Exhibit 10.29
FIRST AMENDMENT TO REVOLVING CREDIT, EQUIPMENT LOAN AND SECURITY
AGREEMENT
THIS First Amendment to Revolving Credit, Equipment Loan and Security Agreement
(the "Amendment") amends that certain Revolving Credit, Equipment Loan and
Security Agreement dated as of August 6, 2003 (the "Agreement") between TRANSACT
TECHNOLOGIES INCORPORATED (the "Borrower"), and Banknorth N.A., a national
banking association (the "Bank") (collectively, the Agreement, the Amendment and
any further or other amendment shall be referred to as the "Credit Agreement")
is made and entered into this 12th day of November 2004 by and between the
Borrower and the Bank. Capitalized terms used herein but not defined shall have
the meanings assigned to them in the Credit Agreement.
In consideration of mutual covenants herein contained and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower and the Bank do hereby amend the Credit Agreement as
follows:
1. Section 2.4 (c) of the Credit Agreement is amended in its entirety to
read as follows:
(c) For the purpose of calculating interest due under this Agreement,
payment items shall be deemed applied by Lender on account of the Loan
one Business Day after receipt in the lockbox, subject to chargebacks
for uncollected payment items. No payment item received by Lender
shall constitute payment to Lender until such item is actually
collected by Lender and credited to the Collections Account; provided,
however, Lender shall have the right to charge back to the Collections
Account, the Demand Deposit Account (or any other account of Borrower
maintained at Lender) any item which is returned for inability to
collect, plus accrued interest during the period of Lender's
provisional credit for such item prior to receiving notice of
dishonor.
2. Section 2.6 of the Credit Agreement is amended by changing the
reference in the first and second paragraph from July 31, 2004 to July 31, 2005
and the second paragraph of Section 2.6 is amended in its entirety to read as
follows:
As of November 12, 2004 there are no Equipment Loans outstanding and the
Borrower may request Equipment Loans up to $1,000,000.00. All Equipment
Loans shall be payable interest only as a Prime Rate Borrowing or a LIBOR
Borrowing until the earlier of the date upon which the Equipment Loans are
advanced up to the Equipment Loan Amount or July 31, 2005. Thereafter the
then outstanding balance of the Equipment Loans advanced after the date
hereof shall amortize based on 60 equal monthly principal payments with
interest. Upon the date amortization commences the Borrower must choose
whether such Equipment Loan will be a Fixed Rate Borrowing for the balance
of the terms of the Equipment Loan or either a LIBOR Borrowing or the
Prime Rate Borrowing for the balance of the terms of the Equipment Loan.
Notwithstanding anything hereinabove to the contrary, the entire unpaid
principal balance of Equipment
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Loans and any accrued and unpaid interest thereon, shall be immediately
due and payable upon the earlier to occur of (i) the acceleration of the
Indebtedness as provided in Section 8 hereof or (ii) July 31, 2010.
3. Section 5.5 of the Credit Agreement is amended and restated in its
entirety to read as follows:
Inspections. Shall permit inspections of the Collateral and the
records of such Person pertaining thereto and verification of the
Accounts, at such times and in such manner as may be reasonably required
by Lender; provided that prior to an Event of Default such examinations
shall take place during normal business hours of the Borrower and upon
twenty-fours (24) hours prior notice. Borrower shall further permit such
inspections, reviews and field examinations of its other records and its
properties (with such reasonable frequency and at such reasonable times as
Lender may desire) by Lender as Lender may deem necessary or desirable
from time to time; provided, that prior to an Event of Default, the Lender
shall conduct such examinations no more than once a year. The cost of such
field examinations, reviews, verifications and inspections shall be borne
by Borrower and, prior to an Event of Default, shall not exceed $750.00
per day plus out of pocket expenses and not more than $11,000 per calendar
year; provided such fees shall be subject to periodic review by Lender.
4. Section 5.6 (a) of the Credit Agreement is amended and restated in its
entirety as follows:
(a) Periodic Borrowing Base Information.
