THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this "Amendment") is made
and entered into as of September 29, 2000, by and among THE CHASE MANHATTAN
BANK, formerly known as CHASE BANK OF TEXAS, N.A., a national banking
association ("Lender"), TIDEL ENGINEERING, L.P. ("Borrower"), a Delaware limited
partnership, and TIDEL TECHNOLOGIES, INC., a Delaware corporation ("Ultimate
Parent").
R E C I T A L S:
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A. On April 1, 1999, Lender, Borrower, and Ultimate Parent entered
into that certain Credit Agreement (including all amendments thereto, the
"Credit Agreement") pursuant to which Lender agreed to make loans and advances
(collectively the "Loans") to Borrower and Ultimate Parent in accordance with
the terms thereof. Lender, Borrower and Ultimate Parent entered into that
certain First Amendment to Credit Agreement, effective as of September 30, 1999,
and that certain Second Amendment to Credit Agreement, effective as of September
8, 2000.
B. The Loans are evidenced by that certain Revolving Credit Note of
even date with the Credit Agreement, in the stated principal amount of
$7,000,000.00, and that certain Term Note of even date with the Credit
Agreement, in the stated principal amount of $544,000.00, each bearing interest
and being payable to the order of Lender as therein provided (collectively, the
"Notes"). The Credit Agreement, the Notes and the documents, instruments and
agreements executed in connection therewith are collectively referred to herein
as the "Loan Documents".
C. Borrower and Ultimate Parent have requested Lender to consent to
the issuance by Ultimate Parent of 6% convertible subordinated debentures (the
"Convertible Subordinated Debentures") in the aggregate amount of $3,000,000,
which will be issued to Acorn Investment Trust on behalf of its series Acorn
Fund, and other related transactions which are contemplated in the convertible
Debenture Purchase Agreement dated as of September __, 2000, between Ultimate
Parent and Acorn Investment Trust.
D. Lender, at the request of Borrower and Ultimate Parent, for good
and valuable consideration, is willing to enter into this Amendment and to
consent to the issuance of the Convertible Subordinated Debentures by Ultimate
Parent and the transactions related thereto, and the performance of the
obligations and agreements of Ultimate Parent thereunder, all upon the terms and
conditions set forth below.
A G R E E M E N T:
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NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Borrower, Ultimate Parent, and Lender hereby
covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Credit Agreement.
2. Additional Definitions. Section 1.1 of the Credit Agreement is
hereby amended to add the following definitions:
Convertible Subordinated Debenture shall mean the following:
(a) the Tidel Technologies, Inc. 6% Convertible Debenture Due
September 8, 2004, issued by Ultimate Parent in the
aggregate principal amount of Fifteen Million Dollars
($15,000,000); and
(b) the Tidel Technologies, Inc. 6% Convertible Debenture Due
September 8, 2004, issued by Ultimate Parent in the
aggregate principal amount of Three Million Dollars
($3,000,000).
Convertible Subordinated Debenture Documents shall mean the
following:
(a) the Convertible Subordinated Debenture and that certain
Convertible Debenture Purchase Agreement dated September
8, 2000, between Montrose Investments Ltd., as purchaser,
and Ultimate Parent, as issuer, and all documents executed
in connection with the foregoing, which evidence the
issuance of the Convertible Subordinated Debentures in the
aggregate amount of Fifteen Million Dollars ($15,000,000)
and related transactions; and
(b) the Convertible Subordinated Debenture and that certain
Convertible Debenture Purchase Agreement dated September
__, 2000, between Acorn Investment Trust on behalf of its
series Acorn Fund, as purchaser, and Ultimate Parent, as
issuer, and all documents executed in connection with the
foregoing, which evidence the issuance of the Convertible
Subordinated Debentures in the aggregate amount of Three
Million Dollars ($3,000,000) and related transactions.
3. Indebtedness. Schedule 6.16 to the Credit Agreement is hereby
amended and supplemented to add the following:
4. 6% Convertible Debentures due September 8, 2004,
in the aggregate principal amount of $3,000,000, issued
pursuant to the Convertible Debenture Purchase Agreement
between Ultimate Parent, as issuer, and the purchaser
party thereto.
4. Amendment and Consent Fee. In consideration of the Lender
entering into this Amendment and giving its consent to the Debenture and the
Investment, the Borrower agrees to pay to the Lender a commitment fee in an
amount equal to Five Thousand Dollars ($5,000) (the "Amendment and Consent
Fee").
5. Consent to Issuance of Convertible Subordinated Debentures.
Subject to satisfaction of and compliance with all terms and conditions
precedent set forth in Section 6 below, Lender consents to the issuance by
Ultimate Parent of the Convertible Subordinated Debentures and related
transactions in accordance with the terms and conditions of the Convertible
Subordinated Debenture Documents and the performance of Ultimate Parent's
obligations and agreements thereunder.
