EXHIBIT 99.1
MODIFICATION AGREEMENT, dated as of August 5, 2004 (this
"Modification Agreement"), by and among Sipex Corporation, a Delaware
corporation (the "Company") (of the First Part); and Rodfre Lending LLC, a
Delaware limited liability company ("Rodfre Lending"), and Rodfre Holding LLC, a
Delaware limited liability company ("Rodfre Holding") (of the Second Part).
WHEREAS, pursuant to a statutory merger, the Company has changed its
jurisdiction of incorporation from Massachusetts to Delaware, and all references
to the Company herein shall mean the successor Delaware corporation and its
predecessor Massachusetts corporation;
WHEREAS, pursuant to a Securities Purchase Agreement dated as of
September 27, 2002 between the Company and S&F Financial Holdings Inc., a
Canadian corporation ("S&F") (the "Purchase Agreement"), the Company has sold to
S&F , and S&F has purchased from the Company a warrant, convertible into nine
hundred thousand (900,000) shares of Common Stock at a conversion price of
$2.9458 per share (the "Warrant"). Each capitalized term used and not otherwise
defined herein shall have the meaning assigned to such term in the Purchase
Agreement or, if not defined therein, in the Warrant;
WHEREAS, effective as of July 21, 2003, S&F has transferred to
Alonim Investments Inc. ("Alonim") and Alonim has assumed all of the assets and
liabilities of S&F including, but not limited to the Warrant, and S&F was
subsequently dissolved effective as of July 24, 2003;
WHEREAS, effective as of July 21, 2003, Alonim has transferred the
Warrant to Future Electronics Inc., a Canadian corporation ("Future") and Future
thereafter transferred the Warrant to Rodfre Investments Inc., a Canadian
corporation, and Rodfre Investments thereafter transferred the Warrant to Rodfre
Holding;
WHEREAS, Rodfre Holding is the successor and assignee of all rights
and obligations of S&F Financial Holdings Inc. in respect of the Warrant;
WHEREAS, pursuant to the Registration and Standstill Agreement dated
as of June 20, 2003 (the "Registration and Standstill Agreement") among the
Company, of the first part, and Alonim, S&F, and Future (collectively, the
"Future Entities"), of the second part, the Company has granted certain
registration rights and the Future Entities have agreed to certain restrictions
on the acquisition and disposition of Common Stock;
WHEREAS, pursuant to the Voting Agreement dated as of June 20, 2003
(the "Voting Agreement") between the Company and Alonim, Alonim has agreed to
certain restrictions on the voting of the Company's Common Stock;
WHEREAS, effective as of July 21, 2003, Alonim has transferred to
Rodfre Investments, and Rodfre Investments thereafter transferred to Rodfre
Holding, all of the six million eighty five thousand two hundred (6,085,200)
shares of Common Stock, which Alonim held prior to such transfer;
WHEREAS, Alonim has also transferred to Rodfre Investments, and
Rodfre Investments thereafter transferred unto Rodfre Holding all of the two
million sixty four thousand (2,064,000) shares of Common Stock that it acquired
after July 21, 2003;
WHEREAS, Future, Rodfre Lending, Rodfre Holding and Rodfre
Investments and each of them are wholly owned subsidiaries of the Purchaser;
WHEREAS, the Company has acknowledged and consented, to the extent
that the same may be required, to the foregoing transfers of the shares of
Common Stock, and the Warrant, and all parties, and the Intervenors (as defined
below), acknowledge that the Purchase Agreement, the Registration and Standstill
Agreement and the Voting Agreement are binding upon Rodfre Holding and Rodfre
Lending and that they shall be deemed to be parties to the same, as if
originally named therein;
WHEREAS, on December 23, 2003, the parties hereto and the
Intervenors entered into a Modification Agreement, which, amongst other things,
amended the Registration and Standstill Agreement (the "First Modification
Agreement");
WHEREAS, subsequent to the Modification Agreement, on or about
February 18, 2004, Rodfre Lending converted the 2002 Note and the 2003 Note into
respectively one million, six hundred thousand (1,600,000) and three million
(3,000,000) shares of Common Stock.
WHEREAS, the Company, the Intervenors, Rodfre Holding, and Rodfre
Lending desire to further modify the terms and conditions of the Registration
and Standstill Agreement as set forth hereafter;
WHEREAS, the Company and Rodfre Holding desire for the Holder of
the Warrant to exercise the Warrant immediately upon closing of the transactions
contemplated herein; and
WHEREAS, except as previously amended or provided for or
contemplated herein, the Company, Rodfre Holding, Rodfre Lending and the
Intervenors, desire to preserve in full force and effect the agreements set
forth in the Registration and Standstill Agreement and the Voting Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Incorporation of Recitals. The Recitals of this Agreement
shall be deemed to constitute a part hereof;
Section 2. Exercise of Warrant. Subject to the terms and conditions
hereof, the Warrant shall be exercised immediately upon closing of the instant
transactions. Concurrently hereto, Rodfre Holding does hereby tender to the
Company, and the Company does hereby acknowledge receiving from Rodfre Holding
the Notice of Exercise of the Warrant, together with the payment by Rodfre
Holding of the sum of two million, six hundred and fifty-one thousand, two
hundred and twenty dollars ($2,651,220.00), which is nine hundred thousand
(900,000) times the
conversion price ($2.9458) being the consideration paid for the issuance of said
nine hundred thousand (900,000) shares of Common Stock. The Company shall
promptly thereafter issue to Rodfre Holding, a share certificate or share
certificates representing 900,000 new shares of Common Stock.
Section 3. Amendments to Registration and Standstill Agreement.
