company had engaged Parker &
Co., Chartered Accountants, as their independent auditor.
Item 4. Recent Sales of Unregistered Securities.
Since September 14, 1998 (the date of inception) the
Company has sold its Common Stock to the persons listed in the
table below in transactions summarized as follows:
<TABLE>
<CAPTION>
Date Aggregate Purchase
of Purchase Price
Name Sale Shares Price Per Share
<S> <C> <C> <C> <C>
Daisy Fisher 9/15/98 500,000 $1,250 $.0025
Fred Fisher 9/15/98 500,000 $1,250 $.0025
James Canten 2/3/99 10,000 $1,000 $.10
Kusum Subasingha 3/2/99 20,000 $2,000 $.10
Patrick Lynch 2/3/99 20,000 $2,000 $.10
Donald Laroque 2/3/99 10,000 $1,000 $.10
Issac Maly 2/3/99 10,000 $1,000 $.10
Michael Mulley 2/3/99 10,000 $1,000 $.10
Donald H. Petch 1/3/99 5,000 $500 $.10
Sajid McKenley 2/3/99 5,000 $500 $.10
Richard Campbell 2/18/99 20,000 $2,000 $.10
Conni Seltzer 2/18/99 20,000 $2,000 $.10
Fee Wai Quan 2/19/99 20,000 $2,000 $.10
Frank Del Vecchio 2/28/99 10,000 $1,000 $.10
Anchana
Chayawatana 2/17/99 30,000 $3,000 $.10
David F. Knapel 2/17/99 30,000 $3,000 $.10
Manoj Batra 2/17/99 20,000 $2,000 $.10
Patama Indhasolasa 2/17/99 10,000 $1,000 $.10
Kanyarat Panya 2/17/99 20,000 $2,000 $.10
Jariya Tookjitt 2/17/99 10,000 $1,000 $.10
Nutjaree Saengjan 2/17/99 20,000 $2,000 $.10
Pramron Samgjinda 2/17/99 20,000 $2,000 $.10
Loy Nongoee 2/18/99 10,000 $1,000 $.10
Buaruch Vantadee 2/18/99 20,000 $2,000 $.10
Kumpoun Meegrad 2/18/99 15,000 $1,500 $.10
Piyavadee Petchavy 2/18/99 20,000 $2,000 $.10
Wanna Chaisana 2/18/99 20,000 $2,000 $.10
Chanaout Asvanund 2/18/99 25,000 $2,500 $.10
Nisant Wongtham 2/18/99 10,000 $1,000 $.10
Raewat Palalert 2/18/99 30,000 $3,000 $.10
Preeya Premget 2/19/99 20,000 $2,000 $.10
Nupit Wongchompu 2/19/99 25,000 $2,500 $.10
Boonpend Sibua 2/19/99 15,000 $1,500 $.10
Sayun Subthaivorn 2/19/99 20,000 $2,000 $.10
Sukarnya Daingdrum 2/19/99 10,000 $1,000 $.10
Paul Spagnolo 2/3/99 10,000 $1,000 $.10
William Semeluk 2/19/99 10,000 $1,000 $.10
Brigita Roebe 2/18/99 20,000 $2,000 $.10
</TABLE>
Each of the sales listed above was made for cash in reliance
under United States law, either upon an exemption from registration
under Section 4(2) of the Securities Act of 1933, or upon an
exemption from registration under Section 3(b) of the Securities Act of
1933 and by Rule 504 of Regulation D promulgated thereunder. Based
upon the Subscription Agreement executed by each of the purchasers,
and based upon the pre-existing relationship between the cash
subscribers and the Company's officers and directors, the Company
had reasonable grounds to believe immediately prior to making an
offer to the private investors, and did in fact believe, when such
subscriptions were accepted, that such purchasers (1) were purchasing
for investment and not with a view to distribution, and (2) had such
knowledge and experience in financial and business matters that they
were capable of evaluating the merits and risks of their investment and
were able to bear those risks. The purchasers had access to pertinent
information enabling them to ask informed questions. The shares were
issued without the benefit of registration. An appropriate Rule 144
restrictive legend is imprinted upon each of the certificates
representing the shares issued pursuant to Section 4(2) and
stop-transfer instructions have been entered in the Company's transfer
records. No restrictive legend is included on the certificates
representing the shares issued pursuant to Section 3(b) and Rule 504,
and such shares have been designated as "free trading" shares in the
records of the transfer agent. All such sales were effected without the
aid of underwriters, and no sales commissions were paid.
Since May 15, 1998 (the date of inception) the Company's
wholly-owned subsidiary, T.Z.F. International Herbs Investment, Inc.,
has sold its common stock and preferred stock to the persons listed in
the table below in transactions summarized as follows:
<TABLE>
<CAPTION>
Date Aggregate Purchase
of Purchase Price
Name Sale Shares Price Per Share
<S> <C> <C> <C> <C>
Xin Chen 5/15/98 5,100,000 $34,325 $.0067
Chung Yu 5/15/98 2,450,000 $16,489 $.0067
Qing Liu 5/15/98 2,450,000 $16,489 $.0067
Shenzhen Hengyunda
Enterprises
Co., Ltd. 12/15/99 6,000,000 $4,632,229 $.6730
John Leong 1/10/00 25,000 $16,826 $.6730
Qi Zhang 1/10/00 100,000 $67,304 $.6730
Heping Chen 2/18/00 10,000 $6,730 $.6730
Anna Xiu
Mei Cui 3/15/00 165,000 $111,051 $.6730
Symonds Wai
Ming Wong 3/15/00 135,000 $90,860 $.6730
Lily Hong Qian 3/16/00 102,000 $68,650 $.6730
Andy Lau 3/16/00 40,200 $27,056 $.6730
Lily Hong Qian 3/23/00 53,334 $53,843 $1.0096
Anna Xiu
Mei Cui 4/15/00 29,068 $29,346 $1.0096
Anna Xiu
Mei Cui 4/15/00 134,541 $135,827 $1.0096
Jiangping Bao 4/30/00 541,000 $546,170 $1.0096
Jianguang Liu 4/30/00 171,000 $172,634 $1.0096
Bihui Nan 4/30/00 392,000 $395,746 $1.0096
Shirong Wang 4/30/00 213,000 $215,036 $1.0096
Jun Xia 4/30/00 200,000 $201,911 $1.0096
Honyan Zhao 4/30/00 140,700 $142,045 $1.0096
Ji Xue Yu 7/4/00 60,000 $60,576 $1.0096
Guang Yu Yang 7/4/00 80,000 $80,768 $1.0096
Shenzhen Shidai Chuangye
Investment Ltd. 7/4/00 200,000 $201,920 $1.0096
</TABLE>
With the exception of the sale to Andy Lau which was in
payment of a finders fee, each of the sales listed above was
made for cash in a private offering under the Securities Act
(British Columbia), and each of the purchasers was a non-U.S.
resident. Each subscriber was required to represent, among
other things, that he or she was making the investment for his or
her own account and not with a view to distribution of the
securities, that he or she would not sell, transfer, assign or
otherwise dispose of the securities except in compliance with all
applicable securities laws, and that he or she is not a U.S.
person, did not purchase the units for the account of a U.S.
person, was not offered the securities in the United States, and
did not execute or deliver the Subscription Agreement in the
United States. On or about April 30, 2000, all of the shares listed
above were exchanged for common stock of the Company
pursuant to the share exchange agreement between the Company
and its wholly-owned subsidiary.
Item 5. Indemnification of Directors and Officers
The Articles of Incorporation and the Bylaws of the
Company provide for indemnification of officers, directors or
controlling persons to the fullest extent permitted by Nevada law.
FINANCIAL STATEMENTS AND EXHIBITS
(a) Audited financial statements for T.Z.F. International
Investments, Inc., as and for the years ended December 31, 1999
and 1998, and unaudited financial statements for the four months
ending April 30, 2000, are attached. See following pages.
T.Z.F. INTERNATIONAL INVESTMENTS, INC.
Financial Statements
For the years ended December 31, 1999, and December 31,
1998.
SABAI SABAI ENTERPRISES, CORP.
INDEX to Financial Statements as at 31 December 1999 and
1998
[S]
Auditors' Report
Statement of Financial Position
Statement of Losses and Deficit
Statement of Cash Flows
Statement of Changes in Stockholders' Equity
Notes to the Financial Statements
AUDITORS' REPORT
To the stockholders of Sabai Sabai Enterprises, Corp.
We have audited the statements of financial position of Sabai
Sabai Enterprises, Corp. as at 31 December 1998 and 1999 and
the statements of losses and deficit, of cash flows and of changes
in stockholders' equity for the period from 15 September 1998
(the date of incorporation) to 31 December 1998 and for the
period from 1 January 1999 to 31 December 1999. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards in Canada, which are in substantial agreement
with those in the United States of America. Those standards
require that we plan and perform an audit to obtain reasonable
assurances whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures to the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial presentation.
In our opinion, these financial statements present fairly, in all
material respects, the financial position of the Company as at 31
December 1998 and 1999 and the result of its operations, cash
flows and changes in stockholders' equity for the period from 15
September 1998 to 31 December 1998, and for the period from 1
January 1999 to 31 december 1999 in accordance with generally
accepted accounting principles in the United States of America.
These financial statements have been prepared assuming that the
Company will continue as a going concern. As stated in Note 2
to the financial statements, the Company will require an infusion
of capital to sustain itself. This requirement for additional
capital raises substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of
this uncertainty.
Vancouver, British Columbia, Canada
4 February 2000
Parker & Co.
Chartered Accountants
SABAI SABAI ENTERPRISES, CORP.
Statement of Financial Position
Audited
<TABLE>
<CAPTION>
AS AT 31 DECEMBER 1999 1998
<S> <C> <C>
CURRENT ASSETS
Cash $54,370 $1,759
Total Current Assets 54,370 1,759
TOTAL ASSETS $54,370 $1,759
AS AT 31 DECEMBER 1999 1998
CURRENT LIABILITIES
Accounts payable $ 500 $ 374
Total current liabilities 500 374
STOCKHOLDERS' EQUITY
Share Capital, Note 3 1,600 1,000
Additional paid-in
capital 60,900 1,500
Total share capital 62,500 2,500
Deficit (8,630) (1,115)
Total stockholders'
equity 53,870 1,385
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $54,370 $ 1,759
</TABLE>
SABAI SABAI ENTERPRISES, CORP.
Statement of Losses and Deficit
Audited
<TABLE>
<CAPTION>
From the date of
Incorporation,
For the 15 September
Year Ended 1998 to
31 December 31 December
1999 1998
<S> <C> <C>
REVENUE
Sales $ 0 $ 0
Interest Earned 956 -
Total Revenue 956 -
EXPENSES
Office Supplies - 38
Accounting 874 695
Legal 1,000 -
Consulting 5,400 -
Bank Charges 157 32
Registration and filing fees 270 350
Transfer agent fees 770 -
Total expenses 8,471 1,115
LOSSES (7,515) (1,115)
INCOME TAXES, NOTE 4 - -
NET LOSS (7,515) (1,115)
DEFICIT, BEGINNING (1,115) -
DEFICIT, ENDING ($8,630) ($1,115)
LOSS PER SHARE, NOTE 5 ($0.01) ($0.00)
</TABLE>
SABAI SABAI ENTERPRISES, CORP.
Statement of Cash Flows
Audited
<TABLE>
<CAPTION>
From the date of
Incorporation,
For the 15 September
Year Ended 1998 to
31 December 31 December
1999 1998
<S> <C> <C>
CASH PROVIDED (USED) FROM OPERATIONS
From operation
Net loss ($7,515) ($1,115)
Changes in working capital other than cash
Accounts payable 126 374
126 374
Total cash provided (used)
from operations (7,389) (741)
CASH PROVIDED (USED) BY
INVESTMENT ACTIVITY - -
CASH PROVIDED (USED) BY FINANCING ACTIVITY
Proceeds from issuance
of common stock 60,000 2,500
Total cash provided by financing 60,000 2,500
CASH CHANGE 52,611 1,759
CASH BEGINNING 1,759 -
CASH ENDING $54,370 $1,759
COMPRISED OF:
Cash $54,370 $1,759
</TABLE>
SABAI SABAI ENTERPRISES, CORP.
Statement of Changes in Stockholders' Equity
From the Date of Incorporation, 15 September 1998 to 31 December 1999
Audited
<TABLE>
<CAPTION>
ADDITION-
COMMON COMMON AL RETAINED
STOCK STOCK PAID IN EARNINGS
ISSUED AMOUNT CAPITAL (DEFICIT)
<S> <C> <C> <C> <C>
CONSIDERATION
Private placement
for cash on 25
September 1998 1,000,000 $1,000 $1,500
Net loss from
date of incorporation to
31 December 1998 ($1,115)
Balance as at 31 December
1998 1,000,000 1,000 1,500 (1,115)
Private placement
for cash on 17
February 1999 600,000 600 59,400
Net loss for the year ended
31 December 1999 (7,515)
Balance as at 30 September
1999 1,600,000 $1,600 $60,900 ($8,630)
</TABLE>
SABAI SABAI ENTERPRISES, CORP.
NOTES TO THE FINANCIAL STATEMENTS
For the Year Ended 31 December 1999
Audited
Note 1 THE CORPORATION AND ITS BUSINESS
Sabai Sabai Enterprises, Corp. was incorporated in the State of
Nevada, United States of America on 14 September 1998 under the
Nevada Revised Statutes, Chapter 78, Private Corporations.
The Company has offices in Vancouver, British Columbia, Canada.
The Company has been organized to engage in any lawful activity.
No going concern business activity had started as at the date of these
financial statements. The fiscal year end of the Company is 31
December.
Note 2 SUMMARY OF ACCOUNTING PRINCIPLES
These financial statements have been prepared in United States of
America dollars, which have been rounded to the nearest whole dollar
except for the net loss per share which has been rounded to the nearest
cent, using United States of America Generally Accepted Accounting
Principles. These accounting principles are applicable to a going
concern, which contemplates the realization and liquidation of
liabilities in the normal course of business. Current business activity
has not yet begun and insufficient revenue has been generated to
sustain the Company as a going concern without the infusion of
additional capital.
Revenue will be recorded as a sale at the time the goods are shipped
from the Company's warehouse. Costs are recorded at the time an
obligation to pay occurs and are expensed at the time the benefit to the
Company is matched to revenue or, if there is no matching revenue, to
the period in which the benefit is realized.
Note 3 SHARE CAPITAL
The authorized capital stock is 25,000,000 shares of common stock
with a par value of $0.001.
1,600,000 shares of common stock have been issued as follows:
<TABLE>
<CAPTION>
SHARE
CONSIDERATION DATE ISSUED CAPITAL
<S> <C> <C> <C>
Private placement
for cash 25 Sep 1998 1,000,000 $1,000
Balance as at 31 Dec 1998 1,000,000 1,000
Private placement
Cash 17 Feb 1999 600,000 600
Balance as at 31 Dec 1999 1,600,000 $1,600
ADDITIONAL
PAID IN
CAPITAL TOTAL
<S> <C> <C>
Private placement
for cash $1,500 $2,500
Balance as at 1,500 2,500
Private placement
Cash 59,400 60,000
Balance as at $60,900 $62,500
</TABLE>
On 25 September 1998 the Company issued 1,000,000 common shares
with a par value o $0.001 for $0.0025 per share. These shares are
"control securities" which cannot be sold except pursuant to certain
limitations and restrictions.
On 17 February 1999 the Company issued 600,000 common shares
with a par value of $0.001 for $0.10 per share.
Note 4 INCOME TAXES
Income taxes on losses have not been reflected in these financial
statements as it is not virtually certain that these losses will be
recovered before the expiry period of the loss carry forwards.
