SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
March 15, 1997
________________________________________________
Date of Report (Date of earliest event reported)
CONTROLLED ENVIRONMENT AQUACULTURE
TECHNOLOGY, INC.
________________________________________________
(Exact name of registrant as specified in its charter)
Colorado 0-25868 84-1293167
________________________________________________
(State or other (Commission I.R.S.Employer
jurisdiction File Number) Identification No.)
of incorporation)
CEA TECH USA, Inc.
7 Waterfront Plaza, Suite 400
500 Ala Moana Blvd.
Honolulu, HI 96813
________________________________________________
Address of principal executive offices) (Zip Code)
(808)521-1801
________________________________________________
Registrant's telephone number, including area code
4750 Table Mesa Drive
Boulder, CO 80303
________________________________________________
Former name or former address, if changed since last
report<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) In accordance with the terms of an Agreement
and Plan of Reorganization dated January 14, 1997, on
March 15, 1997, the Company acquired all of the issued
and outstanding stock of Sunkiss Shrimp Co., Ltd., a
Hawaii corporation ("Sunkiss"), in a stock for stock
exchange intended to qualify as a tax free reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of
1986. In the transaction, the Company issued 100,000
shares of its common stock to the former shareholders of
Sunkiss, and agreed to issue up to 100,000 additional
shares of its common stock ("earn-out" shares) to the
shareholders of Sunkiss upon completion of certain
conditions. Upon completion of the transaction, Sunkiss
became a wholly-owned subsidiary of the Company.
The conditions for issuance of the earn-out shares
include (i) obtaining a lease from the State of Hawaii on
approximately 78 acres of real property, (ii) completion of
construction of expanded hatchery facilities and one-half
acre growout ponds, (iii) completion of stocking of the first
36 one-acre growout ponds on the newly leased property,
and (iv) completion of the first full harvest of the 36 ponds.
There is no assurance as to when or whether these
conditions will be satisfied.
The shareholders of Sunkiss who will receive shares
of the Company in the stock exchange are Landis and Lisa
Ignacio and Robert A. Kanna.
(b) Sunkiss primarily operates as a breeding,
hatchery, and maturation facility for high health genetically
improved shrimp, with some production allocated to
growout and sale of full-grown shrimp for the local
Hawaiian market. The current facility of Sunkiss consists
of approximately 7.5 acres located in Kekaha, Hawaii, on
the island of Maui. An expansion program now underway
will increase the production capability to raise sufficient
brood stock and seed (nauplii and post larvae) to supply all
stock for the growing operations of the Company, with
sales of surplus, if any, to selected Hawaiian and U.S.
shrimp farm growing operations. The Company is also
now negotiating for acquisition of leases on additional
adjoining acreage for the purpose of expanding future
growout operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Audited financial statements are not currently
available for Sunkiss. Required financial statements for
Sunkiss will be filed by the Company as soon as
practicable, but in any event not later than 60 days after the
due date of this Form 8-K reporting the acquisition of all
of the issued and outstanding stock of Sunkiss.
(c) The following Exhibits are filed as part of this
report:
Exhibit (10) Agreement and Plan of Reorganization.
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.
CONTROLLED ENVIRONMENT AQUACULTURE
TECHNOLOGY, INC.
/s/ J. A. Garcia, President 3/20/97
________________________________________________
(Signature) (Date)
<PAGE>
EXHIBIT 10
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated
as of January 14, 1997, by and between CONTROLLED
ENVIRONMENT AQUACULTURE TECHNOLOGY, a Colorado
corporation ("CEA TECH"), and SUNKISS SHRIMP CO. LTD.,
a Hawaii corporation ("SUNKISS").
WHEREAS, the shareholders of SUNKISS (the
"Shareholders") own all of the issued and outstanding stock of
SUNKISS SHRIMP CO. LTD (the "SUNKISS Stock"); and
WHEREAS, the Shareholders desire to transfer to CEA
TECH, and CEA TECH desires to acquire from the Shareholders,
all of the Shareholders' SUNKISS common stock, pursuant to the
applicable provisions of the Corporations Law of Hawaii and the
Colorado Business Corporation Act, in exchange for 100,000
shares of common stock of CEA TECH (the "CEA TECH Stock");
and additional performance (earn-out) shares totalling 100,000
shall be issued in accordance with 1.1(a); and
WHEREAS, the parties hereto intend that the issuance of the
shares of CEA TECH Stock in exchange for the SUNKISS Stock,
shall qualify as a "tax free" exchange as contemplated by the
provisions of Section 368(a)(1)(B) of the Internal Revenue Code of
1986.
NOW THEREFORE, in consideration of the foregoing and
in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
Section 1. ISSUANCE AND TRANSFER OF STOCK
1.1 Issuance and Transfer. Upon the terms and subject to
the conditions set forth in this Agreement, at the "Closing" on the
"Closing Date" (as hereinafter defined),the Shareholders shall sell,
assign, convey and deliver to CEA TECH, and CEA TECH shall
purchase and receive from the Shareholders all of their shares of
common stock, constituting all of the issued and outstanding
SUNKISS Stock and set forth opposite each such Shareholder's
name on Exhibit A. In consideration for the transfer of such
shares of SUNKISS common stock to CEA TECH, CEA TECH
shall issue to the Shareholders in exchange for each share of
SUNKISS common stock, four (4) shares of authorized and newly
issued CEA TECH common stock. No fractional shares shall be
issued.
