<PAGE>

                                                                   Exhibit 10.18

          Amended and Restated Revolving Credit and Security Agreement

                                     between

                       TRANSACT TECHNOLOGIES INCORPORATED

                                   "Borrower"

                                       and

                               TD BANKNORTH, N.A.

                                    "Lender"

                            Dated: November 28, 2006

<PAGE>

          AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT

     THIS Amended and Restated Revolving Credit and Security Agreement (the
"Agreement"), dated as of November 28, 2006 is made by and between TransAct
Technologies Incorporated, a Delaware corporation ("Borrower") and TD Banknorth,
N.A., a national banking association ("Lender").

                                   WITNESSETH:

     In consideration of the premises and of the mutual covenants herein
contained and to induce Lender to extend credit to Borrower, the parties agree
as follows:

1 Definitions. Capitalized terms that are not otherwise defined herein shall
have the meanings set forth in Exhibit 1 hereto.

2 The Loan.

     2.1 Amendment and Restatement of Prior Agreement. This Agreement amends and
restates in its entirety that certain Revolving Credit, Equipment Loan and
Security Agreement by and between Borrower and Lender dated August 6, 2003 (as
amended from time to time the "Prior Agreement"). Borrower reaffirms that all of
the Indebtedness outstanding as of the date hereof under the Prior Agreement
shall continue to be Indebtedness under this Agreement. The Amended and Restated
Revolving Credit Note executed this date amends and restates the Revolving
Credit Note under the Prior Agreement and reaffirms all of the Indebtedness
evidenced by such Revolving Credit Note. The grant of a security interest
hereunder is an affirmation of the security interest granted by Borrower under
the Prior Agreement.

     2.2 Revolving Credit Loan. Lender agrees, on the terms and conditions set
forth in this Agreement to make Revolving Credit Loans to Borrower from time to
time during the Revolving Credit Period, provided that no Default or Event of
Default has occurred and is continuing, in amounts such that the aggregate
principal amount of Revolving Credit Loans and the face amount of any Letters of
Credit at any one time outstanding will not exceed the Maximum Loan Amount or as
to any Revolving Credit Loan used to fund Permitted Acquisitions will not exceed
$7,500,000.00 in the aggregate during the Revolving Credit Period. Within the
foregoing limit, Borrower may borrow, prepay and reborrow Revolving Credit Loans
at any time during the Revolving Credit Period.

     2.3 Amended and Restated Revolving Credit Note. The Revolving Credit Loans
shall be evidenced by a promissory note in the face amount of the Maximum Loan
Amount and dated the date hereof and in the form appended here to as Exhibit 2
(the "Amended and Restated Revolving Credit Note") and shall be payable in
accordance with the terms of the Amended and Restated Revolving Credit Note and
this Agreement.


                                       -1-

<PAGE>

     2.4 Requesting Interest Rate.

          (a) Each Revolving Credit Loan shall be a Prime Rate Borrowing if made
through any controlled disbursement or similar account maintained by Borrower
with Lender or a LIBOR Borrowing if Borrower so requests in compliance with the
provisions of this Agreement. Borrower must request at least two Business Days
prior to the end of any Interest Period that a LIBOR Borrowing be continued as a
LIBOR Borrowing (in accordance with the provisions hereof) otherwise such LIBOR
Borrowing will be continued as a Prime Rate Borrowing.

          (b) Each LIBOR Borrowing or continuation of any LIBOR Borrowing shall
be in an amount at least equal to $100,000 or any greater multiple of $50,000.
There shall not at any time be more than a total of four (4) LIBOR Borrowings
outstanding for all Loans at any time.

          (c) Borrower may request a LIBOR Borrowing or continuation of a LIBOR
Borrowing not later than 11:00 a.m. Eastern Standard or Daylight Savings time,
as applicable, two Business Days before the date of the proposed LIBOR Borrowing
or continuation. Each request for a LIBOR Borrowing shall set forth the
requested Interest Period and shall be irrevocable.

     2.5 Revolving Credit Loans.

          (a) Lender, in its discretion, may require from Borrower a signed
written request for a Revolving Credit Loan in form satisfactory to Lender,
which request shall (i) be delivered to Lender no later than 12:00 noon (local
Eastern Standard or Eastern Daylight Savings Time as applicable) on the date of
the requested Revolving Credit Loan if a Prime Rate Borrowing and as provided in
Section 2.4 if a LIBOR Borrowing, and (ii) specify the date (which shall be a
Business Day) and the amount of the proposed Revolving Credit Loan and (iii)
provide such other information as Lender may require. Lender's acceptance of
such a request shall be indicated by its making the Revolving Credit Loan
requested.

          (b) Notwithstanding the foregoing, Lender may, in its sole and
absolute discretion, make or permit to remain outstanding Revolving Credit Loans
in excess of the original maximum principal amount of the Amended and Restated
Revolving Credit Note, and all such amounts shall (i) be part of the
Indebtedness evidenced by the Amended and Restated Revolving Credit Note, (ii)
bear interest as provided herein, (iii) be payable upon demand by Lender, and
(iv) be entitled to all rights and security as provided under the Loan
Documents.

          (c) Revolving Credit Loans may be repaid and reborrowed during the
Revolving Credit Period.

          (d) Borrower will maintain all of its primary deposit accounts with
Lender, provided that Borrower may continue to utilize a deposit account with
Tompkins County Trust in Ithaca, New York.


                                       -2-

<PAGE>

     2.6 Letter of Credit. Lender in its sole discretion may issue letters of
credit or bankers' acceptances (collectively "Letter of Credit") upon terms and
conditions satisfactory to Lender.

     2.7 Repayment of Loans.

          (a) The Revolving Credit Loans shall mature, and the principal amount
thereof and all interest, fees, expenses and other amounts payable under the
Loan Documents shall be due and payable on the last day of the Revolving Credit
Period unless extended in writing by Lender in its sole discretion.

          (b) Borrower shall pay interest on the aggregate unpaid principal
balance of each LIBOR Borrowing from the date of each such Loan through and
including the last day of the Interest Period chosen by Borrower with respect to
such LIBOR Borrowing or any continuation thereof as provided in Section 2.4 and
shall pay all interest accrued but unpaid at the option of Lender (i) on the
first day of each month, (ii) monthly from the date the LIBOR Borrowing is made
or (iii) on the last day of the applicable Interest Period. Accrued and unpaid
interest on all Prime Rate Borrowings shall be due and payable on the first day
of each calendar month.

          (c) Lender may debit any deposit account of Borrower with Lender or
make Revolving Credit Loans to Borrower (whether or not in excess of the lesser
of the Maximum Loan Amount) and apply such amounts to the payment of interest,
fees, expenses and other amounts to which Lender may be entitled from time to
time under any Indebtedness due Lender and Lender is hereby irrevocably
authorized to do so without the consent of Borrower.

          (d) Borrower shall make each payment of principal of and interest on
the Loan and fees hereunder not later than 12:00 noon (Eastern Standard or
Eastern Daylight Savings Time as applicable) on the date when due, without set
off, counterclaim or other deduction, in immediately available funds to Lender
at its address referred to in Section 10.6. Whenever any payment of principal
of, or interest on, the Loans or of fees shall be due on a day, which is not a
Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for such
extended time.

          (e) Regardless of the term of any Loan, all Loans shall be due and
payable if any Loan is not paid when due.

     2.8 Overdue Amounts. Any payments not made as and when due shall bear
interest from the date due until paid at the Default Rate, in Lender's
discretion.

     2.9 Fees.

          (a) Borrower shall pay to Lender a non-refundable facility fee in the
amount of $27,000.00 on the date of this Agreement.


                                       -3-

<PAGE>

          (b) Borrower shall pay to Lender a unused facility fee for each day at
a rate per annum equal to the product of (i) one-quarter of one percent divided
by 360 multiplied by (ii) the difference between (A) the Maximum Loan Amount and
(B) the aggregate outstanding amount of the Revolving Credit Loans on such day,
payable monthly on the first day of each calendar month with respect to the
immediately preceding month.

     2.10 Statement of Account. Lender will provide Borrower with a statement of
account on a monthly basis, such statement will be presumed complete and
accurate and will be definitive and binding on Borrower, unless objected to with
specificity by Borrower in writing within forty-five (45) days after receipt.

     2.11 Interest Rate.

          (a) The Revolving Credit Loans comprising each Prime Rate Borrowing
shall bear interest at a rate per annum equal to the Prime Rate minus 1.00% per
annum as adjusted from time to time.

          (b) The Revolving Credit Loans comprising each LIBOR Borrowing shall
bear interest at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period in effect for such LIBOR Borrowing plus the Applicable Margin as
adjusted from time to time.

