STOCK REDEMPTION AGREEMENT By and Between Tidel Technologies, Inc. and Laurus Master Fund, Ltd.
Exhibit
10.4
By
and Between
Tidel
Technologies, Inc.
and
Laurus
Master Fund, Ltd.
Dated
as of January 12, 2006
This
Stock Redemption Agreement (this “Agreement”) is made and entered into as of the
12th day of January, 2006 between Tidel Technologies, Inc., a Delaware
corporation (the “Company”), and Laurus Master Fund, Ltd., a Cayman Islands
company (the “Seller”).
W
I T N E
S S E T H:
WHEREAS,
the Seller is the owner of such
number of
shares
(the “Current Shares”) of
issued
and outstanding common stock of the Company, $.01 par value per share (the
“Common Stock”), as set forth on Schedule A hereto prior to giving effect to the
Exercise and Conversion Agreement by and among Sentinel Technologies, Inc,
Sentinel Operating, L.P., the Company and the Seller, dated as of the date
hereof (the “Exercise Agreement”);
WHEREAS,
the Seller holds certain indebtedness of the Company and Tidel Engineering,
L.P.
(“Engineering”), convertible in accordance with the
terms
of
such
indebtedness into
shares of Common Stock of the Company, evidenced by that certain Convertible
Term Note in the initial principal amount of $6,450,000, dated November 25,
2003
(the “2003 Note”) together with an additional $292,987 principal amount added
thereto on November 26, 2004, made by the Company in favor of the
Seller;
WHEREAS,
the Company has granted the Seller the following warrants: (i) the Common Stock
Purchase Warrant, issued November 25, 2003 (the “2003 Warrant”), whereby the
Seller
has the
right to purchase 4,250,000 shares of the Company’s
Common
Stock, subject to adjustment, at an exercise price of $0.30 per share; and
(ii)
the Common Stock Purchase Warrant, issued November 26, 2004 (the “2004 Warrant”
and together with the 2003 Warrant, the “Warrants”), whereby the Seller
has the
right to purchase 500,000 shares of the Company’s
Common
Stock, subject to adjustment, at an exercise price of $0.30 per
share;
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 are negotiating to sell the Company’s cash security
business (the “TACC Sale”);
WHEREAS,
the proposed TACC Sale requires the approval of a majority of the holders of
the
Common Stock;
WHEREAS,
pursuant to the terms of the Exercise Agreement, the Seller intends to convert
a
certain
portion of the
2003
Note for shares of Common Stock (the “New Shares” and together with the Current
Shares, the “Shares”) at the prices and in the amounts set forth on Schedule A
hereto; and
WHEREAS,
the Seller and the Company each have agreed, that effective on the Closing
Date,
the then unexercised portion of the Warrants shall be cancelled;
and
WHEREAS,
the Seller wishes to sell, and the Company wishes to purchase, the Shares
immediately following the consummation of the TACC Sale on the terms and subject
to the conditions contained herein.
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:
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Section
1.
|
Purchase and Sale of Shares; Termination of Warrants. |
(a)
On
the
terms and subject to the conditions of this Agreement, on
the
Closing
Date (as
defined below):
(x) the
Company shall purchase from the Seller, and the Seller shall sell, transfer,
assign, convey and deliver to the Company, all of the Shares as set forth on
Schedule A hereto for an amount equal to the Purchase Price (as defined below);
and (y) the unexercised portion of the Warrants, without further action or
deed,
shall thereupon be cancelled and of no further force and effect. The Seller
shall, promptly following the Closing Date, deliver to the Company, for
cancellation, any Warrants cancelled pursuant to clause (y) above.
(b)
The
Purchase Price shall be payable by wire transfer of immediately available funds
(to a bank account designated by the Seller to the Company at least one business
day prior to the Closing) on the Closing Date.
