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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13
or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): JUNE 1, 1998
MARGO CARIBE, INC.
(Exact name of registrant as specified in this charter)
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<S> <C> <C>
PUERTO RICO 0-15336 66-0550881
(State or other jurisdiction of (Commission File No.) (IRS Employer Identification No.)
incorporation)
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ROAD 690, KILOMETER 5.8 VEGA ALTA, PUERTO RICO 00692
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (787) 883-2570
MARGO NURSERY FARMS, INC.
(Former Name or Former Address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 29, 1998 the shareholders of the Company approved the restructuring
of the Company's existing corporate structure into a holding company structure
pursuant to an Agreement and Plan of Reorganization dated April 1, 1998 (the
"Agreement"). On June 1, 1998, pursuant to the terms of the Agreement, the
Company transferred substantially all of its assets to Interim Margo, Inc., a
newly formed Puerto Rico corporation ("Newco"), in exchange for all the
outstanding common stock of Newco. In addition, Newco assumed all of the
Company's liabilities. Following the effective date of the Agreement, Newco will
conduct the nursery business previously conducted by the Company as a wholly
owned subsidiary of the Company and, thus, the Company would become a holding
company that would possess a 100% ownership interest in Newco as well as the
other existing subsidiaries of Margo.
ITEM 5. OTHER EVENTS
As part of the reorganization described in Item 2 above, on June 5, 1998,
the Company changed its name to "Margo Caribe, Inc.". On the same date, Newco
changed its corporate name from "Interim Margo, Inc." to "Margo Nursery Farms,
Inc."
ITEM 7. FINANCIAL STATEMENTS, PRO FORM, FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
2.1 Agreement and Plan of Reorganization dated April 1,
1998 between Margo Nursery Farms, Inc. and Interim
Margo, Inc.
2.2 Bill of Sale, Assignment and Assumption of Liability
Agreement dated June 1, 1998 between Margo Nursery
Farms, Inc. and Interim Margo, Inc.
3 Certificate of Amendment of Certificate of
Incorporation of Margo Nursery Farms, Inc. changing
its corporate name to "Margo Caribe, Inc."
99 Press release issued by Margo Nursery Farms, Inc. on
June 8, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
MARGO CARIBE, INC.
By: /S/ ALFONSO ORTEGA
------------------------------------
Alfonso Ortega
Vice President and
Chief Financial Officer
Date: June 8, 1998
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
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2.1 Agreement and Plan of Reorganization dated April 1,
1998 between Margo Nursery Farms, Inc. and Interim
Margo, Inc.
2.2 Bill of Sale, Assignment and Assumption of Liability
Agreement dated June 1, 1998 between Margo Nursery
Farms, Inc. and Interim Margo, Inc.
3 Certificate of Amendment of Certificate of
Incorporation of Margo Nursery Farms, Inc. changing
its corporate name to "Margo Caribe, Inc."
99 Press release issued by Margo Nursery Farms, Inc. on
June 8, 1998.
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, made and entered into as of
the 1st day of April, 1998, by and among Margo Nursery Farms, Inc., a Puerto
Rico Corporation ("Margo Nursery") and Interim Margo, Inc. ("Newco"), a Puerto
Rico corporation (Margo Nursery and Newco are hereinafter collectively referred
to as the "Corporations").
W I T N E S S E T H:
WHEREAS, Margo Nursery is a Puerto Rico corporation that is engaged in
the production and distribution of tropical and flowering plants, garden
products as well as landscaping design and installation services;
WHEREAS, Newco is a newly formed Puerto Rico corporation that was
created to accomplish a restructuring of the corporate structure of Margo
Nursery to create a holding company structure;
WHEREAS, the Corporations recognize that the corporate restructuring of
Margo as a holding company will facilitate the future expansion or
diversification of its business activities and thereby contribute to the future
long range financial strength of Margo Nursery;
WHEREAS, the Corporations recognize that the proposal corporate
restructuring will be effected through the transfer to Newco of substantially
all of Margo's assets in exchange for all the outstanding capital stock of Newco
in accordance with Article 9.01 of the Puerto Rico General Corporation Law of
1995, and the assumption of substantially all the liabilities of Margo by Newco;
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WHEREAS, Newco will change its name to "Margo Nursery Farms, Inc." and
conduct the business presently conducted by Margo Nursery and Margo Nursery will
change its name to "Margo Caribe, Inc.";
WHEREAS, to accomplish the foregoing purposes, the Corporations have
agreed to this Agreement and Plan of Reorganization whereby Margo Nursery will
transfer substantially all of its assets and certain of its liabilities to Newco
so that following the effective date of the reorganization, the business
previously conducted by Margo Nursery will hereforth be conducted by Newco as a
wholly-owned subsidiary of Margo Nursery which will operate as a holding company
under the corporate name of "Margo Caribe, Inc."