          (c) If prior to the commencement of any Interest Period for a LIBOR
Borrowing Lender determines (which determination shall be conclusive absent
manifest error):

          (d) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period; or that, due to changes in circumstances, the Adjusted LIBO Rate or the
LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to Lender of making or maintaining their Loans included
in such LIBOR Borrowing for such Interest Period; then Lender shall give notice
thereof to Borrower by telephone or telecopy as promptly as practicable
thereafter and such Loan shall be made as a Prime Rate Borrowing.

          (e) All interest hereunder shall be computed on the basis of a year of
360 days, and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Prime Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by Lender and
such determination shall be conclusive absent manifest error.

     2.12 Increased Costs.

          (a) Increased Costs Generally. If any Change in Law shall impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, Lender (except any
reserve requirement reflected in the Adjusted LIBO Rate) and the result of any
of the foregoing shall be to increase the cost to Lender of making or
maintaining any LIBOR Borrowing (or of maintaining its obligation to make any
such Loan)


                                       -4-

<PAGE>

then, upon request of Lender, Borrower will pay to Lender such additional amount
or amounts as will compensate Lender for such additional costs incurred or
reduction suffered.

          (b) Capital Requirements. If Lender reasonably determines that any
Change in Law affecting Lender or any lending office of such Lender or such
Lender's holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on Lender's capital or on the
capital of Lender's holding company, if any, as a consequence of this Agreement,
the commitments of Lender hereunder or the Loans made by Lender to a level below
that which Lender or Lender's holding company could have achieved but for such
Change in Law (taking into consideration Lender's policies and the policies of
such Lender's holding company with respect to capital adequacy), then from time
to time Borrower will pay to Lender such additional amount or amounts as will
compensate such Lender or Lender's holding company for any such reduction
suffered.

          (c) Certificates for Reimbursement. A certificate of Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section setting forth in reasonable detail the basis for such claim and a
calculation of the amount payable to the Lender and delivered to Borrower shall
be conclusive. so long as it reflects a reasonable basis for the calculation of
the amounts set forth therein and does not contain any manifest error. Borrower
shall pay the Lender the amount shown as due on any such certificate within 10
days after receipt thereof.

          (d) Delay in Requests. Failure or delay on the part of Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
Lender's right to demand such compensation, provided that Borrower shall not be
required to compensate Lender pursuant to this Section for any increased costs
incurred or reductions suffered more than six months prior to the date that
Lender, notifies Borrower of the Change in Law giving rise to such increased
costs or reductions and of Lender's intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

     2.13 Break Funding Payment. In the event of (i) the payment of any
principal of any LIBOR Borrowing other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (ii)
the conversion of any LIBOR Borrowing other than on the last day of the Interest
Period applicable thereto, or (iii) the failure to borrow, convert, continue or
prepay any LIBOR Borrowing on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
and is revoked in accordance herewith) then, in any such event, Borrower shall
compensate Lender for the loss, cost and expense attributable to such event,
including the LIBOR Yield Maintenance Fee.

     2.14 Mandatory Prepayments.

          (a) Sale, Damage, Destruction, etc. If Borrower sells any Equipment,
or if any of the Collateral is damaged, destroyed or taken by condemnation,
Borrower shall pay to Lender,


                                       -5-

<PAGE>

unless otherwise specifically provided herein or otherwise agreed to by Lender,
as and when received by Borrower and as a mandatory prepayment of the Loans, to
be applied to the Revolving Credit Loans, subject to Borrower's ability to
reborrow Revolving Credit Loans in accordance with the terms hereof (or, at
Lender's option, such of the other Indebtedness of Borrower as Lender may
elect), a sum equal to the net proceeds received by Borrower from (i) such sale
or (ii) such damage, destruction or condemnation, provided, however, that
without Lender's consent, unless and until an Event of Default has occurred and
is continuing:

               (i) obsolete or worn out Equipment may be sold or otherwise
               disposed of by Borrower and the proceeds thereof may be retained
               by Borrower, so long as the fair market value of any such
               Equipment sold or otherwise disposed of in any single transaction
               is less than $100,000, and the fair market value, in the
               aggregate, of all such Equipment sold or otherwise disposed of by
               Borrower during any twelve-month period is less than $100,000;
               and

               (ii) proceeds of Collateral arising from the damage, destruction
               or condemnation thereof may be retained by Borrower and used by
               Borrower to repair, restore or replace such Collateral, as the
               case may be, so long as the fair market value of any such
               Collateral damaged, destroyed or condemned in any single incident
               is less than $100,000 and the fair market value, in the
               aggregate, of all such Collateral owned by Borrower and damaged,
               destroyed or condemned during any twelve-month period is less
               than $100,000.

3 Conditions Precedent to Borrowing. Prior to making any Loan, the following
conditions shall have been satisfied, in the sole opinion of Lender and its
counsel:

     3.1 Conditions Precedent to Initial Advance. In addition to any other
requirement set forth in this Agreement, Lender will not make the initial Loan
unless and until the following conditions shall have been satisfied:

          (a) Loan Documents. Borrower and each other party to any Loan
Document, as applicable, shall have executed and delivered this Agreement, the
Amended and Restated Revolving Credit Note and other required Loan Documents,
all in form and substance satisfactory to Lender.

          (b) Supporting Documents. Borrower shall cause to be delivered to
Lender the following documents:

               (i) A copy of the governing instruments of Borrower and each
               Subsidiary, and a good standing certificate of Borrower and each
               Subsidiary, certified by the appropriate official of its state of
               incorporation;

               (ii) Incumbency certificate and certified resolutions of the
               board of directors (or other appropriate Persons) of Borrower and
               each other Person executing any Loan Documents, signed by the
               Secretary or another authorized officer of


                                       -6-

<PAGE>

               Borrower or such other Person, authorizing the execution,
               delivery and performance of the Loan Documents;

               (iii) The legal opinion of Borrower's legal counsel addressed to
               Lender regarding such matters as Lender and its counsel may
               reasonably request;

               (iv) Satisfactory evidence of payment of all fees due and
               reimbursement of all costs incurred by Lender, and evidence of
               payment to other parties of all fees or costs which Borrower is
               required to pay under this Agreement;

               (v) UCC searches and other Lien searches showing no existing
               security interests in or Liens on the Collateral other than
               Permitted Liens or Liens to be terminated upon funding of the
               initial Loan and for which Lender has a satisfactory payoff
               letter;

               (vi) An Affirmation of Guaranty from each of the Guarantors;

               (vii) Fully executed and completed certificate in the form
               appended hereto as Exhibit 3 (the "Perfection Certificate");

               (viii) Intellectual Property Security Agreement as to any
               Intellectual Property identified in the revised Perfection
               Certificate;

               (ix) All material contracts not yet delivered to the Lender,
               including the GTECH Contract and any of the following, which if
               cancelled or violated would have a Material Adverse Effect on
               Borrower including by way of example (a) leases, (b) union
               contracts, (c) labor contracts, (d) vendor supply contracts,
               (e)license agreements, and (f) distributorship agreements; and

               (x) The Transact UK Pledge Agreement duly executed and original
               share certificate for 65% of the issued and outstanding shares of
               Transact UK.

          (c) Insurance. Borrower shall have delivered to Lender satisfactory
evidence of insurance meeting the requirements of Section 5.3.

          (d) Perfection of Liens. UCC-1 financing statements shall duly have
been recorded or filed in the manner and places required by law to establish,
preserve, protect and perfect the interests and rights created or intended to be
created by the security interest granted hereunder; and all taxes, fees and
other charges in connection with the execution, delivery and filing of the
financing statements shall duly have been paid.

          (e) Lien Waiver. Lender has received certain Lien Waivers as provided
on the Perfection Certificate and Borrower shall use best efforts to obtain all
additional Lien Waivers from (i) all lessors of real property to Borrower or in
which Collateral is located and (ii) all


                                       -7-

<PAGE>

processors and vendors agreed to by Borrower and Lender for which the Borrower
has not yet received such Lien Waiver and which are listed on the Perfection
Certificate.

          (f) Additional Documents. Borrower shall have delivered to Lender all
additional opinions, documents, certificates and other assurances that Lender or
its counsel may require.

     3.2 Conditions Precedent to Each Advance. The following conditions, in
addition to any other requirements set forth in this Agreement, shall have been
met or performed by the requested date for any Revolving Credit Loan (whether or
not a written request is required) shall be deemed to be a representation that
all such conditions have been satisfied:

          (a) No Default. No Default shall have occurred and be continuing or
would occur upon the making of the Revolving Credit Loan in question.

