EXHIBIT 4.40
PARTNERSHIP INTEREST PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT") dated as of November 25,
2003 made by TIDEL CASH SYSTEMS, INC., a Delaware corporation and TIDEL
SERVICES, INC., a Delaware corporation (collectively, the "PLEDGORS"), in favor
of LAURUS MASTER FUND, LTD. , a Cayman Islands Company ("LAURUS").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Securities Purchase Agreement, dated as
of the date hereof (as amended, modified, extended, renewed or replaced from
time to time, the "PURCHASE AGREEMENT") by and between Tidel Technologies, Inc.
("COMPANY") and Laurus, Company agreed to sell and Laurus agreed to purchase the
Purchaser Notes (as defined in the Purchase Agreement) and Company agreed to
issue to Laurus the Warrants (as defined in the Purchase Agreement) (the
Purchase Agreement, the Purchaser Notes, the Warrant together with any and
documents, instruments and agreements executed in connection therewith,
collectively, the "PURCHASE DOCUMENTS").
WHEREAS, Pledgors have executed and delivered to Laurus a Guaranty dated
as of the date hereof (as amended, modified and supplemented from time to time,
the "GUARANTY") pursuant to which Pledgors jointly and severally guaranteed to
Laurus the payment and performance of all of the obligations and indebtedness of
Company under the Purchase Documents.
WHEREAS, it is a condition precedent to the effectiveness of the Purchase
Agreement and the obligations of Laurus thereunder that the Pledgors shall have
executed and delivered this Pledge Agreement to Laurus;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Pledgors hereby agree with Laurus as follows:
1. Defined Terms. Unless otherwise defined herein, terms which are defined
in the Purchase Agreement and used herein are so used as so defined.
(a) The following terms defined in Article 9 of the Uniform
Commercial Code as from time to time in effect in the State of New York
are used herein as so defined: Accounts, Proceeds, Instrument, and Chattel
Paper; and the following terms have the following meanings:
"AGREEMENT": this Pledge Agreement, as amended, supplemented or
otherwise modified from time to time.
"CODE": the Uniform Commercial Code as from time to time in effect
in the State of New York.
"COLLATERAL": as defined in Section 2 of this Agreement.
"GENERAL INTANGIBLES": as defined in Section 9-106 of the Code and
shall include, without limitation, the partnership interests listed on
Schedule 1 to this Agreement and all rights of the Pledgors to receive,
directly or indirectly, moneys or any other rights or benefits therefrom.
"PARTNERSHIP": Tidel Engineering, L.P., a Delaware limited
partnership.
"PARTNERSHIP AGREEMENT": Agreement of Limited Partnership of Tidel
Engineering, L.P. made and entered into as of March 24, 1999 by and
between Tidel Cash Systems, Inc. and Tidel Services, Inc.
"PARTNERSHIP INTEREST(S)": as defined in Section 2 of this
Agreement.
"SECURED OBLIGATIONS": the collective reference to all obligations
owing by Company to Laurus (including, without limitation, interest
accruing at the Contract Rate (as defined in the Purchaser Notes) after
the occurrence of an Event of Default and interest accruing at the
Contract Rate after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
relating to any Pledgor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) pursuant to the
Purchaser Notes, all obligations and liabilities of Pledgors under the
Guaranty and all other obligations and liabilities of the Pledgors and the
Company to Laurus, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Purchase Agreement, the
Purchaser Notes, this Agreement, the other Purchase Documents or any other
document made, delivered or given in connection therewith, or otherwise,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to Laurus or to
Laurus that are required to be paid by the Pledgors or Company pursuant to
the terms of the Purchase Agreement, this Agreement, or any other Purchase
Document).
2. Grant of Security Interest. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations, now existing or hereafter
arising, each of the Pledgors hereby pledges, assigns and transfers to Laurus,
and grants to Laurus, a continuing first priority security interest in any and
all of the following property now owned or at any time hereafter acquired by the
Pledgors, or in which the Pledgors may acquire any right, title or interest
(collectively, the "COLLATERAL"):
(a) any and all of its partnership interests in the Partnership as
set forth in Schedule 1 attached hereto, including, without limitation,
all its rights, title and interest to participate in the operation or
management of the Partnership and all its rights to properties, assets,
partnership interests and distributions under the Partnership Agreement in
respect of such partnership interest (collectively, the "PARTNERSHIP
INTEREST(S)");
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(b) all Accounts arising out of any Partnership Agreement in respect
of any Pledgor's Partnership Interest(s);
(c) all General Intangibles arising out of or constituted by the
Partnership Agreement in respect of any Pledgor's Partnership Interest(s);
and
(d) to the extent not otherwise included, all Proceeds of any and
all of the foregoing.
