U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: July 21, 1997
HA SPINAKER, INC.
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(Exact name of registrant as specified in its charter)
COLORADO
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(State or other jurisdiction of incorporation)
000-21099 84-112830
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(Commission File No.) (IRS Employer
Identification No.)
5650 Greenwood Plaza Blvd.
Suite 216
Englewood, Colorado 80111
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 741-1118
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Item 2. Acquisition and Disposition of Assets.
Effective July 11, 1997, HA Spinaker, Inc. (the "Company")
entered into a letter of intent with Zaba International Holdings
USA, Inc. ("Zaba"), a privately held Nevada corporation, whereby
the Company has agreed in principle to acquire all of the issued
and outstanding shares of Zaba in exchange for issuance by the
Company of previously unissued "restricted" common stock.
The relevant terms of the proposed transaction require the
Company to (i) undertake a "reverse split" of its common stock,
whereby one (1) shares of common stock will be issued in exchange
for every twelve (12) shares of common stock then issued and
outstanding; and (ii) issue to the Zaba shareholders an aggregate
of 9,628,660 "restricted" common shares (post split), representing
80% of the Company's then outstanding common stock, in exchange for
all of the issued and outstanding shares of Zaba.
The proposed share exchange is subject to satisfaction of
certain conditions, including completion of due diligence
activities, the approval of the transaction by all of the
shareholders of Zaba and the Company, and confirmation of the
financial condition of Zaba by presentation of Zaba audited
financial statements. The proposed transaction is expected to
close immediately after these conditions have been satisfied. If
the proposed transaction with Zaba is consummated, the present
officers and directors of the Company are expected to resign their
respective positions with the Company, to be replaced by the
present management of Zaba, or their designees. A copy of the
letter of intent between the Company and Zaba is attached hereto as
Exhibit 2.0 and incorporated herein as if set forth.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
2.0 Letter of Intent between the Company and Zaba
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934 the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
HA SPINAKER, INC.
By:/s/ Gregory W. Skufka
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Gregory W. Skufka,
President
Dated: July 21, 1997.
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HA SPINAKER, INC.
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EXHIBIT 2.0
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LETTER OF INTENT BETWEEN
THE COMPANY AND
ZABA INTERNATIONAL HOLDINGS USA, INC.
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HA SPINNAKER, INC.
5650 Greenwood Plaza Blvd.
Suite 216
Englewood, Colorado 80111
July 11, 1997
Board of Directors
Zaba International Holdings USA, Inc.
2963 Glen Drive
Suite 308
Coquitlam, British Columbia, Canada V3B 2P7
Attention: Robert Zaba, President
Re: Plan of Reorganization Between HA Spinnaker,
Inc. and Zaba International, Inc.
Dear Mr. Zaba:
This letter is intended to express the general terms of the Plan of
Reorganization to be formalized between HA Spinnaker, Inc., a
Colorado corporation ("HAS") and Zaba USA Holdings, Inc., a Nevada
corporation to be formed immediately after execution of this letter
agreement ("Zaba"). The objective of our discussions has been the
execution and consummation of applicable, formal Agreement(s)
between HAS and Zaba (the "Exchange Agreements") which, among other
things, would provide for the various matters set forth below.
1. Plan of Reorganization and Reorganization of the
Companies. The board of directors of HAS and Zaba have completed
an initial evaluation of the business plan, financial statements
and other relevant corporate documents of the other and have
concluded that a reorganization of Zaba and HAS, whereby HAS would
issue shares of its Common Stock equal to ownership of 80% of its
outstanding shares in exchange for 100% of the then outstanding
securities of Zaba would be in the best interest of both companies.
It is the intent of the parties hereto that the proposed
reorganization of Zaba and HAS be effected as a tax-free exchange
pursuant to Section 368 of the Internal Revenue Code of 1986, as
amended.
2. Terms of Reorganization.
(A) HAS Capitalization. HAS's total authorized capital
stock consists of 1,000,000,000 shares of Common Stock, par value
$0.001 per share and 100,000,000 shares of Preferred Stock, par
value $0.001 per share. As of the date hereof there are 28,600,000
Common Shares of HAS issued and outstanding. There are no
Preferred Shares issued or outstanding. As of the Closing Date (as
defined herein), there will be no more than 28,886,000 shares of
HAS' common stock issued or outstanding, pre reverse split.
Prior to the Closing Date, as defined hereinbelow, the Board of
Directors of HAS shall undertake a reverse split of the HAS issued
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and outstanding Common Stock, whereby 1 share of Common Stock shall
be issued in exchange for each 12 shares of Common Stock presently
issued and outstanding, in order to establish the number of issued
and outstanding Common Shares of HAS at the Closing Date to be
2,407,166 shares.