          (b) Correctness of Representations. All representations and warranties
made by Borrower herein or otherwise in writing in connection herewith shall be
true and correct in all material respects with the same effect as though the
representations and warranties had been made on and as of the proposed date for
the Revolving Credit Loan except to the extent that such representations relate
to a specific date or prior event.

          (c) Limitations Not Exceeded. The proposed Revolving Credit Loan shall
not cause the outstanding principal balance of the Revolving Credit Loans to
exceed the Maximum Loan Amount.

          (d) Further Assurances. Borrower shall have delivered such further
documentation or assurances as Lender may reasonably require.

4 Representations and Warranties. In order to induce Lender to enter into this
Agreement and to make the Loans provided for herein, Borrower makes the
following representations and warranties, all of which shall survive the
execution and delivery of the Loan Documents. Unless otherwise specified, such
representations and warranties shall be deemed made as of the date hereof and as
of each date Borrower requests a Revolving Credit Loan:

     4.1 Valid Existence and Power. Borrower and each Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and is duly qualified or licensed to
transact business in all places where the failure to be so qualified would have
a Material Adverse Effect on it. Each of Borrower and each other Person which is
a party to any Loan Document (other than Lender) has the power to make and
perform the Loan Documents executed by it and all such instruments will
constitute the legal, valid and binding obligations of such Person, enforceable
in accordance with their respective terms, subject only to bankruptcy and
similar laws affecting creditors' rights generally.

     4.2 Authority. The execution, delivery and performance thereof by Borrower
and each other Person (other than Lender) executing any Loan Document have been
duly authorized by all necessary action of such Person, and do not and will not
violate any provision of law or


                                       -8-

<PAGE>

regulation, or any writ, order or decree of any court or governmental or
regulatory authority or agency or any provision of the governing instruments of
such Person, and, except as set forth on Schedule 4.2, do not and will not, with
the passage of time or the giving of notice, result in a breach of, or
constitute a default or require any consent under, or result in the creation of
any Lien upon any property or assets of such Person pursuant to, any law,
regulation, instrument or agreement to which any such Person is a party or by
which any such Person or its respective properties may be subject, bound or
affected.

     4.3 Financial Condition. Other than as disclosed in financial statements
delivered on or prior to the date hereof to Lender, neither Borrower nor any
Subsidiary has any direct or contingent obligations or liabilities (including
any guarantees or leases) or any material unrealized or anticipated losses from
any commitments of such Person except as described on Schedule 4.3 (if any). All
such financial statements have been prepared in accordance with GAAP (other than
the absence of footnotes and subject to year end adjustment, as to interim
statements) and fairly present the financial condition of Borrower or
Subsidiary, as the case may be, as of the date thereof. Borrower is Solvent, and
after consummation of the transactions set forth in this Agreement and the other
Loan documents, Borrower will be Solvent.

     4.4 Litigation. Except as disclosed on Schedules 4.4 and 4.14 (if any),
there are no suits or proceedings pending, or to the knowledge of Borrower
threatened, before any court or by or before any governmental or regulatory
authority, commission, bureau or agency or public regulatory body against or
affecting Borrower or any Subsidiary, or their assets, which if adversely
determined would have a Material Adverse Effect on Borrower or such Subsidiary.

     4.5 Agreements, Etc. Neither Borrower nor any Subsidiary is a party to any
agreement or instrument or subject to any court order, governmental decree or
any charter or other corporate restriction, adversely affecting its business,
assets, operations or condition (financial or otherwise), and except as set
forth on Schedule 4.5 (if any), no such Person is in default in the performance,
observance or fulfillment of any of the material obligations, covenants or
conditions contained in any agreement or instrument to which it is a party, or
any law, regulation, decree, order or the like.

     4.6 Authorizations. All authorizations, consents, approvals and licenses
required under applicable law or regulation for the ownership or operation of
the property owned or operated by Borrower or any Subsidiary or for the conduct
of any business in which it is engaged have been duly issued and are in full
force and effect, and it is not in default, nor has any event occurred which
with the passage of time or the giving of notice, or both, would constitute a
default, under any of the terms or provisions of any part thereof, or under any
order, decree, ruling, regulation, closing agreement or other decision or
instrument of any governmental commission, bureau or other administrative agency
or public regulatory body having jurisdiction over such Person, which default
would have a Material Adverse Effect on such Person. Except as noted herein, no
approval, consent or authorization of, or filing or registration with, any
governmental commission, bureau or other regulatory authority or agency is
required with respect to the execution, delivery or performance of any Loan
Document.


                                       -9-

<PAGE>

     4.7 Title. Each of Borrower and each Subsidiary have good title to all of
the assets shown in its financial statements free and clear of all Liens, except
Permitted Liens.

     4.8 Collateral. The security interests granted to Lender herein and
pursuant to any other Security Agreement (a) constitute and, as to subsequently
acquired property included in the Collateral covered by the Security Agreement,
will constitute, security interests under the Code entitled to all of the
rights, benefits and priorities provided by the Code and (b) are, and as to such
subsequently acquired Collateral will be, fully perfected, superior and prior to
the rights of all third persons, now existing or hereafter arising, subject only
to Permitted Liens. All of the Collateral is intended for use solely in
Borrower's business.

     4.9 Taxes. Borrower and each Subsidiary have filed all federal and state
income and other tax returns which are required to be filed, and have paid all
taxes as shown on said returns and all taxes, including withholding, FICA and ad
valorem taxes, shown on all assessments received by it to the extent that such
taxes have become due. Except as set forth on Schedule 4.9, neither Borrower nor
any Subsidiary is subject to any federal, state or local tax Liens nor has such
Person received any notice of deficiency or other official notice to pay any
taxes. Borrower and each Subsidiary have paid all sales and excise taxes payable
by it.

     4.10 Labor Law Matters. No goods or services have been produced by Borrower
or any Subsidiary in violation of any applicable labor laws or regulations or
any collective bargaining agreement or other labor agreements or in violation of
any minimum wage, wage-and-hour or other similar laws or regulations, except for
such violations as would not have a Material Adverse Effect on Borrower.

     4.11 Accounts. Each Account, instrument, chattel paper and other writing
constituting any portion of the Collateral is genuine and enforceable in
accordance with its terms except for such limits thereon arising from bankruptcy
and similar laws relating to creditors' rights.

     4.12 Judgment Liens. Neither Borrower nor any Subsidiary, nor any of their
assets, are subject to any unpaid judgments (whether or not stayed) or any
judgment liens in any jurisdiction.

     4.13 Subsidiaries. Borrower's Subsidiaries are listed on Schedule 4.13.

     4.14 Environmental. Except as disclosed on Schedule 4.14 or remedied to the
satisfaction of the appropriate regulatory agency and to the best knowledge of
Borrower, and except for ordinary and customary amounts of solvents, cleaners
and similar materials used in the ordinary course of Borrower's business and in
material compliance with all Environmental Laws, Borrower has not generated,
stored or disposed of any Regulated Material on any portion of any property
currently owned or operated by Borrower, or transferred any Regulated Material
from such property to any other location in violation of any applicable
Environmental Laws. Except as disclosed on Schedule 4.14, to the best knowledge
of Borrower, Borrower is in material compliance with all applicable
Environmental Laws, and Borrower has not been notified of any action, suit,
proceeding or investigation which calls into question compliance by


                                      -10-

<PAGE>

Borrower with any Environmental Laws, or which seeks to suspend, revoke or
terminate any license, permit or approval necessary for the generation,
handling, storage, treatment or disposal of any Regulated Material. To the best
knowledge of Borrower, any material non-compliance whether set forth on Schedule
4.14 or otherwise, which has been the subject of an investigation by a
regulatory agency has been remedied or is being remedied to the satisfaction of
the applicable regulatory agency.