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Section
2.
|
Purchase Price. |
(a)
The
purchase price for the Shares (the “Purchase Price”) shall consist of the Per
Share Price (as defined below) multiplied by the number of Shares.
(b)
The
“Per
Share
Price”
shall
equal
the
quotient
obtained
by dividing (1)
the
value on the Closing Date of
(A)
the sum of the value of all assets
of
the Company that would be valued by the Company in connection with a liquidation
of the Company following
the closing of
the TACC
Sale (after giving effect to such closing),
including, but not limited to:
(i) all
cash and cash equivalents held by the Company, (ii) all marketable securities
held by the Company, and (iii) all other remaining tangible and intangible
assets held directly or indirectly by the Company, valued at fair market value,
minus
(B) the
sum of (i) all fees and expenses of the Company and its subsidiaries in
connection with the ATM Sale and the TACC Sale
incurred
through the Closing Date,
(ii)
all payments and obligations due to, or on behalf of, present and former
employees of the Company and its subsidiaries
incurred
through the Closing Date,
(iii)
all amounts paid or payable to Seller pursuant to the Agreement Regarding NCR
Transaction and Other Assets Sales dated as of November 26, 2004 by and between
the Company and Seller, (iv) all other liabilities of the Company and its
subsidiaries,
(v)
payments due to independent directors of the Company in an aggregate amount
not
to exceed $400,000, and (vi) a good faith estimate of the costs and expenses
which would be incurred in connection with the liquidation of the Company
including, without limitation, legal fees, directors and officers insurance,
all
fees and expenses relating to SEC and governmental filings and related expenses,
by
(2)
the
total number of shares of Common Stock outstanding on the Closing Date.
Notwithstanding the foregoing, the Per Share Price shall not be less than $.20
per share nor greater than $.34 per share.
2
(c)
At
least
fifteen business days prior to the Closing Date the Company shall send a written
notice to Seller with the Per Share Price, including (i) a certificate of an
officer of the Company certifying that such Per Share Price was prepared in
good
faith and (ii) a statement setting forth the assets of the Company as of the
date of determining the Per Share Price and their value, the number of shares
used to calculate the Per Share Price and the Per Share Price; provided, that
the Per Share Price shall comply with Section 2(b). The Seller shall notify
the
Company within five business days following giving of such notice whether it
has
any questions regarding the Per Share Price or the calculation. If the Seller
does not notify the Company within such five business day period, the Seller
shall be deemed to have no objection to the Per Share Price. If the Seller
has
any questions regarding the Per Share Price, the Seller shall notify the Company
and may request such additional information regarding the calculation that
it
reasonably requires. The parties shall engage in good faith discussions
regarding the Per Share Price. If the parties cannot reach an agreement on
or
prior to the Closing Date as to the Per Share Price, then subject to Section
2(b), the Per Share Price shall be as determined by the Company, calculated
in
good faith.
Section
3.
Closing.
The
Closing (the “Closing”) of the purchase and sale of the Shares shall take place
at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Park
Avenue Tower, ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ on such date (the
“Closing Date”) that
is
the TACC
Sale closing
date.
The
Company shall give the Seller two (2) business days advance written notice
of
the Closing Date.
Section
4.
Delivery
and Transfer of the Shares.
The
transfer and sale of the Shares contemplated by this Agreement upon
the
Closing shall (A) in the case of Shares held of record and beneficially, be
effectuated by the Seller delivering to the Company a certificate or
certificates representing such Shares, duly endorsed for transfer or accompanied
by appropriate stock powers duly executed, and any other documents necessary
to
transfer the Shares to the Company, and (B) in the case of Shares not
represented by physical stock certificates, be
effectuated by Seller delivering a
letter
of instruction (the "Instruction Letter") addressed to Seller's brokerage firm
instructing such brokerage firm to cause the electronic delivery of the Shares
held in street name through the Depository Trust Company (“DTC”) (or another
established cleaing corporation performing similar functions) to an account
designated in writing by the Company.
