Exhibit 4.43
BLOCKED ACCOUNT CONTROL AGREEMENT
("SHIFTING CONTROL")
AGREEMENT dated as of November 25, 2003, by and among Tidel Engineering,
L.P. ("Company"), Laurus Master Fund, Ltd. ("Lender") and JPMorgan Chase Bank
("Depositary").
The parties hereto refer to Account No.32407011661 in the name of Company
maintained at Depositary (the "Account") and hereby agree as follows:
1. Company and Lender notify Depositary that by separate agreement Company
has granted Lender a security interest in the Account and all funds on deposit
from time to time therein. Depositary acknowledges being so notified.
2. Prior to the Effective Time (as defined below) Depositary shall honor
all withdrawal, payment, transfer or other fund disposition or other
instructions which the Company is entitled to give under the Account
Documentation (as hereinafter defined) (collectively, "instructions") received
from the Company (but not those from Lender) concerning the Account. On and
after the Effective Time (and without Company's consent), Depositary shall honor
all instructions received from Lender (but not those from Company) concerning
the Account and Company shall have no right or ability to access or withdraw or
transfer funds from the Account.
For the purposes hereof, the "Effective Time" shall be the opening of business
on the second business day next succeeding the business day on which a notice
purporting to be signed by Lender in substantially the same form as Exhibit A,
attached hereto, with a copy of this Agreement attached thereto (a "Shifting
Control Notice"), is actually received by the individual employee of Depositary
to whom the notice is required hereunder to be addressed; provided, however,
that if any such notice is so received after 12:00 noon, New York City time, on
any business day, the "Effective Time" shall be the opening of business on the
third business day next succeeding the business day on which such receipt
occurs; and, provided further, that a "business day" is any day other than a
Saturday, Sunday or other day on which Depositary is or is authorized or
required by law to be closed.
The Lender hereby covenants that it shall not send a Shifting Control Notice to
Depositary prior to the occurrence of an Event of Default (as such term is
defined in that certain Convertible Note in the aggregate principal amount of
six million four hundred fifty thousand dollars ($6,450,000) payable to Lender
by Company, as the same may be amended, modified and supplemented from time to
time).
Notwithstanding the foregoing: (i) all transactions involving or resulting in a
transaction involving the Account duly commenced by Depositary or any affiliate
prior to the Effective Time and so consummated or processed thereafter shall be
deemed not to constitute a violation of this Agreement; and (ii) Depositary
and/or any affiliate may (at its discretion and without any obligation to do so)
(x) cease honoring Company's instructions and/or commence honoring solely
Lender's instructions concerning the Account at any time or from time to time
after it becomes aware that Lender has sent to it a Shifting Control Notice but
prior to the Effective Time therefor (including without limitation halting,
reversing or redirecting any transaction referred to in clause (i) above), or
(y) deem a Shifting Control Notice to be received by it for
purposes of the foregoing paragraph prior to the specified individual's actual
receipt if otherwise actually received by Depositary (or if such Shifting
Control Notice contains minor mistakes or other irregularities but otherwise
substantially complies with the form attached hereto as Exhibit A or does not
attach an appropriate copy of this Agreement), with no liability whatsoever to
Company or any other party for doing so.
3. This Agreement supplements, rather than replaces, Depositary's deposit
account agreement, terms and conditions and other standard documentation in
effect from time to time with respect to the Account or services provided in
connection with the Account (the "Account Documentation"), which Account
Documentation will continue to apply to the Account and such services, and the
respective rights, powers, duties, obligations, liabilities and responsibilities
of the parties thereto and hereto, to the extent not expressly conflicting with
the provisions of this Agreement (however, in the event of any such conflict,
the provisions of this Agreement shall control). Prior to issuing any
instructions on or after the Effective Time, Lender shall provide Depositary
with such documentation as Depositary may reasonably request to establish the
identity and authority of the individuals issuing instructions on behalf of
Lender. Lender may request the Depositary to provide other services (such as
automatic daily transfers) with respect to the Account on or after the Effective
Time; however, if such services are not authorized or otherwise covered under
the Account Documentation, Depositary's decision to provide any such services
shall be made in its sole discretion (including without limitation being subject
to Company and/or Lender executing such Account Documentation or other
documentation as Depositary may require in connection therewith).
4. Depositary agrees not to exercise or claim any right of offset,
banker's lien or other like right against the Account for so long as this
Agreement is in effect except with respect to (i) returned or charged-back
items, (ii) reversals or cancellations of payment orders and other electronic
fund transfers, (iii) Depositary's charges, fees and expenses with respect to
the Account or the services provided hereunder or (iv) overdrafts in the
Account.