The accumulated losses carried forward are as follows:
YEAR INCURRED AMOUNT
1998 ($1,115)
1999 ( 7,515)
($8,630)
Note 5 LOSS PER SHARE
Basic loss per share is computed by dividing losses available to
common stockholders by the weighted-average number of
common shares during the period. Diluted loss per share
amounts that would have resulted if dilutive common stock
equivalents had been converted to common stock. No stock
options were available or granted during the period presented.
Accordingly, basic and diluted loss per share are the same for all
periods presented.
Note 6 RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real property. Office
services are provided by the President of the Company. Such
costs are immaterial to the financial statements and accordingly
have not been reflected therein. The officers and directors of the
Company are involved in other business activities. If a specific
business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their own
business interests. The Company has not formulated a policy for
the resolution of such conflicts.
SABAI SABAI ENTERPRISES, CORP.
FINANCIAL STATEMENTS
For the four months ended April 30, 2000
The unaudited financial statements of the Company for the four
months ending April 30, 2000, follow. The financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented.
SABAI SABAI ENTERPRISES, CORP.
Index to Financial Statements as of April 30, 2000
(Unaudited)
[S]
Report on the Review of Pro Forma Financial Information
Pro Forma Consolidated Balance Sheet
Pro Forma Consolidated Statements of Loss
Pro Forma Consolidated Statements of Earnings (Deficit)
Notes to Pro Forma Consolidated Financial Statements
MOEN AND COMPANY
CHARTERED ACCOUNTANTS
PO Box 10129
1400 IBM Tower
701 West Georgia Street
Telephone: (604) 662-8899
Fax: (604) 662-8809
Vancouver, BC V7Y 1C6
REPORT ON THE REVIEW OF PRO FORMA FINANCIAL
INFORMATION
To the Directors and Shareholders of Sabai Sabai Enterprises,
Corp. (A Nevada Corporation) (A Development Stage Company)
We have reviewed the pro forma adjustments reflecting the
acquisition of TZF International Herbs Investment, Inc. by Sabai
Sabai Enterprises, Corp. (A Nevada Corporation) (A
Development Stage Company) described in Note 1 and the
application of those adjustments to the historical amounts in the
accompanying pro forma condensed balance sheet of Sabai Sabai
Enterprises, Corp. as of April 30, 2000 and the pro forma
condensed statement of income for the four months then ended.
These historical condensed financial statements are derived from
the historical unaudited financial statements of Sabai Sabai
Enterprises, Corp., which were reviewed by us, and of TZF
International Herbs Investment Inc., which were reviewed by us,
appearing elsewhere herein. Such pro forma adjustments are
based on management's assumptions as described in Note 2.
Our review was conducted in accordance with standards
established by the American Institute of Certified Public
Accountants.
A review is substantially less in scope than an examination, the
objective of which is the expression of an opinion on
management's assumptions, the pro forma adjustments, and the
application of those adjustments to historical financial
information. Accordingly, we do not express such an opinion.
The objective of this pro forma financial information is to show
what the significant effects on the historical information might
have been if the acquisition of TZF International Herbs
Investment Inc. had occurred at an earlier date. However, the
pro forma condensed financial statements are not necessarily
indicative of the results of operations or related effects on
financial position that would have been attained if the
abovementioned acquisition had actually occurred earlier.
Based on our review, nothing came to our attention that caused
us to believe that management's assumptions do not provide a
reasonable basis for presenting the significant effects directly
attributable to the acquisition of TZF International Herbs
Investment Inc. described in Note 1, that the related pro forma
adjustment do not give appropriate effect the proper application
of those adjustments to the historical financial statement amounts
in the pro forma condensed balance sheets as of April 30, 2000,
and the pro forma condensed statement of income for the four
months then ended.
"Moen and Company"
Chartered Accountants
Vancouver, British Columbia, Canada
June 12, 2000
SABAI SABAI ENTERPRISES, CORP.
Pro Forma Consolidated Balance Sheet
April 30, 2000
(In US Dollars)
(Unaudited)
This pro forma financial information should be read in conjunction with the
attached notes and the historical financial information contained therein.
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Current Assets
Cash and short term
deposit (note 4) $ 1,094,013
Accounts receivable (note 5) 13,217
Subscriptions receivable (note 6) 374,546
Prepaid expense and deposit (note 7) 5,382
Inventories, at lower of market or costs
(note 2(d)) 206,532
$ 1,693,690
Deferred lease expense, net of amortization
(note 8) 5,047
Fixed Assets, at cost (note 2(c)) 64,749
Less: accumulated depreciation (4,822)
59,927
Intangible Assets - technology rights,
at cost (note 3) 4,038,229
$ 5,796,893
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued (note 9) $ 125,417
Accrued payroll deductions payable
(note 10) 45,767
Management fees payable (note 11 and 12(a)) 168,205
Due to related parties, unsecured, non interest
bearing, with no specific terms of repayment
(note 12(b)) 60,755
400,144
Stockholders' Equity
Capital Stock (note 13)
Authorized
25,000,000 common shares at 0.001 par value
Issued
20,01,843 common shares 20,052
Paid in capital in excess of par value
of stock 5,395,380
Deficit, accumulated during the development
stage (19,359)
Cumulative translation (note 2(b)) 676
5,396,749
$ 5,796,893
</TABLE>
Approved on behalf of the board:
"Johnson Chung Yu," Director
"Eric Liu," Director
SABAI SABAI ENTERPRISES, CORP.
Pro Forma Consolidated Statements of Loss
Four Months Ended April 30, 2000
(In US Dollars)
(Unaudited)
This pro forma financial information should be read in conjunction with the
attached notes and the historical financial information contained therein.
<TABLE>
<CAPTION>
<S> <C>
Administration Costs
Bank charges and interest, net $ (29)
Office costs 465
Professional fees 10,107
Transfer agency and filing fees 185
Net loss for the period $ 10,728
Net loss per share
Basic $0.02
Diluted $0.02
</TABLE>
SABAI SABAI ENTERPRISES, CORP.
Pro Forma Consolidated Statements of Earnings (Deficit)
Four Months Ended April 30, 2000
(In US Dollars)
(Unaudited)
This pro forma financial information should be read in conjunction with the
attached notes and the historical financial information contained therein.
<TABLE>
<CAPTION>
<S> <C>
Deficit, December 31, 1999 $ (8,631)
Net loss for the four month period
ended April 30, 2000 (10,728)
Deficit, April 30, 2000 $ (19,359)
</TABLE>
SABAI SABAI ENTERPRISES, CORP.
Notes to Pro Forma Consolidated Financial Statements
April 30, 2000
Note 1. BUSINESS OPERATIONS
a) The Company was incorporated on September 14, 1998 in the
State of Nevada, U.S.A.
b) The Company is in the development stage and has not
generated any significant revenue from operations. The deficit to
April 30, 2000 has been accumulated during the development
stage.
c) These financial statements are in United States of America
Dollars and prepared in accordance with United States of
America Generally Accepted Accounting Principle (US GAAP).
d) Acquisition of TZF International Herbs Investment Inc.
As at April 30, 2000, the Company acquired 100% of the issued
shares of TZF International Herbs Investment Inc. ("TZF") by
the issuance of 18,451,843 common shares issued for total
consideration of $5,352,932 made up of par value of $18,452
and additional paid-in capital of $5,334,480. Assets and
liabilities of TZF being integrated into the historical information
of Sabai Sabai are as follows as at April 30, 2000:
<TABLE>
<CAPTION>
<S> <C>
Assets
Cash and short term deposits $1,040,372
Accounts receivable 13,217
Subscriptions receivable 374,546
Prepaid expense and deposit 5,382
Inventories 206,532
Deferred lease expense, net of amortization 5,047
Fixed assets, net of amortization 59,927
Intangible assets, technology rights 4,038,229
5,743,252
Liabilities
Accounts payable and accrued 114,917
Accrued payroll deductions payable 45,767
Management fees payable 168,205
Due to related parties 60,755
389,644
Net assets including cumulative translation 5,353,608
Cumulative translation, included in above,
Booked in stockholders' equity of Sabai Sabai (676)
Net value in exchange for 18,451,843 Common
Shares off Sabai Sabai and net equity on date of
acquisition of TZF $5,352,932
</TABLE>
The historical information of Sabai Sabai that is the basis for the
pro forma information at April 30, 2000 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Summary Balance Sheet
Assets
Cash $53,641
Liabilities
Accounts payable and accrued 10,500
Stockholders' equity
Capital stock - par value 1,600
- additional paid-in capital 60,900
62,500
Deficit (19,359)
43,141
$53,641
</TABLE>
Note 2. SIGNIFICANT ACCOUNTING POLICIES
a) Administration Costs
Administration costs are written off to operations when incurred.
b) Translation of Foreign Currency
The functional currency of the parent Company Sabai Sabai is
the United States Dollar and of TZF is the Canadian Dollar and
the reporting currency on a consolidated basis is the United
States Dollar.
The assets, liabilities, and operations of the Company are
expressed in the functional currency of the Company in United
States Dollars and for the subsidiary TZF in Canadian Dollars,
the Canadian Dollar; in conformity with US GAAP, before they
are translated into the reporting currency, the United States
Dollar.
Monetary assets and liabilities are translated at the current rate of
exchange.
The weighted average exchange rate for the period is used to
translate revenue, expenses, and gains or losses from the
functional currency to the reporting currency.
The gain or loss on translation is reported as a separate
component of stockholders' equity and not recognized in net
income. Gains or losses on remeasurement are recognized in
current net income.
Gains or losses from foreign currency transactions are recognized
in current net income.
Fixed assets are measured at historical exchange rates that
existed at the time of the transaction.
Depreciation is remeasured at historical exchange rates that
existed at the time the underlying related asset was acquired.
An analysis of the changes in the cumulative translation
adjustment as disclosed as part of stockholders' equity, is as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Four months ended Year Ended
April 30, December 31,
2000 1999 1998
Beginning balance $ - $ - $ -
Changes during the
period 676 - -
Ending Balance $ 676 $ - $ -
</TABLE>
Fixed assets are translated at their historical exchange rates when the
capital stock was issued.
The effect of exchange rate changes on cash balances is reported in the
statement of cash flows as a separate part of the reconciliation of
change in cash and cash equivalents during the year.
c) Depreciation
The Company depreciates its capital assets based on the following
methods:
Office equipment - 20% per annum on the declining balance basis
Leasehold improvement - based on the term of lease
Computer equipment - 30% per annum on the declining balance basis
As at April 30, 2000, the fixed assets and accumulated depreciation are
as follows:
<TABLE>
<CAPTION>
Accumulated Net Book
Cost Depreciation Value
<S> <C> <C> <C>
Office equipment $12,257 $1,375 10,882
Leasehold improvements 38,427 3,202 35,225
Computer equipment 14,065 245 13,820
$64,749 $4,822 $59,927
</TABLE>
d) Inventories
The inventories are recorded at lower cost or market. As at April 30,
2000 the inventories total $206,532.
Note 3. TECHNOLOGY ACQUISITION
By agreement dated December 15, 1999, Shenzhen Hengyunda
Enterprises Co. Ltd. of P.R. China agreed to sell and assign certain
information and rights relating to a series of products known as the
Snow Lotus Tea series products to TZF.
TZF International Herbs Investment Inc.("TZF") agreed to pay
consideration of 4,038,229 by the issuance of 6,000,000 Class B
common shares at a price of CAD$1.00 per share for total
consideration of CAD$6,000,000 (US$4,038,229).
Shenzhen Hengyunda Enterprises Co. Ltd. has warranted that there are
no charges or encumbrances against the rights being acquired.
This agreement includes the sale, assignment and transfer of all the
right, title and interest in and to the Product Information and all the
rights to use, exploit, develop or otherwise deal with the Product
Information or the Project, including the right to register any
Intellectual Property in connection with the Product, the same to be
held and enjoyed by TZF and its successors and assigns as fully and
effectively as the same would have been held and enjoyed by
Shenzhen Hengyunda Enterprises Co. Ltd. had this transfer and
assignment not been made.
Shenzhen Hengyunda Enterprises Co. Ltd. further agrees to execute
and deliver all such documents and further assurances as may be
necessary or desirable to give effect to the sale and assignment.
Amortization of the cost of the technology will commence when the
products relating to the technologies are available to be marketed;
which is expected to be effective May 1, 2000. The amortization
period is for ten years on a straight-line basis.
Note 4. CASH AND SHORT TERM DEPOSIT - $1,094,013
The total for cash and short term deposit as at April 30, 2000, is made
up as follows:
<TABLE>
<CAPTION>
<S> <C>
Cash in bank current accounts $405,583
Short term deposits - one month term GIC 688,430
Net book value $1,094,013
</TABLE>
Note 5. ACCOUNTS RECEIVABLE - $13,217
This balance represents the following:
Goods and Services Taxes refundable $9,986
Trade account receivable 3,231
Total $13,217
Note 6. SUBSCRIPTIONS RECEIVABLE - $374,546
Subscriptions receivable as at April 30, 2000 is made up as follows:
Jianguang Liu $172,634
Jun Xia 201,912
Total $374,546
Subsequent to April 30, 2000 these amounts were received.
Note 7. PREPAID EXPENSE AND DEPOSIT - $5,382
The balance of prepaid expense and deposit as at April 30, 2000, is the
deposit for two months payment of office lease in Vancouver, Canada.
Note 8. DEFERRED LEASE EXPENSES
The Company capitalized lease down payments and amortizes this
amount over the lease period to which it applies. As at April 30, 2000
the deferred lease expense and amortization is as follows:
Lease down payment $6,730
Less: accumulated amortization (1,683)
Net book value $5,047
Note 9. ACCOUNTS PAYABLE AND ACCRUED - $125,417
Details of the total of accounts payable and accrued as at April 30,
2000, are as follows:
Zhong Jia Yi Medical Ltd., Manufacturing costs $114,917
Frascona, Joiner, Goodman and Greenstein, P.C.
Accrued legal fees 5,000
Parker & Co., C.A., accrued accounting fee 500
Moen and Company, accrued accounting fee 5,000
Total $125,417
Note 10. ACCRUED PAYROLL DEDUCTIONS PAYABLE -
$45,767
Detail of the total of accrued payroll deductions payable as at April
30, 2000, are as follows:
Accrued payroll deductions for Mr. Xin Chen $22,883
Accrued payroll deductions for Mr. Eric Liu 22,884
Total $45,767
Note 11. MANAGEMENT FEES PAYABLE - $168,205
Detail of the total of management fees payable as at April 30, 2000,
are as follows:
Mr. Xin Chen $91,533
Mr. Chung Yu 48,960
Mr. Eric Liu 27,712
Total $168,205
Note 12. RELATED PARTY TRANSACTIONS - TZF:
a) By a director resolution dated December 1, 1998, each of Mr. Qing
Liu, Director and Vice-president of the Company, Mr. Chung Yu,
Director and CEO of the Company and Mr. Xin Chen, Director and
Chairman of the Company will be paid CAD$8,000 per month as
director's fees effective as of the date of this resolution. Payment of
such director's fees may be deferred till such time until the Company
has had a public offering, or as the Board of Directors otherwise
decides in view of the financial situation of the Company.
As at April 30, 2000, management fees payable for which payment has
deferred total $168,205 (see note 11).
b) The amount of $60,755 is due to a related party, Mr. Xin Chen, as
at April 30, 2000 for loans that he has advanced to the Company.