This Agreement shall create a continuing security interest in the
Collateral which shall remain in effect until all the Secured Obligations, now
existing or hereafter arising, shall have been paid in full and the Purchase
Documents shall no longer be in effect.
3. Delivery to Laurus.
(a) Each Pledgor shall deliver to Laurus (i) simultaneously with or
prior to the execution and delivery of this Pledge Agreement, all
certificates, if any, representing the Collateral and (ii) promptly upon
the receipt thereof by or on behalf of such Pledgor, all other
certificates and instruments constituting Collateral of such Pledgor.
Prior to delivery to Laurus, all such certificates and instruments
constituting Collateral of a Pledgor shall be held in trust by such
Pledgor for the benefit of Laurus pursuant hereto. All such certificates
shall be delivered in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in
blank, substantially in the form provided in Schedule 2 attached hereto.
(b) If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note, other
Instrument or Chattel Paper, such note, Instrument or Chattel Paper shall
be immediately delivered to Laurus, duly endorsed in a manner satisfactory
to Laurus, to be held as Collateral pursuant to this Pledge Agreement.
(c) Each Pledgor authorizes Laurus to file such UCC or other
applicable financing statements as may be reasonably requested by Laurus
in order to perfect and protect the security interest created hereby in
the Collateral.
(d) Each Pledgor agrees to execute and to cause the other partners
of the Partnership to execute and deliver to Laurus such other consents,
acknowledgments, agreements, instruments and documentation as Laurus may
reasonably request from time to time to effectuate the conveyance,
transfer, assignment and grant to Laurus of all of such Pledgor's right,
title and interest in and to the Collateral and to evidence the
substitution of Laurus in place of the such Pledgor as a partner in the
Partnership.
4. Transfer Powers. If at any time any equity interest in the Partnership
is evidenced by a certificate or other written instrument or document (a
"CERTIFICATE"), the Pledgor thereof shall, immediately deliver such certificate
to Laurus and, concurrently with the delivery to Laurus of each certificate by
the respective Pledgor, such Pledgor shall deliver an undated
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transfer power covering such certificate, duly executed in blank with, if Laurus
so requests, signature guaranteed, in the form attached hereto in Schedule 2 or
such other form as reasonably acceptable to Laurus to be held as part of the
Collateral pursuant hereto.
5. Rights of Collateral Agent; Limitations on Laurus' Obligations.
(a) Pledgor Remains Liable. Anything herein to the contrary
notwithstanding, the Pledgors shall remain liable under the Partnership
Agreement to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and
pursuant to the terms and provisions thereof. Laurus shall not have any
obligation or liability by reason of or arising out of this Agreement or
the receipt by Laurus of any payment relating to any Collateral pursuant
hereto, nor shall Laurus be obligated in any manner to perform any of the
obligations of the Pledgors under or pursuant to the Partnership Agreement
or any Account or General Intangible related thereto, to make any payment,
to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
under the Partnership Agreement, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any
time or times.
(b) Proceeds. Laurus hereby authorizes the Pledgors to collect the
Accounts in respect of the Pledgors' respective Partnership Interest(s).
If required by Laurus at any time after the occurrence and during the
continuance of an Event of Default, the Accounts in respect of the
Pledgors' Partnership Interest(s) and any Proceeds of such Accounts, when
and if collected by the Pledgors, shall be forthwith deposited by the
Pledgors in the exact form received, duly endorsed by such Pledgor and
Laurus if required, in a special bank account maintained by Laurus,
subject to withdrawal by Laurus only, as hereinafter provided, and, until
so turned over, shall be held by the Pledgors in trust for Laurus,
segregated from other funds of the Pledgors.
6. Representations and Warranties. Upon and after the closing of the
transactions contemplated by the Purchase Agreement (and after giving full
effect thereto), each of the Pledgors hereby represents and warrants that:
(a) Title; No Other Liens. Except for the lien granted to Laurus
pursuant to this Agreement and other than as may be permitted pursuant to
any Purchase Document, such Pledgor owns each item of the Collateral free
and clear of any and all liens or claims of others. No security agreement,
financing statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office except such
as may have been filed in favor of Laurus pursuant to this Agreement or
the other Purchase Documents.
