EXHIBIT 10.19
TERMINATION AGREEMENT
AGREEMENT (this "Agreement"), dated as of November 25, 2003, by and
between Tidel Technologies, Inc., a Delaware corporation (the "Company") and
Columbia Acorn Trust (formerly known as Acorn Investment Trust, the "Trust"), on
behalf of its series Columbia Acorn Fund (formerly known as the series Acorn
Fund, "Acorn").
WHEREAS, as of September 29, 2000, (a) the Company and the Trust, on
behalf of Acorn, entered into that certain Convertible Debenture Purchase
Agreement, among the Company and the investors signatory thereto (the "Purchase
Agreement"), whereby Acorn purchased 6% Convertible Debentures, issued by the
Company in the aggregate principal amount of $3,000,000 (the "Debentures"); (b)
the Company issued to Acorn that certain Warrant to purchase from the Company up
to a total of 63,158 shares of the Company's common stock, $.01 par value per
share (the "Common Stock", and such warrant, the "Warrant"); (c) the Company,
the Trust, on behalf of Acorn, and Montrose Investments Ltd. ("Montrose")
entered into that certain Joinder and Amendment to Registration Rights Agreement
(the "Registration Rights Agreement"), which amended the Registration Rights
Agreement between the Company and Montrose, dated as of September 8, 2000; and
(d) the Company, the Trust, on behalf of Acorn, and certain other third parties
entered into certain other related agreements in connection with the
transactions contemplated by the Purchase Agreement (such agreements, together
with the Purchase Agreement, the Debenture, the Warrant and the Registration
Rights Agreement, the "Acorn Agreements");
WHEREAS, the Company is negotiating to enter into a financing arrangement,
pursuant to which it will be obtaining certain loans and advances from one or
more investors, and a condition to such investment(s) is that the Debentures be
repaid, the Warrant be cancelled and the other Acorn Agreements be terminated;
WHEREAS, the Company desires to pay to Acorn one million ($1,000,000)
dollars in full and complete payment of the Debentures, including all principal,
accrued and unpaid interest, fees, charges, penalties, costs and expenses, and
Acorn desires to accept such amount as full and complete payment, and the
parties desire to terminate the Warrant and all of the other Acorn Agreements;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows:
1. PAYMENT OF INDEBTEDNESS AND OBLIGATIONS. As a condition to the
obligations of the Trust, Acorn and the Company contained herein, the Company
hereby agrees to pay to Acorn as provided herein the amount of one million
($1,000,000) dollars (the "Payment") as full and complete payment and
satisfaction of the Debentures, including without limitation all principal,
accrued and unpaid interest, fees, charges, penalties, costs and expenses.
The Payment shall be made, no later than ten business days following the
execution of this Agreement by the Trust, on behalf of Acorn, and the Company,
by wire transfer of immediately available funds in accordance with the
instructions listed on Exhibit A.
