EXHIBIT 10.16
NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "AGREEMENT" is made and entered into
effective the 30 day of June, 2003 ("EFFECTIVE DATE"), by and between JPMORGAN
CHASE BANK, formerly known as The Chase Manhattan Bank, successor by merger to
Chase Bank of Texas, National Association, formerly known as Texas Commerce Bank
National Association ("ASSIGNOR") and WALLIS STATE BANK, a TEXAS STATE BANK
("ASSIGNEE") with the consent and agreement of TIDEL ENGINEERING, L.P., a
Delaware limited partnership ("BORROWER"), TIDEL TECHNOLOGIES, INC., TIDEL
SERVICES, INC. AND TIDEL CASH SYSTEMS, INC., each Delaware corporations (each a
"GUARANTOR" and collectively, the "GUARANTORS") and TIDEL TECHNOLGIES, INC.
("ULTIMATE PARENT").
RECITALS:
Assignor is the owner of an Amended and Restated Revolving Credit Note
dated April 30, 2002 (the same, as heretofore modified, renewed and extended, is
herein collectively referred to as the "NOTE"), executed by Borrower in the
original principal amount of $4,680,000.00 and payable to the order of Assignor.
Assignee has approached Assignor to purchase the Note and Assignee desires
to purchase the Note and Assignor is willing to sell the same to Assignee on the
terms and conditions set forth herein.
AGREEMENTS:
For and in consideration of the mutual covenants and agreements contained
herein, Assignor and Assignee agree as follows:
1. Purchase/Conveyance of Note. The purchase price of the Note is equal to
the sum of the total unpaid principal balance and accrued unpaid interest
and all other amounts owing under the Note, including any and all costs of
collection thereof as of the date of purchase ("Purchase Price"). Promptly
upon receipt of the Purchase Price, Assignor wilt deliver to Assignee (i)
an Assignment of Note and Lien substantially in the form of Exhibit A
("Assignment") duly executed by Assignor; (ii) the original Note endorsed
by Assignor to Assignee as follows: "Pay to the order of Wallis State
Bank, without recourse and without representation or warranty of any kind,
express or implied, except as set forth in that certain Note Purchase
Agreement dated as of June 30, 2003 between the undersigned and Wallis
State Bank; (iii) copies of the Loan Documents (as defined in Schedule 1);
and (iv) a letter duly executed by Assignor authorizing Assignee to file
amendments to any financing statements of record showing Assignor as
secured party and Borrower or any Guarantor as debtor. In contemplation of
the purchase of the Note, Assignee has executed and delivered to Assignor
a Confidentiality Agreement in the form attached hereto as Exhibit "B"
(the "Confidentiality Agreement"). To the extent of any conflict between
the terms and provisions of this Agreement and those contained in the
Assignment or the Confidentiality Agreement, the provisions in this
Agreement shall control. Assignor represents that Assignor (i) is the
owner of the Note and has not endorsed, granted, assigned or transferred
the Note to any other person; and (ii) has all
Page 1 of 8 Pages
requisite power and authority to make the assignment and transfer of the
Note contemplated hereby. Assignor also represents and warrants to
Assignor that the total of the outstanding unpaid principal, accrued
unpaid interest, other amounts owing under the Note and collection costs
equals $ 2,000,000 as of the Effective Date.