1.1.(a) Additional Performance Shares. Up to an additional
100,000 common shares shall be issued as part of this acquisition
to the original shareholders listed on Exhibit A hereto, as directed
in Exhibit A(1).
1.2 Total Shares to be Issued and Outstanding. Upon the
Closing Date, the total number of shares to be issued and
outstanding of CEA TECH, including shares issued to SUNKISS
Shareholders, and shares to be issued in connection with the
pending private placement, shall be no more than 3,257,000
common shares.
SECTION 2 CLOSING; TERMINATION
2.1 Closing. Subject to the fulfillment or waiver of the
conditions precedent set forth in Sections 7 and 8 hereof, the
Closing shall take place on the Closing Date at the offices of CEA
TECH, or at such other place on the Closing Date as the parties
may mutually agree in writing.
2.2 Closing Date. The Closing Date shall be January 15,
1997, or such later date upon which SUNKISS and the
Shareholders and CEA TECH may mutually agree in writing. If
the Closing Date shall not have taken place on or before March
31, 1997, this Agreement shall terminate upon written notice of
such termination given by either party not then in material default.
Upon such termination, the parties shall be released from all
obligation or liabilities arising hereunder except for (a) liabilities
arising out of pre-termination breaches hereof and (b) obligations
arising under Section 9.4 hereof.
2.3 Filings; Cooperation.
(a) Prior to the Closing, the parties shall proceed with due
diligence and in good faith to make such filings and take such
other actions as may be necessary to satisfy the conditions
precedent set forth in Sections 7 and 8 below.
(b) On and after the Closing Date, CEA TECH and
SUNKISS and the Shareholders shall, on request, with and without
further consideration, cooperate with one another by furnishing or
using their best efforts to cause others to furnish any additional
information and/or executing and delivering or using their best
efforts to cause others to execute and deliver any additional
documents and/or instruments, and doing or using their best efforts
to cause others to do any and all such other things as may be
reasonably required by the parties or their counsel to consummate
or otherwise implement the transactions contemplated by this
Agreement.
SECTION 3. SUNKISS CORPORATION'S
REPRESENTATIONS AND WARRANTIES
3.1 SUNKISS REPRESENTATIONS AND
WARRANTIES. Set forth in this Section 3.1 are certain
representations and warranties made by SUNKISS to CEA TECH
which shall constitute all of the representations and warranties by
SUNKISS with respect to the transactions covered by this
Agreement.
(a) Organization and Good Standing. The Articles of
Incorporation of SUNKISS as presently in effect, certified by the
Secretary of State of Hawaii and the Bylaws of SUNKISS as
presently in effect, certified by the President and Secretary of
SUNKISS, have been delivered to CEA TECH and are complete
and correct and since the date of such delivery, there has been no
amendment, modification or other change thereto other than those
necessary to consummate this Agreement and therefore, disclosed
herein.
(b) Capitalization. SUNKISS' authorized capital stock
consists of 500,000 shares of common stock (defined as SUNKISS
Common Stock), par value $1.00 per share, of which 25,000
shares are issued and outstanding. No other equity securities or
debt obligations of SUNKISS are authorized, issued or
outstanding.
(c) Subsidiaries. SUNKISS has no subsidiaries, investments,
or other financial interest in any other corporation or business
organization, joint venture or partnership.
(d) Financial Statements. SUNKISS had furnished to CEA
TECH its unaudited financial data as of October 31, 1996,
consisting primarily of a list of assets totalling $432,000, with
liabilities to the Department of Agriculture, State of Hawaii
totalling $130,000, arising from one or more loans received by
SUNKISS pursuant to Chapter 219 Hawaii Revised Statutes. In
connection therewith, SUNKISS must obtain the written consent of
the Department of Agriculture to the planned
reorganization/acquisition under certain negative covenant
agreements, Section 5, Page 2 of the Loan Commitment issued
pursuant to the approval of the Loan Application submitted to the
Board of Agriculture on February 17, 1994 and dated February 24,
1994.
SUNKISS agrees to supply all books and records necessary
to the conduct of an independent audit as of January 31, 1997 by
Grant Thornton & Co., in connection with its annual audit of CEA
TECH. SUNKISS has agreed to permit CEA TECH to engage
independent appraisers to evaluate and opine on the value of
acquired assets and inventory, which evaluations CEA TECH may
utilize in connection with the purchase basis of this transaction if
it so elects, in connection with the year end January 31, 1997
audit.
(e) Litigation. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, governmental or
regulatory body or arbitration tribunal against SUNKISS or its
properties. There are no actions, suits or proceedings pending, or
threatened against or affecting SUNKISS, or any of its properties,
at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, in
connection with the business, operations or affairs of SUNKISS
which might result in any material adverse change in the
operations or financial condition of SUNKISS, or which might
prevent or materially impede the consummation of the transactions
under this Agreement.