     4.15 ERISA. Except as set forth on Schedule 4.15, no Benefit Plan was in
violation in any material respect of any of the provisions of ERISA or any of
the qualification requirements of Section 401(a) of the IRC within the
immediately preceding five year period, no non-exempt Prohibited Transaction or
Reportable Event has occurred with respect to any Benefit Plan, no Benefit Plan
has been the subject of a waiver of the minimum funding standard under Section
412 of the IRC, no Benefit Plan has experienced an accumulated funding
deficiency under Section 412 of the IRC, no Lien has been imposed upon Borrower
or any ERISA Affiliate of Borrower under Section 412(n) of the IRC, no Benefit
Plan has been amended in such a way that the security requirements of Section
401(a)(29) of the IRC apply, no notice of intent to terminate a Benefit Plan has
been distributed to affected parties or filed with the PBGC under Section 4041
of ERISA, and no Benefit Plan has been terminated under Section 4041(e) of
ERISA, the PBGC has not instituted proceedings to terminate, or appoint a
trustee to administer, a Benefit Plan and no event has occurred or condition
exists which might reasonably constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any Benefit
Plan, neither Borrower nor any ERISA Affiliate of Borrower would be liable for
any amount in the aggregate pursuant to Sections 4062, 4063 or 4064 of ERISA if
all Benefit Plans terminated as of the most recent valuation dates of such
Benefit Plans which would reasonably result in a Material Adverse Effect;
neither Borrower nor any ERISA Affiliate of Borrower maintains any employee
welfare benefit plan, as defined in Section 3(1) of ERISA, which provides any
benefits to an employee or the employee's dependents with respect to claims
incurred after the employee separates from service other than is required by
applicable law; and neither Borrower nor any ERISA Affiliate of Borrower has
incurred or expects to incur any withdrawal liability to any Multiemployer Plan
and after the Closing Date, none of the above-described events shall occur which
are reasonably likely to result in Material Adverse Effect;

     4.16 Investment Company Act. Neither Borrower nor any Subsidiary is an
"investment company" as defined in the Investment Company Act of 1940, as
amended.

     4.17 Compliance with Covenants; No Default. Borrower is, and upon funding
of the Loans will be, in compliance with all of the covenants hereof. No Default
has occurred, and the execution, delivery and performance of the Loan Documents
and the funding of the Loans will not cause a Default.

     4.18 Intellectual Property. Borrower and each of its Subsidiaries own such
patents, trademarks, copyrights and other intellectual property to operate their
respective businesses and have valid and enforceable licenses or rights to any
additional patents, trademarks and registered copyrights necessary for the
operation of their respective businesses. Schedule 4.18 is a complete list of
all owned and licensed patents, trademarks, copyrights and other intellectual
property of


                                      -11-

<PAGE>

Borrower or any of its Subsidiaries. Except as set forth on Schedule 4.18, no
claim of infringement has been asserted against Borrower as to any intellectual
property.

     4.19 Full Disclosure. There is no fact (other than facts which are
generally available to the public and not particular to Borrower, such as
general economic or industry trends) which is known by Borrower that Borrower
has not disclosed to Lender which would have a greater than $250,000 negative
impact on the Company's results of operations or Collateral, as determined under
generally accepted accounting principles, in the then current quarter. Taken as
a whole the Loan Documents and any agreement, document, certificate or statement
delivered by Borrower to Lender do not contain any untrue statement of a
material fact or omit to state any material fact which is known by Borrower and
which is necessary to keep the other statements from being misleading.

     4.20 Perfection Certificate. All representations, warranties and statements
made by Borrower in the Perfection Certificate executed and delivered by
Borrower to Lender in connection with the Loan are true and correct as of the
date hereof.

     4.21 Compliance with Law. Borrower, each Guarantor and each Subsidiary
thereof is in compliance in all material respects with the requirements of all
laws and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of law or
order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

5 Affirmative Covenants of Borrower. Borrower covenants and agrees that from the
date hereof and until payment in full of the Indebtedness and the formal
termination of this Agreement, Borrower and each Subsidiary:

     5.1 Use of Loan Proceeds. Shall use the proceeds of the Revolving Credit
Loans for working capital to be used in the operation of Borrower's business and
for Permitted Acquisitions and the payment of stock buyouts under Section 6.3
(b), and Borrower shall furnish Lender all evidence that it may reasonably
require with respect to such use.

     5.2 Maintenance of Business and Properties. Shall at all times maintain,
preserve and protect all Collateral and all the remainder of its material
property used or useful in the conduct of its business, and keep the same in
good repair, working order and condition (ordinary wear and tear accepted), and
from time to time make, or cause to be made, all material needful and proper
repairs, renewals, replacements, betterments and improvements thereto so that
the business carried on in connection therewith may be conducted properly and in
accordance with standards generally accepted in businesses of a similar type and
size at all times, and maintain and keep in full force and effect all licenses
and permits reasonably necessary to the proper conduct of its business.


                                      -12-

<PAGE>

     5.3 Insurance. Shall maintain such liability insurance, workers'
compensation insurance, business interruption insurance and casualty insurance
as may be required by law, customary and usual for prudent businesses in its
industry or as may be reasonably required by Lender and shall insure and keep
insured all Collateral and other properties in good and responsible insurance
companies satisfactory to Lender. Such insurance shall insure all Collateral no
matter where located, including collateral held by third parties as processors
or vendors to Borrower. All hazard insurance covering Collateral shall be in
amounts and shall contain co-insurance and deductible provisions approved by
Lender, shall name and directly insure Lender as secured party and loss payee
under a long-form loss payee clause acceptable to Lender, or its equivalent, and
shall not be terminable except upon 30 days' written notice to Lender.

     5.4 Notice of Default. Shall provide to Lender prompt notice of (a) the
occurrence of a Default and what action (if any) Borrower is taking to correct
the same, (b) any material litigation or material changes in existing litigation
or any judgment against it or its assets, (c) any material damage or loss to
property, (d) any notice from taxing authorities as to claimed deficiencies or
any tax lien or any notice relating to alleged ERISA violations, (e) any ERISA
Event, (f) the cancellation or termination of, or any default under, any
material agreement to which Borrower is a party or by which any of its
properties are bound, or any acceleration of the maturity of any Debt of
Borrower and (g) any loss or threatened loss of material licenses or permits.

     5.5 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 Borrower and upon twenty-four (24) hours prior notice and no
more often than once each calendar year. 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, 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; provided such fees shall be subject to periodic review by Lender.

     5.6 Financial Information. Shall maintain books and records in accordance
with GAAP and shall furnish to Lender the following periodic financial
information:

          (a) Inventory and Equipment Reports. Borrower has delivered as of the
date hereof a report listing for each of the processors and vendors listed on
Schedule 3 to Perfection Certificate (i) the name and address of any third party
which is holding, processing or using such Inventory or Equipment and (ii)
stating whether such third party has executed a Lien Waiver in favor of Lender
(the "Inventory and Equipment Report"), and a spread sheet setting forth in
summary the tooling by vendor, whether or not listed on the Perfection
Certificate. Borrower shall update the tooling at vendors listed on Schedule 3
to the Perfection Certificate at any time when there is a change which exceeds
$200,000 in the aggregate in the tooling at any particular


                                      -13-

<PAGE>

location or any new location when the tooling at a vendor exceeds $50,000 in
value. At the request of the Lender, Borrower shall deliver to Lender an update
to the Inventory and Equipment Report not more frequently than thirty (30) days
after the end of each fiscal quarter, modifying Schedule 3 to the Perfection
Certificate, if necessary, so that the vendors listed on Schedule 3 to the
Perfection Certificate as holding tooling make up at least 80% of the value of
tooling at all vendors and listing any new processors holding inventory of a
value of more than $200,000 and the amount of inventory at that processor;

          (b) Interim Statements. Within forty-five days after the end of each
fiscal quarter, a copy of Borrower's Form 10-Q submitted to the Securities and
Exchange Commission, including a consolidated balance sheet of Borrower at the
end of that period and a consolidated income statement and statement of cash
flows for that period (and for the portion of the fiscal year ending with such
period), together with all supporting schedules, setting forth in comparative
form the figures for the same period of the preceding fiscal year, and certified
by the chief financial officer of Borrower as true and correct and fairly
representing the financial condition of Borrower and its Subsidiaries and that
such statements are prepared in accordance with GAAP, except without footnotes
and subject to normal year end audit adjustments; provided that each fiscal
quarter financial statement delivered to Lender hereunder shall be reviewed but
not audited;

          (c) Annual Statements. As soon as available and in any event within 90
days after the end of each fiscal year of Borrower:

               (i) a copy of Borrower's Form 10-K as submitted to the Securities
               and Exchange Commission, including:

               (ii) consolidated statements of income, retained earnings and
               cash flows of Borrower for such fiscal year and the related
               consolidated sheets of Borrower as at the end of such fiscal
               year, setting forth in each case in comparative form the
               corresponding consolidated figures for the preceding fiscal year;
               and

               (iii) an opinion of independent certified public accountants of
               recognized standing (without a "going concern" or like
               qualification or exception and without any qualification or
               exception as to the scope of such audit) stating that said
               financial statements referred to in the preceding clause (i)
               fairly present the financial condition and results of operations
               of Borrower as at the end of, and for, such fiscal year in
               accordance with GAAP.

