Exhibit 10.58
Certain portions of this Exhibit have been filed separately with the
Commission and are subject to a request for confidential treatment.
STOCK PURCHASE AGREEMENT
AGREEMENT FOR THE PURCHASE AND SALE OF STOCK dated as of September
17, 1998, by and between AMBI INC., a New York corporation ("AMBI"), and
AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation ("AHP").
PRELIMINARY STATEMENT
The parties are concurrently herewith entering into a License, Option
and Marketing Agreement dated the date hereof (the "Product Agreement"). The
terms "Effective Date," "HSR Act," "Product," "Option Product," and "Additional
Product" shall have the meanings attributed thereto in the Product Agreement.
The parties wish to provide for certain purchases by AHP of common
stock of AMBI ("common stock") and for certain agreements in connection
therewith.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
1. Purchases and Sales of AMBI Stock
1.1. Base Purchase.
1.1.1. At a closing (the "Base Closing") to occur on September 24,
1998, or, if a filing is required to be made under the HSR
Act or rules, within five business days after any applicable
waiting periods under the HSR Act or rules shall have
terminated or expired, AHP shall purchase from AMBI, and AMBI
shall issue to AHP, 3,478,261 shares of common stock (the
"Base Shares").
1.1.2. The purchase price for the Base Shares shall be $4,000,000,
and shall be paid by AHP at the Base Closing by wire transfer
against the delivery by AMBI to AHP of the certificates which
represent the Base Shares and the opinion of AMBI's counsel
to the effect that the Base Shares are duly authorized,
validly issued, fully paid and nonassessable, and free and
clear from any liens or encumbrances of any kind (except
restrictions from transfer as set forth in applicable
securities laws).
1.1.3. The Base Closing shall occur at the offices of AMBI. At such
Closing, each of AMBI and AHP shall deliver to the other
party, a certificate by an officer of each company (whose
incumbency is verified by the Corporate Secretary or an
Assistant Secretary) certifying that each of the
representations and warranties (other than with respect to
the number of shares issued and outstanding in the
capitalization) are true and correct as of the date of such
Closing and that all covenants required to be performed in
this Agreement have been performed in all material respects
by each such party.
1.2. Additional Purchases.
1.2.1. At a closing (each, an "Additional Closing," with any of the
"Base Closing" or Additional Closing being referred to herein
as a "Closing") to occur at the offices of AMBI concurrently
with the execution of each of the first three licenses for
any one or more Option Products or Additional Products, as
provided in Section 12.2 of the Product Agreement, AHP shall
purchase from AMBI, and AMBI shall issue to AHP, a number of
additional shares of common stock equal to $(***) divided by
(***)% of the average of the closing prices of a share of
common stock on NASDAQ on each of the 10 trading days up to
and including the date which is 5 trading days immediately
preceding such Additional Closing. In addition, as provided
in Section 7.2 of the Product Agreement, AHP may make certain
purchases of additional shares of AMBI common stock, the
number of additional shares of common stock of each purchase
being equal to $(***) divided by (***)% of the average of the
closing prices of a share of common stock on NASDAQ during
the 10 trading days up to and including the date which is 5
trading days immediately preceding such Additional Closing.
The shares of common stock to be purchased by AHP at each
Additional Closing are referred to herein as the "License
Shares."
1.2.2. The purchase price for the License Shares purchased at each
Additional Closing shall be $(***), and shall be paid by AHP
at such Additional Closing by wire transfer against the
delivery by AMBI to AHP of the certificates which represent
the License Shares purchased at such Additional Closing and
the opinion of AMBI's counsel to the effect that the License
Shares are duly authorized, validly issued, fully paid and
nonassessable, and free and clear from any liens or
encumbrances of any kind (except restrictions from transfer
as set forth in applicable securities laws). At such Closing,
each of AMBI and AHP shall deliver to the other party, a
certificate by an officer of each company (whose incumbency
is verified by the Corporate Secretary or an Assistant
Secretary) certifying that each of the representations and
warranties (other than with respect to the number of shares
issued and outstanding in the capitalization) are true and
correct as of the date of such Closing and that all covenants
required to be
performed in this Agreement have been performed in all material
respects by each such party.
1.2.3. By way of example, if on any day AHP executes two licenses
for Option Products, AHP shall in connection therewith
purchase common stock for an aggregate purchase price of
$(***).
1.2.4. In the event that the common stock of AMBI is not traded on
NASDAQ during the period or periods set forth in this Article
1, the fair market price on each such day shall be determined
to be the average bid and asked price on each such day that
the common stock is traded on the over-the-counter bulletin
board, or if not so traded, as determined in good faith by
the Board of Directors of AMBI.
