AgroFresh Solutions, Inc. (NASDAQ:AGFS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On April 4, 2017, AgroFresh Solutions, Inc. (the Company) entered
into an agreement (the Amendment Agreement) with The Dow Chemical
Company (TDCC), Rohm and Haas Company (RH), Boulevard Acquisition
Sponsor, LLC (the Sponsor), AgroFresh Inc., a wholly-owned
subsidiary of the Company (AgroFresh), Avenue Capital Management
II, L.P. (Avenue) and, solely as to certain sections of the
Amendment Agreement, Joel Citron, Darren Thompson and Robert J.
Campbell (collectively, the Founding Holders), Marc Lasry and
Stephen Trevor. to the Amendment Agreement and certain related
agreements entered into on the same date (as described below),
among other things, the Company and TDCC agreed to modify certain
obligations of the Company to (i) the Stock Purchase Agreement,
dated April 30, 2015 (the Purchase Agreement), between the
Company and TDCC, and (ii) the Tax Receivables Agreement, dated
July 31, 2015 (the Tax Receivables Agreement), among the Company,
TDCC, RH and AgroFresh, and (iii) the Warrant Purchase Agreement,
dated July 31, 2015 (the Warrant Purchase Agreement), among the
Company, TDCC, RH and the Sponsor. Each of Mr. Campbell, Mr.
Lasry and Mr. Trevor is a member of the Companys board of
directors (the Board), and each of TDCC and the Sponsor is a
significant stockholder of the Company.
into an agreement (the Amendment Agreement) with The Dow Chemical
Company (TDCC), Rohm and Haas Company (RH), Boulevard Acquisition
Sponsor, LLC (the Sponsor), AgroFresh Inc., a wholly-owned
subsidiary of the Company (AgroFresh), Avenue Capital Management
II, L.P. (Avenue) and, solely as to certain sections of the
Amendment Agreement, Joel Citron, Darren Thompson and Robert J.
Campbell (collectively, the Founding Holders), Marc Lasry and
Stephen Trevor. to the Amendment Agreement and certain related
agreements entered into on the same date (as described below),
among other things, the Company and TDCC agreed to modify certain
obligations of the Company to (i) the Stock Purchase Agreement,
dated April 30, 2015 (the Purchase Agreement), between the
Company and TDCC, and (ii) the Tax Receivables Agreement, dated
July 31, 2015 (the Tax Receivables Agreement), among the Company,
TDCC, RH and AgroFresh, and (iii) the Warrant Purchase Agreement,
dated July 31, 2015 (the Warrant Purchase Agreement), among the
Company, TDCC, RH and the Sponsor. Each of Mr. Campbell, Mr.
Lasry and Mr. Trevor is a member of the Companys board of
directors (the Board), and each of TDCC and the Sponsor is a
significant stockholder of the Company.
Amendment Agreement
to the Amendment Agreement, the Company agreed to pay TDCC, in
full satisfaction of the Companys obligations with respect to (i)
the working capital adjustment under the Purchase Agreement, (ii)
certain transfer and value added tax reimbursement obligations
under the Purchase Agreement, and (iii) the amount payable to
TDCC to the Tax Receivables Agreement on account of the 2015 tax
year, the aggregate amount of $20 million, of which $10 million
was paid on April 4, 2017 and the remaining $10 million is
payable on or before January 31, 2018.
full satisfaction of the Companys obligations with respect to (i)
the working capital adjustment under the Purchase Agreement, (ii)
certain transfer and value added tax reimbursement obligations
under the Purchase Agreement, and (iii) the amount payable to
TDCC to the Tax Receivables Agreement on account of the 2015 tax
year, the aggregate amount of $20 million, of which $10 million
was paid on April 4, 2017 and the remaining $10 million is
payable on or before January 31, 2018.
Also to the Amendment Agreement, each of Avenue and TDCC agreed
to make available to the Company a credit facility, providing for
loans of up to $50 million each, for use to complete one or more
potential acquisitions prior to December 31, 2019, in each case
subject to approval by both Avenue and TDCC. Any such loans would
be provided on such terms as may be mutually agreed upon by
Avenue and Dow, and would be subject to compliance by the Company
with the terms of its senior credit facility and any other
outstanding debt documents.
to make available to the Company a credit facility, providing for
loans of up to $50 million each, for use to complete one or more
potential acquisitions prior to December 31, 2019, in each case
subject to approval by both Avenue and TDCC. Any such loans would
be provided on such terms as may be mutually agreed upon by
Avenue and Dow, and would be subject to compliance by the Company
with the terms of its senior credit facility and any other
outstanding debt documents.