6. Conditions Precedent to Consent to Amendment and Consent to
Convertible Subordinated Debenture. The effectiveness of this Amendment and of
Lender's consent to the Convertible Subordinated Debentures is subject to the
satisfaction of the following conditions precedent, unless specifically waived
in writing by Lender:
(1) Lender shall have received a Subordination Agreement, in
form and substance satisfactory to Lender, duly executed
by each holder of the Convertible Subordinated Debenture;
(2) The representations and warranties contained herein and
in all Loan Documents, as amended hereby, shall be true
and correct in all material respects as of the date
hereof as if made on the date hereof;
(3) No Event of Default by Borrower or Ultimate Parent under
the Loan Documents, as amended hereby, as of the date
hereof, shall have occurred and be continuing and no
event or conditions shall have occurred that with the
giving of notice or lapse of time or both would be an
Event of Default by Borrower or Ultimate Parent under the
Loan Documents, as amended hereby, as of the date hereof,
unless such Event of Default has been specifically waived
in writing by Lender;
(4) Lender shall have received executed copies of the
Convertible Subordinated Debenture and all other
documents executed in connection therewith (including
without limitation, the Purchase Agreement, and the
Registration Rights Agreement, as such terms are defined
in the Convertible Subordinated Debenture), certified by
Borrower as being true and complete; and
(5) Lender shall have received the Amendment and Consent Fee.
7. Costs and Expenses. Borrower agrees to reimburse Lender for
Lender's costs and expenses, including, but not limited to, reasonable
attorneys' fees and legal expenses, incurred by Lender in connection with the
preparation of this Amendment and in connection with the negotiation and
consummation of the transaction contemplated hereby.
8. The Credit Agreement. All references to the Credit Agreement in
the Loan Documents shall be deemed to be the Credit Agreement, as modified
hereby. Borrower expressly promises to perform all of its obligations under the
Credit Agreement and other Loan Documents, as modified by this Amendment.
9. Acknowledgments of Borrower and Ultimate Parent. Borrower and
Ultimate Parent each hereby acknowledge and agree that (a) Lender is not in
default in the performance of its obligations under the Loan Documents; (b)
Borrower and Ultimate Parent have no claims, counterclaims, offsets, credits or
defenses to the Loan Documents and the performance of their respective
obligations thereunder, or if Borrower or Ultimate Parent have any such claims,
counterclaims, offsets, credits or defenses to the Loan Documents or any
transaction related to the Loans and/or the Loan Documents, same are hereby
waived, relinquished and released in consideration of Lender's execution and
delivery of this Amendment; (c) all of the provisions of the Loan Documents,
except as amended hereby, are in full force and effect; and (d) upon the
execution hereof, the Credit Agreement, the Notes, and the other Loan Documents,
as amended herein, are not in default by Borrower or Ultimate Parent.
10. Full Force and Effect. Except as expressly modified and amended
in this Amendment, all of the terms, provisions and conditions of the Credit
Agreement, the Notes, and all other Loan Documents are and shall remain in full
force and effect and are incorporated herein by reference.
11. Counterparts and Facsimile Signatures. This Amendment may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original, and all of which taken together shall constitute but one and the
same instrument. Any party to this Amendment may indicate its intention to be
bound by this Amendment by its signature to the signature page hereof and the
delivery of the signature page hereof to the other party or its representatives
by facsimile transmission or telecopy. The delivery of a party's signature page
on the signature page hereof by facsimile transmission or telecopy shall have
the same force and effect as if such party signed and delivered this Amendment
in person.
12. No Oral Agreements. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS
EMBODY THE ENTIRE AGREEMENT AMONG THE PARTIES AND SUPERSEDES ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER HEREOF.
THIS WRITTEN AMENDMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Third Amendment
to Credit Agreement as of the day and year first above written.
LENDER:
THE CHASE MANHATTAN BANK, formerly
known as CHASE BANK OF TEXAS, N.A.,
a New York state banking association
By:_________________________________________
Joanne Bramanti, Vice President
BORROWER:
TIDEL ENGINEERING, L.P.,
a Delaware limited partnership
By: Tidel Cash Systems, Inc., its sole
general partner
By:___________________________________
James T. Rash, Chairman
ULTIMATE PARENT:
TIDEL TECHNOLOGIES, INC.,
a Delaware corporation
By:_________________________________________
James T. Rash, Chief Executive Officer
By its execution below, each of Tidel Technologies, Inc., a Delaware
corporation, Tidel Services Inc., a Delaware corporation, and Tidel Cash
Systems, Inc., a Delaware corporation (each individually, a "Guarantor"),
acknowledges and consents to all of the terms and conditions of this Amendment,
and ratifies and confirms its respective Guaranty to and for the benefit of
Lender. Each Guarantor acknowledges that such Guarantor has no claims,
counterclaims, offsets, credits or defenses to the Loan Documents and the
performance of its obligations thereunder, or if such Guarantor does have any
such claims, counterclaims, offsets, credits or defenses to the Loan Documents
or any transaction related to the Loans and/or the Loan Documents, same are
hereby waived, relinquished and released in consideration of Lender's execution
and delivery of this Amendment. Further, each Guarantor agrees that nothing
contained in this Amendment shall adversely affect any right or remedy of Lender
under its respective Guaranty and that with respect to such Guaranty, all
references in such Guaranty to the "Obligations" shall mean the "Obligations",
as amended by this Amendment; that the execution and delivery of this Amendment
shall in no way change or modify such Guarantor's obligations as Guarantor
pursuant to its Guaranty; and that the execution and delivery of any agreements
by Borrower and Lender in connection with this Amendment shall not constitute a
waiver by Lender of any of Lender's rights against any Guarantor.
TIDEL TECHNOLOGIES, INC.,
a Delaware corporation
By:________________________________________
James T. Rash,
Chief Executive Officer
TIDEL SERVICES, INC.,
a Delaware corporation
By:_________________________________________
James T. Rash, Chairman
TIDEL CASH SYSTEMS, INC.,
a Delaware corporation
By:_________________________________________
James T. Rash, Chairman