This amount is unsecured, non interest bearing, with no specific terms
of repayment.
c) A finder's fee of $167,354 was incurred by the Company,
representing a fee due to Mr. Wang Yong of 10% of $1,673,543 of
equity financing. The fee was paid by Mr. Xin Chen on behalf of the
Company, of which $106,599 was reimbursed to Mr. Xin Chen. The
amount of $60,755 is still owing to Mr. Xin Chen as at April 30,
2000, as outlined in (b) above.
Note 13. CAPITAL STOCK
a) Authorized: 25,000,000 common shares with a par value of $0.001.
b) Issued and outstanding as at April 30, 2000 are as follows:
<TABLE>
<CAPTION>
Issued Number of Share
Date Shares Capital
<S> <C> <C> <C>
private placement 25/09/98 1,000,000 $1,000
Balance 12/31/98 1,000,000 1,000
private placement 17/02/99 600,000 600
Balance 12/31/99 1,600,000 1,600
acquisition of TZF 18,451,843 18,452
Balance 4/30/00 20,051,843 $20,052
Note 13. CAPITAL STOCK (continued)
Additional
Paid-in
Capital Total
<C> <C>
private placement $1,500 $2,500
Balance 1,500 2,500
private placement 59,400 60,000
Balance 60,900 62,500
acquisition of TZF 5,334,480 5,352,932
Balance $5,395,380 $5,415,432
</TABLE>
c) Outstanding Warrants of TZF at April 30, 2000
537,000 - warrants to purchase 537,000 common shares at CAD$1.00
per shares to December 17, 2000 increasing thereafter to CAD$2.00
per share to December 17, 2001.
1,874,643 - warrants to purchase 1,874,643 common shares at
CAD$1.50 per shares to December 17, 2000 increasing thereafter to
CAD$2.50 per share to December 17, 2001
It is expected that these warrants will be assigned to Sabai Sabai as
part of the acquisition of 100% of the shares of TZF by Sabai Sabai.
Note 14. INCOME TAXES
a) The most recent Federal Income Tax filing for Sabai Sabai for the
US was for the year ended December 31, 1999. There is no indication
of any income taxes payable to the US Internal Revenue Service.
b) The most recent Federal Income Tax filing for TZF for Canada was
for the year ended December 31, 1999. There is no indication of any
income taxes payable to the Canadian Customs and Revenue Agency,
except the amount included in payroll deductions payable, as disclosed
in note 10, above. There is a loss carried forward in Canadian
operations that may be applied towards further profits, as follows:
Year Amount
2006 $19,393
2007 305,438
2008 515,187
Total $840,018
No deferred income taxes are recorded as an asset as a reserve has
been claimed that offsets the amount of tax credit, as there is presently
no indication that these tax losses will be utilized.
Note 15. FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and short term
deposit, accounts receivable, subscription receivable, prepaid expense
and deposit, inventories, accounts payable and accrued, accrued payroll
deductions payable, management fees payable and balances due to
related parties. It is management's opinion that the Company is not
exposed to significant interest, currency or credit risks arising from
these financial instruments. The fair value of these financial
statements approximated their carrying values.
Note 16. LEASE OBLIGATIONS
a) Canon Copier (NP-3825) Lease
On October 1, 1999, the Company entered into a 48 month lease with
Dominion Technologies for a Canon Copier to be used by the
Company. Lease payments are expensed as they are incurred. Lease
obligations are as follows:
2000 CAD$ 1,327
2001 CAD$ 1,327
2002 CAD$ 1,327
2003 CAD$ 995
b) Computer Lease
On October 1, 1999, the Company entered into a 36 month lease with
Dominion Technologies for computer equipment to be used by the
Company. Lease payments are expensed as they are incurred. Lease
obligations are as follows:
2000 CAD$ 2,947
2001 CAD$ 2,947
2002 CAD$ 2,210
c) Vehicles Lease
On July 29, 1999, the Company entered into a 36 month lease with
Mercedes-Benz Credit of Canada Inc. for two vehicles to be used by
the Company. Lease payments are expensed as they are incurred.
Lease obligations are as follows:
2000 CAD$ 20,927
2001 CAD$ 20,927
2002 CAD$ 12,207
d) Lease of Premises
The Company entered into a lease for offices on April 26, 1999 with
Omnia Overseas Trading Ltd. for three years for monthly rent and
costs of CAD$3,133.51, commence on July 1, 1999.
The first and the last months rent of CAD$6,631.15 is due at the time
of signing. This amount has been paid and is recorded as prepaid
expense and deposit as at April 30, 2000.
Summary of lease obligations
Equivalent
Year CDN$ US$
2000 $ 62,803 $ 42,269
2001 62,803 42,269
2002 34,545 23,250
2003 995 670
$ 161,146 $ 108,458
Note 17. NET LOSS PER SHARE
Net loss per share is computing by dividing net loss by the weighted
average of shares outstanding during the period.
Note 18. PENSION AND EMPLOYMENT LIABILITIES
The Company does not have liabilities as at April 30, 2000, for
pension, post-employment benefits or post-retirement benefits. The
Company does not have a pension plan.
Note 19. SUBSEQUENT EVENT
Subscriptions receivable unpaid as at April 30, 2000 were received in
full by the Company as at the date of issuance of this financial
information on June 12, 2000.
PART III
Item 1. INDEX TO EXHIBITS
The Exhibits listed below are filed as part of this Registration
Statement.
<TABLE>
<CAPTION>
Exhibit
No. Document
<S> <C>
2.1 Agreement for Share Exchange
2.2 Stock Purchase Agreement
3.1 Articles of Incorporation
3.1a Amendment to Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
27.1 Financial Data Schedule - Year ended
December 31, 1999
27.2 Financial Data Schedule - Four months
April 30, 2000
</TABLE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
T.Z.F. INTERNATIONAL INVESTMENTS, INC.
By: /s/ ________________________________
Chung Yu, President
Date: August 21, 2000
U. S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
T.Z.F. INTERNATIONAL INVESTMENTS, INC.
(Name of Small Business Issuer in its charter)
Nevada 88-0404186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Unit 1, 3071 No. 5 Road
Richmond, B.C., Canada V6X 2T4
(Address of Principal Office) Zip Code
Issuer's telephone number: (604) 718-2188
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Document
<S> <C>
2.1 Agreement for Share Exchange
2.2 Stock Purchase Agreement
3.1 Articles of Incorporation
3.1a Amendment to Articles of Incorporation
3.2 Bylaws
4.1 Specimen Stock Certificate
27.1 Financial Data Schedule - Year ended
December 31, 1999
27.2 Financial Data Schedule - Four months
April 30, 2000
</TABLE>
EXHIBIT 2.1 - AGREEMENT FOR SHARE EXCHANGE
AGREEMENT FOR SHARE EXCHANGE
AGREEMENT FOR SHARE EXCHANGE
("AGREEMENT") dated as of May 30, 2000, to be effective as
of April 30, 2000, by and among SABAI SABAI
ENTERPRISES CORP., a Nevada corporation ("SABAI") and
T.Z.F. INTERNATIONAL HERBS INVESTMENT, INC.,
British Columbia corporation ("TZF").
RECITALS:
WHEREAS, the Boards of Directors of SABAI
and TZF have approved the acquisition by SABAI of 100% of
the issued and outstanding shares of TZF solely in exchange for
voting stock of SABAI pursuant to the terms and conditions
hereinafter set forth (the "Exchange"); and
WHEREAS, the parties desire to make certain
representation, warranties and agreements in connection with the
Exchange and also to prescribe various conditions to the
Exchange.
NOW, THEREFORE, in consideration of the
foregoing recitals, which shall be considered an integral part of
this Agreement, and the covenants, conditions, representations
and warranties hereinafter set forth, the parties hereby agree as
follows:
ARTICLE I
THE EXCHANGE
1.1 The Exchange. At the closing (as hereinafter defined)
SABAI shall acquire an aggregate of 10,000,000 shares of Class
A Common Stock, 6,000,000 shares of Class B Common Stock
and 2,451,843 shares of Class B Preferred Stock of TZF,
representing 100% of the issued and outstanding stock of TZF.
Consideration to be issued by SABAI in exchange for the TZF
shares shall be the issuance of one share of common stock of
SABAI for each shares of SABAI Common Stock (the
"Exchange Shares"). The Exchange shall take place upon the
terms and conditions provided for in this Agreement and
applicable state law. At the Closing, there shall be no more than
a total of 22,451,843 shares of SABAI issued and outstanding.
For Federal income tax purposes, it is intended that the
Exchange shall constitute a reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended
(the "Code").
1.2 Closing and Effective Time. Subject to the
provisions of this Agreement, the parties shall hold a closing (the
"Closing") on (i) the first business day on which the last of the
conditions set forth in Article V to be fulfilled prior to the
Closing is fulfilled or waived or (ii) such other date as the
parties hereto may agree (the "Closing Date"), at such time and
place as the parties hereto may agree. Such date shall be the date
of Exchange (the "Effective Time").
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of SABAI.
SABAI represents and warrants to TZF as follows:
(a) Organization, Standing and Power. SABAI is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, has all requisite power
and authority to own, lease and operate its properties and to
carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction
in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary.
(b) Capital Structure. The authorized capital stock of
SABAI consists of 100,000,000 shares of Common Stock,
$0.001 par value per share. As of the close of business on April
30, 2000, 16,000,000 shares of SABAI Common Stock were
outstanding (adjusted to account for a 10:1 forward split which
was approved and completed on or about May 15, 2000). All
outstanding shares of SABAI Common Stock are, and the
Exchange Shares to be issued pursuant to this Agreement will be
when issued pursuant to the terms of the resolution of the Board
of Directors of SABAI approving such issuance, validly issued,
fully paid and nonassessable and not subject to preemptive rights.
All of the issued and outstanding shares of SABAI Common
Stock were issued in compliance with all Federal and state
securities laws. There are no options, warrants, calls, agreements
or other rights to purchase or otherwise acquire from SABAI at
any time, or upon the happening of any stated event, any shares
of the capital stock of SABAI, whether or not presently issued or
outstanding.
(c) Certificate of Incorporation, By-Laws, and Minute
Books. The copies of the Articles of Incorporation and of the
By-Laws of SABAI which have been delivered to TZF are true,
correct and complete copies thereof. The minute books of
SABAI which have been made available for inspection contain
accurate minutes of all meetings and accurate consents in lieu of
meetings of the Board of Directors (and any committee thereof)
and of the shareholders of SABAI since the respective dates of
incorporation and accurately reflect all transactions referred to in
such minutes and consents in lieu of meetings.
(d) Authority. SABAI has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of
Director of SABAI. No other corporate or shareholder
proceedings on the part of SABAI are necessary to authorize the
Exchange, or the other transactions contemplated hereby.
(e) Conflict with Other Agreements; Approvals. The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not
result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or the
loss of a material benefit under, or the creation of a lien, pledge,
security interest or other encumbrance on assets (any such
conflict, violation, default, right of termination, cancellation or
acceleration, loss or creation, a "violation") pursuant to any
provision of the Articles of Incorporation or By-laws or any
organizational document of SABAI or, result in any violation of
any loan or credit agreement, note, mortgage, indenture, lease,
benefit plan or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to SABAI which
violation would have a material adverse effect on SABAI taken
as a whole. No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity") is
required by or with respect to SABAI in connection with the
execution and delivery of this Agreement by SABAI or the
consummation by SABAI of the transactions contemplated
hereby.
(f) Books and Records. SABAI has made and will
make available for inspection by TZF upon reasonable request all
the books of SABAI relating to the business of SABAI. Such
books of SABAI have been maintained in the ordinary course of
business. All documents furnished or caused to be furnished to
TZF by SABAI are true and correct copies, and there are no
amendments or modifications thereto except as set forth in such
documents.
(g) Compliance with Laws. SABAI is and has
been in compliance in all material respects with all laws,
regulations, rules, orders, judgments, decrees and other
requirements and policies imposed by any Governmental Entity
applicable to it, its properties or the operation of its businesses.
(h) Financial Statements. SABAI has delivered to
TZF audited financial statements for the periods ending
December 31, 1999 and 1998. Such financial statements are true
and correct, and provide a fair and accurate presentation of the
financial condition and assets and liabilities of SABAI as of the
date thereof.
(i) Litigation. There is no suit, action or proceeding
pending, or, to the knowledge of SABAI, threatened against or
affecting SABAI which is reasonably likely to have a material
adverse effect on SABAI, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against SABAI having, or which, insofar as
reasonably can be foreseen, in the future could have, any such
effect.
(j) Tax Returns. SABAI has duly filed all tax reports
and returns required to be filed by it and has fully paid all taxes
and other charges claimed to be due from it by any federal, state
or local taxing authorities (including without limitation those due
in respect of its properties, income, franchises, licenses, sales and
payrolls); there are not now any pending questions relating to, or
claims asserted for, taxes or assessments asserted upon SABAI.
2.2 Representations and Warranties of TZF. TZF
represents and warrants to SABAI as follows:
(a) Organization, Standing and Power. TZF is a
corporation duly organized, validly existing and in good standing
under the laws of British Columbia, Canada, has all requisite
power and authority to own, lease and operate its properties and
to carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction
in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary.
(b) Capital Structure. The authorized capital stock of
TZF consists of 110,000,000 shares of Class A Common Stock
without par value, 100,000,000 shares of Class B Common Stock
without par value, 100,000,000 shares of Class A Preferred Stock
without par value and 100,000,000 shares of Class B Preferred
Stock without par value. As of April 30,2000, a total of
10,000,000 shares of Class A Common Stock, 6,000,000 shares
of Class B Common Stock and 2,451,843 shares of Class B
Preferred Stock were issued and outstanding. All outstanding
shares of TZF Stock are validly issued, fully paid and
nonassessable and not subject to preemptive rights or other
restrictions on transfer. All of the issued and outstanding shares
of TZF were issued in compliance with all applicable securities
laws. There are no options, warrants, calls, agreements or other
rights to purchase or otherwise acquire from TZF at any time, or
upon the happening of any stated event, any shares of the capital
stock of TZF, except that certain holders of Class B Preferred
Stock have warrants which entitle them to acquire 2,411,643
additional shares of Class B Preferred Stock.
(c) Certificate of Incorporation, By-Laws and Minute
Books. The copies of the Certificate of Incorporation and of the
By-Laws of TZF which have been delivered to SABAI are true,
correct and complete copies thereof. The minute books of TZF
which have been made available for inspection contain accurate
minutes of all meetings and accurate consents in lieu of meetings
of the Board of Directors (and any committee thereof) and of the
shareholders of TZF since the date of incorporation and
accurately reflect all transactions referred to in such minutes and
consents in lieu of meetings.
(d) Authority. TZF has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Board of
Directors of TZF and by its shareholders, and no other corporate
or shareholder proceedings on the part of TZF are necessary to
authorize the Exchange and the other transactions contemplated
hereby. This Agreement has been duly executed and delivered
by TZF and constitutes a valid and binding obligation of TZF
enforceable in accordance with its terms.
(e) Conflict with Agreements; Approvals. The execution and
delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby will not, conflict with, or
result in any violation of any provision of the Certificate of
Incorporation or By-laws of TZF or of any loan or credit
agreement, note, mortgage, indenture, lease, benefit plan or other
agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to TZF or its properties or assets. No
consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required
by or with respect to TZF in connection with the execution and
delivery of this Agreement by TZF, or the consummation by
TZF of the transactions contemplated hereby.
(f) Financial Statements. TZF has furnished SABAI
with unaudited financial statements as of December 31, 1999.
The TZF financials statements are substantially complete and
correct in all material respects and fairly present in all material
respects the financial condition and results of the operations of
TZF and the changes in its financial position at such dates and
for such periods and show all material liabilities, absolute or
contingent of TZF.
