UNITED STATES
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): August 1, 2008
Dot Hill Systems Corp.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation)
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1-13317
(Commission File Number)
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13-3460176
(I.R.S. Employer
Identification No.) |
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2200 Faraday Avenue, Suite 100, Carlsbad, CA
(Address of principal executive offices)
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92008
(Zip Code) |
Registrant’s telephone number, including area code: (760) 931-5500
Not applicable.
(Former name or former address, if changed since last report.)
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 (see General Instruction
A.2. below):
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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(c)) |
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement.
On August 1, 2008, Dot Hill entered into a credit agreement with Silicon Valley Bank to provide for
a revolving credit facility for cash advances and letters of credit of up to an aggregate of $30
million based upon an advance rate of 85% of eligible accounts receivable. Borrowings under the
credit facility bear interest at the prime rate and are secured by substantially all of Dot Hill’s
accounts receivable, deposit and securities accounts. The agreement provides for a negative pledge
on Dot Hill’s inventory and intellectual property, subject to certain exceptions, and contains
usual and customary covenants for an arrangement of its type, including an obligation of Dot Hill
to maintain at all times a net worth of $55 million (subject to certain increases). The agreement
also includes provisions to increase the financing facility by $20 million subject to Dot Hill
meeting certain requirements, including $40 million in borrowing base for the immediately preceding
90 days, and Silicon Valley Bank locating a lender willing to finance the additional facility. In
addition, if Dot Hill’s cash and cash equivalents net of the total amount outstanding under the
credit facility fall below $20 million (measured on a rolling three-month basis), the interest rate
will increase to prime plus 1% and additional restrictions will apply. The credit agreement is
attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On August 4, 2008, Dot Hill terminated its credit agreement dated July 1, 2004, as amended, with
Wells Fargo Bank, National Association, effective as of August 6, 2008. The material terms and
conditions of the credit agreement are described in Dot Hill’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2007. The credit agreement was terminated as it was no longer
necessary given the establishment of Dot Hill’s revolving credit facility with Silicon Valley Bank.
There were no early termination penalties associated with the termination of the credit agreement
and no outstanding borrowings under the credit line established by the credit agreement at the time
of its termination.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Description |
10.1
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Loan and Security Agreement dated August 1, 2008 by and between
Dot Hill Systems Corp. and Silicon Valley Bank. |