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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 10, 1997
AMBI Inc.
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(Exact Name of Registrant as Specified in its Charter)
New York 1-12106 11-2653613
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation or organization) Identification Number)
771 Old Saw Mill River Road, Tarrytown, New York 10591
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including Area Code: (914) 347-5767
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Item 5. Other Events
The terms of Registrant's Series C Convertible Preferred Stock (the
"Series C Stock") have been amended as provided in the attached Exhibits, which,
among other things, provide that: (1) the Investors will not convert their
Preferred Stock prior to June 5, 1998, (2) the Fixed Conversion Price is changed
to $2.75, (3) the Maturity Date for mandatory conversion is changed to October
13, 1999, and (5) there is redemption at Registrant's election.
The terms of Registrant's Series D Convertible Preferred Stock (the
"Series D Stock") have been amended as provided in the attached Exhibits, which,
among other things, provide that: (1) the Investors will not convert their
Preferred Stock prior to June 5, 1998, (2) the Fixed Conversion Price is changed
to $2.25, (3) the Exercise Price of the Warrants is changed to $2.25, (4) the
Maturity Date for mandatory conversion is changed to May 8, 2001, and (5) the
notice period for Registrant to effect an Optional Redemption is changed to ten
(10) business days.
Item 7. Exhibits
(a) Agreement dated January 10, 1997 by and between the Company and
certain parties, relating to the Series C Stock.
(b) Agreement dated September 12, 1997 by and between the Company and
certain parties, relating to the Series C Stock.
(c) Agreement dated December 5, 1997 by and between the Company and
certain parties, relating to the Series C Stock.
(d) Agreement dated January 10, 1997 by and between the Company and
certain parties, relating to the Series D Stock.
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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 thereunto duly authorized.
AMBI Inc.
By: /s/ Fredric D. Price
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Fredric D. Price
President and Chief Executive Officer
Date: May 28, 1998
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Exhibit (a)
[AMBI Inc. Letterhead]
January 10, 1997
Mr. Kenneth C. Griffin
Citadel Investment Group, L.L.C.
225 West Washington Street - 9th Floor
Chicago, Illinois 60606
RE: Series C Preferred Stock
Dear Mr. Griffin:
We refer to the 280 shares of Series C Preferred Stock (the "Preferred
Stock") of AMBI Inc., formerly Applied Microbiology, Inc., (the "Corporation")
which are owned by Nelson Partners (216 shares) and Olympus Securities, Ltd. (64
shares), each of Nelson Partners and Olympus Securities, Ltd. being referred to
as a "Holder". Capitalized terms which are not defined in this letter shall have
the meaning set forth in Certificate of Amendment of the Certificate of
Incorporation of the Corporation creating the Preferred Stock (the
"Certificate").
For good and valuable consideration, the Corporation and each Holder
agree as follows:
The following legend shall be forthwith inscribed on the Certificates
which represent the shares of Preferred Stock: The terms of the Certificate of
Incorporation of Applied Microbiology, Inc. creating the Series C Preferred
Stock have been amended by a letter agreement dated January 10, 1997, a copy of
which is available upon request to the Secretary of the Corporation.
Notwithstanding anything in the Certificate to the contrary, neither
Holder shall be entitled to convert any shares of Preferred Stock which, upon
conversion, would cause the aggregate number of shares of Common Stock
beneficially owned by such Holder and its affiliates, including the number of
shares of Common Stock issuable upon conversion of the shares of Preferred Stock
with respect to which the determination of this paragraph is being made, to
exceed 4.9% of the outstanding shares of the Common Stock following such
conversion. For purposes of the preceding sentence, beneficial ownership shall
be calculated in accordance with Sections 13 (d) of the Securities Exchange Act
of 1934, as amended, except that Common Stock which would be issuable upon
conversion of the shares which the Holder is not entitled to convert pursuant to
the preceding sentence shall not be deemed to be beneficially owned by the
Holder.