          (d) No Default Certificates. Together with each report required by
Subsection (b) and (c), a certificate of its chief executive officer or chief
financial officer in the form appended hereto as Exhibit 4 ("Compliance
Certificate") that no Event of Default then exists or if an Event of Default
exists, the nature and duration thereof and Borrower's intention with respect
thereto, and that Borrower is in compliance with the financial covenants set
forth in Section 7.


                                      -14-

<PAGE>

          (e) Auditor's Management Letters. Promptly upon receipt thereof,
copies of each report submitted to Borrower by independent public accountants in
connection with any annual, interim or special audit made by them of the books
of Borrower including, without limitation, each report submitted to Borrower
concerning its accounting practices and systems and any final comment letter
submitted by such accountants to management in connection with the annual audit
of Borrower;

          (f) Other Filing. Borrower shall deliver to Lender copies of all
notices received from or filings made with the Securities and Exchange
Commission, any state securities office or any exchange;

          (g) Other Information. Such other information reasonably requested by
Lender from time to time concerning the business, properties or financial
condition of Borrower and its Subsidiaries; and

          (h) Projections. No later than thirty (30) days after the commencement
of each fiscal year, deliver Projections to Lender for Borrower for such fiscal
year. All Projections will be prepared in good faith by Borrower based on
assumptions and opinions that Borrower arrives at in good faith. Actual results
may vary significantly and Borrower shall have no liability by reason of
Borrower's failure to meet any projections or estimates. Borrower disclaims any
representation or warranty regarding the accuracy of such projections or
estimates or the truth or reasonableness of such projections and estimates or
the assumptions and opinions which underlie such projections and estimates,
except that they will be arrived at in good faith.

     5.7 Maintenance of Existence and Rights. Borrower will preserve and
maintain its corporate existence, authorities to transact business, rights and
franchises, trade names, patents, trademarks and permits necessary to the
conduct of its business.

     5.8 Payment of Taxes, Etc. Shall pay before delinquent all of its debts and
taxes, except for debts and taxes being actively contested in good faith and in
accordance with law and with proper reserves maintained on its books and
records. Borrower shall promptly notify Lender of any such taxes being so
contested.

     5.9 Compliance; Hazardous Materials. Except as set forth on Schedule 4.14,
shall materially comply with all laws, regulations, ordinances and other legal
requirements, specifically including, without limitation, ERISA and all
securities laws. Unless approved in writing by Lender, neither Borrower nor any
Subsidiary shall engage in the storage, manufacture, disposition, processing,
handling, use or transportation of any hazardous or toxic materials, unless in
material compliance with applicable laws and regulations.

     5.10 Compliance with Assignment Laws. Shall, if required by Lender, comply
with the Federal Assignment of Claims Act and any other applicable law relating
to assignment of government contracts.


                                      -15-

<PAGE>

     5.11 Compliance with Intellectual Property. Borrower shall maintain all of
its patents, trademarks and copyrights and shall actively pursue any
infringement of any such patent, trademark or copyright unless Borrower
reasonably determines, after notice to Lender, that the foregoing is not
necessary for the conduct of its business and would not have a Material Adverse
Effect. Borrower shall operate its business so as to not knowingly infringe any
patent, trademark or copyright.

     5.12 Further Assurances. Shall take such further action and provide to
Lender such further assurances as may be reasonably requested to ensure
compliance with the intent of this Agreement and the other Loan Documents.

     5.13 Covenants Regarding Collateral. Borrower makes the following covenants
with Lender regarding the Collateral:

          (a) Borrower will use the Collateral only in the ordinary course of
its business and will not permit the Collateral to be used in violation of any
applicable law or policy of insurance;

          (b) Borrower will defend the Collateral against all claims and demands
of all Persons, except for Permitted Liens;

          (c) Borrower will, at Lender's request, use reasonable best efforts to
obtain and deliver to Lender such waivers as Lender may require waiving the
landlord's, mortgagee's or other lienholder's enforcement rights against the
Collateral and assuring Lender's access to the Collateral in exercise of its
rights hereunder;

          (d) Borrower will promptly deliver to Lender all promissory notes,
drafts, trade acceptances, chattel paper, instruments or documents of title
which are Collateral, appropriately endorsed to Lender's order; and

          (e) Except for sales of Inventory in the ordinary course of business
and the disposition of obsolete Equipment as provided in Section 2.14, Borrower
will not sell, assign, lease, transfer, pledge, hypothecate or otherwise dispose
of or encumber any Collateral or any interest therein.

     5.14 Environmental Matters; Reporting. Borrower will observe and comply
with, and cause each Subsidiary to observe and comply with, all Environmental
Laws to the extent non-compliance could result in a material liability or
otherwise have a Material Adverse Effect on Borrower or any Subsidiary. Borrower
will give Lender prompt written notice of any material violation as to any
environmental matter by Borrower and of the commencement of any judicial or
administrative proceeding relating to health, safety or environmental matters
(a) in which an adverse result would have a Material Adverse Effect on any
operating permits, air emission permits, water discharge permits, hazardous
waste permits or other permits held by Borrower which are material to the
operations of Borrower, or (b) which will or threatens to impose a material
liability on Borrower to any Person or which will require a material expenditure
by Borrower to cure any alleged problem or violation.


                                      -16-

<PAGE>

6 Negative Covenants of Borrower. Borrower covenants and agrees that from the
date hereof and until payment in full of the Indebtedness and the formal
termination of this Agreement, Borrower and each Subsidiary:

     6.1 Debt. Shall not create or permit to exist any Debt, except Permitted
Debt.

     6.2 Liens. Shall not create or permit any Liens on any of its property
except Permitted Liens.

     6.3 Dividends.

          (a) Shall not pay or acquire any Subordinated Debt unless, after
giving effect thereto, there shall be no Default hereunder and such payment or
acquisition is specifically permitted by Lender in writing (including, without
limitation, by the express terms of the applicable Subordination Agreement).
Additionally, Borrower shall not, unless specifically permitted by Lender in
writing (i) declare or pay any dividend or other distribution (other than stock
dividends) on, purchase, redeem or retire any shares of any class of its stock,
or make any payment on account of, or set apart assets for the repurchase,
redemption, defeasance or retirement of, any class of its stock, equity or other
interest (ii) make any optional payment or prepayment on or redemption
(including without limitation by making payments to a sinking fund or analogous
fund) or repurchase of any Indebtedness for borrowed money other than
indebtedness pursuant to this Agreement; (iii) pay any management or similar
fees to any Person; or (iv) make any loan to any Person (except advances to
Borrower's employees in the ordinary course of business consistent with past
practices provided that all such advances shall not exceed $10,000 outstanding
in the aggregate at any time).

          (b) Notwithstanding the foregoing limitations of this Section 6.3,
Borrower may complete the stock buyback program as approved by the Board of
Directors and commenced in 2005 provided that

               (i) all future payments plus all payments through the date hereof
               shall not exceed $10,000,000;

               (ii) Borrower shall buy back the stock at a price determined by
               its officers in compliance with the Board of Directors original
               resolutions;

               (iii) Borrower shall not buy back any such stock when an Event of
               Default has occurred and is continuing or which would cause an
               Event of Default; and

               (iv) Borrower shall provide information as to any such buyback
               during any fiscal quarter in the financial statements to be
               provided under Section 5.6(b) hereof;

               (v) All the repurchased common stock of Borrower shall be treated
               as a reduction in equity in accordance with GAAP; and


                                      -17-

<PAGE>

               (vi) Borrower may use up to $5,000,000 in Revolving Credit Loans
               in any one fiscal year to fund the buyback under this Section
               6.3(b).