5. Notwithstanding anything to the contrary in this Agreement: (i)
Depositary shall have only the duties and responsibilities with respect to the
matters set forth herein as is expressly set forth in writing herein and shall
not be deemed to be an agent, bailee or fiduciary for any party hereto; (ii)
Depositary shall be fully protected in acting or refraining from acting in good
faith without investigation on any notice (including without limitation a
Shifting Control Notice), instruction or request purportedly furnished to it by
Company or Lender in accordance with the terms hereof, in which case the parties
hereto agree that Depositary has no duty to make any further inquiry whatsoever;
(iii) it is hereby acknowledged and agreed that Depositary has no knowledge of
(and is not required to know) the terms and provisions of the separate agreement
referred to in paragraph 1 above or any other related documentation or whether
any actions by Lender (including without limitation the sending of a Shifting
Control Notice), Company or any other person or entity are permitted or a breach
thereunder or consistent or inconsistent therewith, (iv) Depositary shall not be
liable to any party hereto or any other person for any action or failure to act
under or in connection with this Agreement except to the extent such conduct
constitutes its own willful misconduct or gross negligence (and to the maximum
extent permitted by law, shall under no circumstances be liable for any
incidental, indirect, special, consequential or punitive damages); and (v)
Depositary shall not be liable for losses or delays caused by force majeure,
interruption or malfunction of computer, transmission or
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communications facilities, labor difficulties, court order or decree, the
commencement of bankruptcy or other similar proceedings or other matters beyond
Depositary's reasonable control.
6.Company hereby agrees to indemnify, defend and save harmless Depositary
against any loss, liability or expense (including reasonable fees and
disbursements of counsel who may be an employee of Depositary) (collectively,
"Covered Items") incurred in connection with this Agreement or the Account
(except to the extent due to Depositary's willful misconduct or gross
negligence) or any interpleader proceeding relating thereto or incurred at
Company's direction or instruction. Lender hereby agrees to indemnify, defend
and save harmless Depositary against any Covered Items incurred (i) on or after
the Effective Time in connection with this Agreement or the Account (except to
the extent due to Depositary's willful misconduct or gross negligence) or any
interpleader proceeding related thereto, (ii) at Lender's direction or
instruction (including without limitation Depositary's honoring of a Shifting
Control Notice) or (iii) due to any claim by Lender of an interest in the
Account or the funds on deposit therein.
7. Depositary may terminate this Agreement (a) in its discretion upon the
sending of at least thirty (30) days' advance written notice to the other
parties hereto or (b) because of a material breach by Company or Lender of any
of the terms of this Agreement or the Account Documentation, upon the sending of
at least twenty (20) days advance written notice to the other parties hereto.
This Agreement may be terminated by Lender at any time, with or without cause,
upon its delivery of at least seven (7) days' advance written notice to the
other parties hereto. In connection with any such termination initiated by
Depositary or Lender, Depositary shall continue to comply with the provisions of
paragraph 2 up to the effective date of termination (including, if prior to such
effective date the Effective Time has occurred or Depositary has received in the
manner required under paragraph 2 a Shifting Control Notice, a transfer to
Lender on such effective date of termination of all collected funds held in the
Account as of the close of business of the immediately preceding business day).
Any other termination or any amendment or waiver of this Agreement shall be
effected solely by an instrument in writing executed by all the parties hereto.
The provisions of paragraphs 5 and 6 above shall survive any such termination.
8.Company shall compensate Depositary for the opening and administration
of the Account and services provided hereunder in accordance with Depositary's
fee schedules from time to time in effect. Payment will be effected by a direct
debit to the Account.
9. This Agreement: (i) may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument; (ii) shall become effective when
counterparts hereof have been signed and delivered by the parties hereto; and
(iii) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. ALL PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATING TO THE ACCOUNT OR THIS AGREEMENT. All notices
under this Agreement shall be in writing and sent (including via facsimile
transmission) to the parties hereto at their respective addresses or fax numbers
set forth below (or to such other address or fax number as any such party shall
designate in writing to the other parties from time to time).
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
TIDEL ENGINEERING, L.P. LAURUS MASTER FUND, LTD.
By: /s/ Mark K. Levenick By: /s/ Eugene Grin
-------------------- ---------------
Name: Mark K. Levenick Name: Eugene Grin
Title: President & CEO Title: Director
Address for Notices: Address for Notices:
______________________ 825 Third Avenue - 14th Floor
______________________ New York, NY 10021
______________________ Fax No.: (212) 541-4434
______________________
Fax No.:______________
JPMORGAN CHASE BANK
By: /s/ Brian McDougal
------------------
Name: Brian McDougal
Title: Vice President
Address for Notices:
JPMorgan Chase Bank
2200 Ross Avenue - 5th Floor
Dallas, Texas 75201
Attention: Charlotte Hardin
Fax No.: (214) 965-3023
Phone: (214) 965-3019
With a copy to:
JPMorgan Chase Bank
2200 Ross Avenue - 5th Floor
Dallas, Texas 75201
Attention: Debbie Poteet
Fax No.: (214) 965-3023
Phone: (214) 965-3020
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EXHIBIT A
[to be placed on Lender letterhead]
BLOCKED ACCOUNT AGREEMENT
SHIFTING CONTROL NOTICE
_______________, ____
JPMorgan Chase Bank
[Address]
Attention: ______________
Re: Blocked Account Control Agreement dated as of November ___, 2003
(the "Agreement") by and among ___________, Laurus Master Fund, Ltd.,
and JPMorgan Chase Bank
Ladies and Gentlemen:
This constitutes a Shifting Control Notice as referred to in paragraph 2 of the
Agreement, a copy of which is attached hereto.
LAURUS MASTER FUND, LTD.
By: ____________________
Signature
____________________
Name
____________________
Title: