SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
November 20, 1997
Date of Report
(Date of Earliest Event Reported)
Delaware
(State or Other Jurisdiction
of Incorporation)
0-19746 04-2912632
(Commission File Number) (I.R.S. Employer I.D. Number)
10 Alvin Court, East Brunswick, NJ 08816
(Address of Principal Executive Offices, Including Zip Code)
732-432-8200
(Registrant's Telephone Number,
Including Area Code)
Not Applicable
(Former Name or Former Address,
if Changed since Last Report)
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Item 5. Other Events
The Registrant incorporates herein by reference, the press release
made available to the public on November 20, 1997, a copy of which is
included in this report as Exhibit 20.1. The press release refers to
the Company entering into a Letter of Intent whereby Agro Power
Development, Inc. will be merged with and into a newly formed
subsidiary of the Company. The Letter of Intent is attached as Exhibit
10.58.
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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.
ECOSCIENCE CORPORATION
Date: December 9, 1997 By: /s/ Harold A. Joannidi
------------------------------
Harold A. Joannidi
Treasurer and Secretary
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Current Report on Form 8-K
ECOSCIENCE CORPORATION
EXHIBIT INDEX
Exhibit Sequential
Number Description of Exhibit Page Number
- ------ ---------------------- -----------
10.58 Letter of Intent to merge between EcoScience 5
Corporation and Agro Power Development, Inc.
dated November 20, 1997
20.1 Press release dated November 20, 1997 12
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ECOSCIENCE CORPORATION
EXHIBIT 10.58
Letter of Intent to merge between EcoScience Corporation
and Agro Power Development, Inc. dated November 20, 1997
<PAGE>
EcoScience Corporation
10 Alvin Court
East Brunswick, NJ 08816
November 19, 1997
Thomas Montanti
Chairman of the Board of Directors
Agro Power Development, Inc.
10 Alvin Court
East Brunswick, NJ 08816
Dear Tom:
This letter of intent reflects the proposal of EcoScience Corporation
("EcoScience") to enter into a definitive agreement (the "Merger Agreement")
with Agro Power Development, Inc. ("APD") for the merger (the "Merger") of APD
with an acquisition subsidiary of EcoScience to be formed ("NewCo"), whereby APD
will become a wholly owned subsidiary of EcoScience (EcoScience and APD will
singularly be referred to herein as the "Party" and collectively as the
"Parties").
The principal points of our understanding to be included in the Merger
Agreement are as follows:
1. The Merger will be structured to be a tax-free reorganization under the
Internal Revenue Code of 1986, as amended (the "Code"), and a pooling of
interests for accounting purposes.
2. Based on the financial and business information submitted to EcoScience to
date, but subject to the results of further due diligence and the
negotiation of a definitive Merger Agreement, the consideration to be paid
by EcoScience for the Merger will be shares (the "EcoScience Shares") of
the Common Stock, $.01 par value ("EcoScience Common Stock"), of EcoScience
which shall represent 80% of the EcoScience Common Stock outstanding, on a
fully diluted basis, immediately after the Merger.
3. The Parties will furnish each other with their audited financial statements
for the past three fiscal years and for the period from the end of the last
fiscal year through a recent date and will provide each other and each
other's representatives and advisors with full access to their books,
records, and its properties and will cooperate fully with each other in
connection with their due diligence investigation. The Parties will treat,
and
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will cause their employees and representatives to treat, all information
obtained from each other in their investigation in accordance with the
Confidentiality and Non-Disclosure Agreement between the parties dated
November 18, 1997.