(g) Books and Records. TZF has made and will make
available for inspection by SABAI upon reasonable request all
the books of account, relating to the business of TZF. Such
books of account of TZF have been maintained in the ordinary
course of business. All documents furnished or caused to be
furnished to SABAI by TZF are true and correct copies, and
there are no amendments or modifications thereto except as set
forth in such documents.
(h) Compliance with Laws. TZF is and has been in
compliance in all material respects with all laws, regulations,
rules, orders, judgments, decrees and other requirements and
policies imposed by any Governmental Entity applicable to it, its
properties or the operation of its businesses.
(i) Liabilities and Obligations. TZF has no material
liabilities or obligations (absolute, accrued, contingent or
otherwise) except (i) liabilities that are reflected and reserved
against on the TZF financial statements as of December 31, 1999
that have not been paid or discharged since the date thereof and
(ii) liabilities incurred since the date of such financial statements
in the ordinary course of business consistent with past practice
and in accordance with this Agreement.
(j) Litigation. There is no suit, action or proceeding
pending, or, to the knowledge of TZF threatened against or
affecting TZF which is reasonably likely to have a material
adverse effect on TZF, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator
outstanding against TZF having, or which, insofar as reasonably
can be foreseen, in the future could have, any such effect.
(k) Taxes. TZF has filed or will file within the time
prescribed by law (including extension of time approved by the
appropriate taxing authority) all tax returns and reports required
to be filed with all other jurisdictions where such filing is
required by law; and TZF has paid, or made adequate provision
for the payment of all taxes, interest, penalties, assessments or
deficiencies due and payable on, and with respect to such
periods. TZF knows of (i) no other tax returns or reports which
are required to be filed which have not been so filed and (ii) no
unpaid assessment for additional taxes for any fiscal period or
any basis therefor.
(l) Licenses, Permits; Intellectual Property. TZF owns
or possesses in the operation of its business all material
authorizations which are necessary for it to conduct its business
as now conducted. Neither the execution or delivery of this
Agreement nor the consummation of the transactions
contemplated hereby will require any notice or consent under or
have any material adverse effect upon any such authorizations.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1 Covenants of TZF and SABAI. During the period
from the date of this Agreement and continuing until the
Effective Time, TZF and SABAI each agree as to themselves
and their related entities that (except as expressly contemplated
or permitted by this Agreement, or to the extent that the other
party shall otherwise consent in writing):
(a) Ordinary Course. Each party shall carry on its
respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted.
(b) Dividends; Changes in Stock. No party shall (i)
declare or pay any dividends on or make other distributions in
respect of any of its capital stock, (ii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (iii) repurchase or
otherwise acquire, or permit any subsidiary to purchase or
otherwise acquire, any shares of its capital stock.
(c) Issuance of Securities. No party shall issue,
deliver or
sell, or authorize or propose the issuance, delivery or sale of, any
shares of its capital stock of any class, any voting debt or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting debt or convertible securities.
(d) Governing Documents. No party shall amend or
propose to amend its Certificate of Incorporation or By-laws.
(e) No Dispositions. Except for the transfer of assets
in the ordinary course of business consistent with prior practice,
no party shall sell, lease, encumber or otherwise dispose of, or
agree to sell, lease, encumber or otherwise dispose of, any of its
assets, which are material, individually or in the aggregate, to
such party.
(f) Indebtedness. No party shall incur any
indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or warrants or
rights to acquire any debt securities of such party or guarantee
any debt securities of others other than in each case in the
ordinary course of business consistent with prior practice.
3.2 Other Actions. No party shall take any action that
would or is reasonably likely to result in any of its
representations and warranties set forth in this Agreement being
untrue as of the date made (to the extent so limited), or in any of
the conditions to the Exchange set forth in Article V not being
satisfied.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Name Change; License. It is contemplated by the
parties that the corporate name of TZF shall be changed
contingent upon and subsequent to the Closing Date.
4.2 Shareholder Approval of TZF. The Shareholders
of TZF have previously voted upon and approved the Exchange.
4.3 Restricted SABAI Shares; Registration Rights. (a)
The Exchange Shares will not be registered under the Securities
Act, but will be issued pursuant to an exemption from such
registration requirements based upon representations and
warranties made by the Shareholders. Accordingly, the
Exchange Shares will constitute "restricted securities" for
purposes of the Securities Act and applicable state securities laws
and Shareholders will not be able to transfer such Exchange
Shares except upon compliance with the registration requirements
of the Securities Act and applicable state securities laws or an
exemption therefrom. The certificates evidencing the Exchange
Shares shall contain a legend to the foregoing effect and the
Shareholders shall deliver at Closing an Investment Letter in
substantially the form of Exhibit 4.2 hereto acknowledging the
fact that the Exchange Shares are restricted securities and
agreeing to the foregoing transfer restrictions.
4.4 Access to Information. Upon reasonable notice,
SABAI and TZF shall each afford to the officers, employees,
accountants, counsel and other representatives of the other
company, access to all their respective properties, books,
contracts, commitments and records and, during such period,
each of SABAI and TZF shall furnish promptly to the other (a) a
copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to
the requirements of Federal or state securities laws and (b) all
other information concerning its business, properties and
personnel as such other party may reasonably request. Unless
otherwise required by law, the parties will hold any such
information which is nonpublic in confidence until such time as
such information otherwise becomes publicly available through
no wrongful act of either party, and in the event of termination
of this Agreement for any reason each party shall promptly
return all nonpublic documents obtained from any other party,
and any copies made of such documents, to such other party.
4.5 Legal Conditions to Exchange. Each of SABAI
and TZF will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on
itself with respect to the Exchange and will promptly cooperate
with and furnish information to each other in connection with
any such requirements imposed upon any of them or any of their
related entities or subsidiaries in connection with the Exchange.
Each party will take all reasonable actions necessary to obtain
(and will cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party,
required to be obtained or made by SABAI or TZF or any of
their related entities or subsidiaries in connection with the
Exchange or the taking of any action contemplated thereby or by
this Agreement.
4.6 SABAI Board of Directors and Officers. The
current officers and directors of SABAI shall remain in office
following the Closing Date.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Each Party's Obligation To Effect
the Exchange. The respective obligation of each party to effect
the Exchange shall be subject to the satisfaction prior to the
Closing Date of the following conditions:
(a) Necessary Approvals. All authorizations,
consents, orders or approvals of, or declarations or filings with,
or expirations of waiting periods imposed by, any Governmental
Entity the failure to obtain which would have a material adverse
effect on SABAI shall have been filed, occurred or been
obtained.
(b) National Quotation Bureau "Pink Sheet" Listing.
SABAI shall continue to maintain its "Pink Sheet" listing.
5.2 Conditions of Obligations of SABAI. The obligations
of SABAI to effect the Exchange are subject to the satisfaction of the
following conditions on or before the Closing Date unless waived by
SABAI:
(a) Representations and Warranties. The representations
and warranties of TZF set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
(except to the extent such representations and warranties speak as of an
earlier date) as of the Closing Date as though made on and as of the
Closing Date, except as otherwise contemplated by this Agreement,
and SABAI shall have received a certificate signed on behalf of TZF
by the President of TZF to such effect.
(b) Performance of Obligations of TZF. TZF shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior the Closing Date, and
SABAI shall have received a certificate signed on behalf of TZF by
the President to such effect.
(c) Closing Documents. SABAI shall have received such
certificates and other closing documents as counsel for SABAI shall
reasonably request.
(d) Consents. TZF shall have obtained the consent or
approval of each person whose consent or approval shall be required in
connection with the transactions contemplated hereby under any loan
or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not, in the reasonable opinion of
SABAI, individually or in the aggregate, have a material adverse effect
on TZF and its subsidiaries and related entities taken as a whole upon
the consummation of the transactions contemplated hereby. TZF shall
also have received the approval of its shareholders in accordance with
applicable law.
(e) TZF Review. SABAI shall have completed to its
reasonable satisfaction a review of the business, operations, finances,
assets and liabilities of TZF and shall not have determined that any of
the representations or warranties of TZF contained herein are, as of the
date hereof or the Closing Date, inaccurate in any material respect or
that TZF is otherwise in violation of any of the provisions of this
Agreement.
(f) Pending Litigation. There shall not be any litigation or
other proceeding pending or threatened to restrain or invalidate the
transactions contemplated by this Agreement, which, in the sole
reasonable judgment of SABAI, made in good faith, would make the
consummation of the Exchange imprudent. In addition, there shall not
be any other litigation or other proceeding pending or threatened
against TZF, the consequences of which, in the judgment of SABAI,
could be materially adverse to TZF.
5.3 Conditions of Obligations of TZF. The obligation of
TZF to effect the Exchange is subject to the satisfaction of the
following conditions unless waived by TZF:
(a) Representations and Warranties. The representations
and warranties of SABAI set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
(except to the extent such representations speak as of an earlier date)
as of the Closing Date as though made on and as of the Closing Date,
except as otherwise contemplated by this Agreement, TZF shall have
received a certificate signed on behalf of SABAI by the Chief
Executive Officer to such effect.
(b) Performance of Obligations of SABAI. SABAI shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date,
and TZF shall have received a certificate signed on behalf of SABAI
by the Chief Executive Officer to such effect.
(c) Opinion of Counsel for SABAI. TZF shall have
received an opinion dated the Closing Date of counsel for SABAI, in
form and substance reasonably satisfactory to TZF and its counsel
relating to such matters as are customarily delivered in connection with
a Exchange transaction.
(d) Closing Documents. TZF shall have received such certificates
and other closing documents as counsel for TZF shall reasonably
request.
(e) Consents. SABAI shall have obtained the consent or
approval of each person whose consent or approval shall be required in
connection with the transactions contemplated hereby.
(f) TZF Review. TZF shall have completed to its
reasonable satisfaction a review of the business, operations, finances,
assets and liabilities of SABAI and shall not have determined that any
of the representations or warranties of SABAI contained herein are, as
of the date hereof or the Closing Date, inaccurate in any material
respect or that SABAI is otherwise in violation of any of the
provisions of this Agreement.
(g) Pending Litigation. There shall not be any litigation or
other proceeding pending or threatened to restrain or invalidate the
transactions contemplated by this Agreement, which, in the sole
reasonable judgment of TZF, made in good faith, would make the
consummation of the Exchange imprudent. In addition, there shall not
be any other litigation or other proceeding pending or threatened
against SABAI the consequences of which, in the judgment of TZF,
could be materially adverse to SABAI.
ARTICLE VI
TERMINATION AND AMENDMENT
6.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time:
(a) by mutual consent of SABAI and TZF;
(b) by either SABAI or TZF if there has been a material
breach of any representation, warranty, covenant or agreement on the
part of the other set forth in this Agreement which breach has not been
cured within 5 business days following receipt by the breaching party
of notice of such breach, or if any permanent injunction or other order
of a court or other competent authority preventing the consummation
of the Exchange shall have become final and non-appealable; or
(c) by either SABAI or TZF if the Exchange shall not have
been consummated before May 30, 2000.
6.2 Effect of Termination. In the event of termination of
this Agreement by either TZF or SABAI as provided in Section 6.1,
this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of any party hereto. In such event,
all costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party
incurring such expenses.
6.3 Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards
of Directors, provided no amendment shall be made which by law
requires approval by the shareholders of any party without such further
approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
6.4 Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their
respective Board of Directors, may, to the extent legally allowed, (a)
extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE VII
GENERAL PROVISIONS
7.1 Survival of Representations, Warranties and
Agreements. All of the representations, warranties and agreements in
this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time for a period of three years
from the date of this Agreement.
7.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed) or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by
like notice):
(a) If to SABAI to
SABAI SABAI ENTERPRISES CORP.
Unit 1, 3071 No. 5 Road
Richmond, B.C. V6X 2T4
Attention: Mr. Xin Chen, President
and
(b) if to TZF, to
TZF International Herbs Investment, Inc.
c/o Wei Shao
Blake, Cassels & Graydon LLP
Suite 2600 Three Bentall Centre
595 Burrard Street, P.O. Box 49314
Vancouver, B.C., Canada V7X 1L3
7.3 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this
Agreement unless otherwise indicated. The headings contained in this
Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. Whenever the
words "include", "includes" or "including" are used in this Agreement,
they shall be deemed to be followed by the words "without limitation".
The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the
party to whom such information is to be made available.
7.4 Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the
same agreement and shall become effective when two or more
counterparts have been signed by each of the parties and delivered to
the other parties, it being understood that all parties need not sign the
same counterpart.
7.5 Entire Agreement; No Third Party Beneficiaries; Rights
of Ownership. This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof, and is
not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
7.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Nevada without
regard to principles of conflicts of law. Each party hereby irrevocably
submits to the jurisdiction of any Nevada state court or any federal
court in the State of Nevada in respect of any suit, action or
proceeding arising out of or relating to this Agreement, and
irrevocably accept for themselves and in respect of their property,
generally and unconditionally, the jurisdiction of the aforesaid courts.
7.7 No Remedy in Certain Circumstances. Each party
agrees that, should any court or other competent authority hold any
provision of this Agreement or part hereof or thereof to be null, void
or unenforceable, or order any party to take any action inconsistent
herewith or not to take any action required herein, the other party shall
not be entitled to specific performance of such provision or part hereof
or thereof or to any other remedy, including but not limited to money
damages, for breach hereof or thereof or of any other provision of this
Agreement or part hereof or thereof as a result of such holding or
order.
7.8 Publicity. Except as otherwise required by law or the
rules of the SEC, so long as this Agreement is in effect, no party shall
issue or cause the publication of any press release or other public
announcement with respect to the transactions contemplated by this
Agreement without the written consent of the other party, which
consent shall not be unreasonably withheld.
7.9 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other parties, except that SABAI or
TZF may assign, in its sole discretion, any or all of its rights, interests
and obligations hereunder to any direct or indirect wholly owned
subsidiary of such company. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been signed by
the parties set forth below as of the date set forth above.
SABAI SABAI ENTERPRISES CORP.
By:/s/ Chung Yu
President
TZF INTERNATIONAL HERBS INVESTMENT, INC.
By:/s/ Chung Yu
President
EXHIBIT 2.2 - STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT
Agreement made and entered into as of March 17, 2000,
among TZF International Herbs Investment, Inc. having an
address at Unit 1 - 3071 No. 5 Road, Richmond, B.C., Canada
V6X 2T4 (hereinafter referred to as the "Buyer"), the persons
executing this Agreement as Sellers (hereinafter collectively
referred to as the "Seller"), and Sabai Sabai Enterprises Corp, a
Nevada corporation, having an address at Suite 206, 455
Granville Street, Vancouver, B.C. V6C 1T1 (hereinafter referred
to as the "Company").
This Agreement sets forth the terms and conditions upon
which the Seller is today selling to the Buyer, and the Buyer is
today purchasing 1,000,000 shares of the issued and outstanding
common stock of the Company, representing approximately
62.5% thereof (hereinafter referred to as the "Shares").
In Consideration of the mutual agreements contained
herein, the parties hereby agree as follows:
I. SALE OF THE SHARES
1.01 Shares being Sold. Subject to the terms
and conditions of this Agreement, the Seller is selling, assigning
and delivering the Shares to the Buyer at the closing provided
for in Section 1.03 hereof (the "Closing"), free and clear of all
liens, charges, or encumbrances of whatsoever nature.
1.02 Consideration. A total of $140,000 shall
be due and payable in certified funds, bank check or wired funds
at the Closing for purchase of the Shares.
1.03 Closing. The Closing of the transactions
provided for in Section 1.04 and 1.05 shall take place at the
offices of Blake, Cassels & Graydon LLP, Suite 2600, Three
Bentall Centre, 595 Burrard Street, Vancouver, British Columbia,
Canada V7X IL3 at 4:30 P.M. on March 16, 2000, or at such
other date and time as the parties may mutually agree in writing.