The Holder acknowledges that the Corporation has the right, in its sole
discretion, to redeem for cash pursuant to Section 6 of the Certificate,
Preferred Stock submitted for conversion. The Holder and the Corporation hereby
agree that the Corporation's right to redeem set forth in Section 6 of the
Certificate, shall also apply to an automatic conversion of the Preferred Stock
pursuant to Section 5 (d) of the Certificate. The Corporation will redeem for
cash any Preferred Stock which would otherwise be converted into Common Stock if
the number of shares issuable upon such conversion, when added to the number of
shares previously issued on conversion of Preferred Stock, would exceed
3,646,203 (20% of the Common Stock outstanding as of October 20, 1995).
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This letter agreement is effective January 10, 1997 and shall be
binding upon the parties and their successors and assigns. It may not be amended
or terminated orally. It and the Certificate sets forth all understandings with
respect to the subject matter hereof. Except as set forth herein, the terms and
conditions of the Certificate are ratified and confirmed.
Please indicate agreement to the above by signing in the space provided below
and faxing the signed copy back. Two original confirmation copies will be mailed
to you. Please return one signed copy.
AMBI Inc.
By: /s/ Benjamin Sporn
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Benjamin Sporn
Vice President Legal & Secretary
Accepted and agreed to:
Nelson Partners and Olympus Securities, Ltd.
By: /s/ Kenneth C. Griffin
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Kenneth C. Griffin
President - Citadel Investment Group, L.L.C
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Exhibit (b)
[AMBI Inc. Letterhead]
September 12, 1997
Nelson Partners
Olympus Securities, Ltd.
C/O Citadel Investment Group, L.L.C.
225 West Washington Street - 9th Floor
Chicago, Illinois 60606
RE: Series C Preferred Stock
Dear Mr. Griffin:
We refer to the 222 shares of Series C Preferred Stock (the "Preferred
Stock") of AMBI Inc., formerly Applied Microbiology, Inc., (the "Corporation")
which are owned by Nelson Partners (166 shares) and Olympus Securities, Ltd. (56
shares), each of Nelson Partners and Olympus Securities, Ltd. being referred to
as a "Holder". Capitalized terms which are not defined in this letter shall have
the meaning set forth in Certificate of Amendment of the Certificate of
Incorporation of the Corporation creating the Preferred Stock (the
"Certificate").
The following legend shall be forthwith inscribed on the Certificates
which represent the shares of Preferred Stock: The terms of the Certificate of
Incorporation of Applied Microbiology, Inc. creating the Series C Preferred
Stock have been amended by letter agreements dated January 10, 1997 and
September 12, 1997 copies of which are available upon request to the Secretary
of the Corporation.
For good and valuable consideration, the Corporation and each Holder
agree as follows:
The Holder agrees not to engage, directly or indirectly, in any
transaction related to the Series C Preferred Stock, or the Series D Preferred
Stock, or the Corporation's Common Stock, including, but not limited to
conversions of the Series C Preferred Stock or the Series D Preferred Stock, and
short sales of the Corporation's Common Stock, from the date of this letter
agreement until December 31, 1997. The Holder and the Corporation agree that the
Fixed Conversion Price set forth in the Certificate shall be changed to $3.25,
and that the Automatic Conversion date set forth in the Certificate shall be
changed to October 13, 1999.
This letter agreement is effective September 12, 1997 and shall be
binding upon the parties and their successors and assigns. It may not be amended
or terminated orally. This letter agreement, the letter agreement dated January
10, 1997 and the Certificate sets forth all understandings with respect to the
subject matter hereof. Except as set forth herein, the terms and conditions of
the Certificate are ratified and confirmed.
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Please indicate agreement to the above by signing in the space provided
below and faxing the signed copy back. Two original confirmation copies will be
mailed to you. Please return one signed copy.
AMBI Inc.
By: /s/ Benjamin Sporn
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Benjamin Sporn
Vice President Legal & Secretary
Accepted and agreed to:
Nelson Partners
By: /s/ Anne Dupuy
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Name: Anne Dupuy
Title:
Olympus Securities, Ltd.
