Exhibit 10.2
SECOND FORBEARANCE AGREEMENT
THIS SECOND FORBEARANCE AGREEMENT
(this “ Agreement ”) is entered into as of
October 9, 2009, among Vitesse Semiconductor Corporation, a
Delaware corporation (the “ Borrower ”), the
other Loan Parties (as defined below), and Whitebox VSC, Ltd., a
limited partnership organized under the law of the British Virgin
Islands (the “ Agent ”). Capitalized terms
used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Loan Agreement dated as of
August 23, 2007, by and among the lenders from time to time
signatory thereto (collectively the “ Lenders ”
and individually each a “ Lender ”), the
Borrower, and the Agent, as one of the Lenders and as agent for the
Lenders.
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
”) exercised their rights pursuant to Section 11.1 of
the Indenture and required 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 an event of default has
occurred and is continuing under Section 4.1(c) of the
Indenture because of the Borrower’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 “ 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 a Forbearance Agreement dated
as of October 9, 2009 in substantially the form previously
provided by the Borrower to the Agent (the “ 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, the Notes Put Repurchase
Default may 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
1
7.1(d) and (e) of the Loan Agreement
(the “ Loan Specified Defaults ”) (it being
expressly understood that the Borrower makes no admissions
hereunder to any Event of Default under the Loan
Agreement).
WHEREAS, the Borrower has requested
that the Lenders agree to forbear, and the Lenders have agreed to
forbear, from exercising their rights and remedies with respect to
any Loan Specified Defaults during the Forbearance Period (as
defined below) should any Loan Specified Default be determined to
have actually occurred, on the terms and conditions and in
consideration for the terms set forth below.
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 (collectively, 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 Lenders do not waive any of the
Loan 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 Loan Parties fail to
comply with the covenants contained in Section 7 of this
Agreement, (b) the date on which the “Forbearance
Period” under and as defined in the Indenture Forbearance
Agreement applicable to them ends, (c) the date of the
commencement by the Borrower 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
Borrower, and (d) 12:00 noon (EST) on October 16, 2009
(the “ Forbearance Period ”), the Lenders hereby
agree to forbear from exercising any and all rights or remedies
available under the Loan Agreement or applicable law as a result of
the Loan Specified Defaults, but only to the extent that
such
