Exhibit 10.22
Banknorth
Massachusetts
1441 Main Street
P.O. Box 3034
Springfield, MA 01103
TransAct Technologies Incorporated
7 Laser Lane
Wallingford, Connecticut 06492
Attn: Steven A. DeMartino, Executive Vice President and Chief Financial Officer
Rate: Stock Buyback
Gentlemen:
Reference made to that certain Revolving Credit, Equipment Loan and
Security Agreement by and between you and the undersigned dated as of August 6,
2003 (the "Loan Agreement").
You have indicated to the undersigned that you wish to initiate a stock
buyback program for your publicly traded common stock. You further indicated
that this program would extend over the next three years. You have requested our
consent to this program, which Transact Technologies would like to commence in
calendar year 2005.
As you are aware such a stock buyback is not permitted under the terms of
section 6.3 of the Loan Agreement, and you have asked us to amend the Loan
Agreement to provide for the stock buyback. You have agreed to certain terms and
conditions limiting the stock buyback as to the source of funds to be used for
the buyback, the outside date for such stock buyback and the total amount of
funds which may be used for the buyback.
Based on the information you have provided to us and your representations
to us, we agree to amend the Loan Agreement by adding the following paragraph
(4) to section 6.3 of the Loan Agreement:
(4) use of up to $10,000,000 to purchase the common stock of the Borrower
upon the terms and conditions set forth in this paragraph (4). Such
buyback shall be accomplished entirely through the use of free cash of the
Borrower and will not require any additional borrowing by the Borrower
under this Agreement or any other borrowing. At no time shall the Borrower
have less than $2,000,000.00 of free cash (that is cash not borrowed from
the Bank or otherwise). The Borrower shall buyback the stock at a price
authorized by its Board of Directors. The Borrower shall commence the
stock buyback program in calendar year 2005, and the stock buyback program
will terminate no later than three years from the date of its
commencement. The Borrower shall not use more than $10,000,000 of its free
cash in total for the entire buyback program. The Borrower shall
not repurchase any stock if it would violate the conditions to such
buyback as provided in this Section 6.3 (4) or be made when and Event of
Default has occurred and is continuing or would cause an Event of Default.
The Borrower shall report to the Bank at the end of each fiscal month all
transactions under the buyback program including the terms of such
buyback, the amount of common stock repurchased and the free cash
available to the Borrower after such buyback. All repurchased common stock
of the Borrower shall be treated as a reduction in equity in accordance
with GAAP.
By signing a copy of this letter you agree to the terms of the amendment
contained in this letter. You further agree that the Loan Agreement is not
modified or amended except as specifically provided in this letter agreement.
BANKNORTH, N.A.
By: /s/ James Hickson
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James Hickson
Its Vice President
ACCEPTED AND AGREED TO AS OF THE 28TH
DAY OF MARCH 2005.
TRANSACT TECHNOLOGIES INCORPORATED
By: /s/ Steven A. DeMartino
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Steven A. DeMartino
Its Executive Vice President and
Chief Financial Officer