2. Assignee's Representations and Acknowledgements. As a material inducement
to Assignor to execute and deliver this Agreement and the Assignment,
Assignee represents and acknowledges to Assignor as follows:
(a) Assignee has made its own independent investigations, inspections and
analyses of: (i) the Note and other Loan Documents described on Schedule I
attached hereto and incorporated herein by reference (the "LOAN
DOCUMENTS"); (ii) the validity and enforceability of the Note and other
Loan Documents; (iii) the perfection or priority of any lien and security
interests of the Loan Documents, if any, listed on Schedule I; (iv) the
value, condition, quality, sufficiency of the description and amount of
collateral purportedly covered and affected by the Loan Documents; and (v)
the enforceability of any documentation related to, collateral for,
nature, terms and tenor of and the rights, remedies of any holder with
respect to, obligations or indebtedness of Borrower or any Guarantor to
any creditor other than Assignor ("OTHER INDEBTEDNESS"), including without
limitation, any Other Indebtedness subordinated to the payment and
performance of the obligations and indebtedness of Borrower or any
Guarantor under the Loan Documents. Assignee acknowledges that Assignor
has attempted to provide accurate information to Assignee but that
Assignor does not represent, warrant or insure the accuracy or
completeness of any information or its sources of information provided to
Assignee or in any of the Loan Documents. Assignee agrees and represents
that the Note, the other Loan Documents and other information made
available to Assignee were an adequate and sufficient basis on which to
determine whether to purchase the Note. Assignee has not relied and will
not rely on Assignor to furnish or make available to Assignee any
documents or information regarding the credit, affairs, financial
condition or business of Borrower or any Guarantor. Assignee has made such
independent investigations as Assignee deems to be warranted into the
nature, validity, enforceability, collectability, and value of the Note
and the other Loan Documents, any Other Indebtedness and all other facts
Assignee deems material to Assignee's purchase and is entering into this
transaction solely on the basis of that investigation and Assignee's own
judgment, and is not acting in reliance on any representation made or
information furnished by Assignor, Assignor's affiliates or its employees,
agents, representatives or independent contractors (other than the
representations and warranties of Assignor contained herein). Assignee
acknowledges that Assignor has not given Assignee any investment advice,
credit information or opinion on whether the purchase of the Note is
prudent.
(b) The transactions contemplated by this Agreement do not involve, nor
are they intended in any way to constitute, the sale of a "security" or
"securities" within the meaning of any applicable securities laws, and
none off the representations, warranties or agreements of Assignee shall
create any inference that the transactions involve any "security" or
"securities". Assignee acknowledges, understands and agrees that the
acquisition of the Note involves a high degree of risk and is suitable
only for persons or
Page 2 of 8 Pages
entities of substantial financial means who have no need for liquidity and
who can hold the Note indefinitely or bear the partial or entire loss of
the value of the Note and any collateral securing the Note. Assignee
represents and warrants to Assignor that Assignee (a) is purchasing for
Assignee's own account; (b) is not purchasing with a view to public
distribution; (c) is not in a disparate bargaining position relative to
Assignor with respect to this Agreement; (d) is a sophisticated entity
with respect to the purchase of the Note; (c) is able to bear the economic
risk associated with the purchase of the Note; (d) has adequate
information concerning the business and financial condition of Borrower
and each Guarantor to make an informed decision regarding the purchase of
the Note; and (e) has such knowledge and experience and has made purchases
of instruments of a similar nature, so as to be aware of the risks and
uncertainties inherent in the type of transaction contemplated by this
Agreement.
(c) Assignee acknowledges that (i) Assignor currently may have, and later
may come into possession of, information with respect to the Note and the
other Loan Documents, Borrower, any Guarantor or any other matter related
thereto that is not known to Assignee and that may be material to a
decision to acquire the Note ("EXCLUDED INFORMATION"), (ii) Assignee has
determined to purchase the Note notwithstanding its
lack of knowledge of the Excluded Information; and (iii) Assignor shall
have no liability to Assignee, and Assignee waives and releases any claims
that it might have against Assignee or any Assignor Party, as defined
below, whether under applicable law or otherwise, with respect to the
nondisclosure of the Excluded Information in connection with the
transactions contemplated hereby; provided, however, that the Excluded
Information shall not and does not affect the truth or accuracy of
Assignor's representations or warranties in this Agreement.
(d) Assignor has not made and does hereby specifically disclaim, in
addition to and cumulative of the disclaimers contained in the Assignment,
any and all representations and warranties of any kind or character,
express or implied, in respect to: (i) the validity, enforceability of or
existence of offsets or defenses to the Note; (ii) the validity,
perfection, enforceability or priority of the liens and security interests
of the Loan Documents; (iii) the proper recordation of the Loan Documents
which are recorded; and (iv) the value, condition or use which may be made
of any purported collateral for the Note, the operational potential
thereof, the suitability for the intended purposes, or the compliance
thereof with governmental codes, rules, regulations, orders and laws.
(e) This Agreement and the Confidentiality Agreement are legal, valid and
binding obligations of Assignee enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency and
other similar laws affecting creditors' rights generally. The execution,
delivery and performance of this Agreement and the Confidentiality
Agreement have all been duly authorized by all necessary action; are
within the power and authority of Assignee.
(f) Assignee acknowledges that the Note is in default.