The
Seller agrees not to exercise the Warrants before the earlier of (x)
March 31, 2006 and (y) the date
on
which the Purchase Agreement (as defined in the Exercise Agreement) shall be
terminated or deemed terminated .
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Section
5.
|
Conditions
to Closing.
|
(a)
Mutual
Conditions.
The
obligations of the Seller and the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment or waiver on
or
before the Closing Date
of
the
following conditions:
(i)
No
temporary restraining order, preliminary injunction or permanent injunction
or
other order or decree which prevents the consummation of the transactions
contemplated by this Agreement shall have been issued and remain in effect,
and
no statute, rule or regulation shall have been enacted by any governmental
entity which would prevent the consummation of the transactions contemplated
by
this Agreement.
3
(ii) Any
governmental or other approvals, reviews or consents of this Agreement and
the
transactions contemplated by this Agreement required including, but not limited
to, under any applicable laws, statutes, regulations, orders, rules, policies
or
guidelines promulgated thereunder shall have been received or
waived.
(b)
Conditions
to Obligations of the Company.
The
obligations of the Company to consummate the transactions contemplated by this
Agreement are subject to the fulfillment or waiver on or before the Closing
Date
of
the
following conditions:
(i) The
representations and warranties of the Seller contained in Section 6 hereof
shall
be true and correct in
all
material respects on
the
Closing
Date
with the
same force and effect as though such representations and warranties had been
made on and as of the Closing
Date.
(ii) The
TACC
Sale shall have been consummated.
(c)
Conditions
to Obligations of the Seller.
The
obligations of the Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment or waiver on or before the Closing
Date
of
the
following conditions:
(i) The
representations and warranties of the Company contained in Section 7 hereof
shall be true and correct on the
Closing
Date
with the
same force and effect as though such representations and warranties had been
made on and as of the Closing
Date.
(ii)
The
TACC
Sale shall have been consummated.
Section
6.
Representations
and Warranties of the Seller. The Seller represents and warrants to the
Company as follows:
(a)
Good
Title.
As of
the Closing, Seller shall have good title to, the right to possession of and
the
right to sell the total number of Shares set forth on Schedule A hereto, free
and clear of any pledges, liens, charges, encumbrances, proxies, options, rights
to purchase or other restrictions or potentially adverse claims of any kind
or
nature (collectively, “Adverse Claims”), and concurrent with the Closing of this
Agreement, the Seller will transfer such Shares to the Company free and clear
of
any Adverse Claims.
(b)
Corporate
Organization; Requisite Authority to Conduct Business.
Seller
is a company
duly
organized, validly existing and in good standing under the laws of the
Cayman
Islands.
Seller
has full corporate power and authority to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby; and no
further action on the part of Seller is necessary to authorize the execution
and
delivery by it of, and the performance of its obligations under, this Agreement.
There are no corporate, contractual, statutory or other restrictions of any
kind
upon the power and authority of Seller to execute and deliver this Agreement
and
to consummate the transactions contemplated hereunder and the
Seller is not aware of any
action,
waiver or consent by any governmental
entity that
is
necessary to make this Agreement a valid instrument binding upon Seller in
accordance with its terms.
4
(c)
Execution
and Delivery.
This
Agreement has been duly executed and delivered by the Seller and constitutes
the
legal, valid and binding obligations of the Seller, enforceable in accordance
with its terms, except (i) as such enforceability may be limited by or subject
to any bankruptcy, reorganization, moratorium or other similar laws affecting
creditors’ rights generally, (ii) as such obligations are subject to general
principles of equity, and (ii) as rights to indemnity may be limited by US
federal or state securities laws or by public policy.
(d)
No
Violation; Absence of Defaults.
