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                                                                   ExhibiT 10.26
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                           NEGATIVE PLEDGE AGREEMENT

     This Negative Pledge Agreement is made as of July 16, 1998, by and between
SILICON VALLEY BANK, a California-chartered bank with its principal place of
business at 3003 Tasman Drive, Santa Clara, CA 95054 and with a loan production
office located at Wellesley Office Park, 40 William Street, Suite 350,
Wellesley, MA 02181, doing business under the name Silicon Valley East ("Bank"),
and TRANSWITCH CORPORATION, a Delaware corporation with its principal place of
business at 3 Enterprise Drive, Shelton, Connecticut 06484 ("Borrower").

In connection with the Loan Documents (as that term is defined in the Commitment
Letter between Borrower and Bank dated July 1, 1993, as amended) concurrently
being executed between Borrower and Bank, Borrower agrees as follows:

1.  Borrower shall not, without Bank's prior written consent which consent shall
not be unreasonably withheld, sell, transfer, or assign other than in the
ordinary course of business mortgage, pledge, lease, grant a security interest
in, or encumber any of Borrower's property, including, without limitation, the
following:

     (a)  All goods and equipment now owned or hereafter acquired, including,
          without limitation, all machinery, fixtures, vehicles (including motor
          vehicles and trailers), and any interest in any of the foregoing, and
          all attachments, accessories, accessions, replacements, substitutions,
          additions, and improvements to any of the foregoing, wherever located;

     (b)  All inventory, now owned or hereafter acquired, including, without
          limitation, all merchandise, raw materials, parts, supplies, packing
          and shipping materials, work in process and finished products
          including such inventory as is temporarily out of Borrower's custody
          or possession or in transit and including any returns upon any
          accounts or other proceeds, including insurance proceeds, resulting
          from the sale or disposition of any of the foregoing and any documents
          of title representing any of the above;

     (c)  All contract rights and general intangibles now owned or hereafter
          acquired, including, without limitation, goodwill, trademarks, service
          marks, trade styles, trade names, patents, patent applications,
          leases, license agreements, franchise agreements, blueprints,
          drawings, purchase orders, customer lists, route lists, infringements,
          claims, computer programs, computer discs, computer tapes, literature,
          reports, catalogs, design rights, income tax refunds, payments of
          insurance and rights to payment of any kind;

     (d)  All now existing and hereafter arising accounts, contract rights,
          royalties, license rights and all other forms of obligations owing to
          Borrower arising out of the sale or lease of goods, the licensing of
          technology or the rendering of services by Borrower, whether or not
          earned by performance, and any and all credit insurance, guaranties,
          and other security therefor, as well as all merchandise returned to or
          reclaimed by Borrower;
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     (e)  All documents, cash, deposit accounts, securities, investment
          property, letters of credit, certificates of deposit, instruments and
          chattel paper now owned or hereafter acquired and Borrower's Books
          relating to the foregoing;

     (f)  All copyright rights, copyright applications, copyright registrations
          and like protections in each work of authorship and derivative work
          thereof, whether published or unpublished, now owned or hereafter
          acquired; all trade secret rights, including all rights to unpatented
          inventions, know-how, operating manuals, license rights and agreements
          and confidential information, now owned or hereafter acquired; all
          mask work or similar rights available for the protection of
          semiconductor chips, now owned or hereafter acquired all claims for
          damages by way of any past, present and future infringement of any of
          the foregoing; and

     (g)  All Borrower's Books relating to the foregoing and any and all claims,
          rights and interests in any of the above and all substitutions for,
          additions and accessions to and proceeds thereof.

2.  It shall be an event of default under the Loan Documents between Borrower
and Bank if there is a breach of any terms of this Negative Pledge Agreement.

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.

"Borrower"                              "Bank"

TRANSWITCH CORPORATION                  SILICON VALLEY BANK, doing business
                                        as SILICON VALLEY EAST

By: /s/ Michael F. Stauff               By:
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   Michael F. Stauff, SVP & Treasurer        William R. Howell, AVP