REAFFIRMATION, RATIFICATION AND CONFIRMATION AGREEMENT January 12, 2006
Exhibit
10.5
January
12, 2006
Laurus
Master Fund, Ltd.
c/o
Laurus Capital Management LLC
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
Reference
is made to the Agreement Regarding NCR Transaction and Other Asset Sales, dated
as of November 26, 2004 (as amended, modified or supplemented from time to
time,
the “NCR Agreement”), by and between Tidel Technologies, Inc., a Delaware
corporation (the “Company”), and Laurus Master Fund, Ltd., a Cayman Islands
company (“Laurus”).
To
induce
Laurus to enter into (a) the Exercise and Conversion Agreement, dated as of
the
date hereof, among Sentinel Technologies, Inc. (“STI”), Sentinel Operating,
L.P., a Texas limited partnership and an affiliate of STI (“Sentinel”), the
Company and Laurus, (b) the Voting Agreement, dated as of the date hereof,
among
STI, Sentinel, the Company and Laurus, and (c) the Stock Redemption Agreement,
dated as of the date hereof, by and between the Company and Laurus, the
undersigned hereby:
(a) acknowledges,
ratifies and confirms that all of the terms, conditions, representations and
covenants contained in the NCR Agreement are in full force and effect and shall
remain in full force and effect prior to and after the consummation and closing
of the transactions contemplated by that certain Asset Purchase Agreement,
dated
as of the date hereof (the “Asset Purchase Agreement”), by and among Sentinel,
the Company and Tidel Engineering, L.P.;
(b) acknowledges,
ratifies and confirms that the Reorganization Fee (as defined in the NCR
Agreement) and all other obligations due and owing from the Company to Laurus
under the NCR Agreement are secured by the collateral granted by the Company
and
its subsidiaries to Laurus under any and all security agreements and pledge
agreements at any time entered into by the Company and/or any such subsidiaries
in favor of Laurus; and
(c) acknowledges,
ratifies and confirms that the Company shall be obligated to pay to Laurus
(the
“Payment”) simultaneously with the consummation and closing of the transactions
contemplated by the Asset Purchase Agreement (the “Closing”), the amounts
payable pursuant to Section 4 of the NCR Agreement based upon the calculation
set forth therein. The calculation, based on estimates known on the date hereof,
is set forth on Exhibit A hereto. For avoidance of doubt, the amount of the
actual payment shall be re-calculated based upon the actual closing numbers.
In
no event shall such payment be less than $5,000,000 or greater than
$11,000,000.
This
agreement may be executed by facsimile signatures and in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one agreement.
[The
remainder of this page intentionally left blank.]
2
This
agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
|
Very
truly yours,
|
||
|
TIDEL
TECHNOLOGIES, INC.
|
||
|
By:
|
/s/ Xxxxxxx X. Xxxx | |
|
Name:
|
Xxxxxxx X. Xxxx | |
|
Title:
|
Director | |
| Address: |
0000
Xxxxxxxx Xxxxx, Xxxxx 000
|
|
|
Xxxxxxx,
Xxxxx 00000
|
||
|
ACCEPTED
AND AGREED TO:
|
||
|
LAURUS
MASTER FUND, LTD.
|
||
|
By:
|
/s/ Xxxxxx Grin | |
|
Name:
|
Xxxxxx Grin | |
|
Title:
|
Director | |
EXHIBIT
A
|
NCR
sales price
|
$
|
10,175,000
|
|||||
|
Add:
adjustment for 2 key employees
|
$
|
260,000
|
|||||
|
Plus:
net asset adjustment
|
|||||||
|
NET
ASSETS
|
6,400,000
|
|
|||||
|
EXCESS
OF 6.825 OR LESS OF 6.175
|
(6,825,000
|
)
|
$
|
-
|
|||
|
|
|||||||
|
Total
Sale Price
|
$
|
10,435,000
|
|||||
|
Less:
|
|||||||
|
Purchase
Price Holdback
|
(500,000
|
)
|
|||||
|
Xxxxxx
bonus
|
(175,000
|
)
|
|||||
|
Moving
allowance for TACC
|
(250,000
|
)
|
|||||
|
Adjustment
for key employees
|
(260,000
|
)
|
|||||
|
Fairness
opinion
|
(150,000
|
)
|
|||||
|
Legal
fees
|
(250,000
|
)
|
|||||
|
Total
NCR Net Proceeds
|
8,850,000
|
||||||
|
TACC
sales price
|
$
|
17,500,000
|
|||||
|
Plus:
working capital est 12-31 BS
|
|||||||
|
CURRENT
ASSETS
|
3,890,801
|
||||||
|
LIABILITIES
|
(4,298,113
|
)
|
|||||
|
(407,312
|
)
|
||||||
|
Less:
|
|||||||
|
Legal
allowance - patent lawsuit
|
(100,000
|
)
|
|||||
|
Taxes
|
(75,000
|
)
|
|||||
|
Fairness
opinion
|
(75,000
|
)
|
|||||
|
Legal
fees
|
(250,000
|
)
|
|||||
|
Banking
fees
|
|||||||
|
Consulting
fees /other
|
(220,000
|
)
|
|||||
|
Stay
bonuses
|
|||||||
|
Employee
contract payouts/settlements
|
(750,000
|
)
|
|||||
|
Total
TACC Net Proceeds
|
15,622,688
|
||||||
|
Total
Net Proceeds
|
$
|
24,472,688
|
|||||
|
Payment
To Laurus due to NCR Purchase Price Holdback
|
$
|
283,500
|
|||||
|
Payment
to Laurus
|
$
|
9,755,065
|
|||||
|
TOTAL
|
$
|
10,038,565
|
|||||