2. TERMINATION OF AGREEMENTS. Upon and subject to receipt by Acorn of the
Payment, (i) any and all commitments, rights, obligations and other agreements
of either the Trust or the Company set forth under the Acorn Agreements shall be
terminated; (ii) all amounts due and payable by the Company under the Debentures
and the Acorn Agreements shall be deemed to be paid, in full and complete
satisfaction of all outstanding obligations; (iii) Acorn shall deliver to the
Company the Debentures marked "Paid in Full," and the Warrant shall be cancelled
and delivered to the Company for cancellation; and (iv) each of the Acorn
Agreements shall terminate and shall have no further force or effect.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents, warrants and agrees that (i) it has full legal right, power and
authority to execute, deliver and perform this Agreement, and consummate the
transactions contemplated hereby, (ii) the execution and delivery of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action, and (iii)
this Agreement constitutes valid, legal and binding obligations of the Company,
enforceable against it in accordance with its terms, except as such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium (whether
general or specific) or other laws now or hereafter in effect. The performance
of the terms of this Agreement does not conflict with, constitute a violation
of, or require any notice or consent under, the organizational documents of the
Company or any agreement or instrument to which the Company is a party or by
which the Company is bound, and shall not require any consent, approval or
notice under any provision of any judgment, order, decree, statute, rule or
regulation applicable to the Company. The terms of this Agreement are
substantially the same as, and in any event are no less favorable to Acorn than,
the terms granted to any other investors in the Company whose investments are
being terminated.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST. The Trust, on behalf of
Acorn, represents, warrants and agrees that:
(a) (i) it has full legal right, power and authority to execute,
deliver and perform this Agreement, and consummate the transactions contemplated
hereby, (ii) the execution and delivery of this Agreement, and the consummation
by Acorn of the transactions contemplated hereby have been duly authorized by
all necessary action, (iii) the Trust was formerly known as the Acorn Investment
Trust and Acorn was formerly known as the series Acorn Fund, and each of the
Trust and Acorn holds all respective right, title and interest to the Acorn
Agreements, and all related matters, previously held by the Acorn Investment
Trust and the series Acorn Fund, respectively, and (iv) this Agreement
constitutes valid, legal and binding obligations of the Trust, enforceable
against it in accordance with its terms, except as such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium (whether general
or specific) or other
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laws now or hereafter in effect. The performance of the terms of this Agreement
shall not conflict with, constitute a violation of, or require any notice or
consent under, the organizational documents of the Trust or any agreement or
instrument to which the Trust or Acorn is a party or by which Acorn is bound,
and shall not require any consent, approval or notice under any provision of any
judgment, order, decree, statute, rule or regulation applicable to the Trust;
(b) it holds all right, title and interest to the Debentures and the
Warrant as well as to any and all claims, whether arising under the Acorn
Agreements or otherwise, it ever held or holds against the Company or its
subsidiaries and affiliates, and it has not transferred, conveyed, sold or
otherwise disposed of any of the Debentures or such claims, or entered into any
agreement to do any of the foregoing;
(c) upon receipt of the Payment, it shall have no right to receive
any shares of Common Stock or other securities of the Company or any other
payments from the Company;
(d) in making the determination to enter into this Agreement, the
Trust, on behalf of Acorn, has not relied on any statements made or information
provided by James T. Rash, Leonard Carr, or any other officer of Tidel; and
(e) it acknowledges the possibility that greater value might be
realized by Acorn in the future for the Debentures, the Warrants, and the other
Acorn Agreements, if Acorn retained such securities and rights, but that there
are significant future uncertainties regarding the Company and its operations,
and Acorn has made the business decision to enter into the transaction set forth
in this Agreement based on its business judgment and internal requirements.
5. COMPANY RELEASE. (a) Upon and subject to receipt by Acorn of the
Payment, the Company on its own behalf and on behalf of its officers, directors,
employees, agents, representatives, successors and assigns, and anyone claiming
by or through any of the foregoing (collectively, the "Company Releasors"),
hereby releases and forever discharges Acorn and its respective directors,
officers, employees, agents, representative and attorneys (collectively, "Acorn
Releasees"), of and from all manner of actions, causes of action, suits, account
reckonings, covenants, agreements, damages, judgments, claims and demands
whatsoever, at law or in equity which the Company Releasors ever had, now have,
or may hereafter have, whether known or unknown, from the beginning of time to
the date of receipt by Acorn of the Payment.
(b) Upon and subject to receipt by Acorn of the Payment, the Company
on its own behalf and on behalf of the other Company Releasors, covenants, to
the maximum extent permitted by law, that neither it nor any Company Releasor
shall at any time hereafter file, commence or maintain or authorize or permit
any third party to file, commence or maintain on its behalf, any suit, action or
proceeding before any federal, state or local court, administrative body, agency
or authority or arbitral organization or other tribunal against the Acorn
Releasees with respect to the matters covered by the release set forth in
Section 6(a) above.
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6. ACORN RELEASE. (a) Upon and subject to receipt by Acorn of the Payment,
the Trust, on its own behalf and on behalf of Acorn and its officers, directors,
employees, agents, representatives, successors and assigns, and anyone claiming
by or through any of the foregoing in their capacity as such (collectively, the
"Acorn Releasors"), hereby releases and forever discharges the Company and its
subsidiaries, and each of their respective directors, officers, employees,
agents, representative and attorneys (collectively, "Company Releasees"), of and
from all manner of actions, causes of action, suits, account reckonings,
covenants, agreements, damages, judgments, claims and demands whatsoever, at law
or in equity which the Acorn Releasors ever had or now have, whether known or
unknown, from the beginning of time to the date of receipt by Acorn of the
Payment and relating to the Acorn Agreements.
(b) Upon and subject to receipt by Acorn of the Payment, the Trust,
on its own behalf and on behalf of Acorn and the other Acorn Releasors,
covenants, to the maximum extent permitted by law, that neither it nor, to the
extent within Acorn's control, any Acorn Releasor shall at any time hereafter
file, commence or maintain or authorize or permit any third party to file,
commence or maintain on its behalf, any suit, action or proceeding before any
federal, state or local court, administrative body, agency or authority or
arbitral organization or other tribunal against the Company Releasees with
respect to the matters covered by the release set forth in Section 7(a) above.
7. FURTHER ASSURANCES. The parties agree to execute and deliver to each
other such further instruments and other written assurances and to do or cause
to be done such further acts or things as may be necessary or convenient to
carry out and give effect to the intent of this Agreement or as any of the
parties may reasonably request in order to carry out the transactions
contemplated herein.
8. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be delivered personally, by facsimile,
sent by certified, registered or express air mail, or overnight carrier, postage
prepaid, and shall be deemed given when so delivered personally or by facsimile,
or if mailed, five (5) days after the date of mailing, or if sent by overnight
carrier, one (1) day after the date of mailing to the addresses set forth on the
signature pages hereto.
9. ENTIRE AGREEMENT; COUNTERPARTS. This Agreement sets forth the entire
agreement among the parties hereto pertaining to the specific subject matter
hereof and replace and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties hereto,
and there are no warranties, representations or other agreements, whether oral
or written, express or implied, statutory or otherwise, between the parties
hereto in connection with the subject matter hereof except as specifically set
forth herein. No supplement, modification, amendment, waiver or termination of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby. This Agreement may be executed in counterparts, each of which
shall be deemed an original agreement, but all of which together shall
constitute one and the same instrument.
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10. SUCCESSORS. This Agreement shall be binding upon and shall enure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors, assigns and legal representatives.
11. GOVERNING LAW. This Agreement shall be governed by, construed, applied
and enforced in accordance with the laws of the State of New York, except that
no doctrine of choice of law shall be used to apply any law other than that of
New York, and no defense, counterclaim or right of set-off given or allowed by
the laws of any other state or jurisdiction, or arising out of the enactment,
modification or repeal of any law, regulation, ordinance or decree of any
foreign jurisdiction, shall be interposed in any action hereon. The parties
hereto agree that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
12. MISCELLANEOUS. A copy of the Amended and Restated Declaration of Trust
of the Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts. This Agreement has been executed on behalf of the Trust by an
officer of the Trust in such capacity and not individually and the obligations
of the Trust under this Agreement are not binding upon such officer, any of the
trustees of the Trust or the shareholders of the Trust individually, but are
binding only upon the assets and property of the Trust.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TIDEL TECHNOLOGIES, INC.
By: /s/ James T. Rash
---------------------------------
Name: James T. Rash
Title: CEO
Address: 2900 Wilcrest Drive
Suite 205
Houston, TX 77042
COLUMBIA ACORN TRUST, on behalf
of its series Columbia Acorn Fund
By: /s/ Kenneth A. Kalina
---------------------------------
Name: Kenneth A. Kalina
Title: Assistant Treasurer
Address: 227 West Monroe Suite 3000
Chicago, IL 60606
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EXHIBIT A
Acorn Wire Instructions
STATE STREET BANK OF BOSTON(SWIFT
SBOSUS33)
MUTUAL FUND AREA
ABA 011000028
A/C 00208488
FUND NUMBER 2s01
CONTACT: Al Kenney 617-662-3020
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