Exhibit 10.2
FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (this
“ Agreement ”) is entered into as of
October 1, 2009, between Vitesse Semiconductor Corporation, a
Delaware corporation (the “ Borrower ”) and
Whitebox VSC, Ltd., as agent (the “ Agent ”)
under that certain Loan Agreement, dated as of August 23, 2007
(the “ Loan Agreement ”), between the Borrower,
the Agent, and the lenders from time to time parties thereto (the
“ Lenders ”). Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed
to such terms in the Loan Agreement.
RECITALS
WHEREAS, the Borrower and U.S. Bank
National Association (the “ Trustee ”) are
parties to that certain Indenture, dated as of September 22,
2004 (the “ Indenture ”), which governs the
Borrower’s 1.50% Convertible Subordinated Debentures due 2024
(the “ Notes ”).
WHEREAS, pursuant to the Indenture,
the Borrower has issued Notes in principal amount of $96,700,000
and certain holders of Notes (the “ Forbearing Holders
”) have exercised, or have indicated that they intend to
exercise, their rights pursuant to Section 11.1 of the
Indenture to require the Borrower to repurchase their Notes (the
“ Forbearing Notes ”) on October 1, 2009
(the “ Put Repurchase Date ”).
WHEREAS, a default has occurred and
is continuing under Section 4.1(d) of the Indenture as a
result of the Borrower’s failure to mail a Repurchase Event
Notice (as defined in the Indenture) pursuant to Section 11.3
of the Indenture and a Repurchase Event Purchase Notice (as defined
in the Indenture) pursuant to Section 11.4 of the Indenture or
to file a Schedule TO pursuant to Section 11.7 of the
Indenture (the “ Notes Existing Defaults
”).
WHEREAS, the Forbearing Holders
assert (and the Borrower disputes) that there will be an event of
default under Section 4.1(c) of the Indenture if the
Borrower fails to repurchase the Forbearing Notes from the
Forbearing Holders on the Put Repurchase Date at a purchase price
equal to 113.76% of the principal amount of the Forbearing Notes
(the “ Notes Put Repurchase Default ” and
together with the Notes Existing Defaults, the “ Notes
Specified Defaults ”).
WHEREAS, the Borrower and the
Forbearing Holders have entered into Forbearance Agreements dated
as of October 1, 2009 in substantially the form previously
provided by the Borrower to the Agent (each, an “
Indenture Forbearance Agreement ”) pursuant to which,
the Forbearing Holders have agreed to forbear from exercising their
rights and remedies with respect to the Notes Specified Defaults
for a certain limited period, under the terms and conditions
specified therein.
WHEREAS, if the Notes Put Repurchase
Default occurs it will result in an Event of Default under
Section 7.1(i) of the Loan Agreement and may also result
in an Event of Default under Sections 7.1(d) and (e) of
the Loan Agreement (the “ Loan Specified Defaults
”).
1
WHEREAS, the Borrower has requested
that the Lenders agree to forbear, and the Lenders have agreed to
forbear, from exercising any rights and remedies that may arise
under the Loan Agreement in the event that the Loan Specified
Defaults occur and are continuing, for the period, and on the terms
and conditions, specified herein.
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1
Acknowledgement and
Reaffirmation . The
Borrower hereby acknowledges and agrees, that:
(a)
(i) the Borrower is indebted
and liable to the Lenders in the aggregate principal amount of
$30,000,000 in respect of the Term Loans, plus interest, fees,
expenses (including but not limited to attorneys’
advisors’ and consultants’ fees that are reimbursable
under the Loan Agreement), charges and all other obligations
incurred in connection therewith as provided in the Loan Agreement,
and (ii) such amounts outstanding under the Loan Agreement
constitute valid and subsisting obligations of the Borrower to the
Agent and the Lenders that are not subject to any credits, offsets,
defenses, claims, counterclaims or adjustments of any kind.
The Borrower and the Guarantors (the “ Loan Parties
”) hereby (i) acknowledge and affirm their obligations
under the respective Loan Documents to which they are party,
(ii) acknowledge and affirm the liens created and granted by
the Loan Parties in the Loan Documents and (iii) agree that
this Agreement shall in no manner adversely affect or impair such
obligations and/or liens; and
(b)
the Loan Specified Defaults have not
previously been waived by the Lenders.
2
Forbearance
. Subject to the terms and
conditions set forth herein, from the Effective Date through the
earlier of (a) the date on which the Loan Parties fail to
comply with the covenants contained in Section 6 of this
Agreement, (b) the date on which the “Forbearance
Period” under and as defined in the Indenture Forbearance
Agre