(f) Compliance with Laws. To the best of SUNKISS' actual
knowledge, the operations and affairs of SUNKISS do not violate
any law, ordinance, rule or regulation currently in effect, or any
order, writ, injunction or decree of any court or governmental
agency, the violation of which would substantially and adversely
affect the business, financial conditions or operations of SUNKISS.
(g) Absence of Undisclosed Liabilities. SUNKISS did not
have, as of October 31, 1996, and SUNKISS shall not have as of
the Closing Date, any liabilities except those liabilities incurred in
the ordinary course of business.
(h) Disclosure. Neither this Agreement, nor any certificate,
exhibit, schedule or other written document or statement, furnished
to CEA TECH by SUNKISS in connection with the transactions
contemplated by this Agreement contains or will contain any
untrue statement of a material fact or willfully omits to state a
material fact necessary to be stated to make the statements
contained herein or therein not misleading.
(i) Title to Assets. Schedule 3.1(i) hereto lists all the assets
which will be owned by SUNKISS on the Closing Date.
SUNKISS owns outright and has good, marketable title to all of
such assets including, without limitation, all of the assets reflected
on the October 31, 1996 SUNKISS financial statements, except as
otherwise disclosed on Schedule 3.1(i).
(j) Contracts. Set forth on Schedule 3.1(j) hereto is a true
and complete list of all material contracts, agreements or
commitments to which SUNKISS is a party or is bound. All such
material contracts, agreements and commitments are valid and
binding on SUNKISS in accordance with their terms.
(k) Books and Records. To its best actual knowledge the
books and records of SUNKISS are complete and correct, are
maintained in accordance with good business practice and the
transactions therein described, and there have been no
transactions involving SUNKISS which properly should have been
set forth therein and which have not been accurately set forth.
(l) Operating Authorities. To the best actual knowledge of
SUNKISS, it has all material operating authorities, governmental
certificates and licenses, permits, authorizations and approvals
("Permits") required to conduct its business as presently
conducted. Since inception to SUNKISS' actual knowledge, there
has not been any notice or adverse development regarding such
permits; such permits are in full force and effect; no material
violations are or have been recorded in respect of any Permit; and
no proceeding is pending or threatened to revoke or limit any
Permit.
(m) Indemnification. SUNKISS shall indemnify CEA TECH
from any losses sustained by it as a result of any breach,
inaccuracy or omission by SUNKISS with regard to any
representation or warranty set forth in this Agreement.
3.2 Restrictions on Securities
(a) Transfer of Securities. None of the CEA TECH
Common Stock acquired pursuant to this Agreement shall be
transferable except upon the conditions specified in this Section
3.2, which conditions are intended to insure compliance with the
provisions of the Securities Act of 1933, as amended ("1933 Act")
in respect to the transfer of such Shares.
(b) Legend. Unless and until otherwise permitted by this
Section 3.2, each certificate or other document evidencing any of
the CEA TECH Common Stock and Preferred Stock shall be
endorsed with a legend substantially in the following form:
"THESE SECURITIES HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS (A) COVERED BY AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, (B) IN
COMPLIANCE WITH RULE 145 UNDER SUCH ACT, OR (C)
THE COMPANY HAS BEEN FURNISHED WITH AN OPINION
OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY TO THE EFFECT THAT NO REGISTRATION IS
REQUIRED BY SUCH TRANSFER."
(c) Restrictions on Transfer. None of the CEA TECH
Common Stock or Preferred Stock shall be transferred, and CEA
TECH shall not be required to register any such transfer on the
books of CEA TECH, unless and until one of the following events
shall have occurred:
(A) CEA TECH shall have received an opinion of
counsel, in form and in substance reasonably acceptable to CEA
TECH and its counsel, stating that the contemplated transfer is
exempt from registration under the 1933 Act as then in effect, and
the Rules and Regulations of the Securities and Exchange
Commission (the "Commission") thereunder. Within five business
days after delivery to CEA TECH and its counsel of such an
opinion, CEA TECH either shall deliver to the proposed transferor
a statement to the effect that such opinion is not satisfactory in the
reasonable opinion of its counsel (and shall specify in detail the
legal analysis supporting any such conclusion) or shall authorize
CEA TECH's transfer agent to make the requested transfer;
(B) CEA TECH shall have been furnished with a letter
from the Commission in response to a written request in form and
substance acceptable to counsel for CEA TECH setting forth all of
the facts and circumstances surrounding the contemplated transfer,
stating that the Commission will take no action with regard to the
contemplated transfer;
(C) The shares of CEA TECH's Common Stock are
transferred pursuant to a registration statement which has been
filed with the Commission and has become effective;
(D) The shares of CEA TECH Common Stock are
transferred pursuant to and in accordance with Rule 144
promulgated by the Commission under the 1933 Act.