Neither
the execution and delivery by the Seller of this Agreement, nor the consummation
of the transactions contemplated hereby, will violate the Seller’s
certificate of incorporation or by-laws or any
judgment, award or decree or any indenture, agreement or other instrument to
which the Seller is a party, or by which the Shares are bound or affected,
or
result in a breach of or constitute (with due notice or lapse of time or both)
a
default under any such indenture, agreement or other instrument, or result
in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon the Shares.
(e)
Brokers’
or Finders’ Fees.
No
broker, finder or investment banker is entitled to any brokerage or finder’s fee
or other commission in connection with the transactions contemplated hereby
based on the arrangements made by or on behalf of the Seller.
(f)
Access
to Information.
The
Seller acknowledges that it has had an opportunity to evaluate all information
regarding the Company as it has deemed necessary or desirable in connection
with
the transactions contemplated by this Agreement, has independently evaluated
the
transactions contemplated by this Agreement and has reached its own decision
to
enter into this Agreement.
Section
7.
Representations
and Warranties of the Company. The Company hereby represents and warrants to
the Seller as follows:
(a)
Corporate
Organization; Requisite Authority to Conduct Business.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has full corporate power
and authority to enter into this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby; and this Agreement
has
been duly authorized and approved by its Board of Directors and no further
action on the part of the Company is necessary to authorize the execution and
delivery by it of, and the performance of its obligations under, this Agreement.
There are no corporate, contractual, statutory or other restrictions of any
kind
upon the power and authority of the Company to execute and deliver this
Agreement and to consummate the transactions contemplated hereunder and no
action, waiver or consent by any governmental entity
is
necessary to make this Agreement a valid instrument binding upon the Company
in
accordance with its terms.
(b)
Execution
and Delivery.
This
Agreement has been duly executed and delivered by the Company and constitutes
a
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, except (i) as such enforceability may be limited by or subject
to any bankruptcy, insolvency, reorganization, moratorium or other similar
laws
affecting creditors’ rights generally, (ii) as such obligations are subject to
general principles of equity, and (iii) as rights to indemnity may be limited
by
US federal or state securities laws or by public policy.
5
(c)
No
Violation; Absence of Defaults.
The
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby does not and will not
violate (a) the Company’s certificate of incorporation or by-laws or (b) any
agreement governing the organization, management, business or affairs of the
Company or, in any material respect, any agreement or instrument which the
Company may be a party or by which the Company (or any of its properties) is
bound, or (c) any law,
administrative regulation or rule or court order, judgment or decree applicable
to the Company, nor will the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby constitute a
breach
of, or any event of default under, any material contract or agreement to which
the Company is bound, or by which the Company (or any of its properties) may
be
bound or affected.
(d)
Required
Filings and Consents.
Except
as may be required by US federal or state securities laws, the Company is not
required to submit any notice, report or other filing with any governmental entity
in
connection with the execution, delivery and performance of this Agreement.
No
Authorization of or from any governmental entity,
or any
other person, or under any statute, law, ordinance, rule, regulation or agency
requirement of any governmental entity,
on the
part of the Company is required in connection with the execution and delivery
of
this Agreement and the performance by the Company of its obligations under
this
Agreement.
(e)
Capitalization.
The
authorized capital stock of the Company consists of (i) 100,000,000 shares
of
Common Stock, of which 20,677,210 shares are outstanding on the date hereof
and
(ii) no shares of preferred stock. Except as set forth in Schedule
7(e)
hereto,
there are no existing options, warrants, calls, preemptive (or similar) rights,
subscriptions or other rights, agreements, arrangements or commitments of any
character obligating the Company to issue, transfer or sell, or cause to be
issued, transferred or sold, any shares of the capital stock of the Company
or
other equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or other equity
interests. All of the issued and outstanding shares of the Company’s capital
stock have been duly authorized and validly issued and are fully paid and
nonassessable.
(f)
Solvency
Following Closing.
Immediately following and after giving effect to the Closing, the fair market
value of the Company’s assets will exceed its liabilities and the Company
anticipates following due consideration of its financial position that its
remaining cash will enable it to pay all of its liabilities and obligations
which have arisen on or prior to the Closing as they become due and payable.