The Amendment Agreement also includes waivers by the Company and
the other parties thereto to any existing restrictions on
transfer of the Companys securities to the extent necessary to
permit (i) the Sponsor to transfer to RH 3,000,000 of the
warrants to purchase shares of the Companys common stock held by
the Sponsor, which transfer occurred on April 4, 2017 to the
terms of the Amendment Agreement, and (ii) the Sponsor to
distribute or otherwise transfer to any member of the Sponsor any
shares of the Companys common stock, or warrants to purchase such
shares, held by the Sponsor (subject to any such transferee
agreeing to be bound by any applicable agreements restricting the
transfer of such securities). The Amendment Agreement also
contains mutual releases and provisions regarding
non-disparagement and indemnification.
the other parties thereto to any existing restrictions on
transfer of the Companys securities to the extent necessary to
permit (i) the Sponsor to transfer to RH 3,000,000 of the
warrants to purchase shares of the Companys common stock held by
the Sponsor, which transfer occurred on April 4, 2017 to the
terms of the Amendment Agreement, and (ii) the Sponsor to
distribute or otherwise transfer to any member of the Sponsor any
shares of the Companys common stock, or warrants to purchase such
shares, held by the Sponsor (subject to any such transferee
agreeing to be bound by any applicable agreements restricting the
transfer of such securities). The Amendment Agreement also
contains mutual releases and provisions regarding
non-disparagement and indemnification.
A copy of the Amendment Agreement is filed with this Current
Report on Form 8-K as Exhibit 10.1 and is incorporated herein by
reference, and the foregoing description of the Amendment
Agreement is qualified in its entirety by reference thereto.
Report on Form 8-K as Exhibit 10.1 and is incorporated herein by
reference, and the foregoing description of the Amendment
Agreement is qualified in its entirety by reference thereto.
First Amendment to Tax Receivables Agreement
On April 4, 2017, the Company, TDCC, RH and AgroFresh entered
into a First Amendment to the Tax Receivables Agreement (the TRA
Amendment). The TRA Amendment reduces, from 85% to 50%, the
percentage that the Company is required to pay annually to TDCC
to the Tax Receivables Agreement of the amount of the tax
savings, if any, in U.S. Federal, state and local income tax or
franchise tax that the Company actually realizes as a result of
the increase in tax basis of the AgroFresh assets resulting from
a Section 338(h)(10) election that the Company and TDCC made in
connection with the transactions contemplated by the Purchase
Agreement. The amendment to the Tax Receivables Agreement is
effective for all applicable tax years ending after December 31,
2015. Other than the foregoing, the TRA Amendment Agreement does
not modify the terms of the Tax Receivables Agreement.
into a First Amendment to the Tax Receivables Agreement (the TRA
Amendment). The TRA Amendment reduces, from 85% to 50%, the
percentage that the Company is required to pay annually to TDCC
to the Tax Receivables Agreement of the amount of the tax
savings, if any, in U.S. Federal, state and local income tax or
franchise tax that the Company actually realizes as a result of
the increase in tax basis of the AgroFresh assets resulting from
a Section 338(h)(10) election that the Company and TDCC made in
connection with the transactions contemplated by the Purchase
Agreement. The amendment to the Tax Receivables Agreement is
effective for all applicable tax years ending after December 31,
2015. Other than the foregoing, the TRA Amendment Agreement does
not modify the terms of the Tax Receivables Agreement.
A copy of the TRA Amendment is filed with this Current Report on
Form 8-K as Exhibit 10.2 and is incorporated herein by reference,
and the foregoing description of the TRA Amendment is qualified
in its entirety by reference thereto.
Form 8-K as Exhibit 10.2 and is incorporated herein by reference,
and the foregoing description of the TRA Amendment is qualified
in its entirety by reference thereto.
Stock Buyback Agreement
On April 4, 2017, the Company and TDCC entered into a letter
agreement (the Stock Buyback Agreement), to which TDCC agreed to
use it reasonable best efforts to purchase up to 5,070,358 shares
of the Companys common stock in the open market (representing
approximately 10% of the total number of shares of the Companys
common stock currently
agreement (the Stock Buyback Agreement), to which TDCC agreed to
use it reasonable best efforts to purchase up to 5,070,358 shares
of the Companys common stock in the open market (representing
approximately 10% of the total number of shares of the Companys
common stock currently
outstanding). Such purchases would be effected by means of one or
more plans or programs designed to comply with Rules 10b5-1 and
10b-18 of the Securities Exchange Act of 1934, as amended (the
Rule 10b5-1 Plans), over a period of up to 18 months commencing
on the date on which a Rule 10b5-1 Plan is adopted, and would be
subject to all of the terms, conditions and limitations contained
in any 10b5-1 Plan adopted by TDCC. The timing and amount of any
share purchases by TDCC will depend on the terms and conditions
contained in any Rule 10b5-1 Plan adopted by TDCC, the market
price of the Companys common stock and trading volumes, and no
assurance can be given that any particular amount of shares will
be purchased by TDCC.
more plans or programs designed to comply with Rules 10b5-1 and
10b-18 of the Securities Exchange Act of 1934, as amended (the
Rule 10b5-1 Plans), over a period of up to 18 months commencing
on the date on which a Rule 10b5-1 Plan is adopted, and would be
subject to all of the terms, conditions and limitations contained
in any 10b5-1 Plan adopted by TDCC. The timing and amount of any
share purchases by TDCC will depend on the terms and conditions
contained in any Rule 10b5-1 Plan adopted by TDCC, the market
price of the Companys common stock and trading volumes, and no
assurance can be given that any particular amount of shares will
be purchased by TDCC.