     6.4 ERISA. Borrower shall not (i) (x) maintain, or permit any member of the
Controlled Group to maintain, or (y) become obligated to contribute, or permit
any member of the Controlled Group to become obligated to contribute, to any
Benefit Plan, other than those Plans disclosed on Schedule 4.15, (ii) engage, or
permit any member of the Controlled Group to engage, in any non-exempt
"prohibited transaction", as that term is defined in section 406 of ERISA and
Section 4975 of the IRC, (iii) incur, or permit any member of the Controlled
Group to incur, any "accumulated funding deficiency", as that term is defined in
Section 302 of ERISA or Section 412 of the IRC, (iv) terminate, or permit any
member of the Controlled Group to terminate, any Benefit Plan could result in
any material liability of Borrower or any member of the Controlled Group or the
imposition of a lien on the property of Borrower or any member of the Controlled
Group pursuant to Section 4068 of ERISA, (v) assume, or permit any member of the
Controlled Group to assume, any obligation to contribute to any Multiemployer
Plan not disclosed on Schedule 4.15, (vi) incur, or permit any member of the
Controlled Group to incur, any withdrawal liability to any Multiemployer Plan;
(vii) fail promptly to notify Lender of the occurrence of any Termination Event,
(viii) fail to comply, in all material respects, or permit a member of the
Controlled Group to fail to comply, in all material respects, with the
requirements of ERISA or IRC or other applicable laws in respect of any Benefit
Plan or (ix) fail to meet, or permit any member of the Controlled Group to fail
to meet, all minimum funding requirements under ERISA or IRC or postpone or
delay or allow any member of the Controlled Group to postpone or delay any
funding requirement with respect of any Benefit Plan except as permitted by
applicable laws, in each event (i) through (ix) which would be reasonably likely
to result in a Material Adverse Effect;

     6.5 Loans and Other Investments. Shall not make or permit to exist any
advances or loans to, or guarantee or become contingently liable, directly or
indirectly, in connection with the obligations, leases, stock or dividends of,
or own, purchase or make any commitment to purchase any stock, bonds, notes,
debentures or other securities of, or any interest in, or make any capital
contributions to (all of which are sometimes collectively referred to herein as
"Investments") any Person except for (a) purchases of direct obligations of the
federal government, (b) deposits in commercial banks, (c) commercial paper of
any U.S. corporation having the highest ratings then given by the Moody's
Investors Services, Inc. or Standard & Poor's Corporation, (d) existing
investments in Subsidiaries, (e) endorsement of negotiable instruments for
collection in the ordinary course of business, (f) Permitted Acquisitions, (g)
advances to employees for business travel and other expenses incurred in the
ordinary course of business which do not at any time exceed $50,000.00 in the
aggregate and (h) any mutual fund or other pooled investment vehicle rated at
least Aa by Moody's Investor Services, Inc. or AAA by Standard & Poors
Corporation.

     6.6 Change in Business. Shall not enter into any business which is
substantially different from the business in which it is presently engaged.

     6.7 Accounts. Shall not sell, assign or discount any of its Accounts,
chattel paper or any promissory notes, instrument or payment intangible held by
it other than the discount of such notes in the ordinary course of business for
collection.


                                      -18-

<PAGE>

     6.8 Transactions with Affiliates. Shall not directly or indirectly
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, pay any management fees to or otherwise deal with, in the ordinary
course of business or otherwise, any Affiliate (other than a Subsidiary);
provided, however, that any acts or transactions prohibited by this Section may
be performed or engaged in if upon terms not less favorable to Borrower or such
Subsidiary than if no such relationship existed or involved a Permitted
Acquisition.

     6.9 No Change in Name, Offices; Removal of Collateral. Shall not, unless it
shall have given 60 days' advance written notice thereof to Lender, (a) change
its name or the location of its chief executive office or other office where
books or records are kept, (b) change its state of organization or (c) permit
any Inventory or other tangible Collateral in excess of ten percent (10%) of the
aggregate value of the total Inventory of Borrower to be located at any location
other than the facilities as specified in the Perfection Certificate.

     6.10 No Sale, Leaseback. Shall not enter into any sale-and-leaseback or
similar transaction.

     6.11 Margin Stock. Shall not use any proceeds of the Loan to purchase or
carry any margin stock (within the meaning of Regulation U of the Board of
Governors of Federal Reserve System) or extend credit to others for the purpose
of purchasing or carrying any margin stock.

     6.12 Tangible Collateral. Shall not, except as otherwise provided herein,
allow any Inventory or other tangible Collateral to be commingled with, or
become an accession to or part of, any property of any other Person so long as
such property is Collateral; nor allow any tangible Collateral to become a
fixture unless Lender shall have given its prior written authorization, except
as disclosed in the Certificate by Officers.

     6.13 Subsidiaries. Shall not acquire, form or dispose of any Subsidiaries
or permit any Subsidiary to issue capital stock except to its parent, except
with the prior written consent of Lender or as part of a Permitted Acquisition.
Any new Subsidiary shall become a party to this Agreement and unless Lender
otherwise agrees, shall grant to Lender a Lien on all of its Collateral and
agree to be bound by the provisions of this Agreement. Borrower shall not
transfer, sell or assign any of its assets to any Subsidiary provided, that,
during each fiscal year, Borrower may sell inventory consisting of finished
goods or spare parts to TransAct UK having an aggregate fair market value of no
more than $500,000 and reducing on and after December 31, 2007 to $250,000. No
Subsidiary of Borrower (other than TransAct UK) currently or shall in the future
(x) engage in any business of a material nature, (y) own assets having an
aggregate value in excess of $2,750,000 and reducing on and after December 31,
2007 to $500,000 or (z) have liabilities in excess of $1,000,000 and reducing on
and after December 31, 2007 to $500,000 in the aggregate other than to Lender
and Lenders pursuant to a Guaranty. In addition, TransAct UK shall not currently
or shall not in the future (i) own assets having an aggregate value in excess of
$2,750,000 and reducing as of December 31, 2007 to $500,000 or (ii) have
indebtedness for borrowed money or any liability other than (A) in the ordinary
course of business and (B) to Lender and Lenders pursuant to a Guaranty.


                                      -19-

<PAGE>

     6.14 Change of Name. Shall give Lender thirty (30) days prior written
notice of any new trade or fictitious name. Borrower's use of any trade or
fictitious name shall be in compliance with all laws regarding the use of such
names.

     6.15 Liquidation, Mergers, Consolidations and Dispositions of Substantial
Assets. Borrower shall not dissolve or liquidate, or become a party to any
merger or consolidation other than a Permitted Acquisition, or acquire by
purchase, lease or otherwise, all or a substantial part (more than 10% in the
aggregate during the term hereof) of the assets of any Person other than a
Permitted Acquisition, or sell, transfer, lease or otherwise dispose of all or a
substantial part (more than 10% in the aggregate during the term hereof) of its
property or assets, except for the sale of Inventory in the ordinary course of
business and the merger of a Subsidiary with and into Borrower and which
Borrower is the surviving party, or sell or dispose of any equity ownership
interests in any Subsidiary.

     6.16 Change of fiscal year or Accounting Methods. Shall not change its
fiscal year or its significant accounting methods without the prior written
consent of Lender.

7 Financial Covenants of Borrower. Borrower covenants and agrees that from the
date hereof and until payment in full of the Indebtedness and the formal
termination of this Agreement, Borrower and each Subsidiary, on a consolidated
basis, shall comply with the following additional covenants:

     7.1 Operating Cash Flow to Total Debt Service Ratio. Borrower shall,
maintain a ratio of Operating Cash Flow for the preceding four fiscal quarters
to Total Debt Service at the end of each fiscal quarter of not less than 1.25 to
1.00.

     7.2 Funded Debt to EBITDA. The ratio of Funded Debt to Twelve Month EBITDA
shall not exceed at the end of each fiscal quarter a ratio 3.25 to 1.00.

8 Default.

     8.1 Events of Default. Each of the following shall constitute an Event of
Default:

          (a) There shall occur any default by Borrower in the payment, when
due, of any principal of or interest on the Revolving Credit Note or any amounts
due hereunder or under any other Loan Document; or

          (b) There has occurred and is continuing default under Sections 5.1,
5.5, 5.6, 5.11, 5.13, Section 6 and Section 7 of this Agreement; or

          (c) Borrower shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those specified in clauses
(a) or (b) of this Article) or any other Loan Document, and such failure shall
continue unremedied for a period of 30 days after notice thereof from Lender
(given at the request of any Lender) to Borrower provided, however, that if such
failure cannot be remedied during such 30 day period despite all reasonable


                                      -20-

<PAGE>

efforts of Borrower, then such 30 day period shall be extended by an additional
30 day period if such delay could not reasonably be expected to have a Material
Adverse Effect; provided, further, that such additional 30 day period shall
immediately end if (i) it is no longer possible for such failure to be cured by
the end of such period, or (ii) Borrower ceases to proceed diligently and in
good faith to cure such failure;

          (d) Any representation or warranty made by Borrower or any other party
to any Loan Document (other than Lender) herein or therein or in any certificate
or report furnished in connection herewith or therewith shall prove to have been
untrue or incorrect in any material respect when made; or

          (e) Any other obligation now or hereafter owed by Borrower or any
Subsidiary to Lender shall be in default and not cured within the grace period,
if any, provided therein, or any such Person shall be in default under any Debt
in excess of $100,000 owed to any other obligee, which default entitles the
obligee to accelerate any such Debt or exercise other remedies with respect
thereto; or

