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TXCC > SEC Filings for TXCC > Form 8-K on 6-Nov-2013All Recent SEC Filings

Show all filings for TRANSWITCH CORP /DE



Creation of a Direct Financial Obligation or an Obligation under an Off-Balan

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

On November 5, 2013, 2013, TranSwitch Corporation ("TranSwitch") entered into an Amended and Restated Business Financing Agreement (the "Agreement") with Bridge Bank, National Association ("Bridge Bank") dated as of November 4, 2013, together with certain other related financing documents (the "Loan Documents"). The Agreement amends and restates TranSwitch's existing Amended and Restated Business Financing Agreement with Bridge Bank, dated April 4, 2011, as amended. The Loan Documents collectively provide a receivables financing facility to TranSwitch of up to $5,000,000 (the "Facility"), secured by substantially all the personal property of TranSwitch, including TranSwitch's accounts receivable and intellectual property.

Subject to the terms of the Agreement, availability under the Facility is equal to 80% of the Company's eligible accounts receivable, with account eligibility defined in the Agreement and subject to Bridge Bank's approval. Either party may terminate the Agreement at any time. Upon any such termination, all loan advances under the Facility would become due and payable upon demand by Bridge Bank.

Except as otherwise set forth in the Agreement, receivables financed pursuant to the Agreement will bear interest at a rate equal to the higher of (i) the prime rate (as announced by Bridge Bank) plus 2.75% or (ii) 6.00%. Bridge Bank is also entitled to the payment of certain fees and expenses pursuant to the Loan Documents.

The Agreement contains customary representations and warranties, and affirmative and negative covenants for facilities of this type, including certain restrictions on dispositions of TranSwitch's assets, and incurrence of certain indebtedness and encumbrances. The Agreement also contains customary events of default, including payment defaults and defaults for a breach of representations and warranties or covenants. If an event of default occurs and is continuing, Bridge Bank has customary rights and remedies under the Agreement, including the right to declare all outstanding indebtedness under the Facility immediately due and payable and ceasing to advance money or extend credit.

The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 2.03.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) On October 31, 2013, Faraj Aalaei provided notice that he would resign as a member of TranSwitch's board of directors and from all committees thereof effective November 15, 2013. Mr. Aalaei's resignation is not due to any disagreements with TranSwitch regarding its operations, policies or practices.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 Amended and Restated Business Financing Agreement by and between TranSwitch Corporation and Bridge Bank, National Association, dated as of November 4, 2013

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