Exhibit 10.1
FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (this
“ Agreement ”) is entered into as of
October 1, 2009, between Vitesse Semiconductor Corporation, a
Delaware corporation (the “ Issuer ”) and the
beneficial owners of the 1.50% Convertible Subordinated Debentures
due 2024 (the “ Notes ”) signatories hereto (the
“ Forbearing Holders ”). Capitalized terms
used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Indenture governing the Notes, dated
as of September 22, 2004, between the Issuer and U.S. Bank
National Association (the “ Trustee ”) (as
amended and supplemented, or otherwise modified, the “
Indenture ”).
RECITALS
WHEREAS, pursuant to the Indenture,
the Issuer has issued Notes in principal amount of $96,700,000 and
the Forbearing Holders hold Notes in the principal amount listed
below each Forbearing Holder’s name on the signature
pages hereto (the “ Forbearing Notes
”).
WHEREAS, 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 Issuer to repurchase 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 Issuer’s failure to mail a Repurchase Event
Notice pursuant to Section 11.3 of the Indenture and a
Repurchase Event Purchase Notice pursuant to Section 11.4 of
the Indenture or to file a Schedule TO pursuant to
Section 11.7 of the Indenture (the “ Existing
Defaults ”).
WHEREAS, the Forbearing Holders
assert (and the Issuer disputes) that there will be an Event of
Default under Section 4.1(c) of the Indenture if the
Issuer 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
“ Put Repurchase Default ” and together with the
Existing Defaults, the “ Specified Defaults
”).
WHEREAS, the Issuer has requested
that the Forbearing Holders agree to forbear, and the Forbearing
Holders have agreed to forbear, from exercising their rights and
remedies with respect to the Specified Defaults 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
Issuer hereby acknowledges and agrees, with respect to the
Forbearing Holders only, that:
1
(a)
On the Put Repurchase Date, the
Issuer will be indebted and liable to the Forbearing Holders
pursuant to Section 11.1(a) of the Indenture in an amount
equal to 113.76% of the principal amount of the Forbearing Notes,
together with any accrued and unpaid interest and any Additional
Amounts (the “ Repurchase Price ”); for the
avoidance of doubt, until such time as the Forbearing Holders
receive the Repurchase Price, the Forbearing Holders will continue
to be the beneficial owners of the Forbearing Notes with all rights
and remedies under the Indenture, and shall have the right to
direct the Trustee as required pursuant to Section 7 herein so
long as any such Forbearing Holder has not sold or otherwise
transferred its beneficial ownership of their respective Forbearing
Notes;
(b)
the obligations of the Issuer to the
Forbearing Holders under the Indenture and hereunder constitute
valid and subsisting obligations of the Issuer to the Forbearing
Holders that are not subject to any credits, offsets, defenses,
claims, counterclaims or adjustments of any kind; and
(c)
the Specified Defaults have not
previously been waived by the Forbearing Holders.
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 Issuer fails to comply
with the covenants contained in Section 6 of this Agreement,
(b) the date of the commencement by the Issuer of a voluntary
bankruptcy, insolvency, reorganization or other similar proceeding
or the commencement of any similar non-voluntary case or proceeding
with respect to the Issuer, and (c) 12:00 noon (EST) on
October 9, 2009 (the “ Forbearance Period
”), the Forbearing Holders hereby agree to forbear from
exercising any and all rights or remedies available under the
Indenture or applicable law as a result of the Specified Defaults,
but only to the extent that such rights and remedies arise solely
as a result of the occurrence and continuation of the Specified
Defaults; provided , however , that in each case, the
Forbearing Holders shall be free to exercise any or all rights and
remedies arising on account of any Specified Default at the end of
the Forbearance Period; provided further , that
except as expressly set forth herein, this Agreement shall not
operate as a waiver, amendment or modification of the
Indenture.
3
No Waiver o