4. The negotiation and execution of the Merger Agreement and the consummation
of the Merger will take place as quickly as possible after the date of this
letter. The Merger will be conditioned upon each Party being satisfied with
its due diligence investigation of the assets, financial condition,
personnel, customers, suppliers, products and prospects of the other Party
(which investigations shall be completed prior to the execution of the
Merger Agreement) and upon the execution of the definitive Merger
Agreement. The Merger Agreement will include representations, warranties,
covenants, conditions, and other provisions customary for a transaction of
this type, including without limitation:
a) An agreement by each Party to pay its own costs and expenses in
connection with the transaction.
b) A covenant by each Party that between the date of its acceptance of
this letter and the date of the Merger it will conduct its business
only in the usual and ordinary course using customary policies and
procedures and will avoid in any case material sales or other
dispositions of assets, unusual salary increases or bonuses (except
that in the case of APD, bonuses and other distributions in an
aggregate amount of up to $400,000 plus such reasonable additional
amounts as may be necessary to satisfy tax liabilities shall be
permitted during the period commencing on the date of this letter of
intent and ending on April 15, 1998) or actions which would prevent
the Merger's being treated as a pooling of interests for accounting
purposes and anything else that could affect materially the value of
such Party.
c) A representation by each of the APD stockholders that he or she is an
accredited investor and an acknowledgment by each of them that such
EcoScience Shares will be issued without registration under the
Securities Act of 1933 and that each of them will be required to
represent that he or she is acquiring the EcoScience Shares for
investment and not with a view to the resale or distribution thereof.
5. The consummation of the Merger will be contingent upon, among other things:
a) Usual conditions, including satisfactory opinions of counsel,
certificates from state authorities, and similar matters.
b) Confirmation by EcoScience's independent accountants that the Merger
will be accounted for as a pooling of interests.
c) Confirmation by EcoScience's tax counsel or independent accountants
that the Merger will be a tax-free reorganization under the Code.
d) Approval of the Merger by the respective Boards of Directors of
EcoScience and APD and the stockholders of EcoScience and APD.
e) The expiration of any waiting periods imposed by the Hart-Scott-Rodino
Antitrust Improvements Act (HSR), if applicable, and the absence of
any legal proceeding seeking to enjoin the consummation of the Merger.
f) The stockholders of APD (the "APD Stockholders") agreeing that they
shall be restricted from selling the EcoScience Shares received in the
Merger for a period of two years; provided, however,
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that shares will be released from this restriction as follows: (i) 25%
on the 12 month (6 month in the case of Thomas Montanti) anniversary
date of the Merger, (ii) 25% on the 18 month anniversary date of the
Merger, and (iii) the remaining 50% on the 24 month anniversary date
of the Merger. The restrictions set forth above in this Section 5(f)
shall terminate (a) in the event that a tender offer is commenced by a
party other than an APD Stockholder or an affiliate of an APD
Stockholder for more than 50% of the outstanding shares of EcoScience
Common Stock (provided that such restrictions shall continue to apply
if such tender offer is not completed) or (b) in the event of a sale
of the business of EcoScience or merger, consolidation or similar
business combination which results in the stockholders of EcoScience
immediately prior to such transaction owning less than 50% of the
common stock of the surviving corporation.
g) The APD Stockholders shall have been granted the following
registration rights with respect to the EcoScience Shares received in
the Merger:
i. unlimited piggyback registration rights (with respect to
EcoScience Shares which have been released from the restrictions
set forth in Section 5(f) above); and
ii. the right to demand registration of the EcoScience Shares on
three (3) additional occasions on Form S-3 if EcoScience
qualifies for the use of such form (with respect to EcoScience
Shares which have been released from the restrictions set forth
in Section 5(f) above).
6. Subject to each Parties' satisfaction with the result of its due diligence
investigation, which each Party will use its reasonable best efforts to
complete within 30 days after your acceptance of this proposal, it is
anticipated that the definitive Merger Agreement will be entered into by
January 10, 1998. Prior to January 10, 1998, this Letter of Intent may only
be terminated as follows:
a) by EcoScience if its Board of Directors in its reasonable discretion
and in good faith determines that the Merger will not be approved by
the EcoScience Stockholders.
b) by either Party if the results of its due diligence investigation are
not reasonably satisfactory.