          (f) Borrower or any Subsidiary shall (A) voluntarily dissolve,
liquidate or terminate operations or apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
such Person or of all or of a substantial part of its assets, other than (i) as
permitted under Section 6.15 or (ii) the liquidation of a Subsidiary and
distribution of its net assets to Borrower, (B) admit in writing its inability,
or be generally unable, to pay its debts as the debts become due, (C) make a
general assignment for the benefit of its creditors, (D) commence a voluntary
case under the federal Bankruptcy Code (as now or hereafter in effect), (E) file
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding up, or composition or adjustment of debts,
(F) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under
Bankruptcy Code, or (G) take any corporate action for the purpose of effecting
any of the foregoing; or

          (g) An involuntary petition or complaint shall be filed against
Borrower or any Subsidiary or any Guarantor seeking bankruptcy relief or
reorganization or the appointment of a receiver, custodian, trustee, intervenor
or liquidator of Borrower or any Subsidiary or any Guarantor, of all or
substantially all of its assets, and such petition or complaint shall not have
been dismissed within ninety (90) days of the filing thereof; or an order, order
for relief, judgment or decree shall be entered by any court of competent
jurisdiction or other competent authority approving or ordering any of the
foregoing actions;

          (h) There shall occur any physical loss, theft, damage or destruction
of any of the Collateral, which loss exceeds $250,000 after the application of
insurance proceeds; or

          (i) A judgment in excess of $250,000 shall be rendered against
Borrower or any Subsidiary and shall remain undischarged, undismissed and
unstayed for more than ten days (except judgments validly covered by insurance
with a deductible of not more than $250,000 except for director and officer
liability insurance with no more than a $100,000 deductible and


                                      -21-

<PAGE>

employment practices coverage under the director and officers liability
insurance with no more than a $50,000 deductible) or there shall occur any levy
upon, or attachment, garnishment or other seizure of, any material portion of
the Collateral or other assets of Borrower, any Subsidiary by reason of the
issuance of any tax levy, judicial attachment or garnishment or levy of
execution; or

          (j) The making of any levy, seizure or attachment upon Collateral
having a value in excess of $100,000 which is not dismissed or released within
10 days of such levy, seizure or attachment; or

          (k) cancellation of the GTECH Contract; or

          (l) A Change of Control; or

          (m) the operations of any of Borrower's manufacturing facilities are
interrupted at any time for more than ten (10) consecutive Business Days, unless
Borrower shall (i) be entitled to receive for such period of interruption,
proceeds of business interruption insurance sufficient to assure that its per
diem cash needs during such period is at least equal to its average per diem
cash needs for the consecutive three month period immediately preceding the
initial date of interruption and (ii) commence receiving such proceeds in the
amount described in clause (i) preceding not later than thirty (30) days
following the initial date of any such interruption.

     8.2 Remedies. If any Event of Default shall occur and be continuing, Lender
may, without notice to Borrower, at its option, (i) withhold further Revolving
Credit Loans to Borrower or (ii) take any or all of the following actions:

          (a) Lender may declare any or all Indebtedness to be immediately due
and payable (if not earlier demanded), terminate its obligation to make
Revolving Credit Loans to Borrower, bring suit against Borrower to collect the
Indebtedness, exercise any remedy available to Lender hereunder or at law and
take any action or exercise any remedy provided herein or in any other Loan
Document or under applicable law. No remedy shall be exclusive of other remedies
or impair the right of Lender to exercise any other remedies.

          (b) Without waiving any of its other rights hereunder or under any
other Loan Document, Lender shall have all rights and remedies of a secured
party under the Code (and the Uniform Commercial Code of any other applicable
jurisdiction) and such other rights and remedies as may be available hereunder,
under other applicable law or pursuant to contract. If requested by Lender,
Borrower will promptly assemble the Collateral and make it available to Lender
at a place to be designated by Lender. Borrower agrees that any notice by Lender
of the sale or disposition of the Collateral or any other intended action
hereunder, whether required by the Code or otherwise, shall constitute
reasonable notice to Borrower if the notice is mailed to Borrower by regular or
certified mail, postage prepaid, at least five days before the action to be
taken. Borrower shall be liable for any deficiencies in the event the proceeds
of the disposition of the Collateral do not satisfy the Indebtedness in full.


                                      -22-

<PAGE>

          (c) Lender may demand, collect and sue for all amounts owed pursuant
to Accounts, general intangibles, chattel paper or for proceeds of any
Collateral (either in Borrower's name or Lender's name at the latter's option),
with the right to enforce, compromise, settle or discharge any such amounts.

9 Security Agreement.

     9.1 Security Interest.

          (a) As security for the payment and performance of any and all of the
Indebtedness and the performance of all other obligations and covenants of
Borrower hereunder and under the other Loan Documents, certain or contingent,
now existing or hereafter arising, which are now, or may at any time or times
hereafter be owing by Borrower to Lender, Borrower hereby pledges to Lender and
gives Lender a continuing security interest in and general Lien upon and right
of set off against, all right, title and interest of Borrower in and to the
Collateral, whether now owned or hereafter acquired by Borrower.

          (b) Except as herein or by applicable law otherwise expressly
provided, Lender shall not be obligated to exercise any degree of care in
connection with any Collateral in its possession, to take any steps necessary to
preserve any rights in any of the Collateral or to preserve any rights therein
against prior parties, and Borrower agrees to take such steps. In any case
Lender shall be deemed to have exercised reasonable care if it shall have taken
such steps for the care and preservation of the Collateral or rights therein as
Borrower may have reasonably requested Lender to take and Lender's omission to
take any action not requested by Borrower shall not be deemed a failure to
exercise reasonable care. No segregation or specific allocation by Lender of
specified items of Collateral against any liability of Borrower shall waive or
affect any security interest in or Lien against other items of Collateral or any
of Lender's options, powers or rights under this Agreement or otherwise arising.

     9.2 Power of Attorney. Borrower authorizes Lender at Borrower's expense to
file any financing statements relating to the Collateral (without Borrower's
signature thereon) which Lender deems appropriate and Borrower irrevocably
appoints Lender as its attorney in fact to execute any such financing statements
in Borrower's name and to perform all other acts which Lender deems appropriate
to perfect and to continue perfection of the security interest of Lender.
Borrower hereby appoints Lender as Borrower's attorney in fact to endorse,
present and collect on behalf of Borrower and in Borrower's name any draft,
checks or other documents necessary or desirable to collect any amounts, which
Borrower may be owed. To the extent permitted by applicable law or by the terms
of any such licenses or franchise agreements, Lender is hereby granted a license
or other right to use, without charge, Borrower's labels, patents, copyrights,
rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, or any Property of a similar nature, as it pertains to the
Collateral, in advertising for sale and selling any Collateral, and Borrower's
rights under all licenses and all franchise agreements shall inure to Lender's
benefit. The proceeds realized from the sale or other disposition of any
Collateral may be applied, after allowing two (2) Business Days for collection,
first to the reasonable costs, expenses and attorneys' fees and expenses
incurred by Lender for collection and for acquisition,


                                      -23-

<PAGE>

completion, protection, removal, storage, sale and delivering of the Collateral;
secondly, to interest due upon any of the Indebtedness; and thirdly, to the
principal amount of the Indebtedness. If any deficiency shall arise, Borrower
shall remain liable to Lender therefore.

     9.3 Entry. Borrower hereby irrevocably consents to any act by Lender or its
agents in entering upon any premises for the purposes of either (i) inspecting
the Collateral or (ii) taking possession of the Collateral and Borrower hereby
waives its right to assert against Lender or its agents any claim based upon
trespass or any similar cause of action for entering upon any premises where the
Collateral may be located.

     9.4 Other Rights. Borrower authorizes Lender without affecting Borrower's
obligations hereunder or under any other Loan Document from time to time (i) to
take from any party and hold additional Collateral or guaranties for the payment
of the Indebtedness or any other supporting obligations or any part thereof, and
to exchange, enforce or release such collateral or guaranty of payment of the
Indebtedness or any other supporting obligation or any part thereof and to
release or substitute any endorser or guarantor or any party who has given any
security interest in any collateral as security for the payment of the
Indebtedness or any part thereof or any party in any way obligated to pay the
Indebtedness or any part thereof; and (ii) upon the occurrence and during the
continuance of any Event of Default to direct the manner of the disposition of
the Collateral and the enforcement of any endorsements, guaranties, letters of
credit or other security relating to the Indebtedness or any part thereof as
Lender in its sole discretion may determine.