SECTION 4 CEA TECH'S REPRESENTATIONS AND
WARRANTIES
CEA TECH represents and warrants to SUNKISS and the
Shareholders as follows:
4.1 Organization and Good Standing. CEA TECH is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado and has full corporate
power and authority to own or lease its properties and to carry on
its business as now being conducted and as proposed to be
conducted. The Articles of Incorporation of CEA TECH and all
amendments thereto, certified by the Secretary of State of
Colorado, and the Bylaws of CEA TECH, as presently in effect,
certified by the President and Secretary of CEA TECH, have been
delivered to SUNKISS and are complete and correct and since the
date of such delivery, there has been no amendment, modification
or other change thereto other than those necessary to consummate
this Agreement, and therefore, disclosed herein.
4.2 Authority.
(a) CEA TECH has full corporate power to enter into this
Agreement, to execute all attendant documents and instruments
necessary to consummate the transactions contemplated hereunder,
to issue and transfer CEA TECH Stock to the Shareholders and to
carry out all of its obligations hereunder, but consummation of this
Agreement is subject to approval of the principal terms of this
Agreement by its outstanding shares, as those terms are defined
under the Colorado Business Corporation Act, of CEA TECH. The
execution and delivery of this Agreement and all other agreements,
documents and instruments to be executed herewith, have been
duly authorized by the Board of Directors of CEA TECH.
(b) CEA TECH shall have obtained any approval of the
transactions set forth in this Agreement by its outstanding shares
required under the Colorado Business Corporation Act.
(c) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor
compliance by CEA TECH with any of the provisions hereof will:
(i) violate or conflict with, or result in a breach of any
provisions of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under,
any of the terms, conditions or provisions of the Articles of
Incorporation or Bylaws of CEA TECH or any note, bond,
mortgage, indenture, deed of trust, license, agreement or other
instrument to which CEA TECH is a party, or by which it or its
properties or assets may be bound or affected; or
(ii) violate any order, writ, injunction or decree, or any
statute, rule, permit, or regulation applicable to CEA TECH or
any of its properties or assets.
(d) Indemnification. CEA TECH shall indemnify SUNKISS
for any losses resulting from any breach, inaccuracy or omission
on the part of CEA TECH with regard to any representation or
warranty set forth in this Agreement.
4.3 Description of and Title to Stock.
(a) CEA TECH's authorized capital stock consists of
100,000,000 shares of common stock, no par value, of which the
issued and outstanding shares do not exceed 3,257,000 shares, and
10,000,000 shares of preferred stock, of which no shares are
issued and outstanding as of the date of this Agreement. A total
of 3,000,000 Class A warrants exercisable until December 31,
2001, are authorized and, 2,739,000 are outstanding. These
warrants are convertible into common stock at $2.00 per share. No
other equity securities or debt obligations of CEA TECH are
authorized, issued or outstanding except those performance shares
described in l.l(a) and those additional earn-out shares agreed to in
connection with the acquisition of Aquacare Environment, Inc.
(b) The outstanding shares of CEA TECH Stock are free and
clear of all liens, charges, claims, pledges, restrictions and
encumbrances whatsoever of any kind or nature that would inhibit,
prevent, or otherwise interfere with the transactions contemplated
hereby. All of the outstanding shares of CEA TECH Stock are
validly issued, fully paid and nonassessable and there are no voting
trust agreements or other contracts, agreements or other contracts,
agreements or arrangements restricting or affecting voting or
dividend rights or transferability with respect to the outstanding
shares of CEA TECH Stock.
(c) All of the CEA TECH Common to be issued to or
transferred to the Shareholders pursuant to this Agreement, when
issued, transferred, and delivered as provided herein, will be duly
authorized, validly issued, fully paid and nonassessable, and will
be free and clear of all liens, charges, claims, pledges, restrictions
and encumbrances whatsoever of any nature.
4.4 Subsidiaries. CEA TECH is incorporating three
corporations in the State of Hawaii to operate as wholly owned
subsidiaries in order to conduct its businesses located in Hawaii.
4.5 Financial Statements. The Form 10-KSB dated January
31, 1996, and subsequent Form 10-Qs filed for the quarters ended
April 30, 1996, July 31, 1996, and October 31, 1996, contain
audited January 31, 1996 and unaudited 10-Q financial statements
and the related statements of operations and shareholders equity.
CEA TECH, formerly known as Global Capital Access
Corporation can be classified to date as a development stage
company, or start up. The Board of Directors have approved the
issuance of the additional shares subject to this agreement,
additional shares in connection with a private placement of
$2,500,000, and additional shares to finders, and key employees,
officers and directors, totalling 1,340,000 restricted shares when
issued. The total common stock issued and outstanding will total
3,257,000 shares giving effect to these transactions.
4.6 Absence of Certain Changes. Since the CEA TECH
Balance Sheet Date, (a) there has been no change in the condition
(financial or otherwise), business, property, prospects, assets or
liabilities of CEA TECH as shown on the CEA TECH Balance
Sheet at that date contained in the CEA TECH Financial
Statements; (b) there has been no damage to, destruction of, or
loss of any of the properties or assets of CEA TECH (whether or
not covered by insurance); (c) CEA TECH has not declared, or
paid any dividend or made any distribution on its capital stock,
redeemed, purchased or otherwise acquired any of its capital stock,
granted any options to purchase shares of its stock, or issued any
shares of its capital stock, except as outlined in Section 4.5 above;
(d) there have been no loans made by CEA TECH to its
employees, officers or directors; (e) there have been no waiver or
compromise by CEA TECH of valuable rights or of a material
debt owed to it; (f) CEA TECH has made no payment or
agreement or commitment to pay any compensation, fee or other
monies to any employee, officer, director, or agent of CEA
TECH; (g) there has been no agreement or commitment by CEA
TECH to do or perform any of the acts described in this Section
4.6; and (h) there has been no other event or condition of any
character which might adversely change the condition (financial or
otherwise), business, property, prospects, assets or liabilities of
CEA TECH or to impair materially the ability to conduct the
business now being conducted by it.