By: /s/ Anne Dupuy
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Name: Anne Dupuy
Title:
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Exhibit (c)
[AMBI Inc. Letterhead]
December 5, 1997
Nelson Partners
Olympus Securities, Ltd.
c/o Citadel Investment Group, L.L.C.
225 West Washington Street
Chicago, Illinois 60606
Attention: Kenneth C. Griffin
Re: Series C Preferred Stock
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Dear Mr. Griffin:
We refer to the 222 shares of Series C Preferred Stock (the "Series C
Preferred Shares") of AMBI Inc., formerly Applied Microbiology, Inc. (the
"Corporation") which are owned by Nelson Partners (166 shares) and Olympus
Securities, Ltd. (56 shares), each of Nelson Partners and Olympus Securities,
Ltd. being referred to as a "Holder". Capitalized terms which are not defined in
this letter shall have the meaning set forth in the Certificate of Amendment of
the Certificate of Incorporation of Applied Microbiology, Inc. creating the
Series C Preferred Stock (the "Certificate of Amendment").
This letter agreement shall supersede the letter agreement, dated
September 12, 1997, between the Corporation and each of the Holders relating to
the Series C Preferred Shares. The following legend shall be forthwith inscribed
on the certificates which represent the Series C Preferred Shares: The terms of
the Certificate of Amendment of the Certificate of Incorporation of Applied
Microbiology, Inc. creating the Series C Preferred Stock have been amended by
letter agreements dated January 10, 1997 and December 5, 1997, copies of which
are available upon request to the Secretary of the Corporation.
For good and valuable consideration, the Corporation and each Holder
agree as follows:
1. Each Holder agrees not to convert any Series C Preferred Shares from
the date of this letter agreement until June 5, 1998. The Holder and the
Corporation agree that the Fixed Conversion Price set forth in the Certificate
of Amendment shall be changed to $2.75, and the date of the automatic conversion
set forth in Section 5(d) of the Certificate of Amendment shall be changed to
October 13, 1999. Notwithstanding the foregoing, the conversion restrictions set
forth in this Section 1 shall not apply if there shall have occurred any change,
event, result or happening involving, directly or indirectly, the Corporation or
any of its subsidiaries resulting in a material adverse effect on the business,
financial condition or results of operations of the Corporation and its
subsidiaries, taken as a whole, which material adverse effect is continuing.
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2. Corporation's Right to Redeem at Its Election. Subject to Section
2(d) below, on any date after the date of this letter agreement the Corporation
shall have the right, in its sole discretion, to redeem ("Redemption at the
Corporation's Election"), from time to time, any or all of the Series C
Preferred Shares at the Redemption Price at the Corporation's Election (as
defined below).
a) Redemption Price at the Corporation's Election. The "Redemption Price
at the Corporation's Election" shall be an amount per Series C Preferred Share
equal to the product of (i) the number of shares of Common Stock issuable (in
accordance with Section 5(a) of the Certificate of Amendment) upon conversion of
the Series C Preferred Shares being redeemed by the Corporation on the Date of
Redemption at the Corporation's Election and (ii) the Closing Bid Price on the
date of the receipt of the Notice of Redemption at the Corporation's Election
(as defined below) by a Holder.
b) Mechanics of Redemption at the Corporation's Election. The Corporation
shall effect each such redemption no sooner than one trading day after
delivering written notice of its Redemption at the Corporation's Election via
facsimile and overnight courier ("Notice of Redemption at the Corporation's
Election") to each Holder of the Series C Preferred Shares. Such Notice of
Redemption at the Corporation's Election shall indicate (A) the number of Series
C Preferred Shares that have been selected for redemption, (B) the date that
such redemption is to become effective (the "Date of Redemption at the
Corporation's Election") and (C) the applicable Redemption Price at the
Corporation's Election. Notwithstanding the above, the Corporation shall not be
entitled to Deliver a Notice of Redemption at the Corporation's Election if the
Conversion Price is greater than the Closing Bid Price on the date of the
receipt of such notice by a Holder.
