EXHIBIT 10.3
AMENDED AND RESTATED PROMISSORY NOTE
(Equipment Line of Credit Loans)
$2,000,000 Wellesley, Massachusetts
July 11, 1997 (originally
dated December 31, 1996)
For value received, the undersigned TRANSWITCH CORPORATION, a Delaware
corporation (the "Borrower"), promises to pay to SILICON VALLEY BANK (the
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"Bank") at the office of the Bank located at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx,
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Xxxxxxxxxx 95054, or to its order, the lesser of (i) Two Million Dollars
($2,000,000) or (ii) the principal outstanding hereunder as of November 30,
1997, in sixty (60) equal monthly installments payable on the last day of each
month, commencing December 31, 1997 and ending on November 30, 2002 (the
"Maturity Date"), together with interest on the principal amount hereof from
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time to time outstanding at a fluctuating rate per annum equal to the Prime Rate
(as defined below) plus one per cent (1%) until the Maturity Date, payable
monthly in arrears on the last day of each calendar month occurring after the
date hereof and on the Maturity Date. The Borrower promises to pay on demand
interest at a per annum rate of interest equal to the Prime Rate plus five per
cent (5%) on any overdue principal (and to the extent permitted by law, overdue
interest). The Bank's "Prime Rate" is the per annum rate of interest from time
to time announced and made effective by the Bank as its Prime Rate (which rate
may or may not be the lowest rate available from the Bank at any given time).
Computations of interest shall be made by the Bank on the basis of a year
of 360 days for the actual number of days occurring in the period for which such
interest is payable.
This promissory note amends and restates the terms and conditions of the
obligations of the Borrower under the Promissory Note (Equipment Line of Credit
Loans) dated December 31, 1996 (the "Original Note"), by the Borrower to the
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Bank. Nothing contained in this promissory note shall be deemed to create or
represent the issuance of new indebtedness or the exchange by the Borrower of
the Original Note for a new promissory note. This note is the Equipment Line
Note referred to in the Loan Document Modification Agreement of even date
herewith, which amended the Commitment Letter dated as of July 1, 1993, between
the Bank and the Borrower, as amended by letter amendments dated as of September
1, 1994 and March 21, 1995, and as further amended by loan modification
agreements dated as of April 19, 1995, January 5, 1996 and December 31, 1996,
together with all related schedules, as the same may be further amended,
modified or supplemented from time to time (the "Commitment Letter"), and is
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entitled to the benefits of the Commitment Letter and of the other Loan
Documents referred to therein, and is subject to optional and mandatory
prepayment as provided therein. This note is secured by, inter alia, a Security
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Agreement dated as of July 1, 1993, by the Borrower in favor of the Bank, as the
same may be amended, modified or supplemented from time to time and by other the
Security Instruments referenced in the Commitment Letter.
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Upon the occurrence of any Event of Default under, and as defined in, the
Commitment Letter, the principal amount then outstanding of and the accrued
interest on the advances under this note and all other amounts payable under
this note shall, at the option of the Bank, become immediately due and payable,
without notice (including, without limitation, notice of intent to accelerate),
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrower.
The Bank shall keep a record of the amount and the date of the making of
each advance pursuant to the Commitment Letter and each payment of principal
with respect thereto either by maintaining a computerized record of such
information and printouts of such computerized record, which endorsement or
computerized record, and the printouts thereof, shall constitute prima facie
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evidence of the accuracy of the information so endorsed.
The undersigned agrees to pay all reasonable costs and expenses of the Bank
(including, without limitation, the reasonable fees and expenses of attorneys)
in connection with the enforcement of this note and the other Loan Documents and
the preservation of their respective rights hereunder and thereunder.
No delay or omission on the part of the Bank in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Bank, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. The
Borrower and every endorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral for this note, and to the additions or releases of any
other parties or persons primarily or secondarily liable.
THIS NOTE SHALL BE DEEMED DELIVERED TO THE BANK AND ACCEPTED BY THE BANK IN
THE STATE OF CALIFORNIA.
THE BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY NOW OR HEREAFTER HAVE
TO A JURY TRIAL IN ANY SUIT, ACTION OR PROCEEDING WHICH ARISES OUT OF OR BY
REASON OF THIS NOTE, ANY LOAN DOCUMENT (AS DEFINED IN THE COMMITMENT LETTER), OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
BY ITS EXECUTION AND DELIVERY OF THIS NOTE, THE BORROWER ACCEPTS FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-
EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE COMMONWEALTH OF MASSACHUSETTS (OR IF FOR ANY REASON ACCESS TO SUCH COURTS
IS DENIED TO THE BANK, THEN IN THE STATE OF CALIFORNIA) IN ANY ACTION, SUIT OR
PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS NOTE,
ANY LOAN DOCUMENT (AS DEFINED IN THE CREDIT AGREEMENT), OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH SUCH ACTION, SUIT
OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL
JUDGMENT
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RENDERED BY ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR PROCEEDING IN WHICH IT
SHALL HAVE BEEN SERVED WITH PROCESS IN THE MANNER HEREINAFTER PROVIDED, SUBJECT
TO EXERCISE AND EXHAUSTION OF ALL RIGHTS OF APPEAL AND TO THE EXTENT THAT IT MAY
LAWFULLY DO SO, WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE
OR OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING ANY CLAIMS THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT ITS PROPERTY IS
EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER, AND AGREES THAT PROCESS MAY BE SERVED UPON IT IN ANY SUCH ACTION, SUIT
OR PROCEEDING IN THE MANNER PROVIDED BY CHAPTER 223A OF THE GENERAL LAWS OF
MASSACHUSETTS, RULE 4 OF THE MASSACHUSETTS RULES OF CIVIL PROCEDURE OR RULE 4 OF
THE FEDERAL RULES OF CIVIL PROCEDURE.
ALL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS AND THIS NOTE SHALL BE DEEMED TO BE UNDER SEAL.
TRANSWITCH CORPORATION
By: /s/ X.X. Xxxxxx
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Name: X.X. Xxxxxx
Title: Sr. Vice President, C.F.O.