c) by EcoScience if its Board of Directors determines in good faith that
it has received an EcoScience Superior Proposal (as defined in Section
7 below); provided, however, that EcoScience shall be required to
reimburse APD for any reasonable fees and expenses (including attorney
fees) incurred by APD through the date of termination.
d) by APD if its Board of Directors determines in good faith that it has
received an APD Superior Proposal (as defined in Section 7 below);
provided, however, that APD shall be required to reimburse EcoScience
for any reasonable fees and expenses (including reasonable attorney
fees) incurred by EcoScience through the date of termination.
e) by either party if a definitive Merger Agreement is not executed by
January 10, 1998 and such party has negotiated in good faith to reach
a definitive Merger Agreement (in which case each Party shall be
responsible for its own expenses); provided however that if the Party
terminating the Letter of Intent receives an Acquisition Proposal (as
such term is used in Section 7) and/or commences discussions with
another party with respect to an Acquisition Proposal prior to January
10, 1998 (or such later date as may be agreed to by the Parties if the
term of this Letter of Intent is extended) and consummates a
transaction with such Party subsequent to the termination of this
letter of intent but prior to January 10, 1999, then such Party shall
be obliged to reimburse the other Party its reasonable fees and
expenses (including attorney fees) incurred by such other Party
through the date of termination.
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7. In order to induce EcoScience to commit its management resources, to forego
other potential opportunities, and to incur the legal, accounting, and
incidental expenses necessary to conduct its due diligence investigation,
to evaluate properly the possibility of acquiring APD, and to negotiate the
terms of and consummate the transactions contemplated hereby, APD agrees
that it will not, prior to January 10, 1998 (or such later date as may be
agreed to by the Parties if the term of this Letter of Intent is extended),
directly or indirectly, and APD will direct its officers, directors,
employees, agents or advisors or other representatives or consultants not
to, directly or indirectly, solicit or initiate any proposals or offers
from any person relating to any acquisition or purchase of all or a
material amount of the assets of, or any securities of, or any merger,
consolidation or business combination with APD (any such proposal or offer
being referred to herein as an "APD Acquisition Proposal"), and shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any persons conducted heretofore with
respect to any such APD Acquisition Proposal; provided, however that (A)
nothing contained herein shall prohibit APD from negotiating or entering
into (i) any transaction in which it acquires a controlling interest in
another entity or any assets of another entity; (ii) a transaction in which
it makes an equity investment in another entity; (iii) a partnership
roll-up transaction; or (iv) a business combination with another entity
which results in the stockholders of APD immediately prior to such business
combination owning a controlling interest in the surviving entity
(provided, however, that APD will provide to the EcoScience Board of
Directors a written description of any such proposed transaction prior to
entering into a binding agreement with respect to same, and the EcoScience
Board of Directors shall not distribute such written description to any
other persons or enities without the consent of APD) and (B) APD may
furnish information and may engage in discussions or negotiations with any
person if, following the receipt of any unsolicited bona fide written APD
Acquisition Proposal from any such person (i) the Board of Directors of APD
believes, in good faith, that such person may make a bona fide proposal for
a transaction more favorable to APD's stockholders than the transactions
contemplated by this letter of intent (an "APD Superior Proposal"). APD
will promptly notify EcoScience of any such APD Acquisition Proposal and
keep EcoScience informed of the status thereof. The Merger Agreement will
contain a provision similar to the provision set forth above in this
paragraph and shall provide that APD may terminate the Merger Agreement as
a result of APD having received an APD Acquisition Proposal which the APD
Board of Directors believes, in good faith, is more favorable to the APD
stockholders than the transactions contemplated by the Merger Agreement. In
such event, in full reimbursement and compensation for EcoScience's time
and effort in negotiating the letter of intent and Merger Agreement, and
taking actions pursuant hereto and thereto, APD shall pay to EcoScience a
fee of (a) $500,000 if such termination of the Merger Agreement occurs on
or before February 28, 1998 and (b) $750,000 if such termination occurs
after February 28, 1998.