4.7 Absence of Undisclosed Liabilities. Except as disclosed
in CEA TECH's Financial Statements, CEA TECH did not have,
as of the Closing Date, any liabilities (secured or unsecured and
whether accrued, absolute, direct, indirect, or otherwise) of a kind
required by generally accepted accounting principles and consistent
with past practice to be set forth on a financial statement or the
notes thereto.
4.8 Litigation. There are no outstanding orders, injunctions,
awards or decrees of any court, governmental or regulatory body
or arbitration tribunal against CEA TECH or its properties.
Except for the threat of litigation by D.J. Walsh & Associates
(USA) Inc., of which the parties hereto have full and prior
knowledge, and mutually agree to be without merit, there are no
judgments, actions, suits or proceedings pending, or to the
knowledge of CEA TECH, threatened against or affecting CEA
TECH or any of its properties, at law or in equity, or before any
state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, foreign or domestic, in
connection with the business, operations or affairs of CEA TECH
which could prevent or impede the consummation of the
transactions contemplated under this Agreement.
4.9 Compliance with Laws. The operations and affairs of
CEA TECH do not violate any law, ordinance, rule or regulation
currently in effect, or any order, writ, injunction or decree of any
court or governmental agency.
4.10 Brokers: Underwriters. CEA TECH has not used the
services of or entered into any agreement with, any broker, agent
or finder in connection with this Agreement or the transactions
contemplated hereby, nor has CEA TECH taken any action which
could result in any other broker's, finder's or other fees or
commission being due and payable to any party with respect to this
Agreement or the transactions contemplated hereby. CEA TECH
has not entered into any agreements, commitments, arrangements
or understandings of any kind whatsoever with any broker-dealer
or underwriter in connection with the transactions contemplated
under this Agreement or the SUNKISS Stock being acquired
hereunder or CEA TECH Stock being issued hereunder.
4.11 Disclosure. Neither this Agreement, nor any
certificate, exhibit, schedule or other written document or
statement furnished to the Shareholders by CEA TECH in
connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to be stated in
order to make the statements contained herein or therein not
misleading.
4.12 Tax Matters. All federal, foreign, state and local tax
returns, reports and information statements required to be filed by
or with respect to the activities of CEA TECH have been filed for
all the years and periods for which such returns and statements
were due, including extensions thereof. Since the CEA TECH
Balance Sheet Date, CEA TECH has not incurred any liability
with respect to any federal, foreign, state or local taxes except in
the ordinary and regular course of business. Such returns, reports
and information statements are true and correct in all material
respects insofar as they relate to the activities of CEA TECH. On
the date of this Agreement, CEA TECH is not delinquent in the
payment of any such tax or assessment, and no deficiencies for any
amount of such tax have been proposed in a revenue agent's report
or assessed, and to the best knowledge of CEA TECH, there is no
basis for any such deficiency or claim. There is no tax sharing
agreement among or between CEA TECH and any affiliate
thereof. There is not now in force any extension of time with
respect to the date on which any tax return was or is due to be
filed by or with respect to CEA TECH, or any waiver or
agreement by CEA TECH for the extension of time for the
assessment of any tax, and CEA TECH is not a "consenting
corporation" within the meaning of Section 341(f)(1) of the
Internal Revenue Code of 1986.
4.13 Books and Records. The books and records of CEA
TECH are complete and correct, are maintained in accordance
with good business practice and accurately present and reflect, in
all material respects, all of the transactions therein described, and
there have been no transactions involving CEA TECH which
properly should have been set forth therein and which have not
been accurately so set forth.
4.14 Registration Rights. CEA TECH has not granted or
agreed to grant any rights relating to the registration of its
securities under applicable federal and state securities laws,
including piggy-back rights, except as to the underlying common
stock upon conversion of the preferred stock placed with Unity
House, Inc.
4.15 Employee Benefit Plans. CEA TECH has never adopted
or maintained a "defined benefit plan" within the meaning of the
Employee Retirement Income Security Act of 1974 ("ERISA"),
nor has such a plan been maintained by any person, firm or
corporation which is under "common controls (within the meaning
of Section 4001(b) of ERISA) with CEA TECH. Any Defined
contribution plan" within the meaning of ERISA adopted or
maintained by CEA TECH has been properly terminated and all
accrued benefits thereunder have been transferred to the employees
or beneficiaries entitled thereto. CEA TECH has never participated
in a Multi-employer plans within the meaning of ERISA. There
have been no "prohibited transactions" or other violations of law
or threatened or pending claims with respect to any of CEA
TECH's employee benefit plans.