3. Assignee's Covenants. (a) Assignee hereby covenants and agrees with
Assignor that Assignee will keep confidential in all respects the terms
and provisions hereof.
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(b) Assignee agrees to immediately assume all obligations with respect to
federal and state income tax informational reporting for the period after
the Effective Date including obligations with respect to Forms 1099 and
1098 and back-up withholding. Assignee further agrees to cooperate with
Assignor to the extent necessary to allow Assignor to fulfill its
obligations it may have with respect to such informational reporting for
the Note for the period prior to the date of this Agreement.
(c) Assignee agrees not to violate any law relating to privacy or unfair
collection practices in connection with the Note purchased by Assignee
hereunder. ASSIGNEE FURTHER AGREES TO INDEMNIFY ASSIGNOR AND HOLD ASSIGNOR
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, LOSSES, DAMAGES,
PENALTIES, FINES, FORFEITURES, JUDGMENTS, LEGAL FEES AND OTHER COSTS, FEES
AND EXPENSES AT ANY TIME INCURRED BY ASSIGNOR AS A RESULT OF (i)
ASSIGNEE'S BREACH OF THE AFORESAID AGREEMENT OR (ii) ANY ACTS OR OMISSIONS
OF ASSIGNEE RESULTING IN ANY CLAIM, DEMAND OR ASSERTION THAT ASSIGNOR,
SUBSEQUENT TO THE DATE OF THIS AGREEMENT, WAS IN ANY WAY INVOLVED IN OR
HAD IN ANY WAY AUTHORIZED ANY UNLAWFUL COLLECTION PRACTICES IN CONNECTION
WITH THE NOTE OR THE OTHER LOAN DOCUMENTS. Each party agrees to notify the
other within ten (10) days of receiving notice or knowledge of any such
claim, demand or assertion.
(d) From and after the date of this Agreement, Assignee shall assume all
of Assignor's obligations and duties with respect to servicing the Note
purchased hereunder and shall service the Note in accordance with
commercially reasonable standards and applicable law.
(e) Assignee warrants, represents and agrees that Assignee will not
institute any legal action in the name of Assignor or continue to
prosecute or defend in the name of Assignor any pending legal action; nor
shall Assignee intentionally or unintentionally, through misrepresentation
or nondisclosure, mislead any person as to, or conceal from any person,
the identity of Assignee of the Note purchased pursuant to this sale; nor
shall Assignee use or refer to the names Texas Commerce Bank National
Association, Chase Bank of Texas, National Association, The Chase
Manhattan Bank, JPMorgan Chase Bank or any name derived therefrom or
confusingly similar therewith to promote Assignee's marketing,
advertising, sale or transfer of the Note or any collateral securing the
Note or the collection or management thereof; provided, however, that
nothing herein shall be deemed to preclude Assignee from disclosing to
potential transferees of the Note the fact that the Note was acquired from
Assignor. Assignee shall immediately upon demand reimburse Assignor for
any costs and expenses incurred by Assignor as a result of any claims,
demands, suits, subpoenas or any costs incurred by Assignor in cooperating
with Assignee in connection with or related to the Note and Loan
Documents. Assignor, agrees, to cooperate with Assignee at Assignee's
expense to transfer of record any collateral security for the Notes or to
effect the transfers contemplated by this Agreement, at the reasonable
request of the Assignee. Any amounts not paid within 5 business days will
bear interest at a per annum interest rate of 18% from the date of demand
until paid.