In order to induce APD to commit its management resources, to forego other
potential opportunities, and to incur the legal, accounting and incidental
expenses necessary to conduct its due diligence investigation, to evaluate
properly the possibility of entering
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into the Merger Agreement, and to negotiate the terms of and consummate the
transactions contemplated hereby, EcoScience will not, prior to January 10,
1998 (or such later date as may be agreed to by the parties if the term of
this letter of intent is extended), directly or indirectly, and will
instruct its officers, directors, employees, agents or advisors or other
representatives or consultants not to, directly or indirectly, solicit or
initiate any proposals or offers from any person relating to any
acquisition or purchase of all or a material amount of the assets of, or
any securities of, or any merger, consolidation or business combination
with EcoScience (any such proposal or offer being referred to herein as an
"EcoScience Acquisition Proposal"), and shall immediately cease and cause
to be terminated any existing activities, discussions or negotiations with
any persons conducted heretofore with respect to any such EcoScience
Acquisition Proposal; provided, however, that EcoScience may furnish
information and may engage in discussions or negotiations with any person
if, following the receipt of an unsolicited bona fide written EcoScience
Acquisition Proposal from any such person (i) counsel advises EcoScience's
directors that failure to furnish such information or engage in such
discussions or negotiations could involve EcoScience's directors in a
breach of their fiduciary duties and (ii) EcoScience's directors believe,
in good faith, after consultation with EcoScience's financial advisors,
that such person may make a bona fide proposal for a transaction more
favorable to EcoScience's stockholders than the transactions contemplated
by this letter of intent (an "EcoScience Superior Proposal"); provided
further, however, that nothing contained in this paragraph shall prohibit
EcoScience or its Board of Directors from making such disclosure to
EcoScience's stockholders which, in the judgment of the Board of Directors
with the advice of counsel, may be required under applicable law.
EcoScience will promptly notify APD of the receipt of any EcoScience
Acquisition Proposal and, subject to the fiduciary duties of EcoScience's
board of directors, keep APD informed of the status thereof. The Merger
Agreement will contain a provision similar to the provision set forth above
in this paragraph and shall provide that EcoScience may terminate the
Merger Agreement as a result of EcoScience having received an EcoScience
Acquisition Proposal which the EcoScience Board of Directors believes, in
good faith, after consultation with EcoScience's financial advisors, is
more favorable to the EcoScience stockholders than the transactions
contemplated by the Merger Agreement. In such event, in full reimbursement
and compensation for APD's time and effort in negotiating the letter of
intent and Merger Agreement and taking actions pursuant hereto and thereto,
EcoScience shall pay to APD a fee of (a) $500,000 if such termination of
the Merger Agreement occurs on or before February 28, 1998 and (b) $750,000
if such termination of the Merger Agreement occurs after February 28, 1998.
8. During the term of this letter of intent the Parties will endeavor in good
faith to reach a mutually acceptable Merger Agreement and each of them will
refrain from making any public disclosure of the proposed transaction
unless the other Party's consent is first obtained or such disclosure is
required by law. The provisions of this letter will be subject to, and any
inconsistencies between this letter and the Merger Agreement will be
resolved in favor of, the Merger Agreement.
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While it is understood that this letter, other than as set forth in Section
3 and the obligation to reimburse expenses as set forth in Section 6 hereof,
does not constitute a legally binding agreement between the parties, it does set
forth the understanding in principle and the present intention of the parties to
enter into a Merger Agreement providing for the Merger upon terms and conditions
mutually acceptable to the parties and their counsel.
If the foregoing is acceptable to APD and you, please so indicate by
signing the attached enclosed counterpart of this letter in the spaces provided
and returning the counterpart to EcoScience. In the event that EcoScience has
not received a copy of this letter signed by APD and you by November 21, 1997,
EcoScience will assume that APD has determined that the offer set forth herein
is unsatisfactory and, therefore, the offer will be considered withdrawn.
