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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 29, 2008
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SPIRE CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-12742 04-2457335
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
One Patriots Park, Bedford, Massachusetts 01730-2396
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(Address of Principal Executive Offices) (Zip Code)
(781) 275-6000
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(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 (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
MANUFACTURING AGREEMENT WITH PRINCIPIA LIGHTWORKS, INC.
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On August 29, 2008, Spire Semiconductor, LLC ("Spire Semiconductor"), a
wholly-owned subsidiary of Spire Corporation (the "Company" or "Spire"),
delivered to Principia Lightworks, Inc. ("Principia") a Notice of Breach and
Pending Termination (the "Notice") of a certain Manufacturing Agreement, dated
August 29, 2006, by and between Spire Semiconductor and Principia (the
"Manufacturing Agreement").
Under the terms of the Manufacturing Agreement, for a period commencing in
the first quarter of 2007 and continuing until May 31, 2012, Spire Semiconductor
was to be the exclusive supplier to Principia of III/V and II/VI semiconductor
wafers to be used by Principia to fabricate electron beam-pumped, vertical
cavity, surface emitting lasers (eVCSEL). Under the terms of the Manufacturing
Agreement, Principia made an up-front payment for nonrecurring engineering and
facility access costs and, in addition was required to make monthly facility
availability payments throughout the term of the agreement.
As a result of Principia's failure to make recent monthly facility
availability payments totaling $300,000, Spire Semiconductor delivered the
Notice, notifying Principia that if Principia fails to make such past due
payments, as well as the payment due for the month of September, by September
29, 2008, then Spire Semiconductor is electing to terminate the Manufacturing
Agreement, effective September 30, 2008. In accordance with the terms of the
Manufacturing Agreement, upon termination of the Agreement, in addition to the
past due payments, Principia would also owe Spire Semiconductor all unpaid
future monthly facility availability payments, totaling $3.15 million.
In the event Principia fails to adequately cure the default, Spire
Semiconductor intends to take title to up to 67,500 shares of Principia common
stock in its possession pledged to Spire Semiconductor to secure Principia's
first eighteen facility payments (of which Principia has not paid $300,000) as
required under the Manufacturing Agreement. The remaining facility payments are
unsecured. At the time the Manufacturing Agreement was executed, these shares
were intended to have an aggregate market value of $1,350,000; however, because
Principia is a private company, the current actual value of such shares is
unknown at this time.
At the time of the agreement, Spire Semiconductor scaled-up its existing
metal organic chemical vapor deposition (MOCVD) capacity and related processing
facilities to satisfy Principia's requirements. At that time, the Company
anticipated that the up-front payment plus the monthly payments would be
sufficient to meet its capital requirements under the agreement. In exchange,
Spire Semiconductor granted Principia first priority with respect to the
expanded manufacturing capacity.
Termination of the Manufacturing Agreement will disencumber manufacturing
capacity allowing Spire Semiconductor to freely enter high volume supply
contracts with other customers for alternative markets such as solar
concentrator cells. Spire Semiconductor continues to discuss alternative
business arrangements to further develop Principia's laser technology.
DEVELOPMENT, MANUFACTURING AND SALES CONSORTIUM AGREEMENT WITH NISSHINBO
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INDUSTRIES, INC.
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On September 1, 2008, Nisshinbo Industries, Inc ("Nisshinbo") served the
Company a letter stating its intention to terminate the Development,
Manufacturing, and Sales Consortium Agreement (the "Agreement") entered into
between the Company and Nisshinbo on May 16, 2005. Pursuant to Article
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12.1 of the Agreement, Nisshinbo is providing its 180 day prior notice to
terminate the Agreement effective as of February 28, 2009.
The Company entered into the 10-year Agreement on May 16, 2005 with
Nisshinbo, headquartered in Tokyo, Japan, for the development, manufacturing,
and sales of solar photovoltaic module manufacturing equipment. Under the terms
of the Agreement, Nisshinbo purchased a permanent license to manufacture and
sell Spire module manufacturing equipment for an undisclosed amount and
additional royalties over the ten-year term. Spire and Nisshinbo also agreed to
pursue joint research and development, and product improvement activities.
Worldwide marketing and sales were to be a joint effort with Pacific Rim
emphasis by Nisshinbo and Western Hemisphere emphasis by Spire. Currently
Nisshinbo manufactures laminators for the Company and the Company receives
royalties based upon Nisshinbo sales to third parties.
Under the terms of the Agreement, early termination by Nisshinbo for
convenience entitles Spire to a termination penalty payment of approximately
$5.8 million. Upon all payments being satisfied, Spire shall grant Nisshinbo a
perpetual, royalty-free, non-exclusive license to Spire's existing solar
photovoltaic module manufacturing equipment methods of engineering, designing,
manufacturing and other related methods that were in effect when the Company
entered into the Agreement. The Company and Nisshinbo are in discussions on
concluding the Agreement, including alternative manufacturing arrangements and
technology license agreements concerning technology developed under the
Agreement.
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SIGNATURE
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 hereunto duly authorized.
SPIRE CORPORATION
Date: September 05, 2008 By: /s/ Christian Dufresne
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Christian Dufresne
Chief Financial Officer and Treasurer
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