1.3. Xxxx-Xxxxx-Xxxxxx
1.3.1. Prior to the effectuation and as a condition to any Closing
under this Agreement, AHP shall have: (i) valued its holdings
of AMBI stock and assets and any stock to be acquired at less
than $15 million in accordance with Title II of the U.S.
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended and the rules promulgated thereunder (16 C.F.R.
ss.ss.801.1 et seq.); or (ii) determined that no such filing
is required to be made under the HSR Act or rules; provided,
however, that in the event that AHP has determined that a
filing under the HSR Act and rules is required, AMBI and AHP
shall promptly make all required filings under the HSR Act
and rules, and shall not effect any Closing hereunder until
any applicable waiting periods under the HSR Act or rules
shall have terminated or expired.
2. Representations And Warranties of AMBI. AMBI represents and warrants to
AHP that the following statements are true and correct:
2.1. Organization and Qualification. AMBI is a corporation duly
organized, validly existing and in good standing under the laws of
the State of New York and has corporate power to carry on its
business as it is now being conducted. The character of AMBI's
properties owned or held under lease and the nature of its
activities does not make it necessary that AMBI qualify to do
business in any foreign jurisdiction.
2.2. Capitalization. The authorized capital stock of AMBI consists of
65,000,000 shares of Common Stock, par value $.005 per share, and
5,000,000 shares of Preferred Stock $.01 par value per share. AMBI
does not have any outstanding securities convertible into or
exchangeable or exercisable for any shares of the capital stock of
AMBI, nor are there outstanding any rights to subscribe for or to
purchase, or any agreements providing for the issuance (contingent
or otherwise) of, or any options, warrants, calls, commitments,
understandings, arrangements or claims of any character relating
to, the capital stock of AMBI or any securities
convertible into or exchangeable or exercisable for any shares of
the capital stock of AMBI. As of September 15, 1998, 21,193,726
shares of AMBI Common Stock, 222 shares of Series C Preferred Stock,
and 19,750 shares of Series D Preferred Stock are validly issued and
outstanding, fully paid and nonassessable and free of preemptive
rights. All of the shares of AMBI Stock issuable in accordance
with this Agreement will be, when so issued, duly authorized,
validly issued, fully paid and nonassessable and free of
preemptive rights, and free and clear from any liens or
encumbrances of any kind (except restrictions from transfer as set
forth in applicable securities laws).
2.3. Authority Relative to This Agreement.
2.3.1. AMBI has the corporate power to enter into this Agreement
and to carry out its obligations hereunder. The execution and
delivery of this Agreement, the performance by AMBI of its
obligations hereunder and the consummation of the
transactions contemplated hereby have been duly authorized by
AMBI's Board of Directors in all material respects; the
issuance of the shares of AMBI Stock pursuant to this
Agreement have been duly authorized by AMBI's Board of
Directors; and no other corporate proceedings on the part of
AMBI are necessary to authorize this Agreement and the
transactions contemplated hereby.
2.3.2. This Agreement has been executed and delivered by AMBI and
(assuming the valid authorization, execution and delivery of
this Agreement by AHP) is a valid and binding obligation of
AMBI enforceable against AMBI in accordance with its terms,
except as may be limited by or subject to any bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and
subject to general principles of equity. No filing or
registration with, or authorization, consent or approval of,
any public body or authority is necessary for the
consummation by AMBI and its subsidiaries of the transactions
contemplated by this Agreement.
2.3.3. No notice to or filing with, and no authorization, consent
or approval of, any domestic or foreign court or any public or
governmental body or authority is necessary for the
consummation by AMBI of the transactions contemplated by this
Agreement (except as may be required by the HSR Act), except
for notices or filings the failure to give or make, and
authorizations, consents and approvals the failure to obtain,
would not materially and adversely affect the ability of AMBI
to consummate the transactions contemplated hereby, or the
future conduct of the AMBI's business.
2.3.4. Neither the execution and delivery of, nor the consummation
of the transactions contemplated by, this Agreement will
result in any of the following:
2.3.4.1. a default or an event that, with notice or lapse of
time, or both, would constitute a default, breach or
violation of the charter, bylaws or other governing
instruments of AMBI, or any material contract,
agreement, license or instrument to which AMBI is a
party or by which AMBI or its property is bound;
2.3.4.2. an event that would permit any Person to terminate
any material contract, agreement, license or
instrument to which AMBI is a party or by which AMBI
or its property is bound, or to accelerate the
maturity of any indebtedness or other material
obligation of AMBI;
2.3.4.3. the creation or imposition of any lien, mortgage,
pledge, charge or encumbrance of any kind upon any
material asset of AMBI;
2.3.4.4. a violation or breach of any statute, ordinance, rule
or regulation in any material respect applicable to
AMBI, or any writ, injunction or decree of any court
or governmental instrumentality to which AMBI is a
party or by which it or any of its properties are
bound; or
2.3.4.5. a loss or adverse modification under the terms
thereof, of any material license, franchise or other
authorization granted to or otherwise held by AMBI.
