AGREEMENT
By and Between
Tidel Technologies, Inc.,
Tidel Engineering, L.P.
and
Laurus Master Fund, Ltd.
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Dated as of June 9, 2006
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AGREEMENT
This Agreement (this "Agreement") is made and entered into as of June 9,
2006 between Tidel Technologies, Inc., a Delaware corporation (the "Company"),
Tidel Engineering, L.P. ("Engineering") and Laurus Master Fund, Ltd., a Cayman
Islands company ("Laurus").
W I T N E S S E T H:
WHEREAS, the Company and Engineering have sold substantially all of the
assets of the Company's automated teller machine business to NCR EasyPoint LLC
(the "ATM Sale") pursuant to the Asset Purchase Agreement, dated as of February
19, 2005, as amended;
WHEREAS, the Company and Engineering have entered into an Asset Purchase
Agreement with Sentinel Operating, L.P. ("Sentinel") dated as of January 12,
2006, to sell the Company's cash security business (the "TACC Sale"), as amended
and restated pursuant to the Amended and Restated Asset Purchase Agreement dated
as of June 9, 2006 (the "Amended APA") and attached hereto as Exhibit A;
WHEREAS, the proposed TACC Sale requires the approval of the holders of a
majority of the outstanding shares of the Company's common stock, $.01 par value
per share (the "Common Stock");
WHEREAS, the Company has entered into a Stock Redemption Agreement with
Laurus dated as of January 12, 2006, as amended as of February 28, 2006 and the
date hereof (as amended, the "Redemption Agreement") pursuant to which the
Company has agreed, among other things, to redeem all shares of Common Stock
held by Laurus, immediately following the closing of the TACC Sale;
WHEREAS, the Company has entered into an Exercise and Conversion Agreement
with Laurus, Sentinel and Sentinel Technologies, Inc., dated as of January 12,
2006, as amended as of February 28, 2006 and the date hereof (as amended, the
"Exercise Agreement") pursuant to which the Company has agreed, among other
things, that at any time on or after September 30, 2006, Laurus is authorized to
apply the Collateral Deposit (as defined therein) to the payment of the
Redemption Amount (as defined therein):
WHEREAS, the Company has entered into an Agreement Regarding NCR
Transaction and Other Asset Sales with Laurus, dated as of November 26, 2004
(the "Sale Agreement"), pursuant to which the Company agreed, among other
things, to make certain payments to Laurus upon the consummation of the ATM Sale
and the TACC Sale;
WHEREAS, the Company and Laurus desire to resolve certain outstanding
matters between them as provided herein to avoid uncertainty, to expedite the
contemplated transactions and to reduce costs and expenses for the benefit of
all parties following the closing of the TACC Sale.
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendment of Sale Agreement, and related matters.
(a) Upon the closing of the TACC Sale, the Company shall pay to Laurus
$8,508,963 in immediately available funds (the "Sale Fee") in full satisfaction
of all amounts due and owing to Laurus under the Sale Agreement, and following
payment of such amount the Sale Agreement shall terminate and be of no further
force and effect.
(b) Upon the payment of the Sale Fee by the Company to Laurus, the
Reaffirmation, Ratification and Confirmation Agreement dated January 12, 2006
between the Company and Laurus shall terminate and be of no further force and
effect.
(c) Following the payment of the Sale Fee by the Company to Laurus and the
performance by the Company of all of its obligations (financial and otherwise)
under and pursuant to the Redemption Agreement, all remaining amounts held under
the Cash Collateral Deposit Letter (the "Cash Collateral Deposit Letter") dated
January 12, 2006 among Laurus, the Company, Engineering, Tidel Services, Inc.,
Tidel Cash Systems, Inc. and AnyCard International, Inc. shall be paid to the
Company by Laurus.
Section 2. Termination of Obligations.
Following the closing of the TACC Sale, the payment of the Sale Fee by the
Company to Laurus and the performance by the Company of all of its obligations
(financial and otherwise) under and pursuant to the Redemption Agreement, the
parties agree that neither the Company nor Engineering or any of their
subsidiaries shall have any further obligations due to, owing to or to be
performed by them for Laurus, all warrants to purchase the Common Stock held by
Laurus shall terminate and be of no further force and effect and all liens,
claims, encumbrances and security interests held by Laurus, or its transferees
or assignees, in the Company's and Engineering's, and each of their
subsidiaries', assets shall terminate and be of no further force and effect.
Section 3. Releases.