4.16 Hazardous Waste. CEA TECH did not use, generate,
store, release or transport any hazardous waste, hazardous
materials or hazardous substances, or cause, direct, or permit any
of the foregoing to be done, and CEA TECH did not violate or
breach any federal state or local environmental protection and/or
health and safety laws and regulations thereto, and CEA TECH
has no contingent liabilities as a "responsible party."
4.17 SEC Filings. CEA TECH is a reporting company under
Section 12g of the Act and has fulfilled all of the reporting
requirements of the SEC and is current with its filings .
SECTION 5 SURVIVAL OF REPRESENTATIONS AND
WARRANTIES
The representations, warranties and covenants of SUNKISS
contained herein and the representations and warranties of the
Shareholders set forth in their consent forms shall survive the
execution and delivery of this Agreement, the Closing and the
consummation of the transactions called for by this Agreement.
The representations, warranties and covenants of CEA TECH
contained herein shall survive the execution and delivery of this
Agreement, the Closing and the consummation of the transactions
called for by this Agreement.
SECTION 6 CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF CEA TECH REGARDING THE CEA
TECH STOCK
The obligations of CEA TECH under this Agreement in
respect to the issuance and transfer of CEA TECH Stock shall, at
the option of CEA TECH, be subject to the satisfaction, on or
prior to the Closing Date, of each of the following conditions
precedent.
6.1 Accuracy of Representations and Warranties:
Performance. The representations and warranties made by
SUNKISS in this Agreement and the representations and warranties
of the Shareholders set forth in their consent forms shall be true
and correct in all material respects on and as of the Closing Date;
the Shareholders shall have performed or complied with all
covenants, agreements and conditions contained in this Agreement
on its part required to be performed or complied with at or prior
to Closing. SUNKISS shall have delivered to CEA TECH an
officer's certificate, dated as of the Closing Date, to the foregoing
effect.
6.2 Shareholder Approval. SUNKISS shall have obtained all
necessary shareholder approval for this acquisition and exchange
of stock.
6.3 No Contrary Judgment. The Closing shall not violate any
Permit or order, decree, or judgment of any court or governmental
body having competent jurisdiction, and there shall not have been
instituted any legal or administrative action or proceeding to enjoin
the transaction contemplated hereby or seeking damages from CEA
TECH with respect thereto.
6.4 Closing. SUNKISS and the Shareholders shall deliver or
cause to be delivered to CEA TECH at or prior to the Closing the
following documents:
(i) Certificate(s) representing all of the Shareholder's shares
of SUNKISS Stock, which certificate(s) shall be either (A) duly
endorsed in blank, or (B) accompanied by stock powers duly
executed;
(ii) The certificate referred to in Section 6.1 hereof;
(iii) SUNKISS' Articles of Incorporation, certified by the
Secretary of State of Hawaii;
(iv) Bylaws of SUNKISS certified as of the Closing Date by
the President and Secretary of SUNKISS.
(v) Such other documents, instruments or certificates as shall
be reasonably requested by CEA TECH or its counsel.
SECTION 7 CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF THE SHAREHOLDERS REGARDING THE
SUNKISS STOCK
The obligations of SUNKISS under the Agreement and the
obligations of the Shareholders, and each of them, under this
Agreement to sell the SUNKISS Stock shall, at the option of
SUNKISS and the Shareholders, be subject to the satisfaction, on
or prior to the Closing Date, of each of the following conditions
precedent.
7.1 Accuracy of Representations and Warranties;
Performance. All representations and warranties made by CEA
TECH in this Agreement shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if
such representations and warranties had been made on and as of
the Closing Date; CEA TECH shall have performed or complied
with all covenants, agreements and conditions contained in this
Agreement on its part required to be performed or complied with
at or prior to Closing. CEA TECH shall have delivered a
statement to the Shareholders, dated the Closing Date to the
foregoing effect.
7.2 Shareholder Approval. This Agreement and the
transactions contemplated hereby shall have been approved and
adopted by The Rally Group Ltd., the majority shareholder of
CEA TECH.
7.3 Consents. All material authorizations, consents or
approvals of any and all governmental regulatory authorities
necessary in connection with the consummation of the transactions
contemplated by this Agreement, shall have been obtained and be
in full force and effect.
7.4 No Contrary Judgment. The Closing shall not violate any
permit or order, decree or judgment of any court or governmental
body having competent jurisdiction and there shall not have been
instituted any legal or administrative action or proceeding to enjoin
the transaction contemplated hereby or seeking damages from the
Shareholders or SUNKISS with respect thereto.