2.4. Reports and Financial Statements. AMBI has filed all required
reports and other filings with the Securities and Exchange
Commission (the "Commission") and all such filings complied in all
material respects with all applicable requirements of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (the "Securities Act") and/or the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder
(the "Exchange Act"). As of their respective dates, such reports,
statements and other written materials did not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The audited statements and any unaudited interim
financial statements of AMBI included in such reports have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis and fairly present the
financial position of AMBI and its subsidiaries as at the dates
thereof and the results of their operations and changes in
financial position for the periods then ended, except as indicated
therein or in the notes thereto.
2.5. No Material Adverse Change. Since March 31, 1998, as of which date
the AMBI filed its most recent report on Form 10-Q, there has not
been any material adverse change in the financial condition,
results of operations, businesses, properties, assets or
liabilities of AMBI taken as a whole.
2.6. Fees, Commissions and Expenses. AMBI has not paid or agreed to
pay, nor has it received any claims with respect to, any brokerage
commissions, finders' fees or similar compensation in connection
with the transactions contemplated by this Agreement.
2.7. Investment Company Act. AMBI is not, and after giving effect to
the transactions described herein will not be, an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended.
3. Representations And Warranties Of AHP. AHP represents and warrants to
AMBI that the following statements are true and correct in all material
respects:
3.1. Organization and Qualification. AHP is a duly organized, validly
existing and in good standing Delaware corporation, and has
corporate power to carry on its business as it is now being
conducted.
3.2. Authority Relative to this Agreement.
3.2.1. AHP has the corporate power to enter into this Agreement and
to carry out its obligations hereunder. The execution and
delivery of this Agreement, the performance by AHP of its
obligations hereunder and the consummation of the
transactions contemplated hereby have been duly authorized
and no other corporate proceedings on the part of AHP are
necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been executed and
delivered by the AHP and (assuming the valid authorization,
execution and delivery of this Agreement by AMBI) is a valid
and binding obligation of AHP enforceable against AHP in
accordance with its terms, except as may be limited by or
subject to any bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and subject to general
principles of equity. Except as referred to herein, no filing
or registration with, or authorization, consent or approval
of, any public body or authority is necessary for the
consummation by AHP of the transactions contemplated herein.
3.2.2. Neither the execution and delivery of, nor the consummation
of the transactions contemplated by, this Agreement will
result in any of the following:
3.2.2.1. a default or an event that, with notice or lapse of
time, or both, would constitute a default, breach or
violation of the charter, bylaws or other governing
instruments of AHP, or any material contract,
agreement, license or instrument to which AHP is a
party or by which AHP, or the property of AHP is
bound;
3.2.2.2. an event that would permit any Person to terminate
any material contract, agreement, license or
instrument to which AHP is a
party or by which AHP is bound, or to accelerate the
maturity of any indebtedness or other obligation of AHP;
3.2.2.3. the creation or imposition of any lien, mortgage,
pledge, charge or encumbrance of any kind upon any
material asset of AHP;
3.2.2.4. a violation or breach of any statute, ordinance, rule
or regulation in any material respect applicable to
AHP , or any writ, injunction or decree of any court
or governmental instrumentality to which AHP is a
party or by which AHP, or the property of AHP is
bound; or
3.2.2.5. a loss or adverse modification under the terms
thereof, of any material license, franchise or other
authorization granted to or otherwise held by AHP.
3.3. Fees, Commissions and Expenses. Neither AHP nor any of its
affiliates has paid or agreed to pay, nor has it received any
claims with respect to, any brokerage commissions, finders' fees
or similar compensation in connection with the transactions
contemplated by this Agreement.
3.4. Investment Representations.
3.4.1. The AMBI Stock may be sold or otherwise transferred only if
registered under the Securities Act, pursuant to an exemption
therefrom as indicated in an opinion of counsel supplied by
AHP reasonably acceptable to AMBI and its counsel, or with
the favorable opinion of counsel to AMBI to the effect that
such sale or other transfer may be made in the absence of
registration under the Securities Act. The certificates
representing the AMBI Stock will be legended to reflect this
restriction, and stop transfer instructions will apply.