(f) INDEMNIFICATION. TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE
LAW, FROM AND AFTER THE DATE OF THIS AGREEMENT, ASSIGNEE AGREES TO
INDEMNIFY, DEFEND AND HOLD
Page 4 of 8 Pages
HARMLESS ASSIGNOR, ITS SUBSIDIARIES, AFFILIATES, AND THEIR OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, REPRESENTATIVES AND ATTORNEYS
(THE "ASSIGNOR PARTIES"), FROM AND AGAINST ANY AND ALL LOSS, LIABILITY,
CLAIM, JUDGMENT, DAMAGE AND EXPENSE WHATSOEVER (INCLUDING ATTORNEYS' FEES
AND AMOUNTS PAID IN SETTLEMENT) DIRECTLY OR INDIRECTLY ARISING OUT OF,
BASED UPON, RESULTING FROM OR OTHERWISE RELATING TO (i) THE SALE OF THE
NOTE AND THE OTHER LOAN DOCUMENTS, THE NOTE, OR ANY OF THE OTHER LOAN
DOCUMENTS, THE ASSIGNED RIGHTS OR OTHERWISE, INCLUDING, BUT NOT LIMITED
TO, ANY ACTION TAKEN BY ASSIGNEE OR ANY ASSIGNOR PARTY IN CONNECTION WITH
THE NOTE, ANY OTHER LOAN DOCUMENTS OR ANY OF THE ASSIGNED RIGHTS,
INCLUDING THAT RESULTING FROM SUCH ASSIGNOR PARTY'S OWN NEGLIGENCE, EXCEPT
AND TO THE EXTENT CAUSED BY SUCH ASSIGNOR PARTY'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OR RESULTING FROM A MATERIAL INACCURACY OR BREACH OF
ASSIGNOR'S REPRESENTATIONS OR WARRANTIES HEREIN, (ii) THE INACCURACY OF
ANY OF ASSIGNEE'S REPRESENTATIONS OR WARRANTIES HEREIN, (iii) THE BREACH
OF ANY OF ASSIGNEE'S COVENANTS HEREIN, OR (iv) CLAIMS BY OTHER CREDITORS,
INCLUDING WITHOUT LIMITATION, TRADE CREDITORS AND HOLDERS OF OTHER
INDEBTEDNESS, OF BORROWER OR ANY GUARANTOR FOR ANY ACT OR OMISSION OF
ASSIGNEE, ITS SUBSIDIARIES AND AFFILIATES AND THEIR OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEE, AGENTS, REPRESENTATIVE AND ATTORNEYS; PROVIDED,
HOWEVER, THAT ASSIGNOR HAS GIVEN ASSIGNEE PROMPT WRITTEN NOTICE OF ANY
CLAIM OR AMOUNTS FOR WHICH IT SEEKS INDEMNITY HEREUNDER UPON ASSIGNOR'S
DISCOVERY OF SUCH CLAIM, AND WRITTEN REQUEST FOR INDEMNIFICATION, AND,
PROVIDED FURTHER, THAT ASSIGNEE SHALL BE ENTITLED TO CONTEST AND DEFEND
SUCH CLAIM BY ALL APPROPRIATE LEGAL PROCEEDINGS USING COUNSEL SELECTED BY
ASSIGNEE TO HANDLE SUCH CLAIM (SUBJECT TO ASSIGNOR'S APPROVAL OF SUCH
COUNSEL, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD). ASSIGNOR AND
ASSIGNEE, AT THE EXPENSE OF ASSIGNEE, AGREE TO COOPERATE IN THE DEFENSE OF
ANY CLAIM OR COUNTERCLAIM IN ANY ACTION TO ENFORCE OR COLLECT AMOUNTS OWED
UNDER THE NOTE OR THE OTHER LOAN DOCUMENTS.
4. ASSIGNEE'S WAIVER OF CONSUMER RIGHTS. ASSIGNEE REPRESENTS AND WARRANTS TO
ASSIGNOR THAT IT HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
MATTERS THAT ENABLE ASSIGNEE TO EVALUATE THE MERITS AND RISKS OF THE
TRANSACTIONS CONTEMPLATED HEREBY. FURTHER, ASSIGNEE REPRESENTS AND
WARRANTS TO ASSIGNOR THAT IT IS NOT IN A DISPARATE BARGAINING POSITION
RELATIVE TO ASSIGNOR. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ASSIGNEE HEREBY WAIVES AND RELINQUISHES ALL RIGHTS AND BENEFITS CONFERRED
(OR WHICH MAY BE CONFERRED) UPON ASSIGNEE IN RESPECT TO THE TRANSACTION
DESCRIBED HEREIN UNDER THE APPLICATION OF THE DECEPTIVE TRADE
PRACTICES-CONSUMER PROTECTION ACT (SECTION 17.41 ET. SEQ., TEXAS BUSINESS
AND COMMERCE CODE), A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF THE UNDERSIGNED
ASSIGNEE'S OWN SELECTION, THE UNDERSIGNED ASSIGNEE VOLUNTARILY CONSENTS TO
THIS WAIVER.