7.5 Closing. CEA TECH shall deliver or cause to be
delivered to SUNKISS and the Shareholders at or prior to the
Closing Date the following documents:
(i) Certificates representing the shares of CEA TECH Stock
to be newly issued by CEA TECH under this Agreement, which
certificates shall be in the names of the Shareholders and duly
executed by CEA TECH;
(ii) An officer's certificate signed by the President and
Secretary of CEA TECH, as to such matters as SUNKISS deems
necessary, including, without limitation, the matters referred to in
Section 7.1 hereof and affirming that all of the conditions detailed
in Sections 7.2, 7.3, and 7.4, have been satisfied;
(iii) CEA TECH's Articles of Incorporation, certified by the
Secretary of State of Colorado;
(iv) Current Certificate of the Secretary of State of Colorado
as to the good standing of CEA TECH;
(v) Certified copies of resolutions adopted by the Board of
Directors of CEA TECH authorizing the execution and delivery of
this Agreement and the transactions contemplated hereby;
(vi) Bylaws of CEA TECH, certified as of the Closing Date
by the President and Secretary of CEA TECH;
(vii) Such other documents, instruments or certificates as
shall be reasonably requested by the Shareholders, or any of them,
or their counsel.
SECTION 8 ADDITIONAL COVENANTS OF THE PARTIES
8.1 Expenses. SUNKISS shall pay all of its own costs and
expenses (including attorneys' and accountants' fees, costs, and
expenses) incurred in connection with this Agreement and the
consummation of the transactions contemplated herein. CEA
TECH may elect to advance costs to SUNKISS, which shall be
repaid after Closing or in the event that SUNKISS should not
complete this transaction due to no fault of CEA TECH.
8.2 Access to Properties and Records. CEA TECH and
SUNKISS shall, at all reasonable times prior to Closing, make the
properties, premises, books and records of CEA TECH and
SUNKISS available to each other and each other's authorized
representatives, during reasonable business hours, in such a
manner as not to unduly disrupt normal business activities.
8.3 Corporate Existence. Rights and Franchises. Prior to the
Closing, SUNKISS and its authorized representatives shall cause
SUNKISS to conduct its business in the ordinary course and, to the
extent not inconsistent with prudent business practice, in such a
manner as to maintain its business organization intact and to retain
its present employees, and to maintain its relationships with
customers, suppliers and others having business relationships with
it, and without the prior written consent of CEA TECH, shall not
permit SUNKISS' assets to become bound by or subject to any
contracts or other agreements except in the ordinary course of
business. SUNKISS shall respond promptly to any reasonable
requests for reports or additional information by CEA TECH.
8.4 Confidentiality. Except for such documents, reports,
information and data (including financial statements) which are of
a public nature, pending the Closing (and if this Agreement is
terminated, at all times after the date hereof), CEA TECH shall
treat as confidential and, except as may be required by law or
necessary or, in the opinion of counsel to SUNKISS or CEA
TECH, desirable, to obtain required regulatory approval of the
transactions contemplated hereby or otherwise, will not use, submit
or disclose, or file with others, or permit any person, firm,
corporation or entity under its control to use, submit or disclose,
or file with others, any documents, reports, information or data
concerning SUNKISS which CEA TECH may obtain from the
Shareholders of SUNKISS; and, except for such documents,
reports and other written materials (including financial statements)
of a public nature, if this Agreement is terminated, CEA TECH
shall return to SUNKISS and the Shareholders any and all
documents, reports and other written materials (including financial
statements) concerning SUNKISS as SUNKISS and the
Shareholders may reasonably request.
8.5 Dispute Resolution. In the event of a dispute, controversy
or claim among the parties hereto involving a claim of breach of
representation or warranty hereunder, or to enforce a covenant
herein (either or both of which are referred to hereafter as a
"Claim") the rights and obligations of the parties 14 hereto arising
under the terms of this Agreement with respect to such Claims
and/or resolution of such disputes shall be submitted to arbitration
before and in accordance with the rules of the American
Arbitration Association or any mutually agreeable
arbitration association. Judgment upon an arbitration award may
be entered in any court having competent jurisdiction and shall be
binding, final, and non-appealable. No punitive or exemplary
damages shall be awarded against any of the parties. Prior to any
arbitration proceeding taking place, either party may at its option
elect to (a) have the arbitrator conduct, in a separate proceeding
prior to the actual arbitration, a preliminary hearing, at which
hearing testimony and other evidence may be presented, or (b)
submit the controversy or claim to non-binding mediation, in
which event the parties shall execute a suitable confidentiality
agreement. The rules of evidence as then in effect in the State of
Colorado shall be followed throughout the arbitration proceedings,
including without limitation any preliminary hearings. This
arbitration provision shall be deemed to be self-executing and in
the event either party fails to appear at any properly noticed
arbitration proceeding, an award may be entered against such party
notwithstanding said failure to appear. Such arbitration shall take
place in a mutually agreed upon location. The arbitrator may, at
its discretion, award the prevailing party its attorney's fees and
costs incurred in the arbitration of any dispute arising under or in
any way connected with the Agreement.
SECTION 9 MISCELLANEOUS
9.1 Entire Agreement. This Agreement (including the
Exhibits and Schedules hereto) contains the entire agreement
between the parties with respect to the transactions contemplated
hereby, and supersedes all negotiations, representations,
warranties, commitments, offers, contracts, and writings prior to
the date hereof. No waiver and no modification or amendment of
any provision of this Agreement shall be effective unless
specifically made in writing and duly signed by the party to be
bound thereby.
9.2 Counterparts. This Agreement may be executed in one
or more counterparts, each of which may be deemed an original,
but all of which together, shall constitute one and the same
instrument.
