UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): May 23, 2006
VITESSE SEMICONDUCTOR CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-31614 77-0138960
(Commission File Number) (IRS Employer Identification No.)
741 Calle Plano, Camarillo, California 93012
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 388-3700
Not applicable
(Former name or former address, if changed since last report)
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))
Item 1.01 Entry into a Material Agreement
As previously disclosed, Vitesse Semiconductor Corporation (the
"Company") is a party to the Second Amended and Restated Loan and Security
Agreement, dated March 2, 2006 (the "Loan Agreement"), among Silicon Valley Bank
(the "Bank"), the Company and Vitesse International, Inc. The Bank has notified
the Company that certain Events of Default under the Loan Agreement have
occurred.
On May 23, 2006, the parties to the Loan Agreement executed a
Forbearance Agreement, dated as of May 19, 2006 (the "Forbearance Agreement").
Under the terms of the Forbearance Agreement, among other things:
(i) the Bank has agreed to forbear from exercising its rights
and remedies with respect to the Existing Events of Default (as defined
in the Forbearance Agreement) until the earlier of June 19, 2006 and
the occurrence of any Additional Default under the Loan Agreement after
the entering into of the Forbearance Agreement or a breach of the
Forbearance Agreement by the Company;
(ii) the Company will pay interest on the outstanding
Obligations under the Loan Agreement at the default interest rate
provided in the Loan Agreement;
(iii) the Company has agreed to limit its cash payments
through June 30, 2006 or maintain a cash bank balance of not less than
$5 million;
(iv) the agreement by which the Bank agreed to acquire
accounts receivable from the Company is terminated;
(v) the Company shall provide the Bank with evidence of a term
sheet for a new debt or equity financing by June 2, 2006 that would
repay all obligations due to the Bank and collateralize all outstanding
letters of credit under the Loan Agreement. If the definitive documents
for the new financing have been executed but the transaction has not
closed by June 19, 2006, the forbearance period may be extended to June
30, 2006 upon payment of a fee and satisfaction of other stated
conditions; and
(vi) the Company will pay the Bank $5 million to be applied to
the principal amount outstanding under the Loan Agreement and a fee of
$94,351.
SIGNATURES
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, in the City of Camarillo, State of
California, on May 25, 2006.
VITESSE SEMICONDUCTOR CORPORATION
By: /s/ Christopher Gardner
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Christopher Gardner
Chief Executive Officer