The
Company agrees to pay all of its liabilities and obligations which have arisen
on or prior to the Closing as they become due and payable.
(g)
Access
to Information.
During
the period from the date of this Agreement and continuing until the earlier
of
(i) the termination of this Agreement pursuant to the provisions of Section
9
and (ii) the Closing, upon reasonable notice, the Company shall give Seller
and
its officers, appropriate employees, accountants, and counsel full access,
during normal business hours, to all buildings, offices, and other facilities
and to all books and records of the Company, whether located on the premises
of
the Company or at another location.
6
(h)
Brokers’
or Finders’ Fees.
No
broker, finder or investment banker is entitled to any brokerage or finder’s fee
or other commission in connection with the transactions contemplated hereby
based upon the arrangements made by or on behalf of the Company.
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Section
8.
|
Indemnification.
|
(a)
Indemnification
by the Company.
Subject
to the limits set forth in this Section 8, the
Company
agrees
to indemnify, defend and hold the Seller,
and
its
directors,
officers,
agents,
partners, members, and their respective successors and assigns (collectively,
the “Seller Parties”),
harmless
from and against any and all loss, liability, damage, costs and expenses
(including interest, penalties and attorneys’ fees) that
any
of
the
Seller Parties
may
incur or become subject to arising out of or due to any inaccuracy of any
representation or the breach of any warranty or covenant of the Company
contained in this Agreement. The Company
will
reimburse
each
of
the
Seller Parties for any legal or other expenses reasonably incurred by them
in
connection with investigating or defending any such loss, claim, liability,
action or proceeding.
(b)
Indemnification
by the Seller.
Subject
to the limits set forth in this Section 8, the Seller agrees to indemnify,
defend and hold the Company, and its directors, officers, agents, partners,
members, and their respective successors and assigns (collectively, the “Company
Parties”), harmless from and against any and all loss, liability, damage, costs
and expenses (including interest, penalties and attorneys’ fees) that any of the
Company Parties may incur or become subject to arising out of or due to any
inaccuracy of any representation or the breach of any warranty or covenant
of
the Seller contained in this Agreement. The Seller will reimburse each of the
Company Parties for any legal or other expenses reasonably incurred by them
in
connection with investigating or defending any such loss, claim, liability,
action or proceeding.
(c)
Survival.
The
representations, warranties and covenants of the Seller and the Company set
forth in this Agreement shall survive the Closing Date
until the first anniversary of the Closing Date, except in the case of Section
7(e), which shall survive until 180 days after the applicable statute of
limitations.
(d)
Third
Party Claims.
In
order for a party (the “indemnified party”) to be entitled to any
indemnification provided for under this Agreement in respect of, arising out
of,
or involving a claim or demand or written notice made by any third party against
the indemnified party (a “Third Party Claim”) after the date hereof, such
indemnified party must notify the indemnifying party (the “indemnifying party”)
in writing of the Third Party Claim within 30 business days after receipt by
such indemnified party of written notice of the Third Party Claim; provided
that
the failure of any indemnified party to give timely notice shall not affect
his
right of indemnification hereunder except to the extent the indemnifying party
has actually been prejudiced or damaged thereby. If
a
Third Party Claim is made against an indemnified party, the indemnifying party
shall be entitled, if it so chooses, to assume the defense thereof with counsel
selected by the indemnifying party (which counsel shall be reasonably
satisfactory to the indemnified party). If the indemnifying party assumes the
defense of a Third Party Claim, the indemnified party will cooperate in all
reasonable respects with the indemnifying party in connection with such defense,
and shall have the right to participate in such defense with counsel selected
by
it; provided
that
the fees
and disbursements of such counsel shall be at the expense of the indemnified
party; and provided
further
that, if
the defendants in any Third Party Claim include both the indemnified party
and
the indemnifying party and the indemnified party shall have reasonably concluded
that the interests of the indemnified party reasonably may be deemed to conflict
with the interests of the indemnifying party, the indemnified party shall have
the right to select one separate counsel and to assume such legal defenses
and
otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as
incurred
7
Except
as
otherwise provided herein, the indemnified party will not, except at its own
cost and expense, settle or compromise any Third Party Claim for which it is
entitled to indemnification hereunder without the prior written consent of
the
indemnifying party, which will not be unreasonably withheld.