(b) Perfected First Priority Liens. Upon the filing of any necessary
and appropriate financing statements, the Liens granted pursuant to this
Agreement shall constitute perfected first priority Liens on the
Collateral in favor of Laurus and shall be enforceable as such against all
creditors of and purchasers from the Pledgors.
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(c) Accounts. The Pledgors' respective chief executive offices and
principal places of business, and the place where the Pledgors keep their
records concerning the Accounts, is located at:
Tidel Services, Inc. Tidel Cash Systems, Inc.
2900 Wilcrest, Suite 205 2900 Wilcrest, Suite 205
Houston, Texas 77042 Houston, Texas 77042
7. Covenants. Each of the Pledgors covenants and agrees with Laurus that
until the Secured Obligations are paid in full and the security interest granted
pursuant to this Agreement is released:
(a) Books and Records. Such Pledgor shall mark its books and records
(and shall cause the Partnership to mark its books and records) to reflect
the security interest granted to Laurus for the benefit of Laurus pursuant
to this Pledge Agreement.
(b) If such Pledgor shall, as a result of its ownership of the
Partnership Interest of such Pledgor, become entitled to receive or shall
receive any certificate (including, without limitation, any certificate
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights, whether
in addition to, in substitution of, as a conversion of, or in exchange for
any shares of the Partnership Interest of such Pledgor, or otherwise in
respect thereof, such Pledgor shall accept the same as the agent for
Laurus, hold the same in trust for Laurus and deliver the same forthwith
to Laurus in the exact form received, duly endorsed by such Pledgor to
Laurus, if required, together with an undated transfer power covering such
certificate duly executed in blank by such Pledgor and with, if Laurus so
requests, signature guaranteed, to be held by Laurus, subject to the terms
hereof, as additional collateral security for the Secured Obligations.
Except in connection with any distributions that are not otherwise
prohibited hereunder and except as expressly permitted by any Purchase
Document any sums paid upon or in respect of the Partnership Interest of
such Pledgor as a dividend or other distribution or upon the liquidation
or dissolution of the Partnership shall be paid over to Laurus to be held
by it hereunder as additional collateral security for the Secured
Obligations, and in case any distribution of capital shall be made on or
in respect of the Partnership Interest of such Pledgor or any property
shall be distributed upon or with respect to the Partnership Interest of
such Pledgor pursuant to any recapitalization, reclassification or
reorganization of the Partnership, the property so distributed shall be
delivered to Laurus to be held by it hereunder as additional collateral
security for the Secured Obligations. If any sums of money or property so
paid or distributed in respect of the Partnership Interest of such Pledgor
shall be received by any Pledgor, such Pledgor shall, until such money or
property is paid or delivered to Laurus, hold such money or property in
trust for Laurus, segregated from other funds of such Pledgor, as
additional collateral security for the Secured Obligations.
(c) Further Documentation; Pledge of Instruments. At any time and
from time to time, upon the written request of Laurus, and at the sole
expense of the Pledgors,
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the Pledgors will promptly and duly execute and deliver such further
instruments and documents and take such further action as Laurus may
reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction
with respect to the liens created hereby. The Pledgors also hereby
authorizes Laurus to file any such financing or continuation statement
without the signature of the Pledgor to the extent permitted by applicable
law. The Pledgor and Laurus agree that a carbon, photographic or other
reproduction of this Agreement or a financing statement is sufficient as a
financing statement. If any amount payable under or in connection with any
of the Collateral shall be or become evidenced by any promissory note,
other Instrument or Chattel Paper, such note, Instrument or Chattel Paper
shall be immediately delivered to Laurus, duly endorsed in a manner
satisfactory to Laurus, to be held as Collateral pursuant to this
Agreement.
(d) Indemnification. The Pledgors will pay, and save Laurus harmless
from, any and all liabilities, reasonable costs and expenses (including,
without limitation, legal fees and expenses) (i) with respect to, or
resulting from, any delay in paying, any and all excise, sales or other
taxes which may be payable or determined to be payable with respect to any
of the Collateral, (ii) with respect to, or resulting from, any delay in
complying with any law, treaty rule or regulation applicable to any of the
Collateral or (iii) in connection with the grant, perfection and
enforcement of the first priority security interest contemplated by this
Agreement, except for any such liabilities which result from the gross
negligence or wilful misconduct of Laurus.