1.04 Delivery by the Agent. At the Closing, the
Seller shall deliver to the Buyer (i) certificates representing the
Shares, endorsed in blank and otherwise in form acceptable for
transfer on the books of the Company, and (ii) all contracts,
books and records of the Company not previously delivered.
1.05 Delivery by the Buyer. At the Closing the
Buyer shall deliver to the Seller the payment provided for in
Section 1.02 hereof.
II. RELATED TRANSACTIONS.
2.01 Finder. Seller and Buyer acknowledge that
there were no finders with respect to the transaction
contemplated herein.
2.02 Expenses of the Transaction. Each party is
responsible for paying all expenses of the transaction incurred by
it, including but not limited to filing fees, legal fees, accounting
fees, printing expenses, certificate engraving fees and transfer
agent fees.
2.03 Resignations. At the Closing, all of the
current directors and officers of the Company shall deliver their
resignations after having elected all designees of the Buyer.
2.04 Purpose of Transaction. Buyer is
purchasing the Shares in anticipation of the completion of a
business combination transaction between the Company and the
Buyer pursuant to which the Buyer will become a wholly-owned
subsidiary of the Company. Accordingly, as soon as reasonably
practical after the Closing, a share exchange transaction shall be
completed pursuant to which the Company shall issue up to
16,000,000 shares (as adjusted to reflect a 10:1 forward split) to
acquire all of the issued and outstanding stock of the Buyer, and
the Buyer shall thereafter surrender the Shares for cancellation.
Following completion of the business combination transaction,
the Company will then have a total of not more than 22,000,000
shares of common stock issued and outstanding.
III. REPRESENTATIONS AND WARRANTIES BY
SELLER.
The Seller hereby represents and warrants as follows:
3.01 Organization, Capitalization, etc.
(a) The Company is a corporation duly
organized, validly existing, and in good standing under the laws
of the State of Nevada, and is qualified in no other state.
(b) The authorized capital stock of the
Company consists of 25,000,000 shares of common stock of
which 1,600,000 shares are currently issued and outstanding.
All of the Shares are owned free and clear of any liens, claims,
options, charges, or encumbrances of whatsoever nature. The
Seller has the unqualified right to sell, assign, and deliver the
Shares, and upon consummation of the purchase and sale
transaction contemplated by this Agreement, the Buyer will
acquire good and valid title to the Shares, free and clear of all
liens, claims, options, charges, and encumbrances of whatsoever
nature. There are no outstanding options or other agreements of
any nature whatsoever relating to the issuance by the Company
of any shares of its capital stock.
(c) The Shareholder list dated March 16,
2000, which is attached hereto as Exhibit A, was prepared by
Signature Stock Transfer, the Transfer Agent of the Company,
and is a true and correct copy of the current list of shareholders
of the Company as of the date of execution of this Agreement
and accurately reflects which of the presently issued and
outstanding shares of common stock of the Company constitute
free trading shares and which constitute restricted securities, as
that term is defined in Rule 144 under the Securities Act of
1933.
(d) The Company's common stock is
approved for trading in the National Quotations Bureau Pink
Sheets under the symbol "SBAI."
3.02 Authority; No Violation. The execution and
delivery of this Agreement by the Company and by the Seller,
and the consummation by them of the transactions contemplated
hereby have been duly authorized. Neither the execution and
delivery of this Agreement nor the consummation of the
transactions contemplated hereby will constitute a violation or
default under any term or provision of the Certificate of
Incorporation or bylaws of the Company, or of any contract,
commitment, indenture, other agreement or restriction of any
kind or character to which the Company or any of the Seller is a
party or by which either the Company or the Seller is bound.
3.03 Financial Statements. The Seller has
delivered to the Buyer audited financial statements of the
Company for the periods ending April 30, 1999 and December
31, 1998. Such financial statements are true and correct, and a
fair and accurate presentation of the financial condition and
assets and liabilities (whether accrued, absolute, contingent, or
otherwise) of the Company as of the date thereof.
3.04 Tax Returns. The Company has duly filed
all tax reports and returns required to be filed by it and has fully
paid all taxes and other charges claimed to be due from it by
federal, state, or local taxing authorities (including without
limitation those due in respect of its properties, income,
franchises, licenses, sales, and payrolls); there are no liens upon
any of the Company's property or assets; there are not now any
pending questions relating to, or claims asserted for, taxes or
assessments asserted against the Company.
3.05 Undisclosed Liabilities. Except to the extent
listed in Schedule 3.05 attached hereto, or reflected or reserved
against in the April 30, 1999, balance sheet of the Company
provided to the Buyer pursuant to Section 3.03 hereof, the
Company, as of the date hereof, had no liabilities or obligations
of any nature, whether absolute, accrued, contingent, or
otherwise and whether due or to become due. Further, the Seller
does not know or have any reasonable ground to know of any
basis for the assertion against the Company of any liability or
obligation of any nature or in any amount not fully reflected or
reserved against in the April 30, 1999, balance sheet or
Schedule 3.05 attached hereto.
3.06 Absence of Certain Changes. The Company
has not since April 30, 1999, and as of the Closing will not
have:
(a) Suffered any material adverse
change in financial condition, assets, liabilities, business, or
prospects;
(b) Incurred any additional obligations
or liabilities (whether absolute, accrued, contingent, or otherwise)
which it either has not previously satisfied or will not satisfy at
or before Closing;
(c) Paid any claim or discharged or
satisfied any lien or encumbrance or paid or satisfied any
liability (whether absolute, accrued, contingent, or otherwise)
other than liabilities shown or reflected in the Company's April
30, 1999 balance sheet or liabilities incurred since April 30, 199,
and listed on Schedule 3.05 hereto;
(d) Declared, paid, or set aside for
payment to its stockholders any dividend or other distribution in
respect of its capital stock or redeemed or purchased or
otherwise acquired any of its capital stock or any options relating
thereto or agreed to take any such action; or
(e) Made any material change in any
method of accounting or accounting practice.
3.07 Litigation. There are no actions,
proceedings, or investigations pending or, to the knowledge of
the Company or the Seller, threatened against the Company, and
neither the Company nor the Seller know or have any reason to
know of any basis for any such action, proceedings, or
investigation. There is no event or condition of any kind or
character pertaining to the business, assets, or prospects of the
Company that may materially and adversely affect such business,
assets or prospects.
3.08 Disclosure. The Seller has disclosed to the
Buyer all facts material to the assets, prospects, and business of
the Company. No representation or warranty by the Seller
contained in this Agreement, and no statement contained in any
instrument, list, certificate, or writing furnished to the Buyer
pursuant to the provisions hereof or in connection with the
transaction contemplated hereby, contains any untrue statement
of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not
misleading or necessary in order to provide a prospective
purchaser of the business of the Company with proper
information as to the Company and its affairs.
IV. REPRESENTATIONS AND WARRANTIES BY
BUYER.
The Buyer hereby represent and warrant as follows:
4.01 Organization. Buyer is a corporation, duly
organized and validly existing under the laws of British
Columbia, Canada.
4.02 Authority; No Violation. The execution
and delivery of this Agreement by the Buyer, and the
consummation by the Buyer of the purchase and sale transaction
contemplated hereby, has been duly authorized. Neither the
execution nor the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will
constitute a violation of Nevada or British Columbia law, or the
law of any other state.
4.03 Representations Regarding the Acquisition
of the Shares.
(a) The Buyer acknowledges that the
Shares constitute "restricted securities" as that term is defined in
Rule 144 under the Securities Act of 1933, and that the Shares
may not be sold or transferred in the absence of an effective
registration statement or the availability of an exemption from
registration;
(b) The Buyer is purchasing the Shares for
its own account, for investment purposes, and not with a view to
sale or distribution;
(c) The Buyer understands the speculative
nature and risks of investments associated with the Company and
confirms that it is able to bear the risk associated with the
investment;
(d) The Buyer has had the opportunity to
ask questions of the Company and the Seller and receive
additional information from the Company and the Seller to the
extent that the Company and the Seller possessed such
information, or could acquire it without unreasonable effort or
expense necessary to evaluate the merits and risks of any
investment in the Company.
V. SURVIVAL OF REPRESENTATIONS;
INDEMNIFICATION.
5.01 Survival of Representations. All
representations, warranties, and agreements made by any party in
this Agreement or pursuant hereto shall survive the execution
and delivery hereof and any investigation at any time made by or
on behalf of any party.
5.02 Indemnification by Agent. The Seller
hereby agrees to indemnify the Buyer and hold Buyer harmless
from and in respect of any assessment, loss, damage, liability,
cost, and expense (including, without limitation, interest,
penalties, and reasonable attorneys' fees), imposed upon or
incurred by the Buyer resulting from a breach of any agreement,
representation, or warranty by the Seller or by the Company,
including, but not limited to, any undisclosed liabilities or
obligations of the Company, whether known by Seller or not, as
described in Section 3.05 of this Agreement. Assertion by the
Buyer of its right to indemnification under this Section 5.02
shall not preclude the assertion by the Buyer of any other rights
or the seeking of any other remedies against the Seller.
5.03 Indemnification by Buyer. The Buyer
agrees to indemnify the Seller and hold Seller harmless from
and in respect of any assessment, loss, damage, liability, cost,
and expense (including, without limitation, interest, penalties,
and reasonable attorneys' fees), imposed upon or incurred by the
Seller resulting from a breach of any agreement, representation,
or warranty of the Buyer contained herein.
VI. ADDITIONAL CONDITIONS TO CLOSING
6.01 Obligation of Buyer to Close. Buyer shall
not be obligated to close this transaction unless:
(a) Buyer is satisfied with the condition of
the Company following a due diligence review of the books,
records, business and affairs of the Company. The Company
agrees to provide Buyer and its agents complete access to all of
the Company's books, records and personnel for purposes of
enabling Buyer to conduct its investigation.
(b) There are no material liabilities on the
books of the Company, other than as disclosed in the Company's
financial statements for April 30, 1999, or Schedule 3.05 hereto,
and there are no undisclosed or contingent liabilities.
(c) There have been no changes in the
Company's business or capitalization between the date of signing
this Agreement and the date of Closing, other than as required
herein.
(d) The Company's shares are approved
for trading in the NQB Pink Sheets.
(e) The current officers and directors of
the Company shall have tendered their resignations effective as
of the date of Closing, and the current directors shall have
appointed persons designated by Buyers as successor members of
the Board of Directors to fill the vacancies created by the
resignation of the current directors.
6.02 Seller's Obligation to Close. Seller shall not
be obligated to close this transaction unless following a due
diligence review of the books, records, business and affairs of
the Buyer and its proposed business plan, Seller is satisfied with
the condition of the Buyer and of its plan for completion of a
business combination transaction involving the Company in
accordance with Section 2.05 hereof.
VII. MISCELLANEOUS
7.01 Expenses. Each of the parties shall bear its
own expenses incurred in conjunction with the Closing
hereunder.
7.02 Further Assurances. From time to time, at
the request of the Buyer and without further consideration, the
Seller shall execute and transfer such documents and take such
action as the Buyer may reasonably request in order to
effectively consummate the purchase and sale transaction herein
contemplated.
7.03 Parties in Interest. All the terms and
provisions of this Agreement shall be binding upon, shall inure
to the benefit of, and shall be enforceable by the heirs,
beneficiaries, representatives, successors, and assigns of the
parties hereto.
7.04 Prior Agreements; Amendments. This
Agreement supersedes all prior agreements and understandings
between the parties with respect to the subject matter hereof.
This Agreement may be amended only by a written instrument
duly executed by the parties hereto or their respective successors
or assigns.
7.05 Headings. The section and paragraph
headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or
interpretations of this Agreement.
7.06 Confidentiality. Each party hereby agrees
that all information provided by the other party and identified as
"confidential" will be treated as such, and the receiving party
shall not make any use of such information other than with
respect to this Agreement. If the Agreement shall be terminated,
each party shall return to the other all such confidential
information in their possession, or will certify to the other party
that all of such confidential information that has not been
returned has been destroyed.
7.07 Notices. All notices, requests, demands, and
other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered or mailed
(registered or certified mail, postage prepaid, return receipt
requested) as follows:
If to the Seller:
c/o Tom Gelfand
#206 - 455 Granville Street
Vancouver, British Columbia
Canada V6C 1T1
If to the Buyer:
c/o Wei Shao
Blake, Cassels & Graydon LLP
Suite 2600 Three Bentall Centre
595 Burrard Street, P.O. Box 49314
Vancouver, B.C., Canada V7X 1L3
7.08 Effect. In the event any portion of this
Agreement is deemed to be null and void under any state or
federal law, all other portions and provisions not deemed void or
voidable shall be given full force and effect.
7.09 Counterparts. This Agreement may be
executed simultaneously in several counterparts, each of which
shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has
been duly executed and delivered by the Seller, the Buyer and
the Company on the date first above written to be effective as of
March 16, 2000.
BUYER: COMPANY:
TZF International Herbs Sabai Sabai Enterprises Corp
Investment, Inc.
By:/s/ Chung Yu By:/s/ Daisy Fisher
Authorized Agent Authorized Agent
SELLER:
/s/ Daisy Fisher
/s/ Fred Fisher
EXHIBIT 3.1 - ARTICLES OF INCORPORATION OF SABAI
SABAI ENTERPRISES CORP.
ARTICLES OF INCORPORATION
OF
SABAI SABAI ENTERPRISES, CORP.
The undersigned, to form a Nevada corporation,
CERTIFIES THAT:
I. NAME: The name of the corporation is: SABAI
SABAI ENTERPRISES, CORP.
II. REGISTERED OFFICE: RESIDENT AGENT:
The location of the registered office of this corporation within
the State of Nevada is 711 S. Carson St. Suite 4, Carson City,
Nevada 89701; this corporation may maintain an office or offices
in such other place within or without the State of Nevada as may
be from time to time designated by the Board of Directors or by
the By-Laws of the corporation; and this corporation may
conduct all corporation business of every kind or nature,
including the holding of any meetings of directors or
shareholders, inside or outside the State of Nevada, as well as
without the State of Nevada.
The Resident Agent for the corporation shall be Resident
Agents of Nevada, Inc., 711 S. Carson St. Suite 4, Carson City,
Nevada 89701.
III. PURPOSE: The purpose for which this
corporation is formed is: To engage in any lawful activity.
IV. AUTHORIZATION OF CAPITAL STOCK: The
amount of the total authorized capital stock of the corporation
shall be TWENTY-FIVE THOUSAND Dollars ($25,000.00),
consisting of TWENTY-FIVE MILLION (25, 000,000) shares of
Common Stock, par value $.001 per share.
V. INCORPORATOR: The name and post office
address of the Incorporator signing these Articles of
Incorporation is as follows:
NAME POST OFFICE ADDRESS
Resident Agents of 711 S. Carson St. Suite 4
Nevada, Inc. Carson City, Nevada 89701
VI. DIRECTORS: The governing board of this
corporation shall be known as directors, and the first Board shall
consist of two (2) directors.
The number of directors may, pursuant to the By-Laws,
be increased or decreased by the Board of Directors, provided
there shall be no less than one (1) nor more than nine (9)
Directors.
The name and post office addresses of the directors
constituting the first Board of Directors is as follows:
NAME POST OFFICE ADDRESS
DAISY FISHER 801 King St. West Suite 1021
Toronto, Ontario Canada M5V 3C9
FREDERICK STEVEN #30B Cedar Tower,
FISHER President Park
99 Sukhumvit 24 Road,
Klongton, Kongtoey, Bangkok
Thailand 10110
VII. STOCK NON-ASSESSABLE: The capital stock,
or the holders thereof, after the amount of the subscription price
has been paid in, shall not be subject to any assessment
whatsoever to pay the debts of the corporation.