NOW THEREFORE, in consideration of the premises and mutual covenants
herein set forth the Corporations adopt the Plan of Reorganization and agree as
follows:
1. RECITALS. All of the recitals set forth are true and correct.
2. TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES. The Corporations
hereby adopt this Agreement and Plan of Reorganization which is intended to be
effected as a tax-free reorganization pursuant to Section 1112(g) of the Puerto
Rico Internal Revenue Code of 1994 as amended. Pursuant to this Agreement and
Plan of Reorganization, all the assets of Margo Nursery, except those identified
in Annex A hereto will be transferred to Newco as of the Effective Date (as
hereinafter defined), and Newco will assume substantially all the liabilities of
Margo Nursery. In exchange from such transfer of assets, Newco agrees to issue
to Margo Nursery 1000 shares of its Common Stock, $0.01 par value, representing
100% of Newco's outstanding Capital Stock. Upon
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issuance in accordance with the terms of the Agreement, such shares will fully
paid and non-assessable shares of Newco.
3. EFFECTIVE DATE. The the transfer of the assets and assumption of
related liabilities will become effective on the date (the "Effective Date"), a
Bill of Sale and Assumption of Liabilities, in form and substance acceptable to
the parties and their counsel is executed, following compliance with the
conditions of this Agreement.
4. CHANGE OF NAME. As part of the corporate restructuring contemplated
hereby, Margo Nursery agrees to take such action as may be required to change
its corporate name to "Margo Caribe, Inc." and Newco agree to take such action
as may be required to change its corporate name to "Margo Nursery Farms, Inc."
5. FURTHER ACTIONS. All necessary action shall be taken to transfer
information, contracts, assets, or any other real or personal property so that
this Agreement Plan of Reorganization be effected pursuant to the provisions
herewith.
6. CONDITIONS OF RESTRUCTURING. Consummation of the corporate
restructuring contemplated herein is subject to fulfillment, on or before the
Effective Date, of the following conditions: (i) the Corporations shall
cooperate and take all such actions or furnish all such information to enable
Newco to comply with the applicable bulk sales statutes under Puerto Rico law;
(ii) receipt of an opinion from Pietrantoni, Mendez & Alvarez satisfactory in
form and substance to Margo Nursery, to the effect that the reorganization
constitutes a tax-free reorganization under the Puerto Rico Internal Revenue
Code of 1994, as amended, and the United States Internal Revenue Code of 1986,
as amended, and (iii) Margo Nursery shall have received the consent to the
reorganization contemplated
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hereby of Puerto Rico Farm Credit ACA ("P.R. Farm Credit") under that certain
financing agreement dated December 15, 1994, between Margo Nursery and P.R. Farm
Credit and of Banco Santander Puerto Rico ("Santander") under that certain
financing agreement dated September 27, 1994 between Margo and Santander, and
any other consents that may be required under existing agreements all such
consents shall be in form and substance reasonably satisfactory to Margo Nursery
and its counsel.
7. AUTHORIZATION. The appropriate officers of the Corporations are
authorized for and on behalf of and in the name of Corporations to take or cause
to be taken all such actions and to execute or cause to be executed such
certificates and other private or public documents as may be deemed necessary or
desirable by them in order to effectuate this Plan of Reorganization.
8. NOTICES. All notices to be given under this Agreement shall be sent
to the Corporations at the following address:
Michael J. Spector
Chief Executive Officer
PO Box 706
Dorado, PR 00766
9. MISCELLANEOUS. This Agreement Plan of Reorganization constitutes the
entire Agreement and understanding between the parties and supersedes all prior
agreements and understandings related hereto. This Plan shall be governed by the
laws of the Commonwealth of Puerto Rico.