5. Consent/Release of Claims of Borrower and Guarantors. Borrower and each
Guarantor accepts and agrees to the conveyance of the Note by Assignor to
Assignee and agrees and
Page 5 of 8 Pages
confirms that the assignment and transfer will not impair Borrower's or
such Guarantor's respective obligations under Note and the other Loan
Documents prior to the conveyance. As a condition to Assignor selling the
Note to Assignee, Borrower and each Guarantor hereby releases Assignor and
Assignee, its affiliates and all officers, employees and agents thereof
from any and all claims, demands, damages, actions, known and unknown,
relating in any way to the Note, any other Loan Documents, the loans
evidenced thereby, and prior extensions or renewals or modifications
thereof, any prior promissory notes evidencing such loans, any collateral,
any document" executed `in connection with the Note, including, but not
limited to the Loan Documents, any claim of any breach by Assignor of any
of its covenants, agreements or obligations related to the loans evidenced
by the Note or any other matter relating in any way to the Note or the
loans evidenced thereby and Assignor's actions or omissions in
administering and collecting the renewed notes including, without
limitation, any claim or defense based on Assignor having contracted for,
charged or collected interest at a rate greater than that allowed to be
contracted for, charged or collected by applicable law.
6. DISCLAIMER OF WARRANTIES AND REPRESENTATIONS NOT EXPRESSED HEREIN. EXCEPT
FOR THOSE WARRANTIES AND REPRESENTATIONS SPECIFICALLY SET FORTH IN THIS
AGREEMENT, NO WARRANTIES OR REPRESENTATIONS, EITHER EXPRESS OR IMPLIED,
HAVE BEEN MADE BY ASSIGNOR OR BY ANYONE ACTING ON ITS BEHALF,
PARTICULARLY, BUT WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE
FOREGOING, NO WARRANTIES OR REPRESENTATIONS REGARDING (I) THE
COLLECTABILITY OF THE NOTE, (II) THE CREDITWORTHINESS OF ANY OBLIGOR OF
THE NOTE AND LOAN DOCUMENTS, (III) THE VALUE OF ANY COLLATERAL SECURING
PAYMENT OF THE NOTE, (IV) THE FREEDOM OF ANY COLLATERAL OF THE NOTE AND
LOAN DOCUMENTS FROM LIENS AND ENCUMBRANCES, IN WHOLE OR IN PART, (V) THE
PERFECTION OR PRIORITY OF THE LIENS AND SECURITY INTERESTS OF ANY
COLLATERAL SECURING THE NOTE, OR (VI) THE TRANSFERABILITY AND
ENFORCEABILITY OF COLLATERAL DOCUMENTS SUPPORTING THE NOTE. EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT, THE NOTE AND LOAN DOCUMENTS SOLD TO
ASSIGNEE UNDER THIS AGREEMENT ARE SOLD AND TRANSFERRED "AS IS, WITH ALL
FAULTS", WITHOUT RECOURSE OR WARRANTY, EITHER EXPRESS OR IMPLIED.
7. Miscellaneous.
(a) Assignee shall, promptly after the execution of this Agreement and the
Assignment, notify Borrower of Assignee's purchase of the Note and direct
that all payments on and communications regarding the Note be sent to
Assignee's address after execution at 900 Town & Country Lane, Ste. 100,
Houston, Texas 77024 and not to Assignor.
(b) This Agreement, the Confidentiality Agreement and the Assignment
constitute the entire agreement between the parties in respect to the
subject matter hereof and may not
Page 6 of 8 Pages
be altered or amended except in a writing by all parties hereto. Words
with initial capital letters used but not defined herein shall have the
respective meanings assigned to them in the Assignment. This Agreement may
be executed in several identical counterparts, on separate counterparts;
each counterpart will constitute an original instrument, and all separate
counterparts will constitute but one and the same instrument.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas. ASSIGNOR AND ASSIGNEE AGREE THAT THIS
AGREEMENT, THE ASSIGNMENT AND THE CONFIDENTIALITY AGREEMENT WILL BE
PERFORMED IN HARRIS COUNTY, TEXAS, AND THAT SUCH COUNTY IS PROPER VENUE
FOR ANY ACTION OR PROCEEDING BROUGHT BY ASSIGNOR OR ASSIGNEE, WHETHER IN
CONTRACT, TORT, OR OTHERWISE. ANY ACTION OR PROCEEDING AGAINST ASSIGNEE
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN SUCH COUNTY TO THE EXTENT
NOT PROHIBITED BY APPLICABLE LAW. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ASSIGNEE HEREBY IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURTS, AND (B) WAIVES ANY OBJECTION ASSIGNEE MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN INCONVENIENT FORUM.
