UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
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 30, 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))
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Item 1.01 Entry into a Material Definitive Agreement.
Vitesse Semiconductor Corporation (the "Company") has entered into a
commitment letter, dated June 4, 2006 (the "Letter"), with Tennenbaum Capital
Partners, LLC ("Tennenbaum"). Pursuant to the terms of the Letter, Tennenbaum
agrees to lend to the Company, through one or more funds managed by Tennenbaum
or an affiliate thereof, up to $24 million (the "Initial Loan"). In addition,
Tennenbaum will, at the request of the Company and upon the satisfaction of
certain conditions, make an additional loan of up to $30 million (the
"Additional Loan" and, together with the Initial Loan, the "Loans") to the
Company.
The Loans will mature on July 15, 2010 and will have an interest rate equal
to LIBOR plus 4% per annum, payable in cash, plus 5% per annum, payable in kind.
Interest will be paid quarterly. The Loans will be secured by substantially all
the assets of the Company. The Loans may be repaid in whole or in part prior to
maturity, but if repaid (i) prior to the second anniversary of the Initial Loan,
a "make-whole premium" on the amount repaid will be payable; (ii) after the
second anniversary of the Initial Loan and prior to the third anniversary of the
Initial Loan, at 108% of the principal amount repaid; and (iii) after the third
anniversary and prior to maturity, at 104% of the principal amount repaid.
At the closing of each Loan, Tennenbaum will receive a fee equal to 4% of
the principal amount of the Loan.
In connection with the Loans, the Company will agree, among other things,
to limitations on the incurrence of indebtedness, transactions with affiliates,
fundamental changes in the Company and its business, acquisitions and changes to
the Companys subordinated debt.
The transaction is subject to the execution of definitive agreements and
the satisfaction of certain conditions. The execution of the agreements and the
Initial Loan are expected to occur during the week of June 5, 2006.
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Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The Company has received a letter from U.S. Bank National Association, as
Trustee (the "Trustee") under the Indenture, dated as of September 22, 2004 (the
"Indenture"), relating to the Company's 1.50% Convertible Subordinated
Debentures due 2024. In the letter, the Trustee alleges compliance deficiencies
under the Indenture. Specifically, the Trustee asserts that the Company has not
complied with the following requirements:
1. Pursuant to the Trust Indenture Act Section 314(a)(1), file with
the indenture trustee copies of the annual reports and of the
information documents, and other reports which such obligor is
required to file with the Commission pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934.
2. Section 9.6(a) of the Indenture, the Company shall deliver to the
Trustee within 15 days after it files them with the SEC copies of
the annual reports and of the information, documents, and other
reports (or copies of such portions of any of the foregoing as the
SEC may be rules and regulations prescribe) which the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act; provided, however, the Company shall not be
required to deliver to the Trustee any materials for which the
Company has sought and received confidential treatment by the SEC.
The Company also shall comply with the other provisions of Section
3.14(a) of the TIA.
The letter states that it serves as a 60-day notice pursuant to Article 4
of the Indenture to allow the Company to cure the compliance deficiencies. The
letter also states that if the compliance deficiencies are not cured within 60
days of May 26, 2006, there will be an Event of Default under the Indenture and
the Trustee will seek the remedies allowed in the Indenture to protect the
interests of the bondholders.
The Company disputes the allegations set forth in the letter from the
Trustee and will contest any attempt to declare an Event of Default under the
Indenture based on the alleged compliance deficiencies in the letter from the
Trustee.
Approximately $96.7 million aggregate principal amount of the Company's
1.50% Convertible Subordinated Debentures due 2024 are outstanding.
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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 June 5, 2006.
VITESSE SEMICONDUCTOR CORPORATION
By: /s/ Christopher Gardner
Christopher Gardner
Chief Executive Officer