VIII. TERM OF EXISTENCE: This corporation shall
have perpetual existence.
IX. CUMULATIVE VOTING: No cumulative voting
shall be permitted in the election of directors.
X. PREEMPTIVE RIGHTS: Shareholders shall not
be entitled to preemptive rights.
XI. LIMITED LIABILITY: No officer or director of
the Corporation shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary
duty as an officer or director, except for liability (i) for any
breach of the officer or directors duty of loyalty to the
Corporation or its Stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, or (iii) for any transaction from which the
officer or director derived any improper personal benefit. If the
Nevada General Corporation Law is amended after the date of
incorporation to authorize corporate action further eliminating or
limiting the personal liability of officers or directors, then the
liability of an officer or director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the
Nevada General Corporation Law, or amendments thereto. No
repeal or modification of this paragraph shall adversely affect
any right or protection of an officer or director of the
Corporation existing at the time of such repeal or modification.
XII. INDEMNIFICATION: Each person who was or is
made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a
proceeding), by reason of the fact that he or she, or a person for
whom he or she is the legal representative, is or was an officer
or director of the Corporation or is or was serving at the request
of the Corporation as an officer or director of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans whether the basis of such proceeding is alleged action in
an official capacity as an officer or director shall be indemnified
and held harmless by the Corporation to the fullest extent
authorized by the Nevada General Corporation Law, as the same
exists or may hereafter be amended, (but, in the case of any such
amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said
law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including
attorneys fees, judgments, fines excise taxes or penalties and
amounts to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification
shall continue as to a person who has ceased to be an officer or
director and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that except as
provided herein with respect to proceedings seeking to enforce
rights to indemnification, the Corporation shall indemnify any
such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The right to indemnification
conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final
disposition; provided however, that, if the Nevada General
Corporation Law requires the payment of such expenses incurred
by an officer or director in his or her capacity as an officer or
director (and not in any other capacity in which service was or is
rendered by such person while an officer or director, including,
without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, payment shall
be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such officer or director, to repay
all amounts so advanced if it shall ultimately be determined that
such officer or director is not entitled to be indemnified under
the Section or otherwise.
If a claim hereunder is not paid in full by the Corporation within
ninety days after a written claim has been received by the
Corporation, the claimant may, at any time thereafter, bring suit
against the Corporation to recover the unpaid amount of the
claim and, if successful, in whole or in part, the claimant shall
be entitled to be paid the expense of prosecuting such claim. It
shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the
required undertaking, if any, is required, has been tendered to the
corporation) that the claimant has not met the standards of
conduct which make it permissible under the Nevada General
Corporation Law for the Corporation to indemnify the claimant
for the amount claimed, but the burden of proving such defense
shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior
to the commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she has
met the applicable standard of conduct set forth in the Nevada
General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action
or create a presumption that the claimant has not met the
applicable standard of conduct.
The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any
other right which any person may have or hereafter acquire
under any statute, provision of the Certificate of Incorporation,
By-Law, agreement, vote of stockholders or disinterested
directors or otherwise.
The Corporation may maintain insurance, at its expense, to
protect itself and any officer, director, employee or agent of the
Corporation or another corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss,
whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss
under the Nevada General Corporation Law.
The Corporation may, to the extent authorized from time to time
by the Board of Directors, grant rights to indemnification to any
employee or agent of the Corporation to the fullest extent of the
provisions of this Section with respect to the indemnification and
advancement of expenses of officers and directors of the
Corporation or individuals serving at the request of the
Corporation as an officer, director, employee or agent of another
corporation or of a partnership, joint venture, trust or other
enterprise.
THE UNDERSIGNED, being the Incorporator hereinafter
named for the purpose of forming a corporation pursuant to the
General Corporation Law of the State of Nevada, does make and
file these Articles of Incorporation, hereby declaring and
certifying the facts herein stated are true, and, accordingly,
has hereunto set his hand this 14th day of September, 1998.
__________________________________
Patricia A. Bozin, Sole Incorporator
For Resident Agents of Nevada, Inc.
STATE OF NEVADA )
) SS.
COUNTY OF CARSON )
On this 14th day of September, 1998, before me, a
Notary Public, personally appeared Patricia A. Bozin, who
acknowledged to me that she executed the above instrument.
______________________________
Notary Public
EXHIBIT 3.1a - AMENDMENT TO ARTICLES OF
INCORPORATION FOR SABAI SABAI ENTERPRISES
CORP.
Certificate of Amendment to Articles of Incorporation for Sabai
Sabai Enterprises Corp.
1. Name of Corporation: Sabai Sabai Enterprises Corp.
2. The Articles have been amended as follows:
Pursuant to the provisions of NRS. 78.390, the undersigned
Corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is Sabai Sabai Enterprises
Corp.
(1) ARTICLE I of the Articles of Incorporation of the
Corporation shall be amended in its entirety to read as follows:
The name of the corporation is: T.Z.F. International Investments,
Inc.
SECOND: ARTICLE IV of the Articles of Incorporation of the
Corporation shall be amended in its entirety to read as follows:
The amount of the total authorized capital stock of the
corporation shall be ONE HUNDRED THOUSAND Dollars
($100,000.00), consisting of ONE HUNDRED MILLION
(100,000,000) shares of Common Stock, par value $.001 per
share.
3. The vote by which the stockholders holding shares in the
corporation entitling them to exercise at least a majority of the
voting power, or such greater proportion of the voting power as
may be required in the case of a vote by classes or series, or as
may be required by the provisions of the articles of incorporation
have voted in favor of the amendment is: 62.5%.
4. Signatures
/s/ CHUNG YU /s/ QING LIU
____________________ _______________
President Secretary
File # C21715-98
May 25, 2000
The office of Dean Heller
Nevada Secretary of State
EXHIBIT 3.2 - BYLAWS OF T.Z.F. INTERNATIONAL
INVESTMENTS, INC.
BYLAWS
OF
SABAI SABAI ENTERPRISES, CORP.
ARTICLE I
OFFICERS
1.1 Business Office
The principal business office ("principal office") of the
corporation shall be located at any place either within or without
the state of Nevada as designated in the corporation's most
current Annual Report filed with the Nevada Secretary of State.
The corporation may have such other offices, either within or
without the State of Nevada, as the Board of Directors may
designate or as the business of the corporation may require from
time to time. The corporation shall maintain at its principal
office a copy of certain records, as specified in Section 2.14 of
Article 2.
1.2 Registered Office
The registered office of the corporation shall be located
within Nevada and may be, but need not be, identical with the
principal office, provided the principal office is located within
Nevada. The address of the registered office may be changed
from time to time by the Board of Directors.
ARTICLE II
SHAREHOLDERS
2.1 Annual Shareholder Meeting
The annual meeting of the shareholders shall be held on the 14th
day of September each year, beginning with 1999, at the hour of
1 o'clock p.m., or at such other time on such other day within
such month as shall be fixed by the Board of Directors, for the
purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the day fixed for
the annual meeting shall be a legal holiday in the State of
Nevada, such meeting shall be held on the next succeeding
business day.
If the election of directors shall not be held on the day
designated herein for any annual meeting of the shareholders, or
at any subsequent continuation after adjournment thereof, the
Board of Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as convenient.
2.2 Special Shareholder Meetings
Special meetings of the shareholders, for any purpose or
purposes described in the notice of meeting, may be called by
the president, or by the Board of Directors, and shall be called
by the president at the request of the holders of not less than
one-tenth of all outstanding shares of the corporation entitled to
vote on any issue at the meeting.
2.3 Place of Shareholder Meetings
The Board of Directors may designate any place, either
within or without the State of Nevada, as the place for any
annual or any special meeting of the shareholders, unless by
written consent, which may be in the form of waivers of notice
or otherwise, all shareholders entitled to vote at the meeting
designate a different place, either within or without the State of
Nevada, as the place for the holding of such meeting. If no
designation is made by either the Board of Directors or
unanimous action of the voting shareholders, the place of
meeting shall be the principal office of the corporation in the
State of Nevada.
2.4 Notice of Shareholder Meetings
(a) Required Notice. Written notice stating the
place, day and hour of any annual meeting shall be delivered not
less than 10 nor more than 60 days before the date of the
meeting, either personally or by mail, by or at the direction of
the president, the Board of Directors, or other persons calling the
meeting, to each shareholder of record entitled to vote at such
meeting and to any other shareholder entitled by the laws of the
State of Nevada governing corporations (the "Act") or the
Articles of Incorporation to receive notice of the meeting.
Notice shall be deemed to be effective at the earlier of: (1) When
deposited in the united States mail, addressed to the shareholder
at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid; (2) on the date shown
on the return receipt requested, and the receipt is signed by or
on behalf of the addressee; (3) when received; or (4) 5 days after
deposit in the United States mail, if mailed postpaid and
correctly addressed to an address, provided in writing by the
shareholder, which is different from that shown in the
corporation's current record of shareholders.
(b) Adjourned Meeting. If any shareholder
meeting is adjourned to a different date, time, or place, notice
need not be given of the new date, time, and place if the new
date, time and place is announced at the meeting before
adjournment. But if a new record date for the adjourned
meeting is, or must be fixed (see Section 2.5 of this Article 2)
then notice must be given pursuant to the requirements of
paragraph (a) of this Section 2.4, to those persons who are
shareholders as of the new record date.
(c) Waiver of Notice. A shareholder may
waive notice of the meeting (or any notice required by the Act,
Articles of Incorporation, or Bylaws), by a writing signed by the
shareholder entitled to the notice, which is delivered to the
corporation (either before or after the date and time stated in the
notice) for inclusion in the minutes of filing with the corporate
records.
A shareholder's attendance at a meeting:
(1) Waives objection to lack of notice or defective
notice of the meeting unless the shareholder, at the beginning of
the meeting, objects to holding the meeting or transacting
business at the meeting; and
(2) Waives objection to consideration of a particular
matter at the meeting that is not within the purposes or purposes
described in the meeting notice, unless the shareholder objects to
consideration of the matter when it is presented.
(d) Contents of Notice. The notice of each special
shareholder meeting shall include a description of the purpose or
purposes for which the meeting is called. Except as provided in
this Section 2.4(d), or as provided in the corporation's articles,
or otherwise in the Act, the notice of an annual shareholder
meeting need not include a description of the purpose or
purposes for which the meeting is called.
If a purpose of any shareholder meeting is to consider
either: (1) a proposed amendment to the Articles of Incorporation
(including any restated articles requiring shareholder approval);
(2) a plan of merger or share exchange; (3) the sale, lease,
exchange or other disposition of all, or substantially all of the
corporation's property; (4) the dissolution of the corporation; or
(5) the removal of a director, the notice must so state and be
accompanied by, respectively, a copy or summary of the: (a)
articles of amendment; (b) plan of merger or share exchange;
and (c) transaction for disposition of all, or substantially all, of
the corporation's property. If the proposed corporate action
creates dissenters' rights, as provided in the Act, the
dissenters' rights, and must be accompanied by a copy of
relevant provisions of the Act. If the corporation issues, or
authorizes the issuance of shares for promissory notes or for
promises to render services in the future, the corporation shall
report in writing to all the shareholders the number of shares
authorized or issued, and the consideration received if the
corporation indemnifies or advances expenses to an officer or
director, this shall be reported to all the shareholders with or
before notice of the next shareholder meeting.
2.5 Fixing of Record Date
For the purposes of determining shareholders of any
voting group entitled to notice of or to vote at any meeting of
shareholders, or shareholders entitled to receive payment of any
distribution or dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors
may fix in advance a date as the record date. Such record date
shall not be more than 70 days prior to the date on which the
particular action requiring such determination of shareholders
entitled to notice of, or to vote at a meeting of shareholders, or
shareholders entitled to receive a share dividend or distribution.
The record date for determination of such shareholders shall be
at the close of business on:
(a) With respect to an annual shareholder meeting
or any special shareholder meeting called by the Board of
Directors or any person specifically authorized by the Board of
Directors or these Bylaws to call a meeting, the Day before the
first notice is given to shareholders;
(b) With respect to a special shareholder meeting
demanded by the shareholders, the date the first shareholder
signs the demand;
(c) With respect to the payment of a share
dividend, the date Board of Directors authorizes the share
dividend;
(d) With respect to actions taken in writing
without a meeting (pursuant to Article 2, Section 2.12, the first
date any shareholder signs a consent; and
(e) With respect to a distribution to shareholders,
(other than one involving a repurchase or reacquisition of
shares), the date the Board of Directors authorizes the
distribution.
When a determination of shareholders entitled to vote at
any meeting of shareholders has been made, as provided in this
section, such determination shall apply to any adjournment
thereof unless the Board of Directors fixes a new record date,
which it must do if the meeting is adjourned to a date more than
120 days after the date fixed for the original meeting.
If no record date has been fixed, the record date shall be
the date the written notice of the meeting is given to
shareholders.
2.6 Shareholder List
The officer or agent having charge of the stock transfer
books for shares of the corporation shall, at least ten (10) days
before each meeting of shareholders, make a complete record of
the shareholders entitled to vote at each meeting of shareholders,
arranged in alphabetical order, with the address of and the
number of shares held by each. The list must be arranged by
class or series of shares. The shareholder list must be available
for inspection by any shareholder, beginning two business days
after notice of the meeting is given for which the list was
prepared and continuing through the meeting. The list shall be
available at the corporation's principal office or at a place in the
city where the meeting is to be held, as set forth in the notice
of meeting. A shareholder, his agent, or attorney is entitled, on
written demand, to inspect and, subject to the requirements of
Section 4 of this Article 2, to copy the list during regular
business hours and at his expense, during the period it is
available for inspection. The corporation shall maintain the
shareholder list in written form or in another form capable of
conversion into written form within a reasonable time.
2.7 Shareholder Quorum and Voting Requirements
A majority of the outstanding shares of the corporation
entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a
majority of the outstanding shares are represented at a meeting, a
majority of the shares so represented may adjourn the meeting
from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at
the meeting as originally notified. The shareholders present at a
dully organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Once a share is represented for any purpose at a meeting,
it is deemed present for quorum purposes for the remainder of
the meeting and for any adjournment of that meeting, unless a
new record date is or must be set for that adjourned meeting.
If a quorum exists, a majority vote of those shares present
and voting at a duly organized meeting shall suffice to defeat or
enact any proposal unless the Statutes of the State of Nevada, the
Articles of Incorporation or these Bylaws require a
greater-than-majority vote, in which event the higher vote shall
be required for the action to constitute the action of the
corporation.
2.8 Increasing Either Quorum or Voting Requirements
For purposes of this Section 2.8, a "supermajority"
quorum is a requirement that more than a majority of the votes
of the voting group be present to constitute a quorum; and a
"supermajority" voting requirement is any requirement that
requires the vote of more than a majority of the affirmative votes
of a voting group at a meeting.
The Shareholders, but only if specifically authorized to do
so by the Articles of Incorporation, may adopt, amend, or delete
a Bylaw which fixes a "supermajority" quorum or
"supermajority" voting requirement.
The adoption or amendment of a Bylaw that adds,
changes, or deletes a"supermajority" quorum or voting
requirement for shareholders must meet the same quorum
requirement and be adopted by the same vote required to take
action under the quorum and voting requirement then if effect or
proposed to be adopted, whichever is greater.
A Bylaw that fixes a supermajority quorum or voting
requirement for shareholders may not be adopted, amended, or
repealed by the Board of Directors.
2.9 Proxies
At all meetings of shareholders, a shareholder may vote
in person, or vote by written proxy executed in writing by the
shareholder or executed by his duly authorized attorney-in-fact.