ASSIGNEE AGREES THAT SERVICE OF PROCESS UPON ASSIGNEE MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ASSIGNEE'S
ADDRESS SPECIFIED BELOW. ASSIGNOR MAY SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW AND MAY BRING ANY ACTION OR PROCEEDING AGAINST ASSIGNEE
OR WITH RESPECT TO ANY OF ASSIGNEE'S PROPERTY IN COURTS IN OTHER PROPER
JURISDICTIONS OR VENUES.
(d) JURY TRIAL WAIVER. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW,
ASSIGNEE AND ASSIGNOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVE ANY RIGHT TO TRIAL BY JURY THAT ASSIGNEE OR ASSIGNOR MAY HAVE IN ANY
ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS
AGREEMENT, THE CONFIDENTIALITY AGREEMENT OR THE ASSIGNMENT. ASSIGNEE
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF ASSIGNOR HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ASSIGNOR WILL NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THIS RIGHT TO JURY TRIAL WAIVER. ASSIGNEE
ACKNOWLEDGES THAT ASSIGNOR HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE ASSIGNMENT BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
Page 7 of 8 Pages
EXECUTED effective as of the day and year first above written.
ASSIGNOR: JPMORGAN CHASE BANK
By: /s/ J. T. White
-----------------------------------
Vice President
For purposes of
paragraph 4 above:
ASSIGNEE: WALLIS STATE BANK
___________________________ By: /s/ J. Mike Smith
-----------------------------------
___________________________ Name: J. Mike Smith
counsel to Assignee Title: SVP
BORROWER: TIDEL ENGINEERING, L.P.
BY: TIDEL CASH SYSTEMS, INC., GENERAL PARTNER
By: /s/ J. Mike Smith
--------------------------------------
Name: J. Mike Smith
Title: SVP
SECRETARY'S CERTIFICATE
The undersigned, Secretary of TIDEL CASH SYSTEMS, INC. ("Cash"), a
Delaware corporation and General Partner of Tidel Engineering, L.P., a Delaware
limited partnership (`Borrower"), does hereby certify that the undersigned is
familiar with the articles of association, charter, bylaws, partnership
agreement and other organizational documents of Cash and Borrower and the books
and records of Borrower and Cash, and that Cash is duly authorized and empowered
to enter into the above Agreement for and on behalf of Cash and Borrower; and
that Mark K. Levenick is an authorized officer of Cash and is authorized and
empowered to sign on behalf of Cash, for itself and as general partner and on
behalf of Borrower and to bind Cash and Borrower with respect to the Agreement
and that the signature appearing above is the true and correct signature Mark K.
Levenick.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of __________ by order of the Board of Directors thereof this _____________
day of __________, 2003.
___________________________
Secretary of Cash
Page 8 of 8 Pages
GUARANTOR AND ULTIMATE PARENT:
TIDEL TECHNOLOGIES, INC.
By: /s/ Mark K. Levenick
------------------------------------------
Name: Mark K. Levenick
Title: President
SECRETARY'S CERTIFICATE
The undersigned, Secretary of TIDEL TECHNOLOGIES, INC. ("TTI"), a Delaware
corporation, does hereby certify that the undersigned is familiar with the
articles of association, charter, bylaws and other organizational documents of
TTI and the books and records of TTI, and that TTI is duly authorized and
empowered to enter into the above Agreement, and that Mark K. Levenick is an
authorized officer of TTI and is authorized and empowered to sign on behalf of
TTI and to bind TTI with respect to the Agreement and that the signature
appearing above is the true and correct signature of Mark K. Levenick.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of _______________ by order of the Board of Directors thereof this
_____________ day of ___________________, 2003.
___________________________
Secretary of TTI
GUARANTOR: TIDEL SERVIDES, INC.
