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): July 21, 2005
SIPEX CORPORATION
(Exact name of Registrant as specified in its charter)
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| Delaware
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000-27892
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04-6135748 |
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| (State of incorporation)
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(Commission file number)
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(IRS. Employer Identification No.) |
233 South Hillview Drive
Milpitas, CA 95053
(Address of principal executive offices)
(408) 934-7500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2
(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4
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TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On
July 21, 2005, Sipex Corporation (the “Company”) entered into a Loan and Security
Agreement, with Silicon Valley Bank. The Loan and Security Agreement provides
for a secured revolving line of credit with an aggregate principal amount of up to $5,000,000,
which may be used to borrow revolving loans or to issue lines of credit on the Company’s behalf.
Company has granted to Silicon Valley Bank a security interest in all presently existing and later
acquired collateral, including but not limited to goods, equipment, inventory, contract rights, and
financial assets, in order to secure the obligations and duties of the Loan and Security Agreement.
Advances accrue interest on the outstanding principal balance at an annual rate equal to Silicon
Valley Bank’s prime rate at the time the funds are drawn. The Loan and Security Agreement matures
on July 20, 2006, at which time all outstanding advances must be repaid, and all outstanding letters
of credit must be cash collateralized.
The Loan and Security Agreement requires the Company to comply with a minimum cash-flow ratio
and retain a minimum net worth of at least $50,000,000 plus fifty percent (50%) of quarterly
positive net income. The Loan and Security Agreement contains additional affirmative
covenants, including, among others, covenants regarding the payment of taxes and other obligations,
maintenance of insurance, reporting requirements and compliance with applicable laws and
regulations. Further, the Loan and Security Agreement contains negative covenants limiting the
Company’s ability to dispose of assets, change its business plans, be acquired or beneficially
owned, merge or consolidate, incur indebtedness, grant liens, make investments, pay dividends,
repurchase stock, and pay subordinated debt.
The Loan and Security Agreement contains events of default that include, among others,
non-payment of principal, interest or fees, inaccuracy of representations and warranties,
violations of covenants, bankruptcy and insolvency events, any material adverse change, material
judgments, cross defaults to certain other indebtedness and seizure of assets. The occurrence of
an event of default will increase the applicable rate of interest by 5.0 % and would, unless waived
by Silicon Valley Bank, result in the immediate payment of all of the Company’s obligations under
the Loan and Security Agreement.
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Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01, “Entry into a Material Definitive Agreement,”
is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
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99.1
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Loan and Security Agreement between Sipex Corporation and
Silicon Valley Bank dated July 21, 2005. |
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