9.3 Severability. If any provisions hereof shall be held
invalid or unenforceable by a court of competent jurisdiction, or
as a result of future legislative action, such holding or action shall
be strictly construed and shall not affect the validity or effect of
any other provisions hereof.
9.4 Assignability. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties
hereto, provided that, neither this Agreement nor any right
hereunder shall be assignable by the Shareholders, or any of them,
or CEA TECH, or SUNKISS without prior written consent of the
other party.
9.5 Captions. The captions of the various Sections of this
Agreement have been inserted only for convenience of reference
and shall not be deemed to modify, explain, enlarge or restrict any
of the provisions of this Agreement.
9.6 Governing Law. The validity, interpretation and effect of
this Agreement shall be governed exclusively by the laws of the
State of Colorado.
9.7 Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and
delivered in person or sent by certified mail, postage prepaid and
properly addressed as follows:
To the Shareholders and Sunkiss Shrimp Co. Ltd.:
SUNKISS SHRIMP CO. LTD.
Landis Ignacio, President
P. O. Box 583
Kekaha, Hawaii 96752
To CONTROLLED ENVIRONMENT AQUACULTURE
TECHNOLOGY:
CONTROLLED ENVIRONMENT
AQUACULTURE TECHNOLOGY
c/o Gary S. Joiner
4750 Table Mesa Drive
Boulder, CO 80303
J.A. Garcia
c/o Robert Matsumoto, Attorney
1441 Kapiolani Blvd., Suite 910
Honolulu, Hawaii 96814
Any party may from time to time change its address for the
purpose of notices to that party by a similar notice specifying the
new address, but no such notice of change shall be deemed to have
been given until it is actually received by the respective party
hereto.
All notices and other communications required or permitted
under this Agreement which are addressed as provided in this
Section 9.7, if delivered personally, shall be effective upon
delivery; and, if delivered by mail, shall be effective three (3) days
following deposit in the United States Mail, postage prepaid.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
SUNKISS SHRIMP CO. LTD.
_______________________________________________
Landis Ignacio, President
_______________________________________________
Lisa Ignacio, Secretary
CONTROLLED ENVIRONMENT AQUICULTURE
TECHNOLOGY
_______________________________________________
J. A. Garcia, President
_______________________________________________
Gary S. Joiner, Secretary
<PAGE>
EXHIBIT A
Shares to be Issued to the Former SUNKISS Shareholders
<TABLE>
<S>
Shareholder Common Shares
<C> <C>
Landis Ignacio 60,000
Robert Kanna 40,000
<PAGE>
ADDENDUM NUMBER 1 TO AGREEMENT AND PLAN OF
REORGANIZATION
This ADDENDUM NUMBER 1 TO AGREEMENT AND PLAN
OF REORGANIZATION by and between CONTROLLED
ENVIRONMENT AQUACULTURE TECHNOLOGY, a Colorado
corporation ("CEA TECH"), and SUNKISS SHRIMP CO. LTD.,
a Hawaii corporation ("SUNKISS"), is entered into as of the 15th
day of March, 1997, and is hereby incorporated into and made a
part of the AGREEMENT AND PLAN OF REORGANIZATION
(the "AGREEMENT").
WHEREAS, effective March 15, 1997, both parties agree
that SUNKISS has satisfied the provisions of Section 3, 3.1(d), by
having paid off all indebtedness to the State of Hawaii with funds
advanced for this purpose by CEA TECH;
WHEREAS, the parties hereby agree that March 15, 1997,
is the effective closing date of the Agreement, in compliance with
Section 2, 2.2 "Closing Date";
WHEREAS, the parties to the Agreement desire to more
clearly define the terms of Section 1.1(a) of the Agreement;
NOW THEREFORE, in consideration of the mutual
covenants, conditions and agreements set forth in the Agreement
the parties hereby adopt the following additions and clarifications
to Section 1.1(a):
1.1(b) TIME PERIOD. The earn-out of an additional
100,000 shares of common stock of CEA TECH shall be issued as
follows:
25,000 shares upon obtaining a lease on an additional 78
acres (approximately) from the State of Hawaii presently under
lease to Kekaha Sugar Co./Amfac.
25,000 shares upon completion of expanded hatchery
facilities and 6 additional one half acre ponds.
25,000 shares upon completion of stock of the first 36 one
acre growout ponds on the newly leased property.
25,000 shares upon successful completion of the first full
harvest of 36 ponds.
All earned shares as per above are to be issued under Rule
144 restrictions bearing legend. Shares to be issued
proportionately to shares owned by and acquired from original
shareholders in Exhibit A of the Agreement. Shares to be issued
not later than the end of the month in which each qualifying event
is completed.
IN WITNESS WHEREOF, the parties hereto have executed
this ADDENDUM TO AGREEMENT AND PLAN OF
REORGANIZATION as of the date first written above.
CONTROLLED ENVIRONMENT AQUACULTURE
TECHNOLOGY
______________________________
J.A. Garcia, President
______________________________
Gary S. Joiner, Secretary
SUNKISS SHRIMP CO. LTD.
______________________________
Landis Ignacio, President
______________________________
Lisa Ignacio, Secretary
</TABLE>