By: /s/ Mark K. Levenick
------------------------------------------
Name: Mark K. Levenick
Title: President
SECRETARY'S CERTIFICATE
The undersigned, Secretary of TIDEL SERVICES, INC. ("TSI"), a Delaware
corporation, does hereby certify that the undersigned is familiar with the
articles of association, charter, by-laws and other organizational documents of
TSI and the books and records of TSI, and that TSI is duly authorized and
empowered to enter into the above Agreement, and that Mark K. Levenick is an
authorized officer of TSI and is authorized and empowered to sign on behalf of
TSI and to bind TSI with respect to the Agreement and that the signature
appearing above is the true and correct signature of Mark K. Levenick.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of ______________________ by order of the Board of Directors thereof this
_____ day of ______________, 2003.
____________________________________
Secretary of TSI
Page 9 of 8 Pages
EXHIBIT "A"
ASSIGNMENT OF NOTE AND LIEN
THIS ASSIGNMENT OF NOTE AND LIEN ("ASSIGNMENT") dated 6-30, 2003, is
executed and delivered by JPMORGAN CHASE BANK, a New York banking corporation
("ASSIGNOR") to WALLIS STATE BANK ("ASSIGNEE").
RECITALS:
Assignor is the owner of an Amended and Restated Revolving Credit Note
dated April 30, 2002 (the same, as heretofore modified, renewed and extended, is
herein collectively referred to as the "NOTE"), executed by TIDEL ENGINEERING,
L.P. ("BORROWER") in the original principal amount of $4,680,000.00 and payable
to the order of Assignor.
The Note is secured by the security agreements, guaranties, assignments,
pledges and security devices, of whatever kind or character, listed on the
attached Schedule I herein together with the Note, collectively called the "LOAN
DOCUMENTS". This Assignment is executed and delivered in furtherance of that
Note Purchase Agreement dated 6-30, 2003 between Assignee and Assignor (the
"NOTE PURCHASE AGREEMENT").
ASSIGNMENTS AND AGREEMENTS:
For good and valuable consideration paid to Assignor and subject to the
following, the receipt and sufficiency of which are hereby acknowledged,
Assignor has TRANSFERRED and ASSIGNED and by these presents TRANSFERS and
ASSIGNS unto Assignee the Note, together with all of the other Loan Documents.
NOTICE:
Except as expressly set forth in the Note Purchase Agreement, this
Assignment of Note and Liens is delivered and accepted on the express
understanding and agreement, which shall bind Assignee and each person or entity
claiming by, through or under Assignee, that the Note and the Loan Documents are
assigned absolutely WITHOUT REPRESENTATION, WARRANTY OR RECOURSE, EXPRESS OR
IMPLIED as to any matter, including, but not limited to, the existence,
validity, perfection, priority or enforceability of any of the liens,
assignments, security interests, pledges or other security devices securing or
purporting to secure the Note or any part thereof. Assignee acknowledges and
represents that it has, independently and without reliance upon Assignor, and
based on such documents and information as it has deemed sufficient, made its
own analysis off the creditworthiness of Borrower and the sufficiency of the
related documentation and any collateral. Without limiting the generality of any
other provision of this paragraph, Assignee acknowledges that Assignor makes and
has made no warranty or representation as to, and shall not in any way be
responsible for: (a) the accuracy or completeness of any statement, appraisal,
warranty or representation from any source made in or in connection with the
Note or the other Loan Documents; (b) the financial condition of Borrower or any
other person who may be obligated, directly or indirectly, upon the Note; (c)
the value, sufficiency, or description of, or title to, any collateral for the
Note or any property
Exhibit A
Page 1of 2
covered or purported to be covered by the other Loan Documents; (d) the
performance or observance of any of the terms, covenants or conditions of any
agreement relating to the Note or other Loan Documents; (e) the due execution,
legality, validity, enforceability, genuineness, sufficiency or collectibility
of the Note, any of the other Loan Documents, or any of the property covered or
purported to be covered by the Loan Documents; (f) any inspection of any of the
property, books or records of Borrower; or (g) any action at anytime taken or
omitted to be taken by the Assignor (other than this Assignment) in connection
with the Note or the other Loan Documents.
EXECUTED this ________ day of ________________, 2003.
JPMORGAN CHASE BANK
By: _________________________________________
________________, Vice President
THE STATE OF TEXAS
COUNTY OF HARRIS
This instrument was acknowledged before me on this ___________ day of
___________, 2003, by _______________, a Vice President of JPMORGAN CHASE BANK,
a New York banking corporation, for and on behalf of said corporation.