10. BENEFITS. This Agreement shall be binding upon and inure to benefit
the parties, their personal representatives, estates, successors and assigns.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written:
MARGO NURSERY FARMS, INC.,
a Puerto Rico corporation
By: /S/ MICHAEL J. SPECTOR
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Michael J. Spector, President
By: /S/ ALFONSO ORTEGA
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Alfonso Ortega
Assistant Secretary
Date executed: April 24, 1998
INTERIM MARGO, INC.
A Puerto Rico Corporation
By: /S/ MICHAEL J. SPECTOR
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Michael J. Spector, President
By: /S/ ALFONSO ORTEGA
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Alfonso Ortega
Secretary
Date executed: April 24, 1998
EXHIBIT 2.2
BILL OF SALE, ASSIGNMENT AND ASSUMPTION OF LIABILITY
BILL OF SALE, ASSIGNMENT AND ASSUMPTION OF LIABILITY (the "Bill of
Sale") dated June 1, 1998 from Margo Nursery Farms, Inc. ("Margo"), a
corporation organized and existing under the laws of the Commonwealth of Puerto
Rico, to Interim Margo, Inc. ("Newco"), a corporation organized and existing
under the laws of the Commonwealth of Puerto Rico.
1. For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Margo hereby sells, conveys, transfers, assigns
and delivers to Newco pursuant to an Agreement and Plan of Reorganization (the
"Plan of Reorganization") dated as of April 1, 1998 between Margo and Newco, and
notwithstanding that the following property may be conveyed by separate and
specific transfer documents, all of Margo's right, title and interest in all
assets, interests and property owned by Margo, except as provided in 1(i) below,
including, but not limited to the following:
(i) all trade account receivables relating to sales made to customers,
all other receivables (including deposits) due from banks and financial
institutions and all accrued interest thereon, including cash items in the
process of collection, with the exception of those deposits listed in Appendix I
hereto, and all currency and coin presently held by Margo;
(ii) all securities presently held by Margo, including the capital
stock of all of Margo's existing subsidiaries, investment and account
securities, securities issued by the United States Treasury and by other United
States government agencies or corporations, or by a state or political
subdivision thereof, or by the Commonwealth of Puerto Rico or a political
subdivision thereof, and all dividends, interest, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange any or all of such securities;
(iii) all computer software, licenses thereto and rights therein, used
by Margo in connection with its current operation, including all documentation
necessary to facilitate the use of such software;
(iv) all furniture, trade fixtures and other tangible personal property
owned by Margo located in or upon real property owned or leased by Margo;
(v) all inventory held by Margo relating to the distribution of
tropical and flowering plants, including raw materials and work in progress used
or consumed in Margo's business;
(vi) all equipment used in the operation of Margo's business, including
all motor vehicles, tractors, trailers and other like property;
(vii) all of Margo's rights, title and interest in all contracts and
agreements executed by Margo, with the exception of any contracts for directors
and officers' insurance policies, as such agreements may be amended or otherwise
modified from time to time, including, without limitation: (a) all rights of
Margo to receive moneys due and to become due under or pursuant such agreements:
(b) all rights of Margo to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to such agreements; (c) all claims of Margo
for damages arising out of, or for breach of or default under such agreements;
and (d) the rights of Margo to perform and to compel performance and otherwise
exercise all remedies thereunder; and
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(vii) all prepaid expenses accruing to Margo.
2. In consideration for the assets delivered to Newco pursuant to
Section 1 hereof, receipt of which is hereby acknowledged, Newco hereby
undertakes, assumes and agrees to perform in accordance with the provisions of
the Plan of Reorganization all of Margo's liabilities and obligations, including
but not limited to the following:
(i) all contractual obligations assumable by Newco and related to the
operation of Margo's business and any other liability or obligation associated
with the assets, interests and property owned by Margo that are hereby assumed
by Newco;
(ii) all of Margo's accounts payable and debt obligations;
(iii) any liabilities incurred by Margo other than in the ordinary
course of Margo's business;
(iv) any obligation or liability arising under any lawsuit filed prior
to the execution of the Plan; and
(v) any obligation or liability of Margo to its employees, officers or
directors.
3. This Bill of Sale, Assignment and Assumption of Liability is
expressly being delivered and other made subject to the provisions of the Plan
of Reorganization.