Such proxy shall be filed with the secretary of the corporation or
other person authorized to tabulate votes before or at the time of
the meeting. No Proxy shall be valid after eleven (11) months
from the date of its execution unless otherwise specifically
provided in the proxy or coupled with an interest.
2.10 Voting of Shares
Unless otherwise provided in the articles, each
outstanding share entitled to vote shall be entitled to one vote
upon each matter submitted to a vote at a meeting of
shareholders.
Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy,
without the transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote shares
held by him without transfer of such shares into his name.
Shares standing in the name of a receiver may be voted
by such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name if authority to do so is contained in an
appropriate order of the Court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled
to vote such shares until the shares are transferred into the name
of the pledgee, and thereafter, the pledgee shall be entitled to
vote the shares so transferred.
Shares of its own stock belonging to the corporation or
held by it in a fiduciary capacity shall not be voted, directly or
indirectly, at any meeting, and shall not be counted in
determining the total number of outstanding shares at any given
time.
Redeemable shares are not entitled to vote after notice of
redemption is mailed to the holders and a sum sufficient to
redeem the shares has been deposited with a bank, trust
company, or other financial institution under an irrevocable
obligation to pay the holders the redemption price on surrender
of the shares.
2.11 Corporation's Acceptance of Votes
(a) If the name signed on a vote, consent, waiver,
or proxy appointment corresponds to the name of a shareholder,
the corporation, if acting in good faith, is entitled to accept the
vote, consent, waiver, or proxy appointment and give it effect as
the act of the shareholder.
(b) If the name signed on a vote, consent, waiver,
or proxy appointment does not correspond to the name of its
shareholder, the corporation, if acting in good faith, is
nevertheless entitled to accept the vote, consent, waiver, or proxy
appointment and give it effect as the act of the
shareholder if:
(1) the shareholder is an entity, as defined in the Act, and
the name signed purports to be that of an officer or agent of the
entity:
(2) the name signed purports to be that of an
administrator, executor, guardian or conservator representing the
shareholder and, if the corporation requests, evidence of
fiduciary status acceptable to the corporation has been presented
with respect to the vote, consent, waiver, or proxy appointment;
(3) the name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation
requests, evidence of this status acceptable to the
corporation has been presented with respect to the vote, consent,
waiver, or proxy appointment;
(4) the name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if
the corporation of the signatory's authority to sign for the
shareholder has been presented with respect to the vote, consent,
waiver, or proxy appointment; or
(5) the shares are held in the name of two or more
persons as co-tenants or fiduciaries and the name signed purports
to be the name of at least one of the co-owners and the person
signing appears to be acting on behalf of all the co-owners.
(c) The corporation is entitled to reject a vote,
consent, waiver, or proxy appointment if the secretary or other
officer or agent authorized to tabulate votes, acting in good faith,
has reasonable basis for doubt about the validity of the signature
on it or about the signatory's authority to sign for the
shareholder
(d) The corporation and its officer or agent who
accepts or rejects a vote, consent, waiver, or proxy appointment
in good faith and in accordance with the standards of this
Section 2.11 are not liable in damages to the shareholder for the
consequences of the acceptance or rejection.
(e) Corporation action based on the acceptance or
rejection of a vote, consent, waiver, or proxy appointment under
this section is valid unless a court of competent jurisdiction
determines otherwise.
2.12 Informal Action by Shareholders
Any action required or permitted to be taken at a meeting
of the shareholders may be taken without a meeting if one or
more written consents, setting forth the action so taken, shall be
signed by shareholders holding a majority of the shares entitled
to vote with respect to the subject matter thereof, unless a
"supermajority" vote is required by these Bylaws, in which case
a "supermajority" vote will be required. Such consent shall be
delivered to the corporation secretary for inclusion in the minute
book. A consent signed under this section has the effect of a
vote at a meeting and may be described as such in any
document.
2.13 Voting for Directors
Unless otherwise provided in the Articles of
Incorporation, directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election at a meeting at
which a quorum is present.
2.14 Shareholders' Rights to Inspect Corporate Records
Shareholders shall have the following rights regarding
inspection of corporate records:
(a) Minutes and Accounting Records - The
corporation shall keep, as permanent records, minutes of all
meetings of its shareholders and Board of Directors, a record of
all actions taken by the shareholders or Board of Directors
without a meeting, and a record of all actions taken by a
committee of the Board of Directors on behalf of the
corporation. The corporation shall maintain appropriate
accounting records.
(b) Absolute Inspection Rights of Records
Required at Principal Office - If a shareholder gives the
corporation written notice of his demand at least five business
days before the date on which he wishes to inspect and copy, he,
or his agent or attorney, has the right to inspect and copy, during
regular business hours, any of the following records, all of which
the corporation is required to keep at its principal office:
(1) its Articles of Incorporation and all amendments to
them currently in effect;
(2) its Bylaws or restated Bylaws and all amendments to
them currently in effect;
(3) resolutions adopted by its Board of Directors creating
one or more classes or series of shares, and fixing their relative
rights, preferences, and limitations, if shares issued pursuant to
those resolutions are outstanding;
(4) the minutes of all shareholders' meetings, and records
of all action taken by shareholders without a meeting, for the
past three years;
(5) all written communications to shareholders within the
past three years, including the financial statements furnished for
the past three years to the shareholders;
(6) a list of the names and business addresses of its
current directors and officers; and
(7) its most recent annual report delivered to the Nevada
Secretary of State.
(c) Conditional Inspection Right - In addition, if a
shareholder gives the corporation a written demand, made in
good faith and for a proper purpose, at least five business days
before the date on which he wishes to inspect and copy,
describes with reasonable particularity his purpose and the
records he desires to inspect, and the records are directly
connected to his purpose, a shareholder of a corporation, or his
duly authorized agent or attorney, is entitled to inspect and copy,
during regular business hours at a reasonable location specified
by the corporation, any of the following records of the
corporation:
(1) excerpts from minutes of any meeting of the Board of
Directors; records of any action of a committee of the Board of
Directors on behalf of the corporation; minutes of any meeting
of the shareholders; and records of action taken by the
shareholders or Board of Directors without a meeting, to the
extent not subject to inspection under paragraph (a) of this
Section 2.14;
(2) accounting records of the corporation; and
(3) the record of shareholders (compiled no earlier than
the date of the shareholder's demand).
(d) Copy Costs - The right to copy records
includes, if reasonable, the right to receive copies made by
photographic, xerographic, or other means. The corporation may
impose a reasonable charge, to be paid by the shareholder on
terms set by the corporation, covering the costs of labor and
material incurred in making copies of any documents provided to
the shareholder.
(e) "Shareholder" Includes Beneficial Owner - For
purposes of this Section 2.14, the term "shareholder" shall
include a beneficial owner whose shares are held in a voting
trust or by a nominee on his behalf.
2.15 Financial Statements Shall Be Furnished to the
Shareholders (a) The corporation shall furnish its shareholders
annual financial statements, which may be consolidated or
combined statements of the corporation and one or more of its
subsidiaries, as appropriate, that include a balance sheet as of the
end of the fiscal year, an income statement for that year, and a
statement of changes in shareholders' equity for the year, unless
that information appears elsewhere in the financial statements. If
financial statements are prepared for the corporation on the basis
of generally accepted accounting principles, the annual financial
statements for the shareholders must also be prepared on that
basis.
(b) If the annual financial statements are reported
upon by a public accountant, his report must accompany them.
If not, the statements must be accompanied by a statement of the
president or the person responsible for the corporation's
accounting records:
(1) stating his reasonable belief that the statements were
prepared on the basis of generally accepted accounting principles
and, if not, describing the basis of preparation; and
(2) describing any respects in which the statements were
not prepared on a basis of accounting consistent with statements
prepared for the preceding year.
(c) A corporation shall mail the annual financial
statements to each shareholder within 120 days after the close of
each fiscal year.
Thereafter, on written request from a shareholder who
was not mailed the statements, the corporation shall mail him the
latest financial statements.
2.16 Dissenters' Rights
Each shareholder shall have the right to dissent from and
obtain payment for his shares when so authorized by the Act,
Articles of Incorporation, the Bylaws, or a resolution of the
Board of Directors.
2.17 Order of Business
The following order of business shall be observed at all
meeting of the shareholders, as applicable and so far as
practicable:
(a) Calling the roll of officers and directors
present and determining shareholder quorum requirements;
(b) Reading, correcting and approving of minutes
of previous meeting;
(c) Reports of officers;
(d) Reports of Committees;
(e) Election of Directors;
(f) Unfinished business;
(g) New business; and
(h) Adjournment.
ARTICLE III.
BOARD OF DIRECTORS
3.1 General Powers
Unless the Articles of Incorporation have dispensed with
or limited the authority of the Board of Directors by describing
who will perform some or all of the duties of a Board of
Directors, all corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation shall
be managed under the direction of the Board of Directors.
3.2 Number, Tenure and Qualifications of Directors
Unless otherwise provided in the Articles of
Incorporation, the authorized number of directors shall be not
less than 1 (minimum number) nor more than 9 (maximum
number).
The initial number of directors was established in the
original Articles of Incorporation. The number of directors shall
always be within the limits specified above, and as determined
by resolution adopted by the Board of Directors. After any
shares of this corporation are issued, neither the maximum nor
minimum number of directors can be changed, nor can a fixed
number be substituted for the maximum and minimum numbers,
except by a duly adopted amendment to the Articles of
Incorporation duly approved by a majority of the outstanding
shares entitled to vote. Each director shall hold office until the
next annual meeting of shareholders or until his successor shall
have been elected and qualified, or until there is a decrease in
the number of directors. Unless required by the Articles of
Incorporation, directors do not need to be residents of Nevada or
shareholders of the corporation.
3.3 Regular Meetings of the Board of Directors
A regular meeting of the Board of Directors shall be held
without other notice than this Bylaw immediately after, and at
the same place as, the annual meeting of the shareholders. The
Board of Directors may provide, by resolution, the time and
place for the holding of additional regular meetings without other
notice than such resolution. (If permitted by Section 3.7, any
regular meeting may be held by telephone).
3.4 Special Meeting of the Board of Directors
Special meetings of the Board of Directors may be called
by or at the request of the president or any one director. The
person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or without
the State of Nevada, as the place for holding any special meeting
of the Board of Directors or, if for holding any special meeting
of the Board of Directors or, if permitted by Section 3.7, any
special meeting may be held by telephone.
3.5 Notice of, and Waiver of Notice of, Special Meetings
of the Board of Directors
Unless the Articles of Incorporation provide for a longer
or shorter period, notice of any special meeting of the Board of
Directors shall be given at least two days prior thereto, either
orally or in writing. If mailed, notice of any director meeting
shall be deemed to be effective at the earlier of: (1) when
received; (2) five days after deposited in the United States mail,
addressed to the director's business office, with postage thereon
prepaid; or (3) the date shown on the return receipt, if sent by
registered or certified mail, return receipt requested, and the
receipt is signed by or on behalf of the director. Notice may
also be given by facsimile and, in such event, notice shall be
deemed effective upon transmittal thereof to a facsimile number
of a compatible facsimile machine at the director's business
office. Any director may waive notice of any meeting. Except
as otherwise provided herein, the waiver must be in writing,
signed by the director entitled to the notice, and filed with the
minutes or corporate records. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose
of objecting to the transaction of any business and at the
beginning of the meeting, or promptly upon his arrival, objects
to holding the meeting or transacting business at the meeting,
and does not thereafter vote for or assent to action taken at the
meeting. Unless required by the Articles of Incorporation or the
Act, neither the business to be transacted at, nor the purpose of,
any special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting.
3.6 Director Quorum
A majority of the number of directors fixed, pursuant to
Section 3.2 of this Articled 3, shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors,
unless the Articles of Incorporation or the Act require a greater
number for a quorum.
Any amendment to this quorum requirement is subject to
the provisions of Section 3.8 of this Article 3.
Once a quorum has been established at a duly organized
meeting, the Board of Directors may continue to transact
corporate business until adjournment, notwithstanding the
withdrawal of enough directors to leave less than a quorum.
3.7 Actions By Directors
The act of the majority of the directors present at a
meeting at which a quorum is present when the vote is taken
shall be the act of the Board of Directors, unless the Articles of
Incorporation or the Act require a greater percentage. Any
amendment which changes the number of directors needed to
take action is subject to the provisions of Section 3.8 of this
Article 3.
Unless the Articles of Incorporation provide otherwise,
any or all directors may participate in a regular or special
meeting by, or conduct the meeting through the use of, any
means of communication by which all directors participating may
simultaneously hear each other during the meeting. Minutes of
any such meeting shall be prepared and entered into the records
of the corporation. A director participating in a meeting by this
means is deemed to be present in person at the meeting.
A director who is present at a meeting of the Board of
Directors or a committee of the Board of Directors when
corporate action is taken is deemed to have assented to the action
taken unless: (1) he objects at the beginning of the meeting,
promptly upon his arrival, to holding it or transacting business at
the meeting; or (2) his dissent or abstention from the action
taken is entered in the minutes of the meeting; or (3) he delivers
written notice of his dissent or abstention to the presiding officer
of the meeting before its adjournment or to the corporation
within 24 hours after adjournment of the meeting. The right of
dissent or abstention is not available to a director who votes in
favor of the action taken.
3.8 Establishing a "Supermajority" Quorum or Voting
Requirement for the Board of Directors
For purposes of this Section 3.8, a "supermajority"
quorum is a requirement that more than a majority of the
directors in office constitute a quorum; and a "supermajority"
voting requirement is one which requires the vote of more than a
majority of those directors present at a meeting at which a
quorum is present to be the act of the directors.
A Bylaw that fixes a supermajority quorum or
supermajority voting requirement may be amended or repealed:
(a) if originally adopted by the shareholders, only
by the shareholders (unless otherwise provided by the
shareholders); or
(b) if originally adopted by the Board of
Directors, either by the shareholders or by the Board of
Directors.
A Bylaw adopted or amended by the shareholders that
fixes a supermajority quorum or supermajority voting
requirement for the Board of Directors may provide that it may
be amended or repealed only by a specified vote of either the
shareholders or the Board of Directors.
Subject to the provisions of the preceding paragraph,
action by the Board of Directors to adopt, amend, or repeal a
Bylaw that changes the quorum or voting requirements for the
Board of Directors must meet the same quorum requirement and
be adopted by the same vote required to take action under the
quorum and voting requirement then in effect or proposed to be
adopted, whichever is greater.
3.9 Director Action Without a Meeting
Unless the Articles of Incorporation provide otherwise,
any action required or permitted to be taken by the Board of
Directors at a meeting may be taken without a meeting if all the
directors sign a written consent describing the action taken.
Such consents shall be filed with the records of the corporation.
Action taken by consent is effective when the last director signs
the consent, unless the consent specifies a different effective
date. A signed consent has the effect of a vote at a duly noticed
and conducted meeting of the Board of Directors and may be
described as such in any document.
3.10 Removal of Directors
The shareholders may remove one or more directors at a
meeting called for that purpose if notice has been given that a
purpose of the meeting is such removal. The removal may be
with or without cause unless the Articles of Incorporation
provide that directors may only be removed for cause. If
cumulative voting is not authorized, a director may be removed
only if the number of votes cast in favor of removal exceeds the
number of votes cast against removal.
3.11 Board of Director Vacancies
Unless the Articles of Incorporation provide otherwise, if
a vacancy occurs on the Board of Directors, excluding a vacancy
resulting from an increase in the number of directors, the
director(s) remaining in office shall fill the vacancy. If the
directors remaining in office constitute fewer than a quorum of
the Board of Directors, they may fill the vacancy by the
affirmative vote of a majority of all the directors remaining in
office.