(a) Release by Laurus. Upon and subject to the closing of the TACC Sale,
the payment of the Sale Fee by the Company to Laurus and the performance by the
Company of all of its obligations (financial and otherwise) under and pursuant
to the Redemption Agreement, Laurus, individually and on behalf of its officers,
directors, affiliates, successors and assigns (together, the "Laurus
Releasors"), hereby remises, releases and forever discharges the Company and
Engineering, and each of their predecessors, parents, subsidiaries, affiliates,
and the past, present and future officers, directors, partners, members,
employees, agents, consultants, representatives, attorneys, and insurers of any
of the foregoing, together with all successors and
assigns of any of the foregoing (collectively, the "Tidel Releasees") of and
from all claims, demands, actions, causes of action, rights of action, debts,
dues, bonds, bills, judgments, contracts, controversies, covenants, obligations,
agreements, damages, penalties, interest, fees, expenses, costs, remedies,
accounts, reckonings, extents, responsibilities, liabilities, suits, and
proceedings of whatsoever kind, nature, or description, direct or indirect,
vested or contingent, known or unknown, suspected or unsuspected, in contract,
tort, law, equity, or otherwise, under the laws of any jurisdiction, that Laurus
Releasors ever had, or now have, for, upon, or by reason of any matter, cause or
thing whatsoever from the beginning of the world to the date of this Agreement;
provided, however, that the foregoing release shall not extend to (i) any claims
arising from the breach of this Agreement by any of the Tidel Releasees or (ii)
any rights the Laurus Releasors may have pursuant to the collateral assignment
made by Sentinel to Laurus in respect of the Amended APA.
(b) Release by the Company and Engineering. Upon and subject to the
closing of the TACC Sale, the payment of the Sale Fee by the Company to Laurus
and the performance by the Company of all of its obligations (financial and
otherwise) under and pursuant to the Redemption Agreement, the Company and
Engineering, individually and on behalf of each of its officers, directors,
affiliates, successors and assigns (together, the "Tidel Releasors"), hereby
remises, releases and forever discharges Laurus, and its predecessors, parents,
subsidiaries, affiliates, and the past, present and future officers, directors,
partners, members, employees, agents, consultants, representatives, attorneys,
and insurers of any of the foregoing, together with all successors and assigns
of any of the foregoing (collectively, the "Laurus Releasees") of and from all
claims, demands, actions, causes of action, rights of action, debts, dues,
bonds, bills, judgments, contracts, controversies, covenants, obligations,
agreements, damages, penalties, interest, fees, expenses, costs, remedies,
accounts, reckonings, extents, responsibilities, liabilities, suits, and
proceedings of whatsoever kind, nature, or description, direct or indirect,
vested or contingent, known or unknown, suspected or unsuspected, in contract,
tort, law, equity, or otherwise, under the laws of any jurisdiction, that Tidel
Releasors, ever had or now have, for, upon, or by reason of any matter, cause or
thing whatsoever from the beginning of the world to the date of this Agreement;
provided, however, the foregoing release shall not extend to any claims arising
from the breach of this Agreement by any of the Laurus Releasees.
Section 4. Miscellaneous.
(a) Expenses. Each party shall pay its own costs and expenses incurred in
connection with this Agreement.
(b) Notices. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when delivered personally or by facsimile
transmission, in either case with receipt acknowledged, or five days after being
sent by registered or certified mail, return receipt requested, postage prepaid,
or one day after being sent by nationally-recognized overnight carrier:
(i) If to the Company to:
Tidel Technologies, Inc.
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▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman of the Board
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
Park Avenue Tower
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(ii) If to the Seller, to:
Laurus Master Fund, Ltd.
M & C Corporate Services Limited
▇.▇. ▇▇▇ ▇▇▇ G.T., ▇▇▇▇▇▇ House
South Church Street
▇▇▇▇▇▇ Town
Grand Cayman, Cayman Islands
Attention: Authorized Person
with a copy to:
Loeb & Loeb LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
and
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC
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Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address as any party shall have specified by notice in writing
to the other in compliance with this Section 4.
(c) Amendment. Laurus hereby consents to the execution and performance of
the Amended APA.
(d) Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, representations and understandings among the
parties hereto.
(e) Binding Effect, Benefits, Assignments. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns; nothing in this Agreement, expressed or implied, is
intended to confer on any other person, other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement. This Agreement may not be
assigned by the Company without the prior written consent of Laurus. This
Agreement may only be assigned by Laurus together with and as a part of the
assignment of the Sale Agreement and all of the Laurus Documents (as defined in
the Cash Collateral Deposit Letter).
(f) Applicable Law. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the State of New York, without regard to principles of conflicts of law.
(g) Jurisdiction. Unless otherwise provided herein, the parties hereto
agree to submit to the jurisdiction of any Federal or state court located in the
State of New York, County of New York, for the purpose of resolving any action
or claim arising out of the performance of the provisions of this Agreement.
(h) Headings. The headings and captions in this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.
(i) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. (j) Further Assurances.
At, and from time to time after the date hereof, at the request and expense of
the Company but without further consideration, Seller will execute and deliver
such other instruments of conveyance, assignment, transfer, and delivery and
take such other action as the Company reasonably may request in order more
effectively to convey, transfer, assign and deliver to the Company, and to place
the Company in possession and control of the Shares.
(j) Agreement Void Ab Initio. If (i) the purchase price (as adjusted) for
the TACC Sale is less then the amount set forth in the Amended APA, (ii) the
Amended APA is amended in any material respect, or (iii) the TACC Sale has not
closed on or before September 30, 2006, then this Agreement shall be deemed Void
Ab Initio and shall be of no further force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first set forth.
TIDEL TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director
TIDEL ENGINEERING, L.P.
By: Tidel Cash Systems, Inc., its managing
general partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President and Secretary
LAURUS MASTER FUND, LTD.
By: /s/ ▇▇▇▇▇▇ Grin
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Name: ▇▇▇▇▇▇ Grin
Title: Director
[Laurus Termination Agreement]