4. This Bill of Sale, Assignment and Assumption of Liability shall
inure to the benefit of and be binding upon Newco and its respective successors
and assigns.
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IN WITNESS WHEREOF, Margo and Newco have executed and delivered this
Bill of Sale, Assignment and Assumption of Liability on the day and year first
above written.
MARGO NURSERY FARMS, INC.
By: /S/ MICHAEL J. SPECTOR
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Name: Michael J. Spector
Title: Chief Executive Officer
INTERIM MARGO, INC.
By: /S/ MICHAEL J. SPECTOR
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Name: Michael J. Spector
Title: Chief Executive Officer
EXHIBIT 3
MARGO NURSERY FARMS, INC.
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
Margo Nursery Farms, Inc. (the "Corporation"), a corporation organized
and existing under the laws of the Commonwealth of Puerto Rico, does hereby
certify:
FIRST: That pursuant to unanimous written consent of the Board
of Directors dated as of April 23, 1998, resolutions were duly adopted
setting forth a proposed amendment to Certificate of Incorporation of
the Corporation and declaring said amendment advisable.
SECOND: The amendment adopted is as follows:
Article FIRST of the Certificate of Incorporation of
the Corporation is amended to read in its entirety as follows:
"FIRST: NAME OF CORPORATION. The name of this
Corporation is Margo Caribe, Inc. (the "Corporation")."
THIRD: That said amendment has been consented to and
authorized by a majority of all the issued and outstanding capital
stock of the Corporation at a meeting of the stockholders of the
Corporation held on May 29, 1998.
FOURTH: The aforesaid amendment was duly adopted in accordance
with the applicable provisions of Article 8.02 of the General
Corporation Law of Puerto Rico.
IN WITNESS WHEREOF, Margo Nursery Farms, Inc. has caused its
corporate seal to be hereunto affixed and this Certificate to be signed by
Michael J. Spector, its President and by Margaret D. Spector, its Secretary,
this 29th day of May, 1998.
/S/ MICHAEL J. SPECTOR
--------------------------
Name: Michael J. Spector
Title: President
/S/ MARGARET D. SPECTOR
-------------------------
Name: Margaret D. Spector
Title: Secretary
EXHIBIT 99
NEWS RELEASE
NASDAQ SYMBOL: MRGO
FOR IMMEDIATE RELEASE CONTACTS: MICHAEL J. SPECTOR OR
ALFONSO ORTEGA
(787) 883-2570
MARGO NURSERY FARMS, INC.
ANNOUNCES COMPLETION OF HOLDING COMPANY
RESTRUCTURING AND CHANGE OF NAME TO
MARGO CARIBE, INC.
Vega Alta, Puerto Rico: June 8, 1998 - Margo Nursery Farms, Inc., a Puerto Rico
corporation (the "Company")(NASDAQ) SYMBOL: MRGO, announced today that at its
Annual Meeting of Shareholders held on May 29, 1998, the shareholders of the
Company approved the restructuring of the Company's existing corporate structure
into a holding company structure pursuant to the transfer of substantially all
the Company's assets and liabilities to a new wholly-owned subsidiary that will
conduct the existing nursery business of the Company. The corporate
restructuring became effective June 1, 1998. As part of the corporate
restructuring, the name of the Company was changed to Margo Caribe, Inc.
effective June 5, 1998. The nursery business will continue to be conducted by
the new subsidiary under the name Margo Nursery Farms, Inc. Margo Caribe, Inc.
will also act as the holding company for the Company's other existing
subsidiaries, Margo Garden Products, Inc., Margo Landscaping and Development,
Inc. Rain Forest Products Group, Inc. and Margo Development, Inc.
Shareholders of the Company will not be required to exchange their stock
certificates in connection with the creation of the holding company structure or
the change in name. The common stock of the Company will continue to be traded
on the NASDAQ Small-Cap Market under the existing symbol "MRGO".
The Company through its subsidiaries is engaged in the business of growing and
distributing a wide range of both indoor and outdoor tropical foliage and
flowering plants in Vega Alta, and Barranquitas, Puerto Rico. The Company is
also engaged in the sale of lawn and garden products and the provision of
landscaping services for Puerto Rico and the Caribbean.
