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): June 20, 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.
As previously reported, on June 7, 2006, Silicon Valley Bank assigned all
outstanding loans receivable from Vitesse Semiconductor Corporation (the
"Company") and Vitesse International, Inc. ("Vitesse International") under the
Second Amended and Restated Loan and Security Agreement, dated March 2, 2006
(the "Original Loan Agreement"), to Special Value Expansion Fund, LLC and
Special Value Opportunities Fund, LLC (collectively, the "Lenders"), affiliates
of Tennenbaum Capital Partners, LLC. On June 7, 2006, the Company, Vitesse
International, Vitesse Manufacturing & Development Corporation and Vitesse
Semiconductor Sales Corporation (collectively, the "Borrowers"), the Lenders and
Obsidian , LLC, as agent and collateral agent (the "Agent"), entered into a
Third Amended and Restated Loan Agreement (the "Loan Agreement"), a copy of
which is attached to the Company's Form 8-K filed on June 12, 2006. On June 7,
2006, the initial loan was made under the Loan Agreement in the amount of
approximately $22 million (the "Initial Loan").
On June 20, 2006, the Borrowers, the Lenders and the Agent entered into a
Fourth Amended and Restated Loan Agreement (the "Amended Loan Agreement"), a
copy of which is attached to this Form 8-K as Exhibit 10.1 and is incorporated
herein by reference. The Amended Loan Agreement, among other things, extended
the term of the loans under the Amended Loan Agreement by one year, revised the
terms under which loans can be prepaid and identified certain security documents
that the Borrowers must provide to the Lenders. On June 20, 2006, the second
loan was made under the Amended Loan Agreement in the amount of approximately
$30 million (the "Second Loan" and with the Initial Loan, collectively the
"Loans").
The Loans mature on July 15, 2011 and 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 Company may elect, at its sole option, each quarter
to pay in kind up to 400 basis points of the cash interest otherwise payable on
a Loan at the following ratio: for each 100 basis points of cash interest the
Company elects not to pay in cash, the Company will pay 150 basis points of
interest in kind. Thus, the Company may, at its sole option, in any quarter pay
interest in cash at LIBOR and the remainder of the interest in kind. The Loans
are 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; (iii) after the third anniversary of the
Initial Loan and prior to the fourth anniversary of the Initial Loan, at 104% of
the principal amount repaid; and (iv) after the fourth anniversary of the
Initial Loan and prior to maturity, at the principal amount repaid.
At the closing of each Loan, the Lenders received a fee equal to 4% of the
principal amount of the Loan.
In connection with the Loans, the Company agreed, 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 Company's subordinated debt. There are no maintenance or financial covenants
in the Amended Loan Agreement.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Item No. Description
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10.1 Fourth Amended and Restated Loan Agreement, dated June 20,
2006, among Vitesse Semiconductor Corporation, Vitesse
International, Inc., Vitesse Manufacturing & Development
Corporation, Vitesse Semiconductor Sales Corporation,Special
Value Expansion Fund LLC, Special Value Opportunities
Fund, LLC and Obsidian, LLC
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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 26, 2006.
VITESSE SEMICONDUCTOR CORPORATION
By: /s/Christopher Gardner
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Christopher Gardner
Chief Executive Officer
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EXHIBIT INDEX
Item No. Description
10.1 Fourth Amended and Restated Loan and Security Agreement,
dated June 7, 2006, among Vitesse Semiconductor Corporation,
Vitesse International, Inc., Vitesse Manufacturing Development
Corporation, Vitesse Semiconductor Sales Corporation, Special
Value Expansion Fund LLC, Special Value Opportunities Fund, LLC
and Obsidian, LLC