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Section
9.
|
Termination.
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(a)
Termination
by the Company.
This
Agreement may be terminated and canceled prior to the Closing Date by the
Company: (i) if (A) any of the representations and warranties of the Seller
contained in this Agreement shall prove to be inaccurate in any material respect
or any covenant, obligation or condition to be performed or observed by the
Seller under this Agreement has not been performed or observed in any material
respect at or prior to the time specified in this Agreement and (B) such
inaccuracy or failure shall not have been cured or waived by the Company within
five (5) business days after such inaccuracy or failure shall have first been
discovered, (ii) if any permanent injunction or other order of a governmental
entity having proper authority preventing consummation of the transactions
contemplated by this Agreement shall have become final and non-appealable,
or
(iii) so long as the Company is not in material breach of any representation,
warranty, covenant or agreement, if the Closing has not occurred by March 31,
2006.
(b)
Termination
by the Seller.
This
Agreement may be terminated and canceled prior to the Closing Date by the
Seller: (i) if (A) any of the representations and warranties of the Company
contained in this Agreement shall prove to be inaccurate in any material respect
or any covenant, obligation or condition to be performed or observed by the
Company under this Agreement has not been performed or observed in any material
respect at or prior to the time specified in this Agreement and (B) such
inaccuracy or failure shall not have been cured or waived by the Seller within
five (5) business days after such inaccuracy or failure shall have first been
discovered, (ii) if any permanent injunction or other order of a governmental
entity having proper authority preventing consummation of the transactions
contemplated by this Agreement shall have become final and non-appealable,
or
(iii) so long as the Seller is not in material breach of any representation,
warranty, covenant or agreement, if the Closing has not occurred by March 31,
2006.
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Section
10.
|
Covenants. |
8
(a)
Transfer
of Shares.
From the
date hereof until the earlier of the Closing Date or the termination pursuant
to
Section 9 (the “Termination Date”), the Seller hereby agrees that it shall not,
directly or indirectly, sell, assign, transfer, encumber, pledge or otherwise
dispose of, or enter into any contract, option or other agreement, arrangement
or understanding with respect to the direct or indirect sale, assignment,
transfer, encumberance, pledge or other disposition of, any of the Shares;
provided, however, that the Seller may sell or otherwise assign, with or without
consideration, an unlimited amount of the Shares to any affiliate, member or
limited or general partner of the Seller or such affiliate if each such
transferee or assignee, prior to the completion of the sale, transfer or
assignment shall have executed and delivered to the Company documents assuming
the obligations of the Seller under this Agreement with respect to the
transferred securities, such documents to be satisfactory to the Company in
its
reasonable discretion. The Seller hereby agrees it shall not seek or solicit
any
sale, assignment transfer, encumbrance, pledge or other disposition of the
Shares to any other person other than its affiliates and agrees to notify the
Company promptly (but in any event, within 24 hours), and it and its affiliates
shall provide all details requested by the Company, if the Seller shall be
approached or solicited, directly or indirectly, by any person with respect
to
any of the foregoing.