If a vacancy results from an increase in the number of
directors, only the shareholders may fill the vacancy.
A vacancy that will occur at a specific later date (by
reason of a resignation effective at a later date) may be filled by
the Board of Directors before the vacancy occurs, but the new
director may not take office until the vacancy occurs.
The term of a director elected to fill a vacancy expires at
the next shareholders' meeting at which directors are elected.
However, if his term expires, he shall continue to serve until his
successor is elected and qualifies or until there is a decrease in
the number of directors.
3.12 Director Compensation
Unless otherwise provided in the Articles of
Incorporation, by resolution of the Board of Directors, each
director may be paid his expenses, if any, of attendance at each
meeting of the Board of Directors, and may be paid a stated
salary as director or a fixed sum for attendance at each meeting
of the Board of Directors, or both. No such payment shall
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
3.13 Director Committees
(a) Creation of Committees. Unless the Articles of
Incorporation provide otherwise, the Board of Directors may
create one or more committees and appoint members of the
Board of Directors to serve on them. Each committee must have
two or more members, who serve at the pleasure of the Board of
Directors.
(b) Selection of Members. The creation of a
committee and appointment of members to it must be approved
by the greater of (1) a majority of all the directors in office
when the action is taken, or (2) the number of directors required
by the Articles of Incorporation to take such action.
(c) Required Procedures. Sections 3.4, 3.5, 3.6,
3.7, 3.8, and 3.9 of this Article apply to committees and their
members.
(d) Authority. Unless limited by the Articles of
Incorporation or the Act, each committee may exercise those
aspects of the authority of the Board of Directors which the
Board of Directors confers upon such committee in the resolution
creating the committee. Provided, however, a committee may
not:
(1) authorize distributions to shareholders;
(2) approve or propose to shareholders any action that the
Act requires be approved by shareholders;
(3) fill vacancies on the Board of Directors or on any of
its committees;
(4) amend the Articles of Incorporation;
(5) adopt, amend, or repeal Bylaws;
(6) approve a plan of merger not requiring shareholder
approval;
(7) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the Board of
Directors; or
(8) authorize or approve the issuance or sale, or contract
for sale of shares, or determine the designation and relative
rights, preferences, and limitations of a class or series of shares;
except that the Board of Directors may authorize a committee to
do so within limits specifically prescribed by the Board of
Directors.
ARTICLE IV.
OFFICERS
4.1 Designation of Officers
The officers of the corporation shall be a president, a
secretary, and a treasurer, each of whom shall be appointed by
the Board of Directors. Such other officers and assistant officers
as may be deemed necessary, including any vice-presidents, may
be appointed by the Board of Directors. The same individual
may simultaneously hold more than one office in the corporation.
4.2 Appointment and Term of Office
The officers of the corporation shall be appointed by the
Board of Directors for a term as determined by the Board of
Directors. If no term is specified, they shall hold office until the
first meeting of the directors held after the next annual meeting
of shareholders. If the appointment of officers is not made at
such meeting, such appointment shall be made as soon thereafter
as is convenient. Each officer shall hold office until his
successor has been duly appointed and qualified, until his death,
or until he resigns or has been removed in the manner provided
in Section 4.3 of this Article 4.
The designation of a specified term does not grant to the
officer any contract rights, and the Board of Directors can
remove the officer at any time prior to the termination of such
term.
Appointment of an officer shall not of itself create any
contract rights.
4.3 Removal of Officers
Any officer may be removed by the Board of Directors at
any time, with or without cause. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
4.4 President
The president shall be the principal executive officer of
the corporation, and subject to the control of the Board of
Directors, shall generally supervise and control all of the
business and affairs of the corporation. He shall, when
president, preside at all meetings of the shareholders. He may
sign, with the secretary or any other proper officer of the
corporation thereunto duly authorized by the Board of Directors,
certificates for shares of the corporation and deeds, mortgages,
bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where
the signing and execution thereof shall be expressly delegated by
the Board of Directors or by these Bylaws to some other officer
or agent of the corporation, or shall be required by law to be
otherwise signed or executed. The president shall generally
perform all duties incident to the office of president and such
other duties as may be prescribed by the Board of Directors from
time to time.
4.5 Vice-President
If appointed, in the absence of the president or in the
event of the president's death, inability or refusal to act, the
vice-president (or in the event there be more than one
vice-president, the vice-presidents in the order designated at the
time of their election, or in the absence of any designation, then
in the order of their appointment) shall perform the duties of the
president, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the president. If there is
no vice-president, then the treasurer shall perform such duties of
the president. Any vice-president may sign, with the secretary or
an assistant secretary, certificates for shares of the corporation
the issuance of which have been authorized by resolution of the
Board of Directors. A vice-president shall perform such other
duties as from time to time may be assigned to him by the
president or by the Board of Directors.
4.6 Secretary
The secretary shall (a) keep the minutes of the
proceedings of the shareholders and of the Board of Directors in
one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these
Bylaws or as required by law; (c) be custodian of the corporate
records and of any seal of the corporation and, if there is a seal
of the corporation, see that it is affixed to all documents, the
execution of which on behalf of the corporation under its seal is
duly authorized; (d) when requested or required, authenticate any
records of the corporation; (e) keep a register of the post office
address of each shareholder, as provided to the secretary by the
shareholders; (f) sign with the president, or vice-president,
certificates for shares of the corporation, the issuance of which
has been authorized by resolution of the Board of Directors; (g)
have general charge of the stock transfer books of the
corporation; and (h) generally perform all duties incident to the
office of secretary and such other duties as from time to time
may be assigned to him by the president or by the Board of
Directors.
4.7 Treasurer
The treasurer shall (a) have charge and custody of and be
responsible for all funds and securities of the corporation; (b)
receive and give receipts for moneys due and payable to the
corporation; (c) receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such
banks, trust companies, or other depositories as may be selected
by the Board of Directors; and (d) generally perform all of the
duties incident to the office of treasurer and such other duties as
from time to time may be assigned to him by the president or by
the Board of Directors.
If required by the Board of Directors, the treasurer shall
give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the Board of Directors shall
determine.
4.8 Assistant Secretaries and Assistant Treasurers
The assistant secretaries, when authorized by the Board of
Directors, may sign with the president, or a vice-president,
certificates for shares of the corporation, the issuance of which
has been authorized by a resolution of the Board of Directors.
The assistant treasurers shall respectively, if required by the
Board of Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the Board of
Directors shall determine.
The assistant secretaries and assistant treasurers,
generally, shall perform such duties as may be assigned to them
by the secretary or the treasurer, respectively, or by the president
or the Board of Directors.
4.9 Salaries
The salaries of the officers, if any, shall be fixed from
time to time by the Board of Directors.
ARTICLE V.
INDEMNIFICATION OF DIRECTORS, OFFICERS, AGENTS,
AND EMPLOYEES
5.1 Indemnification of Officers, Directors, Employees and
Agents.
Unless otherwise provided in the Articles of
Incorporation, the corporation shall indemnify any individual
made a party to a proceeding because he is or was an officer,
director, employee or agent of the corporation against liability
incurred in the proceeding, all pursuant to and consistent with
the provisions of NRS 78.751, as amended from time to time.
5.2 Advance Expenses for Officers and Directors.
The expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding shall be
paid by the corporation as they are incurred and in advance of
the final deposition of the action, suit or proceeding, but only
after receipt by the corporation of an undertaking by or on behalf
of the officer or director on terms set by the Board of Directors,
to repay the expenses advanced if it is ultimately determined by
a court of competent jurisdiction that he is not entitled to be
indemnified by the corporation.
5.3 Scope of Indemnification
The indemnification permitted herein is intended to be to
the fullest extent permissible under the laws of the State of
Nevada, and any amendments thereto.
ARTICLE VI.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 Certificates for Shares
(a) Content
Certificates representing shares of the corporation shall at
minimum, state on their face the name of the issuing corporation;
that the corporation is formed under the laws of the State of
Nevada; the name of the person to whom issued; the certificate
number; class and par value of shares; and the designation of the
series, if any, the certificate represents. The form of the
certificate shall be as determined by the Board of Directors.
Such certificates shall be signed (either manually or by facsimile)
by the president or a vice-president and by the secretary or an
assistant secretary and may be sealed with a corporate seal or a
facsimile thereof. Each certificate for shares shall be
consecutively numbered or otherwise identified.
(b) Legend as to Class or Series
If the corporation is authorized to issue different classes
of shares or different series within a class, the designations,
relative rights, preferences, and limitations applicable to each
class and the variations in rights, preferences, and limitations
determined for each series (and the authority of the Board of
Directors to determine variations for future series) must be
summarized on the front or back of the certificate indicating that
the corporation will furnish the shareholder this information on
request in writing and without charge.
(c) Shareholder List
The name and address of the person to whom the shares
are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the corporation.
(d) Transferring Shares
All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been
surrendered and canceled, except that in case of a lost, destroyed,
or mutilated certificate, a new one may be issued therefore upon
such terms as the Board of Directors may prescribe, including
indemnification of the corporation and bond requirements.
6.2 Registration of the Transfer of Shares
Registration of the transfer of shares of the corporation
shall be made only on the stock transfer books of the
corporation. In order to register a transfer, the record owner shall
surrender the share certificate to the corporation for cancellation,
properly endorsed by the appropriate person or persons with
reasonable assurances that the endorsements are genuine and
effective. Unless the corporation has established a procedure by
which a beneficial owner of shares held by a nominee is to be
recognized by the corporation, as the owner, the person in whose
name shares stand on the books of the corporation shall be
deemed by the corporation to be the owner thereof for all
purposes.
6.3 Restrictions on Transfer of Shares Permitted
The Board of Directors may impose restrictions on the
transfer or registration of transfer of shares, including any
security convertible into, or carrying a right to subscribe for or
acquire shares. A restriction does not affect shares issued before
the restriction as adopted unless the holders of the shares are
parties to the restriction agreement or voted in favor of the
restriction.
A restriction on the transfer or registration of transfer of
shares may be authorized:
(a) to maintain the corporation's status when it is
dependent on the number or identity of its shareholders;
(b) to preserve exemptions under federal or state
securities law; or
(c) For any other reasonable purpose.
A restriction on the transfer or registration of transfer of
shares may:
(a) obligate the shareholder first to offer the
corporation or other persons (separately, consecutively, or
simultaneously) an opportunity to acquire the restricted shares;
(b) obligate the corporation or other persons
(separately, consecutively, or simultaneously) to acquire the
restricted shares;
(c) require the corporation, the holders of any
class of its shares, or another person to approve the transfer of
the restricted shares, if the requirement is not manifestly
unreasonable; or
(d) prohibit the transfer of the restricted shares to
designated persons or classes of persons, if the prohibition is not
manifestly unreasonable.
A restriction on the transfer or registration of transfer of
shares is valid and enforceable against the holder or a transferee
of the holder if the restriction is authorized by this Section 6.3
and its existence is noted conspicuously on the front or back of
the certificate. Unless so noted, a restriction is not enforceable
against a person without knowledge of the restriction.
6.4 Acquisition of Shares
The corporation may acquire its own shares and unless
otherwise provided in the Articles of Incorporation, the shares so
acquired constitute authorized but unissued shares.
If the Articles of Incorporation prohibit the reissue of
shares acquired by the corporation, the number of authorized
shares is reduced by the number of shares acquired, effective
upon amendment of the Articles of Incorporation, which
amendment shall be adopted by the shareholders, or the Board of
Directors without shareholder action (if permitted by the Act).
The amendment must be delivered to the Secretary of State and
must set forth:
(a) the name of the corporation;
(b) the reduction in the number of authorized
shares, itemized by class and series; and
(c) the total number of authorized shares, itemized
by class and series, remaining after reduction of the shares.
ARTICLE VII.
DISTRIBUTIONS
7.1 Distributions
The Board of Directors may authorize, and the
corporation may make distributions (including dividends on its
outstanding shares)in the manner and upon the terms and
conditions provided by law.
ARTICLE VIII.
CORPORATE SEAL
8.1 Corporate Seal
The Board of Directors may adopt a corporate seal which
may be circular in form and have inscribed thereon any
designation, including the name of the corporation, Nevada as
the state of incorporation, and the words "Corporate Seal."
ARTICLE IX.
EMERGENCY BYLAWS
9.1 Emergency Bylaws
Unless the Articles of Incorporation provide otherwise,
the following provisions shall be effective during an emergency,
which is defined as a time when a quorum of the corporation's
directors cannot be readily assembled because of some
catastrophic event. During such emergency:
(a) Notice of Board Meetings
Any one member of the Board of Directors or any one of
the following officers: president, any vice-president, secretary, or
treasurer, may call a meeting of the Board of Directors. Notice
of such meeting need be given only to those directors whom it is
practicable to reach, any may be given in any practical manner,
including by publication and radio. Such notice shall be given at
least six hours prior to commencement of the meeting.
(b) Temporary Directors and Quorum
One or more officers of the corporation present at the
emergency board meeting, as is necessary to achieve a quorum,
shall be considered to be directors for the meeting, and shall so
serve in order of rank, and within the same rank, in order of
seniority. In the event that less than a quorum (as determined by
Section 3.6 of Article 3) of the directors are present (including
any officers who are to serve as directors for the meeting), those
directors present (including the officers serving as directors) shall
constitute a quorum.
(c) Actions Permitted To Be Taken
The Board of Directors, as constituted in paragraph (b),
and after notice as set forth in paragraph (a), may:
(1) Officers' Powers
Prescribe emergency powers to any officer of the
corporation;
(2) Delegation of Any Power
Delegate to any officer or director, any of the powers of
the Board of Directors;
(3) Lines of Succession
Designate lines of succession of officers and agents, in
the event that any of them are unable to discharge their duties;
(4) Relocate Principal Place of Business
Relocate the principal place of business, or designate
successive or simultaneous principal places of business;
(5) All Other Action
Take any other action which is convenient, helpful, or
necessary to carry on the business of the corporation.
ARTICLE X.
AMENDMENTS
10.1 Amendments
The Board of Directors may amend or repeal the
corporation's Bylaws unless:
(a) the Articles of Incorporation or the Act reserve
this power exclusively to the shareholders, in whole or part; or
(b) the shareholders, in adopting, amending, or
repealing a particular Bylaw, provide expressly that the Board of
Directors may not amend or repeal that Bylaw; or
(c) The Bylaw either establishes, amends or
deletes a"supermajority" shareholder quorum or voting
requirement, as defined in Section 2.8 of Article 2.
Any amendment which changes the voting or quorum
requirement for the Board of Directors must comply with Section
3.8 of Article 3, and for the shareholders, must comply
with Section 2.8 of Article 2.
The corporation's shareholders may also amend or repeal
the corporation's Bylaws at any meeting held pursuant to Article
2.
CERTIFICATE OF THE SECRETARY
I hereby certify that I am the Secretary of Sabai Sabai
Enterprises, Corp. and that the forgoing Bylaws, consisting of
twenty-four (24) pages, constitutes the code of Sabai Sabai
Enterprises, Corp. as duly adopted by the Board of Directors of
the Corporation on this 14th day of September, 1998.
IN WITNESS WHEREOF, I have hereunto subscribed
my name this 14th day of September, 1998.
_______________________
Secretary
EXHIBIT 4.1 - SPECIMEN STOCK CERTIFICATE
CONTENTS:
State of Incorporation
Name of Company
Number of authorized shares of common stock
Name of individual shareholder
Number of shares owned by individual shareholder
Fully paid and non-assessable shares
Date of issuance of certificate
Signatures of President and Secretary
Restrictive transfer legend
EXHIBIT 27 - Financial Data Schedule