3.4.2. AHP represents and warrants that it is purchasing the common
stock solely for investment solely for its own account and
not with a view to or for the resale or distribution thereof
except as permitted under a Registration Statement or as
otherwise permitted under the Securities Act.
4. Rule 144 Current Information. AMBI shall timely file periodic reports
under the Exchange Act to the end that AMBI shall satisfy the
requirements of Rule 144 in relation to the availability of current
public information with respect to AMBI.
5. Participation Registration Rights.
5.1. If AMBI shall at any time propose the registration under the
Securities Act of any shares of common stock, AMBI shall give
notice as promptly as possible (but no less than 10 days before
filing a registration statement with respect to such registration)
of such proposed registration to AHP, and AMBI at its sole expense
(except with respect to any underwriting discount) shall use its
best efforts to cause such number of Common Shares as AHP shall
request within 10 days after the receipt of such notice to be
included in any such offering; provided, however, that
5.1.1. AMBI shall not be required to give notice or include such
shares in any such registration which is (A) a registration
of a stock option or compensation plan or of securities
issued or issuable pursuant to any such plan, or (B) a
registration of securities proposed to be issued in exchange
for securities or assets of, or in connection with a merger
or consolidation with, another corporation;
5.1.2. AMBI shall not be required to include such shares in any
such registration if AMBI is advised in writing by its investment
banking firm that the inclusion of such shares would in its
opinion have a materially adverse effect on such proposed
offering of its common stock, provided, however, that such
exclusion shall be made in proportion to the number of shares
proposed to be included in such offering other than by AMBI,
and in no case shall such exclusion be more than 10% of the
total number of shares proposed to be sold in any such
offering; and
5.2. AMBI may, without the consent of AHP, withdraw such registration
statement and abandon the proposed offering in which AHP had
requested to participate.
5.3. AMBI shall supply to AHP a reasonable number of copies of all
registration materials and prospectuses. AMBI and AHP shall
execute and deliver to each other indemnity agreements which are
conventional in registered offerings of this type, indemnifying
AHP for any and all liabilities relating to any registration
statement, other than based upon information supplied by AHP
specifically for use therein, and in no case shall AHP's liability
exceed the proceeds of the sale to AHP under any such offering or
registration. AHP shall reasonably cooperate with AMBI in the
preparation and filing of the Registration Statement and
appropriate amendments thereto, and shall provide to AMBI such
information with respect to the AHP as AMBI may reasonably require
in connection therewith.
5.4. AHP's rights under this Section 5 shall terminate on the later of
(i) 5 years from the date of this Agreement, or (ii) after AHP
owns less than 5% of the outstanding common stock of AMBI and is
free to sell all shares it owns under Rule 144 (k) of the
Securities Act or any successor provision thereof.
6. General Provisions
6.1. Survival of Representations and Warranties. All representations
and warranties made hereunder shall survive the Closing until
September 30, 1999, or 12 months from the last Closing in which a
certificate with respect to the representations and warranties is
made hereunder, as the case may be.
6.2. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if three days after being
mailed by registered or certified mail (return receipt requested,
postage prepaid) or if delivered personally to the parties at the
following addresses (or at such other address for a party as shall
be specified by like notice):
If to AMBI, to:
AMBI Inc.
000 Xxx Xxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Senior Vice President & General Counsel
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Law Offices of Xxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
if to AHP, to:
American Home Products Corporation
Five Giralda Farms
Madison, NJ 07940
Attention: Treasurer
with a copy to:
American Home Products Corporation
Five Giralda Farms
Madison, NJ 07940
Attention: Senior Vice President and General Counsel
7 Miscellaneous. This Agreement (including the documents and instruments
referred to herein) (a) constitutes the entire agreement and supersedes
all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter
hereof; (b) inures to the benefit of the parties hereto and their
respective permitted representatives and assigns; (c) shall not be
assigned by operation of law or otherwise; and (d) shall be governed in
all respects, including validity, interpretation and effect, by the laws
of the State of New York (without giving effect to the provisions thereof
relating to conflicts of law). This Agreement may be executed in two or
more counterparts which together constitute a single agreement.
8 Publicity. Neither party shall issue any press releases which make
references to the other without the consent of the other party, which
consent shall not unreasonably withheld. Each party shall therefore
provide the other with draft press releases for review and comment. Each
party agrees to review and comment promptly on draft press releases
received from the other party.
IN WITNESS WHEREOF, AMBI and AHP have caused this Agreement to be
signed by their respective officers thereunto duly authorized all as of the
date first written above.
AMBI INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
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Title: President & CEO
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AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President
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