Exhibit 10.2
FORM OF
FORBEARANCE AGREEMENT
THIS FORBEARANCE AGREEMENT (this
“ Agreement ”) is entered into as of
October 18, 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
exercised their rights pursuant to Section 11.1 of the
Indenture and required 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 an Event of Default has
occurred and is continuing under Section 4.1(c) of the
Indenture because of the Issuer’s failure 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 such Forbearing Notes (the “ Put Repurchase Default
” and together with the Existing Defaults, the “
Specified Defaults ”).
WHEREAS, certain of the Forbearing
Holders and the Issuer have previously entered into a Forbearance
Agreement, dated as of October 1, 2009, pursuant to which,
among other things, such Forbearance Holders agreed to forbear from
exercising any rights or remedies in connection with the Specified
defaults (as defined therein) on the terms and conditions contained
therein until October 9, 2009.
WHEREAS, certain of the Forbearing
Holders and the Issuer have previously entered into a Forbearance
Agreement, dated as of October 9, 2009, pursuant to which,
among other things, such Forbearance Holders agreed to forbear from
exercising any rights or remedies in connection
with the Specified defaults (as defined therein)
on the terms and conditions contained therein until
October 16, 2009.
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.
WHEREAS, on October 14, 2009,
the Issuer delivered an irrevocable notice (the “ Issuer
Notice ”) to the Forbearing Holders pursuant to which the
Issuer agreed that through October 16, 2009 it would
exclusively pursue a transaction in good faith with the Forbearing
Holders pursuant to which the Issuer will exchange the Forbearing
Notes for a combination of cash and new securities (the “
Noteholder Transaction ”).
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:
(a)
The Issuer is 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 and Forbearance Interest (the “
Repurchase Price ”). The Issuer acknowledges and
agrees that notwithstanding the fact that the Forbearing Holders
exercised their rights pursuant to Section 11.1 of the
Indenture as set forth above, until such time as the Forbearing
Holders receive the Repurchase Price, the Forbearing Holders will
continue to be the beneficial owner of the Forbearing Notes with
all rights and remedies under the Indenture;
(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 Forbearing Holders do not waive
any of the Specified Defaults.
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 7 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) the termination of that
certain Conversion Agreement, dated as of the date hereof, among
the Issuer and the Forbearing Holders (the “ Forbearance
Period ”), the Forbearing Holders hereby agree to forbear
from exercising any and all of their rights or remedies available
under the
Indenture or applicable law as a result of any
Defaults or Events of 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 Default or
Event of 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 of Rights or
Remedies . The
Forbearing Holders and the Issuer agree that, other than as
expressly set forth herein, nothing in this Agreement, or the
performance by the Forbearing Holders of their obligations
hereunder, constitutes or shall be deemed to constitute a waiver of
any of the rights or remedies available to the Forbearing Holders
under the Indenture or any applicable law, all of which are hereby
reserved.
4
Representations and Warranties of
the Issuer . The
Issuer hereby represents and warrants to the Forbearing Holders
that:
(a)
No Default or Event of Default
exists (or shall exist), to the knowledge of the Issuer, as of the
date hereof (other than the Specified Defaults); and
(b)
The execution, delivery and performance by the Issuer of this
Agreement has been duly authorized by all necessary corporate or
other organizational action, and do not and will not:
(i) contravene the terms of any of such Person’s
organizational documents; (ii) conflict with or result in any
breach or contravention of, or result in or req