_____________________________________________
Notary Public in and for the State of Texas
Printed Name: _______________________________
My Commission Expires: ______________________
Exhibit A
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EXHIBIT B
6-30, 2003
JPMORGAN CHASE BANK
700 North Pearl, 8th Floor
Dallas, Texas 775201
Attn: Michael B. Phillips
RE: Confidentiality Agreement Ladies and Gentlemen:
The undersigned has expressed an interest in purchasing from you an
Amended and Restated Revolving Credit Note dated April 30, 2002 (the same, as
heretofore modified, renewed and extended, is herein collectively referred to as
the "NOTE"), executed by Tidel Engineering, L.P.. ("BORROWER") in the original
principal amount of $4,680,000.00 and payable to your order. You have advised
the undersigned that any such purchase and sale would be with very limited
representations and warranties on your behalf and that the undersigned must rely
upon the results of its own investigations and analyses in electing to purchase
the Note. To assist in that effort, you have agreed to make available to the
undersigned certain information in your files and records in respect to the
Note, but your willingness to do so is conditioned upon the undersigned's
agreement to the terms and provisions hereof which shall be and are binding upon
the undersigned irrespective of whether or not the purchase and sale of the Note
is consummated.
In consideration of your willingness to make available to the undersigned
information in your files and record in respect to the Note and the collateral
purportedly securing repayment of the same, the undersigned hereby agrees with
you as follows (each of which agreements and covenants shall bind the
undersigned irrespective of whether or not the undersigned consummates the
purchase and sale of the Note):
1. The undersigned shall not have the right to review any portions of the
records or information you have in your possession in respect to the Note,
Borrower, the purported collateral for the Note or your relationship to
Borrower or any guarantor in respect to the Note or otherwise other than
the loan documents executed in connection with the Note. Without limiting
the generality of the foregoing, the undersigned recognizes and agrees
that you will provide no information in respect to the creditworthiness of
Borrower or any other party liable for repayment of the Note, including
personal financial statements, tax returns or credit applications of
Borrower. The undersigned further recognizes and agrees that such
information as is not delivered to the undersigned by you is not and will
not be material to the undersigned in reaching its decision as to whether
or not to purchase the Note.
2. The undersigned will safeguard all information which the undersigned
receives from you against unauthorized use or disclosure to others and
agree to refrain from copying any such information provided by you. In the
event that the undersigned does not consummate the purchase of the Note,
the undersigned will return to you all copies of all information, files
and records in respect to the Note which you provide to the
Exhibit B
Page 1 of 2
undersigned promptly upon your request therefor. The undersigned will
retain no copies of any such information, files or records. The
undersigned further agrees that you are not granting any license, right,
title or interest in and to any materials which you may provide the
undersigned.
3. Until such time as the undersigned has purchased the Note, the undersigned
will keep all information in respect to the Note and any of the documents,
instruments and agreements executed in connection therewith or as security
therefor, Borrower and any collateral purportedly securing repayment of
the Note in the strictest confidence and shall not divulge the same to any
party for any purpose (other than consultants employed by the undersigned
but then only after such consultants execute and deliver to you agreements
satisfactory to you wherein such parties agree to be bound by the terms
and provisions of this letter agreement) except to the extent required to
do so by court order or other legal process, provided however, the
undersigned will be responsible for any disclosures of any such
information by the undersigned in violation of applicable law and any such
disclosures shall specifically be covered by and included in Section 4
hereof. The undersigned recognizes that its agreement to keep confidential
all such material and information is a material inducement to you in
providing information from your files and records in respect to the Note
and but for the undersigned's agreements set forth herein you would not do
so. Until such time as the undersigned has purchased the Note, the
undersigned further agrees to use such information solely for the purposes
of evaluating whether or not it desires to purchase the Note and for no
other purpose whatsoever.
4. The undersigned hereby agrees to indemnify, defend and hold you harmless
of, from and against any and all claims, demands, liabilities, causes of
action, losses, damages, costs and expenses (including attorneys' fees)
hereafter suffered or incurred by you arising out of, directly or
indirectly, the undersigned's failure to observe (and to cause its agents,
contractors, employees and consultants to observe) and comply with the
terms and provisions hereof. The indemnification obligations of the
undersigned contained herein shall bind the undersigned, its successors
and assigns, irrespective of whether or not the purchase of the Note is
consummated.
5. This letter agreement shall be governed by and construed in accordance
with the laws of the State of Texas, Harris County Texas, shall be a
proper place of venue to enforce the terms and provisions hereof.
Very truly yours,
WALLIS STATE BANK
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
Exhibit B
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