(b)
Company
Actions. Except as contemplated by this Agreement, between the date of this
Agreement and the Closing Date, the Company shall and shall cause it
subsidiaries to conduct their business in the ordinary course and use their
best
efforts to preserve substantially intact its business organization and assets
and not incur any additional liabilities (subject to and in light of its plans
to sell its cash security business). In addition, except as otherwise expressly
provided in this Agreement, between the date of this Agreement and the Closing
Date and except to the extent required by the asset purchase agreement to be
entered into in respect of the TACC Sale, the Company shall not and shall cause
its subsidiaries not to:
(i) amend
their articles or certificate of incorporation or by-laws, other than to change
the name of the Company as required in connection with the TACC
Sale;
(ii) issue,
sell or otherwise dispose of any of their capital stock, or create or suffer
to
be created any Adverse Claims thereon, or reclassify, split up or otherwise
change any of their capital stock, or grant or enter into any options, covenants
or calls or other rights to purchase or convert any obligation into any of
their
capital stock;
(iii) organize
any subsidiary or acquire any capital stock of any Person or any equity or
ownership interest in any business (other than portfolio investments in
marketable securities);
(iv)
incur
or
guarantee any indebtedness for borrowed money other than up to $1,250,000 of
indebtedness incurred in connection with the fulfillment of the Company's
obligations under contracts related to the TACC business;
(v) make
or
grant increases in salaries, bonuses, severance or other remuneration to any
employee;
(vi) declare
or pay any dividend or make any other payment or distribution in respect of
their capital stock; or
9
(vii) make
any
commitment for capital expenditures or capital additions or
improvements.
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Section
11.
|
Miscellaneous. |
(a)
Expenses.
Each
party shall pay its own costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
(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. |
| ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ |
| ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ |
| Attention: Chairman of the Board |
| with a copy to: |
| ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP |
| Park Avenue Tower |
| ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ |
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ |
| 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: |
| ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC |
| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ |
| ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ |
| Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. |
10
or
to
such other address as any party shall have specified by notice in writing to
the
other in compliance with this Section 10.
(c)
Entire
Agreement.
This
Agreement, including the schedules hereto, constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof
and supersedes all prior agreements, representations and understandings among
the parties hereto.
(d)
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 without the prior written consent of the other parties
hereto.
(e)
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.
(f)
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.
(g)
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.
(h)
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.
(i)
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)
Limitation
on Liability.
Notwithstanding anything herein contained to the contrary, in no event shall
the
Seller or any of the Seller Parties have any liability hereunder or with respect
to the transactions contemplated hereby in excess of the Purchase Price received
by the Sellers hereunder.
11
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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | ||
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
|
|||
|
Title:
Director
|
|||
|
LAURUS
MASTER FUND, LTD.
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ Grin | ||
|
Name:
▇▇▇▇▇▇ Grin
|
|||
|
Title:
Director
|
|||
12
Schedule
A
CURRENT
SHARES:
1,251,000
shares
NEW
SHARES:
|
Amount
to be converted
|
Conversion
Price
|
Number
of New Shares into which Note is convertible into
|
||||||||
|
2003
Note. $5,917,987.50 principal amount was outstanding as of December
31,
2005.
|
$
|
5,400,000
|
$
|
.30
|
18,000,000
|
|||||
|
TOTAL
NEW SHARES
|
18,000,000
|
|||||||||
TOTAL
SHARES:
19,251,000
Schedule
7(e)
Capitalization
|
1.
|
Debt
issued by the Company in favor of the Seller and convertible in Company
common stock pursuant to the terms
thereof.
|
|
2.
|
Warrants
for 4,750,000 shares of Company common stock issued to
Seller.
|
|
3.
|
Warrants
granted to persons other than Seller in the aggregate amount of 1,140,000
shares of Company common stock, exercisable at various exercise
prices.
|
|
4.
|
Options
granted to employees at various exercise prices pursuant to the Company’s
1997 Long-Term Incentive Plan in the aggregate amount of 1,100,560
shares
of Company common stock.
|
|
5.
|
Reserve
for grants pursuant to the Company’s 1997 Long-Term Incentive Plan in the
aggregate amount of 944,643 shares of Company common
stock.
|