c) Payment of Redemption Price. Each holder submitting Series C Preferred
Shares being redeemed under this Section 2 shall send such holder's Series C
Preferred Stock Certificates so redeemed to the Corporation within five (5)
business days after the Date of Redemption at the Corporation's Election, and
the Corporation shall pay the applicable Redemption Price at the Corporation's
Election to that holder in cash within three business days after such holder's
Series C Preferred Stock Certificates are so delivered to the Corporation. If
the Corporation shall fail to pay the applicable Redemption Price at the
Corporation's Election to such holder on a timely basis as described in this
Section 2(c), in addition to any remedy such holder of Series C Preferred Shares
may have under the Certificate of Amendment, such unpaid amount shall bear
interest at the rate of 2.5% per month until paid in full.
d) Corporation Must Have Immediately Available Funds or Credit Facilities.
The Corporation shall not be entitled to send any Notice of Redemption at the
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Corporation's Election pursuant to Section 2(b) above and begin the redemption
procedure under this Section 2, unless it has:
(1) the full amount of the Redemption Price at the Corporation's Election
in cash, available in a demand or other immediately available account in a bank
or similar financial institution;
(2) credit facilities, with a bank or similar financial institutions that
are immediately available and unrestricted for use in redeeming the Series C
Preferred Shares, in the full amount of the Redemption Price at the
Corporation's Election;
(3) a written agreement with a standby underwriter or qualified buyer
ready, willing and able to purchase from the Corporation a sufficient number of
shares of stock to provide proceeds necessary to redeem any stock that is not
converted prior to a Redemption at the Corporation's Election; or
(4) a combination of the items set forth in the preceding clauses (1), (2)
and (3), aggregating the full amount of the Redemption Price at the
Corporation's Election.
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This letter agreement is effective December 5, 1997 and shall be binding upon
the parties and their successors and assigns. It may not be amended or
terminated orally. This letter agreement, the letter agreement dated January 10,
1997 and the Certificate of Amendment set forth all understandings with respect
to the subject matter hereof. Except as set forth herein, the terms and
conditions of the Certificate of Amendment are ratified and confirmed.
Please indicate agreement to the above by signing in the space provided below
and faxing the signed copy back. Two original confirmation copies will be mailed
to you. Please return one signed copy.
AMBI INC.
By: /s/ Fredric D. Price
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Fredric D. Price
President and Chief Executive Officer
Accepted and agreed to:
NELSON PARTNERS OLYMPUS SECURITIES, LTD.
By: /s/ N. Aggarwal By: /s/ N. Aggarwal
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Name: N. Aggarwal Name: N. Aggarwal
Title: Title:
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Exhibit (d)
AGREEMENT
AGREEMENT (this "Agreement"), dated as of December 5, 1997, by and
among AMBI Inc., a corporation organized under the laws of the State of New York
(the "Company"), and the undersigned Initial Investors (together with
affiliates, the "Initial Investors").
WHEREAS:
In connection with that certain Securities Purchase Agreement, dated
as of May 8, 1997, by and among the Company and the Initial Investors (the
"Securities Purchase Agreement"), the Company issued and sold to the Initial
Investors certain units consisting of (i) one share of the Company's Series D
Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock"),
convertible into common stock, par value $.005 per share of the Company (the
"Common Stock") and (ii) warrants (the "Warrants") to acquire shares of Common
Stock. The rights, preferences and privileges of the Preferred Stock are set
forth in the Certificate of Amendment of the Certificate of Incorporation by
AMBI Inc. ("Certificate of Amendment") attached as Exhibit A to the Securities
Purchase Agreement. The terms of the Warrants are set forth in the Stock
Purchase Warrant attached as Exhibit B to the Securities Purchase Agreement.
Capitalized terms used and not otherwise defined herein shall have the meaning
ascribed thereto in the Securities Purchase Agreement, the Certificate of
Amendment and the Stock Purchase Warrant.