(i) Section 2 (a) (i) of the Registration and Standstill Agreement
shall be amended to read as follows:
"acquire (by purchase or otherwise), offer to acquire, or agree to
acquire, directly or indirectly, any shares of Company Voting Stock or
Derivative Securities if the effect of such acquisition would be to cause
Alonim and its Affiliates to become, in the aggregate, the Beneficial
Owner of either: (A) on a Fully Diluted Basis, more than forty-two and a
half percent (42.5%) of the Company Voting Stock (the "Standstill
Percentage"); or (B) on a non-diluted basis, more than forty-nine percent
(49%) of the outstanding Company Voting Stock (the "Second Standstill
Percentage").
(ii) Section 2 (a) (ii) of the Registration and Standstill Agreement is
hereby amended to read as follows:
"request that the Company or any of its representatives, directly or
indirectly, amend or waive any provision of this Section 2.
Notwithstanding the foregoing, Alonim and its Affiliates shall not be in
breach hereof, nor shall they be obligated to dispose of Company Voting
Stock or Derivative Securities if the aggregate percentage of Company
Voting Stock which Alonim and its Affiliates are the Beneficial Owner of:
(A) on a Fully Diluted Basis, exceeds the Standstill Percentage; or (B) on
a non-diluted basis, exceeds the Second Standstill Percentage; in each
case, solely as a result of (1) the Company engaging in a stock repurchase
of shares of its Company Voting Stock or (2) the lapsing of subscription
rights pursuant to Derivative Securities not Beneficially Owned by Alonim
and its Affiliates."
(iii) Section 4 (a) (ii) of the Registration and Standstill Agreement is
hereby amended to read as follows:
"from time to time, upon demand from Alonim, prepare and file with the SEC
a registration statement (each such registration statement, an "Additional
Registration Statement," and "Registration Statement" shall refer to the
Initial Registration Statement, any Additional Registration Statement or
any registration statement filed pursuant to Section 4(b) hereof), subject
to receipt of the information called for by the questionnaire attached to
this Agreement as Exhibit A from Alonim, after prompt written request from
the Company to Alonim to provide such information. Such Additional
Registration Statement(s) shall be prepared to enable the resale by Alonim
or its Affiliates, from time to time, on the automated quotation system of
the Nasdaq National Market (or any other exchange or market on which the
Common Stock is then listed or traded), or in privately negotiated
transactions, without
restriction other than those expressly set forth herein, of the other
shares of Common Stock now or in the future held by Alonim or any of its
Affiliates within the Standstill Percentage (on a Fully Diluted Basis) and
within the Second Standstill Percentage (on a non-diluted basis) (the
"Affiliate Shares"); provided, that any such demand for registration
pursuant to this subsection 4(a)(ii) by Alonim shall be for a minimum of
2,000,000 shares;"
(iv) Section 5 (b) of the Registration and Standstill Agreement is hereby
amended to read as follows:
"During the term of this Agreement, the Company shall not take any action
in such a manner that would cause Alonim and its Affiliates' aggregate
Beneficial Ownership of Company Voting Stock; (i) on a Fully Diluted
Basis, to exceed the Standstill Percentage; or (ii) on a non-diluted
basis, to exceed the Second Standstill Percentage."
Section 4. Covenants. Each party agrees to cooperate with each other
and their respective officers, employees, attorneys, accountants and other
agents, and, generally, do such other acts and things in good faith as may be
reasonable or appropriate to timely effectuate the intents and purposes of this
Modification Agreement and the consummation of the transactions contemplated
hereby, including, but not limited to, execution of any additional document,
contract, deed, or other instrument, consistent with the terms and conditions
hereof, necessary or useful to give effect to the transactions contemplated
hereby.
Section 5. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
Section 6. Captions. The captions and paragraph headings of this
Modification Agreement are solely for the convenience of reference and shall not
affect its interpretation.
Section 7. Counterparts. This Modification Agreement may be signed
in one or more counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
Section 8. Effect of Modification Agreement. Except as expressly
amended or as contemplated by this Modification Agreement, the Warrant, the
Registration and Standstill Agreement and the Voting Agreement shall remain in
full force and effect as the same were in effect immediately prior to the
effectiveness of this Modification Agreement. All references in the Registration
and Standstill Agreement to "this Agreement" shall be deemed to refer to the
Registration and Standstill Agreement as modified by this Modification
Agreement.
Section 9. Successors and Assigns, Intervenors. This Modification
Agreement, as well as all other agreements and instruments ancillary hereto,
shall avail in favor of and be binding upon the parties hereto and upon the
Intervenors, and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Modification
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
SIPEX CORPORATION
By: /s/ Walid Maghribi
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Name: Walid Maghribi
Title: President and Chief Executive Officer
RODFRE HOLDING LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
RODFRE LENDING LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
INTERVENTION
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, we, Alonim Investments Inc., a Canadian corporation,
and Future Electronics Inc., a New Brunswick corporation, (herein and in the
Agreement referred to as the "Intervenors") do hereby acknowledge, concur in and
consent to the transactions contemplated in this Modification Agreement, for all
intents and purposes, and agree to be bound by the terms and conditions of this
Modification Agreement as if we were each parties to this Modification Agreement
and to cause our subsidiaries and affiliates to be similarly bound if necessary
or useful to give effect to the transactions contemplated hereby.
IN WITNESS WHEREOF, the Intervenors have executed this Intervention to the
Modification Agreement, through their respective authorized officers as of the
day and year first above written.
FUTURE ELECTRONICS INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Attorney in Fact
ALONIM INVESTMENTS INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Attorney in Fact