(B) Zaba Capitalization. Zaba's total authorized
capital will, upon formation, consist of 100,000 Common Shares, par
value $0.01 per share. As of the date of Closing, there will be
100 shares of Zaba's Common Stock issued and outstanding.
(C) Exchange Terms. At the Closing, the exchange shall
occur as follows:
(i) Each Share of Zaba Common Stock will be converted
into shares of HAS Common Stock on a pro rata basis to
their respective holdings in Zaba.
(D) Special Board and Shareholder Meetings.
(i) Prior to Closing, the Board of Directors of HAS will
call a special meeting of the HAS shareholders, or
otherwise obtain the written consent of its shareholders,
for the purposes of: (a) ratifying the transaction
proposed herein; (b) amending the HAS Articles of
Incorporation, to change the name of HAS to "Zaba
International, Inc." or such other name as may be
available and acceptable to the present Zaba Board of
Directors; (c) providing any applicable dissenter's
rights afforded to the HAS Shareholders pursuant to the
laws of the State of Colorado; and (d) undertaking to
include any additional amendments to the HAS Articles of
Incorporation reasonably requested by the Zaba Board of
Directors in a timely manner and acceptable to the HAS
Board of Directors.
(ii) Prior to Closing, the Board of Directors of Zaba
will undertake all action necessary pursuant to the laws
of Nevada in to effectuate the transaction proposed
herein, including but not limited to obtaining the
consent of the Zaba Shareholders for the purposes of
ratifying the transaction proposed herein and shall take
all additional action necessary to cause the intent of
this letter to be adopted and ratified.
(E) Share Exchange. Subject to the approval of the
terms and conditions contained herein by the HAS and Zaba
shareholders (the "Closing" or the "Closing Date"), Zaba shall
consummate a reorganization with HAS by the Zaba shareholders
exchanging all of the issued and outstanding Zaba Stock owned by
them for an aggregate of 9,600,000 "restricted" Common Shares of
HAS (post split), with HAS emerging as the parent company and Zaba
being dissolved by operation of law.
(F) Officers and Directors. At Closing, the present
officers and directors of HAS shall deliver to Zaba their
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respective letters of resignation, along with certified minutes of
the HAS Board of Directors accepting such resignation and
appointing to the HAS Board those persons designated by Zaba to be
officers and directors of the surviving entity herein.
3. Financial Condition of HAS. Except as provided herein,
as of the Closing Date, HAS balance sheet will reflect no assets or
liabilities.
4. Financial Condition of Zaba. Zaba hereby represents
and warrants that the audited balance sheet of Zaba and its
predecessor companies, dated March 31, 1997 will reflect, in US
Dollars, total assets and net assets of no less than $8,000,000 and
net income for its most recent fiscal year of no less than
$100,000. Zaba further represents and warrants that no negative
material changes to its financial statements have occurred since
the end of its last fiscal year.
5. Conditions to Closing.
(A) Closing. The Closing of the transaction proposed
herein shall take place as soon as practical after the following
conditions, in addition to other customary conditions, have been
satisfied: (i) the terms of the reorganization have been approved
by the requisite vote of its shareholders; and (ii) the
reorganization has been approved by a requisite number of Zaba's
security holders. The Closing shall take place in Aurora, Colorado
at the offices of legal counsel for HAS, Andrew I. Telsey, P.C.,
2851 S. Parker Road, Suite 720, Aurora, Colorado 80014, or such
other location as the parties may so agree. At the discretion of
the parties hereto, Closing may also occur via telephonic means.
(B) To Be Provided by Zaba. As soon as possible, but in
no event later than the Closing Date, in addition to those items
which may be required to be delivered pursuant to the terms of the
applicable Exchange Agreements, Zaba shall provide to the present
Board of Directors of HAS the following:
i) a financial audit of its books as of the end of its
last fiscal year and unaudited financial statements for
those interim periods required to be provided the SEC
under Regulation SB or SK, as applicable and as
promulgated under the Securities Act of 1933, as amended
which shall be prepared in accordance with Generally
Accepted Accounting Principles. The audited financial
statements shall be provided by an independent, SEC
Certified Public Accountant and such audit shall
demonstrate balance sheet information consistent with the
financial information provided to HAS by Zaba prior to
Closing; and
ii) an investment letter in a form acceptable to counsel
to HAS, duly executed by each Zaba shareholder,
acknowledging that each such shareholder is exchanging
their respective securities of Zaba for their pro rata
applicable number of HAS Common Shares, that such shares
to be acquired by each
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Zaba shareholder are solely for their account and for
investment and they have no plan, intention, contract,
understanding, agreement or arrangement with any person
to sell, assign, pledge, hypothecate or otherwise
transfer to any person such shares, or any portion
thereof.
