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EXHIBIT 10.34
February 23, 1999
Mr. Bart C. Shuldman
28 Bermuda Road
Westport, Connecticut
Dear Bart:
The Company has agreed to loan you $330,000.00 to permit the purchase
by you of 104,000 shares of the Company's common stock. In order to accomplish
this loan transaction, you will need to sign each of the enclosed documents,
which are briefly described below. Your signature acknowledging and agreeing to
certain additional terms contained in this letter also will be necessary.
Promissory Note
- You will sign a $330,000 term Note in favor of the Company. The
principal (and any unpaid interest) is due in a balloon payment five years after
the execution of the Note. The interest rate will be calculated as the greater
of (i) an amount based on the Company's average variable lending rate under its
primary credit facility for each fiscal year or (ii) the Applicable Federal
Rate, as defined in the Note. Interest will be payable by you in arrears on the
fifteenth day of March each year.
- The Note describes what happens if your employment with the Company
is terminated or in the event of death or disability. Termination by the Company
for "Cause" as defined in any employment contract in effect on the date of
termination or your voluntary termination will advance the maturity date for the
Note to the date that is six months after the date of your termination.
Termination without Cause or in the event of death or disability as defined in
any employment contract in effect at that time will not affect the maturity date
of the Note.
- The occurrence of an Event of Default under the Note will give the
Company the ability to accelerate the maturity date, making all amounts due and
payable at once.
- Your obligations under the Note will be secured by a stock pledge.
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Stock Pledge Agreement
- You agree to pledge to the Company (i) 104,000 shares purchased with
the loan proceeds and (ii) 50,000 shares of the Company's restricted stock. The
Company will retain the physical certificates and you will sign stock powers in
blank. During the term of the Note, you will be able to vote the shares, and you
will receive any cash dividends issued with respect to the shares. If there is a
stock split or similar adjustment, you will be required to pledge any such
additional shares as you may be entitled to receive.
- If there is an Event of Default and subject to applicable law, the
Company is entitled to sell the shares and retain as much of the proceeds as are
necessary to satisfy your obligations under the Note.
Additional Terms
- Continuing Security. Until all amounts due and owing under the Note
have been satisfied and regardless of your employment status, you agree that the
obligations under the Note will remain secured under and by the stock pledge
agreement.
- Selling the Stock to Satisfy the Note. At any time up to and
including the maturity date of the Note, if the market value of the stock
purchased with the loan proceeds exceeds 150% of the outstanding loan balance
under the Note, you may request permission to satisfy, in full or in part, your
obligations under the Note by your sale of the pledged shares. If you do not
make this request, the loan shall be repaid as set forth in the Note. Any sale
permitted by this provision may pay your obligations under the Note in full or
in part; provided, however, that for any requested partial payment of the
obligations under the Note, you will apply all of the proceeds from the sale of
pledged shares to the partial satisfaction of your obligations under the Note.
- Event of Default. Your failure to comply with any of the terms
hereunder, which failure is not cured within 30 days of occurrence, or the
occurrence of an event of default under the Note or the other agreements
executed in connection herewith shall constitute an event of default hereunder.
The Note describes the remedies the Company may take upon the occurrence of an
event of default.
- Severability. If any provision of this letter agreement or any of the
agreements enclosed herewith shall be held by any court or other tribunal of
competent jurisdiction to be illegal, void or unenforceable in such
jurisdiction, the remainder of such provision and of the letter agreement shall
not be affected thereby and shall be given full effect, without regard to the
invalid provision. We mutually agree that such court or tribunal, if possible,
shall limit such invalid provision or clause in scope so that it shall not be
invalid and shall be enforceable as so limited.
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- Further Assurances. You agree to execute any and all instruments and
documents deemed necessary or desirable by the Company to carry out the
provisions of this letter agreement, including financing statements for purposes
of filing under the Uniform Commercial Code.
- Entire Agreement. This letter agreement and the attachments hereto
contain the entire understanding of the Company and you with respect to the
subject matter set forth herein and supersedes any prior agreements between us
with respect thereto.
- Governing Law. This letter agreement and the rights of the parties
shall be governed by and construed in accordance with the laws of the state of
Connecticut without regard to its conflict of laws principles. Each of the
parties consents in advance to the jurisdiction of the appropriate state or
federal courts located within the state of Connecticut.
Please signify your acceptance and agreement with the terms of this
letter agreement by signing in the indicated area below.
TRANSACT TECHNOLOGIES INCORPORATED
By: /s/ Thomas R. Schwarz
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Name: Thomas R. Schwarz
Title: Chairman
Date: February 23, 1999
/s/ Bart C. Shuldman
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BART C. SHULDMAN
237346 v.02
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