Very truly yours,
EcoScience Corporation
By: /s/ E.A. Grinstead, III
------------------------------
Name: E.A. Grinstead, III
Title: Director
Accepted and agreed to as of November 20, 1997:
Agro Power Development, Inc.
By: /s/ Thomas Montanti
------------------------------
Name: Thomas Montanti
Title: Chairman
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ECOSCIENCE CORPORATION
EXHIBIT 20.1
Press release dated November 20, 1997
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News Release
CONTACT
Investor Relations
EcoScience Corporation
732-432-8200 For Immediate Release
ECOSCIENCE ANNOUNCES INTENT TO MERGE
WITH AGRO POWER DEVELOPMENT
East Brunswick, New Jersey, November 20, 1997: EcoScience Corporation (Nasdaq:
ECSC) announced today that it has entered into a letter of intent to merge with
Agro Power Development, Inc. (APD), a privately held corporation. As currently
proposed, APD will be merged with a newly formed subsidiary of EcoScience.
Pursuant to the merger, APD shareholders will receive, in exchange for their APD
shares, EcoScience Common Stock representing 80% of the outstanding Common Stock
of EcoScience on a fully diluted basis after the merger.
The companies are combining to form an integrated, environmentally responsible,
global agri-business to take advantage of their respective expertise in
naturally derived food technologies, intensive production of high quality fresh
produce, innovative biorational pest control technologies, and sophisticated
growing and postharvest systems. EcoScience believes APD will provide the
combined entity greater international presence, increased marketing capability,
management depth, and the critical mass needed to accelerate revenue growth and
increase shareholder value. On a consolidated basis, the companies estimate
calendar year 1998 revenues will be between $60 and $80 million.
The merger is subject to completion of final due diligence by both parties,
negotiation and execution of a definitive merger agreement, and approval by
EcoScience and APD stockholders. As a result of the signing of this letter of
intent, EcoScience will postpone its Special Meeting in lieu of the 1997 Annual
Meeting of Stockholders, scheduled for Tuesday, November 25, 1997. The Special
Meeting will be rescheduled and notice of the new meeting date will be provided
to EcoScience's stockholders.
APD, founded in 1990, was ranked #18 in October, 1997 by Inc. Magazine in its
annual list of the 500 fastest growing privately held companies in the United
States. APD is a vertically integrated producer and marketer of branded, premium
fresh produce grown in environmentally controlled production facilities. In
addition to the development and operation of its facilities, APD markets its
products and that of others via marketing alliances, through its Village Farms
LLC subsidiary, under the Village Farms(R) brand name. APD utilizes state of the
art technology in the design and construction of its intensive agriculture
facilities, and applies cost effective, environmentally compatible and chemical
pesticide free techniques to harvest and distribute high quality produce to
consumers year round. Michael A. DeGiglio, President, Chief Executive Officer
and Director of EcoScience, is a principal stockholder, CEO and Director of APD.
EcoScience is engaged in the development and commercialization of natural pest
control products, naturally derived coatings to preserve food quality and extend
the shelf life of fruits and vegetables, and the marketing and distribution of
advanced technologies, products, growing systems and services for the intensive
agriculture, horticulture and produce packing industries.
This press release contains forward looking statements, including those which
relate to the completion of this merger. The results of that merger in terms of
market acceptance and corporate position are subject to risks and uncertainties
which could cause actual results to differ materially from the statements made
herein. Additional risks and uncertainties related to EcoScience have been
included in EcoScience's filings with the Securities and Exchange Commission.
Investors are encouraged to review EcoScience's Form 10-K for the year ended
June 30, 1997, and Forms 10-Q and other documents filed with the Securities and
Exchange Commission for a more complete discussion of factors that could affect
EcoScience's performance.
# # #
EcoScience Corporation
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10 Alvin Court East Brunswick, NJ 08816 732-432-8200 Fax 732-432-0770
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