     9.5 Accounts. After the occurrence and during the continuance of an Event
of Default, Lender may notify any Account Debtor of Lender's security interest
and may direct such Account Debtor to make payment directly to Lender for
application against the Indebtedness. Any such payments received by or on behalf
of Borrower at any time, whether before or after default, shall be the property
of Lender, shall be held in trust for Lender and not commingled with any other
assets of any Person (except to the extent they may be commingled with other
assets of Borrower in an account with Lender) and shall be immediately delivered
to Lender in the form received. Lender shall have the right to apply any
proceeds of Collateral to such of the Indebtedness as it may determine.

     9.6 Waiver of Marshaling. Borrower hereby waives any right it may have to
require marshaling of its assets.

10 Miscellaneous.

     10.1 No Waiver, Remedies Cumulative. No failure on the part of Lender to
exercise, and no delay in exercising, any right hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and are in addition to any other remedies provided by law, any Loan Document or
otherwise.


                                      -24-

<PAGE>

     10.2 Survival of Representations. All representations and warranties made
herein shall survive the making of the Loan hereunder and the delivery of the
Revolving Credit Note, and shall continue in full force and effect so long as
any Indebtedness is outstanding, there exists any commitment by Lender to
Borrower, and until this Agreement is formally terminated in writing.

     10.3 Costs and Expenses. Borrower shall pay (i) all reasonable out of
pocket expenses incurred by Lender (including the reasonable fees, charges and
disbursements of counsel for Lender, in connection with the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out of pocket
expenses incurred by Lender in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out of pocket expenses incurred by Lender (including the fees, charges
and disbursements of any counsel for Lender, in connection with the enforcement
or protection of its rights (A) in connection with this Agreement and the other
Loan Documents, including its rights under this Section 10.3, or (B) in
connection with the Revolving Credit Loans made or Letters of Credit issued
hereunder, including all such out of pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Revolving Credit Loans
or Letters of Credit.

     10.4 Indemnification by Borrower. Borrower shall indemnify Lender and its
Affiliate, and each officer, director, agent or attorney of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by Borrower arising out of, in connection with,
or as a result of (i) the execution or delivery of this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Revolving Credit Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by Lender to honor
a demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of hazardous or
toxic materials on or from any property owned or operated by Borrower or any of
its Subsidiaries, or any liability under any Environmental Law related in any
way to Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by Borrower, and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by
Borrower against an Indemnitee for breach in bad faith of such Indemnitee's
obligations hereunder or under any other Loan Document, if Borrower has obtained
a final and


                                      -25-

<PAGE>

nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.

     10.5 Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

     10.6 Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in paragraph (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:

     Lender:   TD Banknorth, N.A
               Asset Based Lending Group
               1441 Main Street
               Springfield, MA 01103
               Attn: James Hickson
               Fax: (413) 748-8037
               Email: jhickson@banknorth.com

     Borrower: TransAct Technologies Incorporated
               7 Laser Lane
               Wallingford, Connecticut 06492
               Attn: Steven A. DeMartino, Executive Vice President and Chief
               Financial Officer
               Fax: (203) 949-9048
               Email: sdemartino@transact-tech.com

               Copy to: David A. McKay, Esq.
               Ropes & Gray
               One International Place
               Boston, MA 02110-2624
               Fax: 617-235-0074
               Email: david.mckay@ropesgray.com


                                      -26-

<PAGE>

          (a) Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the
extent provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

          (b) Notices and other communications sent to an e-mail address shall
be deemed received upon the sender's receipt of an acknowledgement from the
intended recipient (such as by the "return receipt requested" function, as
available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and

          (c) Notices or communications posted to an Internet or intranet
website shall be deemed received upon the deemed receipt by the intended
recipient at its e-mail address as described in the foregoing clause (b) of
notification that such notice or communication is available and identifying the
website address therefor.

          (d) Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.

     10.7 Set Off. If an Event of Default shall have occurred and be continuing,
Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by applicable law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
in whatever currency) at any time held and other obligations at any time owing
by Lender or any Affiliate to or for the credit or the account of Borrower
against any and all of the Indebtedness of Borrower now or hereafter existing
under this Agreement or any other Loan Document, irrespective of whether or not
Lender shall have made any demand under this Agreement or any other Loan
Document and although such Indebtedness may be contingent or unmatured. The
rights of Lender and its Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that Lender or its
Affiliates may have. Lender agrees to notify Borrower promptly after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.

     10.8 Governing Law. This Agreement and the Loan Documents shall be deemed
contracts made under the laws of The Commonwealth of Massachusetts and shall be
governed by and construed in accordance with the laws of said commonwealth
(excluding its conflict of laws provisions if such provisions would require
application of the laws of another jurisdiction) except insofar as the laws of
another jurisdiction may, by reason of mandatory provisions of law, govern the
perfection, priority and enforcement of security interests in the Collateral.

     10.9 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of Borrower and Lender, and their respective successors and
assigns; provided that


                                      -27-

<PAGE>

Borrower may not assign any of its rights hereunder without the prior written
consent of Lender, and any such assignment made without such consent will be
void.

     10.10 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute but one and the same instrument.

     10.11 No Usury. Regardless of any other provision of this Agreement, the
Amended and Restated Note or in any other Loan Document, if for any reason the
effective interest should exceed the maximum lawful interest, the effective
interest shall be deemed reduced to, and shall be, such maximum lawful interest,
and (i) the amount which would be excessive interest shall be deemed applied to
the reduction of the principal balance of the Amended and Restated Note and not
to the payment of interest, and (ii) if the loan evidenced by the Amended and
Restated Note has been or is thereby paid in full, the excess shall be returned
to the party paying same, such application to the principal balance of the
Amended and Restated Note or the refunding of excess to be a complete settlement
and acquittance thereof.

     10.12 Powers. All powers of attorney granted to Lender are coupled with an
interest and are irrevocable.

     10.13 Approvals. If this Agreement calls for the approval or consent of
Lender, such approval or consent may be given or withheld in the discretion of
Lender unless otherwise specified herein.

     10.14 No Punitive Damages. Each party agrees that it shall not have a
remedy of punitive or exemplary damages against the other in any dispute and
hereby waives any right or claim to punitive or exemplary damages it may have
now or which may arise in the future in connection with any dispute.

     10.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.15.

     10.16 Participations. Lender shall have the right to enter into one or more
participation with other lenders with respect to the Indebtedness. Upon prior
notice to Borrower of such


                                      -28-

<PAGE>

participation, Borrower shall thereafter furnish to such participant any
information furnished by Borrower to Lender pursuant to the terms of the Loan
Documents. Nothing in this Agreement or any other Loan Document shall prohibit
Lender from pledging or assigning this Agreement and Lender's rights under any
of the other Loan Documents, including collateral therefore, to any Federal
Reserve Lender in accordance with applicable law.

     10.17 Dealings with Multiple Borrower. If more than one Person is named as
Borrower hereunder, all Indebtedness, representations, warranties, covenants and
indemnities set forth in the Loan Documents to which such Person is a party
shall be joint and several. Lender shall have the right to deal with any
individual of any Borrower with regard to all matters concerning the rights and
obligations of Lender hereunder and pursuant to applicable law with regard to
the transactions contemplated under the Loan Documents. All actions or inactions
of the officers, managers, members and/or agents of any Borrower with regard to
the transactions contemplated under the Loan Documents shall be deemed with full
authority and binding upon all Borrower hereunder. Each Borrower hereby appoints
each other Borrower as its true and lawful attorney-in-fact, with full right and
power, for purposes of exercising all rights of such Person hereunder and under
applicable law with regard to the transactions contemplated under the Loan
Documents. The foregoing is a material inducement to the agreement of Lender to
enter into the terms hereof and to consummate the transactions contemplated
hereby.

     10.18 Waiver of Certain Defenses. All rights of Lender and all obligations
of Borrower hereunder shall be absolute and unconditional irrespective of (i)
any change in the time, manner or place of payment of, or any other term of, all
or any of the Indebtedness, or any other amendment or waiver of or any consent
to any departure from any provision of the Loan Documents, (ii) any exchange,
release or non-perfection of any other collateral given as security for the
Indebtedness, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Indebtedness, or (iii) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, Borrower or any third party, other than payment and performance in
full of the Indebtedness.

                            [SIGNATURES ON NEXT PAGE]


                                      -29-

<PAGE>

SIGNATURE PAGE FOR AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                        TD BANKNORTH, N.A.


                                        By: /s/ James Hickson
                                            ------------------------------------
                                            James Hickson
                                        Its Vice President


                                        TRANSACT TECHNOLOGIES INCORPORATED


                                        By: /s/ Steven A. DeMartino
                                            ------------------------------------
                                            Steven A. DeMartino
                                        Its Executive Vice President and
                                            Chief Financial Officer


                                       -1-