(C) Non-Delivery. Failure by Zaba to provide those items
described hereinabove, or failure of said audit to confirm the
financial condition of Zaba as previously represented herein, shall
render this proposed transaction voidable at the discretion of the
present Board of Directors of HAS.
(D) Representations of HAS. HAS hereby represents that,
as of the Closing Date, it shall be current in all filings required
to be tendered to the Securities and Exchange Commission ("SEC")
pursuant to the Securities Exchange Act of 1934, as amended,
including but not limited to, filings on Forms 8-K, 10-K, 10-KSB,
10-Q and/or 10-QSB.
(E) Private Sale of HAS Common Stock. Subsequent to
Closing, some of the current inside shareholders of HAS may sell
some or all of their HAS Common Shares owned by them, subject to
the exemptions, restrictions, terms and limitations applicable to
such sales under state and federal securities laws. No sales of
any of the issued and outstanding securities of HAS shall be made
prior to Closing.
6. Default. Assuming the execution of a definitive
reorganization agreement by HAS and Zaba, in the event Zaba fails
to perform pursuant to Paragraph 9, below, or otherwise close the
transaction without the fault of HAS, Zaba shall be responsible for
payment of all reasonable costs incurred by HAS, including but not
limited to attorneys fees, due diligence costs, costs related to
proxy solicitation, if any and such other costs as may be incurred
directly relating to this proposed transaction. Zaba shall be
responsible for payment of its own legal, accounting and any other
out-of-pocket expenses reasonably incurred in connection with this
transaction, whether or not this transaction is consummated.
7. Confidentiality. Upon the signing of this Letter of
Intent, HAS and Zaba will provide to each other full access to
their books and records and will furnish financial and operating
data and such other information with respect to their business and
assets as may reasonably be requested from time to time. If the
proposed transaction is not consummated, all parties shall keep
confidential any information (unless ascertainable from public
filings or published information), obtained concerning the other's
operations, assets and business.
8. Retainer of Counsel. As a material condition hereto, upon
execution hereof by Zaba, Zaba shall cause to be tendered a non-
refundable fee of $25,000, payable in two installments, the first
installment upon execution of this letter and the balance on the
earlier of (i) Closing, as defined herein; or (ii) thirty (30) days
from the date of execution of this agreement, to Andrew I. Telsey,
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P.C., counsel to HAS, in order to allow such counsel to commence
preparation of all SEC filings and other related documentation
necessary to allow HAS to comply with the rules and regulations
necessary to consummate the transaction proposed herein. ZABA
hereby covenants to tender all balances due hereunder, whether or
not the transaction proposed herein is consummated.
9. Finders Fees. It is hereby acknowledged that each
party hereto may be responsible for payment of certain finders fees
relating to the transaction proposed herein and that as a further
condition to Closing, as defined herein, each party shall warrant
in such Closing documents that such finders fees have been, or will
be, paid and further, shall indemnify and hold harmless the other
party from such obligation.
10. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same instrument.
11. Jurisdiction. It is the intention of the parties that
the laws of the State of Colorado govern the determination of the
validity of this Agreement, the construction of its terms and the
interpretation of the rights and duties of the parties.
12. Notices. Any notice relevant herein shall be deemed
to have been sufficiently served for all purposes if delivered
personally to the party to whom the same is directed, or, if sent,
by deposit with the United States mail, certified mail, return
receipt requested postage prepaid, at such party's address listed
hereinabove, or to such other address as shall be furnished in
writing by any party to the other. any such notice shall be deemed
to be given three (3) days after deposited in the U.S. mail.
13. Further Action. Each party shall execute and deliver
such papers, documents and instruments, and perform such acts as
are necessary or appropriate to implement the terms hereof and the
intent of the parties hereto.
14. Amendments. This Agreement may only be amended by the
mutual consent of all the parties hereto which Amendment shall be
in writing, duly executed by the parties.
Except for the agreements set forth in Paragraphs 7, 8 and 9
hereof, this letter is not intended as a contract or to create any
enforceable rights or obligations whatsoever on the part of either
party. No obligations on the part of either party with respect to
the matters covered hereby (other than as set forth in Paragraphs
7, 8 and 9 hereof) shall exist unless and until a written
agreement, satisfactory in form and substance to both parties, has
been approved by their respective boards of directors and
shareholders, if necessary and executed by officers specifically
authorized to do so.
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If the foregoing accurately reflects your understanding of the
terms and conditions of our agreement please so indicate by signing
below as designated.
Yours truly,
HA SPINNAKER, INC.
By: /s/ Gregory W. Skufka
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Gregory W. Skufka, President
APPROVED AND ACCEPTED this 11 day of July, 1997.
ZABA INTERNATIONAL HOLDINGS USA, INC.
By: /s/ Robert Zaba
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Robert Zaba, President