Within twenty (20) days of the end of each fiscal month (or more
frequently if required by Lender), Borrower shall deliver to Lender a
Borrowing Base Certificate for the previous month in form appended hereto
as Exhibit 6 (each a "Borrowing Base Certificate") and Borrower shall
attach the following to the Borrowing Base Certificate, which shall be
certified by the chief financial officer or chief executive officer of
Borrower to be accurate and complete and in compliance with the terms of
the Loan Documents: (i) a report listing all Accounts and all Eligible
Accounts of Borrower as of the last Business Day of such fiscal month (an
"Accounts Receivable Report") which shall include the amount and age of
each Account, the name and mailing address of each Account Debtor, a
detailing of all credits due such Account Debtor by Borrower stated in
the number of days which have elapsed since the date each such credit was
issued by Borrower, and such other information as Lender may require in
order to verify the Eligible Accounts, all in reasonable detail and in
form acceptable to Lender, (ii) a report listing all Inventory and all
Eligible Inventory of Borrower as of the last Business Day of such fiscal
month, the cost thereof, specifying Raw Material Eligible Inventory and
Finished Goods Eligible Inventory as well as work in process and all
Inventory which has not been timely sold by Borrower in the ordinary
course of business, and such other information as Lender may require
relating thereto, all in form acceptable to Lender (an "Inventory
Report"), and (iii) a report reconciling (x) the Accounts and Inventory
of Borrower as set forth on the Accounts Receivable Report and the
Inventory Report
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attached to the Borrowing Base Certificate to (y) the aggregate Accounts
and Inventory set forth in the financial statements delivered to Lender
pursuant to Section 5.6(c) (which shall be based upon Borrower's general
ledger).
5. Section 10.4 is amended to change the notification party for the
Borrower as follows:
Borrower: TransAct Technologies Incorporated
0 Xxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxx X. XxXxxxxxx, Executive Vice President
and Chief Financial Officer
6. Exhibit 1 is amended by restating the following definitions in their
entirety:
"Borrowing Base" means at any time the sum of (i) 85% of the total amount
of Eligible Accounts, plus (ii) the lesser of (a) $5,500,000.00 and (b)
45% of the total amount of Raw Material Eligible Inventory plus 50% of
Finished Goods Eligible Inventory, less (iii) the pending credit reserve
of $40,000, less (iv) the outstanding amount of all Letters of Credit.
Paragraph (p) of the definition of Eligible Accounts is amended in its
entirety to read as follows:
(p) Accounts due from any Account Debtor which comprise more than 20% of
total Accounts outstanding of the Borrower or 40% as to Accounts due from
GTECH or Xxxxxx'x Entertainment Inc.
7. The Bank recognizes that Xxxxxxx X. Xxxx is no longer active
with the Borrower and consents to his replacement by Xxxxxx X.
XxXxxxxxx as a Permitted Replacement Officer.
Conditions to Closing. This Amendment shall become effective
upon the completion of each of the following:
a. Execution of this Amendment by the Borrower and the Bank
and delivery of executed originals to the Bank.
b. Perfection Certificate amended to show changes since
Perfection Certificate delivered with the original Credit Agreement.
c. Certificate of Secretary of the Borrower as to
resolutions adopted by the
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Board of Directors of the Borrower appointing Xxxxxx X. XxXxxxxxx as
Executive Vice President and Chief Financial Officer of TransAct
Technologies Incorporated and Secretary and Treasurer of XxxxxXxx.Xxx,
Inc. and the incumbency of the officer executing this Amendment.
d. Such additional documents, certificates and other
assurances that Bank or its counsel may require.
No Default; Representations and Warranties, etc. The Borrower hereby
confirms that: (a) the representations and warranties of the Borrower contained
in the Credit Agreement as modified hereby are true on and as of the date hereof
as if made on such date (except to the extent that such representations and
warranties expressly relate to an earlier date), as modified by any amendment of
Schedules presented herewith; (b) the Borrower is in compliance in all material
respects with all of the terms and provisions set forth in the Credit Agreement
on their part to be observed or performed; and (c) after giving effect to this
Amendment, no Event of Default, nor any event which with the giving of notice or
expiration of any applicable grace period or both would constitute such an Event
of Default, shall have occurred and be continuing.
Miscellaneous.
a . Except to the extent specifically amended hereby, the Credit
Agreement, the Loan Documents and all related documents shall remain in
full force and effect. Whenever the terms or sections amended hereby shall
be referred to in the Credit Agreement, Loan Documents or such other
documents (whether directly or by incorporation into other defined terms),
such defined terms shall be deemed to refer to those terms or sections as
amended by this Amendment.
b . This Amendment may be executed in any number of counterparts,
each of which, when executed and delivered, shall be an original, but all
counterparts shall together constitute one instrument.
c . This Amendment shall be governed by the laws of the State of
Connecticut and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
[SIGNATURES ON THE NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment which
is a sealed instrument as of the date first above written.
BANKNORTH, N.A.
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
It's Vice President
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TRANSACT TECHNOLOGIES INCORPORATED.
By: /s/ Xxxxxx X. XxXxxxxxx
Name: Xxxxxx X. XxXxxxxxx
Title: Executive Vice President and
Chief Financial Officer
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