TranSwitch Corporation Announces Agreement To Raise $2.5 Million In Private Placement

SHELTON, Conn. --August 19, 2013-- TranSwitch Corporation (NASDAQ: TXCC), a leading provider of semiconductor solutions in the rapidly growing consumer electronics and telecommunications markets, today announced that it has entered into a securities purchase agreement with Ilex Partners, LLC ("Ilex"), an entity managed by Michael Steinhardt, pursuant to which the Company has agreed to sell an aggregate of approximately 9.8 million shares of its common stock for total gross proceeds of $2.5 million. In connection with the transaction, Ilex agreed to surrender the warrant to purchase common stock it holds in exchange for an additional approximately 900,000 shares of the Company's common stock. The Company also granted to Ilex the right, for a period ending on the earlier of 180 days or one business day prior to the occurrence of a change of control event, to purchase an additional approximately 9.8 million shares of its common stock for an additional $2.5 million. In connection with the foregoing, the Company entered into an amendment to its Rights Agreement with Computershare Trust Company, N.A., as rights agent, pursuant to which the transactions contemplated by the securities purchase agreement would not trigger the distribution of rights thereunder.

The Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, to Ilex in connection with the purchased securities. The Company will be required to file a registration statement within 20 days of the closing date and will use its reasonable best efforts to have such registration statement declared effective as soon as practicable, but in no event later than 60 days of the closing date (90 days in the event the SEC reviews the registration statement).

Proceeds from these transactions will be used to fund the Company's operations and to meet the Company's obligations as they may arise.

About TranSwitch Corporation

TranSwitch Corporation (Nasdaq:TXCC) provides innovative integrated circuit (IC) and intellectual property (IP) solutions that deliver core functionality for video, voice, and data communications equipment for the customer premises and network infrastructure markets. For the customer-premises market, we offer multi-standard, high-speed interconnect solutions enabling the distribution and presentation of high-definition (HD) video and data content for consumer electronics applications. We also provide a family of best-in-class communications processors. For the network infrastructure market we provide integrated multi-core network processor System-on-a-Chip (SoC) solutions for Fixed, 3G and 4G Mobile, VoIP and Multimedia applications. TranSwitch's customers are leading consumer electronics and telecom equipment companies around the globe. For more information, please visit www.transwitch.com.