The Company desires to induce the Initial Investors to agree not to
convert certain of their Preferred Stock for a period of six (6) months as
described herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investors hereby agree as follows:
Conversion of Preferred Stock; Adjustment in Conversion Price. The
Company and the Initial Investors agree that, effective as of the date of this
Agreement, the Initial Investors shall convert fifty (50%) percent of their
Preferred Stock into such number of fully paid and nonassessable shares of
Common Stock determined in accordance with the formula set forth in Article IV.A
of the Certificate of Amendment. The Company agrees that, for purposes of such
conversion, the Conversion Price shall be the amount obtained by multiplying
Seventy-Five (75%) Percent by the average of the Closing Bid Prices for the
Company's Common Stock for the five (5) consecutive trading days ending on the
trading day immediately preceding the date of this Agreement. The Initial
Investors and the Company agree to effect the conversion in accordance with the
procedures set forth in Article IV.B of the Certificate of Amendment.
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2. Restriction on Conversion of Remaining Preferred Stock. The Initial
Investors agree that, for a period of six (6) months following the date hereof
(the "Lock Up Period"), the Initial Investors shall not convert their remaining
shares of Preferred Stock ("Remaining Preferred Stock") without the prior
written consent of the Company, which consent may be withheld at the sole
discretion of the Company. Upon expiration of the Lock Up Period, the Initial
Investors shall be entitled, at any time or from time to time, at their
discretion, to convert the Remaining Preferred Stock into shares of Common Stock
in accordance with the terms of the Certificate of Amendment.
3. Adjustment in Fixed Conversion Price. The Fixed Conversion Price
applicable to the Remaining Preferred Stock shall be reset to equal $2.25.
4. Adjustment in Warrant Exercise Price. The Company hereby agrees to
reduce the Exercise Price of the Warrants to $2.25. Such reduction may be
evidenced by a future amendment to the Warrants.
5. Extension of the Maturity Date. The Company hereby agrees to extend
the Maturity Date for the mandatory conversion of the Remaining Preferred Stock
under Section IV.D of the Certificate of Amendment from May 8, 1999 to May 8,
2001.
6. Adjustment in Number of Notice Days Required for an Optional
Redemption. The Initial Investors and the Company hereby agree that the minimum
number of days required for prior written notice of an Optional Redemption
Notice pursuant to Section VIII.D of the Certificate of Amendment shall be
reduced from twenty (20) business days to ten (10) business days.
7. (a) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed in the State of New York. The Company and the Initial
Investors irrevocably consents to the jurisdiction of the United States federal
courts and the state courts located in the City of New York in the State of New
York in any suit or proceeding based on or arising under this Agreement and
irrevocably agrees that all claims in respect of such suit or proceeding may be
determined in such courts. The Company and the Initial Investors irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit or
proceeding. Service of process mailed by first class mail shall be deemed in
every respect effective service of process upon the recipient in any such suit
or proceeding. Nothing herein shall affect the right of the Company or the
Initial Investor to serve process in any other manner permitted by law. The
Company and each Initial Investor agree that a final non-appealable judgment in
any such suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful manner.
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(c) Except as expressly provided herein, all of the terms and
provisions of the Certificate of Designation shall continue in full force and
effect and nothing contained herein shall be deemed to constitute a waiver by
the Initial Investors of any of their rights under the Certificate of Amendment,
the Stock Purchase Warrant, the Securities Purchase Agreement, the Registration
Rights Agreement or any other agreement among the Company and the Initial
Investors.
(d) This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto.
(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
AMBI INC.
By: /s/ Frederic D. Price
Name: Frederic D. Price
Title:
INITIAL INVESTORS:
C.C. INVESTMENTS, LDC OLYMPUS SECURITIES, LTD.
By: /s/ John D. Ziegelman By: /s/ N. Aggarwal
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Name: John D. Ziegelman Name: N. Aggarwal
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Title: Title:
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NELSON PARTNERS LAKESHORE INTERNATIONAL, LTD.
By: /s/ N. Aggarwal By: /s/ John D. Brandenborg
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Name: N. Aggarwal Name: John D. Brandenborg
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Title: Title:
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