A copy of the Stock Buyback Agreement is filed with this Current
Report on Form 8-K as Exhibit 10.3 and is incorporated herein by
reference, and the foregoing description of the Stock Buyback
Agreement is qualified in its entirety by reference thereto.
Report on Form 8-K as Exhibit 10.3 and is incorporated herein by
reference, and the foregoing description of the Stock Buyback
Agreement is qualified in its entirety by reference thereto.
Termination of Warrant Purchase Agreement
On April 4, 2017, the Company, TDCC, RH and the Sponsor entered
into a letter agreement (the WPA Termination Agreement), to which
the Warrant Purchase Agreement was terminated effective
immediately. Also to the WPA Termination Agreement, the parties
agreed that the Sponsor, in good faith consultation with TDCC,
will work with the corporate governance and nominating committee
of the Board to identify and recommend to the Board a qualified
individual to fill the vacancy on the Board that will exist
immediately following the completion of the Companys 2017 annual
meeting of stockholders, which individual must qualify as an
independent director under the listing standards of the NASDAQ
Stock Market.
into a letter agreement (the WPA Termination Agreement), to which
the Warrant Purchase Agreement was terminated effective
immediately. Also to the WPA Termination Agreement, the parties
agreed that the Sponsor, in good faith consultation with TDCC,
will work with the corporate governance and nominating committee
of the Board to identify and recommend to the Board a qualified
individual to fill the vacancy on the Board that will exist
immediately following the completion of the Companys 2017 annual
meeting of stockholders, which individual must qualify as an
independent director under the listing standards of the NASDAQ
Stock Market.
A copy of the WPA Termination Agreement is filed with this
Current Report on Form 8-K as Exhibit 10.4 and is incorporated
herein by reference, and the foregoing description of the WPA
Termination Agreement is qualified in its entirety by reference
thereto.
Current Report on Form 8-K as Exhibit 10.4 and is incorporated
herein by reference, and the foregoing description of the WPA
Termination Agreement is qualified in its entirety by reference
thereto.
Item 1.02 Termination of a Material Definitive Agreement.
The disclosure contained in Item 1.01 above under the heading
Termination of Warrant Purchase Agreement is incorporated into
this Item 1.02 by reference.
Termination of Warrant Purchase Agreement is incorporated into
this Item 1.02 by reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The disclosure contained in Item 1.01 above under the heading
Amendment Agreement is incorporated into this Item 2.03 by
reference.
Amendment Agreement is incorporated into this Item 2.03 by
reference.
Item 8.01 Other Events.
On April 5, 2017, the Company issued a press release regarding
the matters described in Item 1.01. A copy of the press release
is furnished as Exhibit 99.1 to this Current Report on Form 8-K
and is incorporated herein by reference.
the matters described in Item 1.01. A copy of the press release
is furnished as Exhibit 99.1 to this Current Report on Form 8-K
and is incorporated herein by reference.
Item 9.01 Exhibits
(d) Exhibits.
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Exhibit
Number
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Exhibit
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10.1
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Agreement, dated April 4, 2017, among the registrant,
The Dow Chemical Company, Rohm and Haas Company, Boulevard Acquisition Sponsor, LLC, AgroFresh Inc., Avenue Capital Management II, L.P. and, solely as to certain sections thereof, Joel Citron, Darren Thompson, Robert J. Campbell, Marc Lasry and Stephen Trevor. |
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10.2
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First Amendment to Tax Receivables Agreement, dated
April 4, 2017, among the registrant, The Dow Chemical Company, Rohm and Haas Company and AgroFresh Inc. |
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10.3
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Letter Agreement, dated April 4, 2017, between the
registrant and The Dow Chemical Company. |
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10.4
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Letter Agreement, dated April 4, 2017, among the
registrant, The Dow Chemical Company, Rohm and Haas Company and Boulevard Acquisition Sponsor, LLC. |
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99.1
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Press Release issued by the Company on April 5, 2017.
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About AgroFresh Solutions, Inc. (NASDAQ:AGFS)
AgroFresh Solutions, Inc., formerly Boulevard Acquisition Corp., is a developer of agricultural technologies that preserve the freshness and value of fresh produce, including apples, pears, kiwifruit, avocados and bananas, as well as flowers. The Company’s principal product, The SmartFresh Quality System (SmartFresh), regulates the post-harvest ripening effects of ethylene, the naturally occurring plant hormone that triggers ripening in certain fruits and vegetables, through technology. SmartFresh is naturally biodegradable and leaves no detectable residue, which has significant consumer appeal. SmartFresh allows growers and packers to deliver just harvested freshness on a year-round basis. An integral part of the SmartFresh sales process is the AgroFresh Whole Product offering, which is a direct service model that provides customers with on-site applications of SmartFresh at their storage facilities combined with advisory services. The Company operates in approximately 40 countries. AgroFresh Solutions, Inc. (NASDAQ:AGFS) Recent Trading Information
AgroFresh Solutions, Inc. (NASDAQ:AGFS) closed its last trading session up +0.71 at 4.86 with 194,755 shares trading hands.