(e) Maintenance of Records. Each Pledgor will keep and maintain at
its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments
received and all credits granted.
(f) Limitation on Liens on Collateral. No Pledgor will create, incur
or permit to exist any liens on the Collateral and each Pledgor will
defend the Collateral against, and will take such other action as is
necessary to remove, any lien or claim on or to the Collateral, other than
the liens created hereby, and other than as may be permitted pursuant to
the Purchase Documents, and will defend the right, title and interest of
Laurus in and to any of the Collateral against the claims and demands of
all persons and entities.
(g) Further Identification of Collateral. Each Pledgor will furnish
to Laurus from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with
the Collateral as Laurus may reasonably request, all in reasonable detail.
(h) Changes in Locations, Name, etc. No Pledgor will, unless it
shall give 30 days' written notice to such effect to Laurus and any
filings required under the Uniform Commercial Code in effect in any
affected jurisdictions to maintain the perfected security interest granted
pursuant to this Agreement shall have been made, (i) change the location
of its chief executive office or principal place of business from that
specified in Section
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6(c) or remove its books and records from such location or (ii) change its
name, identity or structure to such an extent that any financing statement
filed by Laurus in connection with this Agreement would become seriously
misleading.
8. Laurus' Appointment as Attorney-in-Fact. (a) Powers. Each of the
Pledgors hereby irrevocably constitutes and appoints Laurus and any officer or
agent thereof, to the extent permitted by the terms of the Intercreditor
Agreement and to the extent permitted under applicable law, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Pledgor and in the name of the
Pledgor or in its own name, from time to time in Laurus' discretion, for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, each Pledgor hereby gives
Laurus, the power and right, on behalf of such Pledgor, without notice to or
assent by such Pledgor, to do the following:
(i) upon the occurrence and during the continuance of any Event of
Default, to exercise all partnership rights, powers and privileges with
respect to the Partnership Interest(s) to the same extent as a partner
under the Partnership Agreements;
(ii) upon the occurrence and during the continuance of any Event of
Default, in the name of such Pledgor or its own name, or otherwise, to
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under (i)
any Account, Instrument or General Intangible owing to such Pledgor as a
general partner under the Partnership Agreement or (ii) for the payment of
any other moneys due to such Pledgor as a partner under any Partnership
Agreement and to file any claim or to take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by Laurus
for the purpose of collecting any and all such moneys due under any
Account, Instrument, General Intangible or the Partnership Agreement
whenever payable;
(iii) to pay or discharge taxes and liens levied or placed on the
Collateral; and
(iv) upon the occurrence and during the continuance of any Event of
Default, (a) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to Laurus or as Laurus shall direct; (b) to ask for or
demand, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of the Collateral; (c) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (d) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any part
thereof and to enforce any other right in respect of the Collateral; (e)
to defend any suit, action or proceeding brought against the Pledgor with
respect to the Collateral; (f) to settle,
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compromise or adjust any suit, action or proceeding described in clause
(e) above and, in connection therewith, to give such discharges or
releases as Laurus may deem appropriate; and (g) generally, to sell,
transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Laurus were
the absolute owner thereof for all purposes, and to do, at Laurus's option
and such Pledgor's expense, at any time, or from time to time, all
reasonable acts and things which Laurus deems necessary to protect,
preserve or realize upon the Collateral and Laurus's liens thereon and to
effect the intent of this Agreement, all as fully and effectively as the
Pledgor might do.
Each Pledgor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
(b) Other Powers. Each Pledgor also authorizes Laurus, at any time
and from time to time, to execute, in connection with the sale provided
for in Section 8 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
(c) No Duty on Laurus' Part. The powers conferred on Laurus
hereunder are solely to protect Laurus's interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. Laurus
shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither it nor any of its
officers, directors, employees or agents shall be responsible to the
Pledgors for any act or failure to act hereunder, except for its or their
gross negligence or willful misconduct.
9. Performance by Laurus of Pledgors' Obligations; Rights of Pledgors
Prior to Event of Default.
(a) If either Pledgor fails to perform or comply with any of its
agreements contained herein and Laurus, as provided for by the terms of
this Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of Laurus
incurred in connection with such performance or compliance, together with
interest thereon accruing at the Contract Rate shall be payable by such
Pledgor to Laurus on demand and shall constitute Secured Obligations
secured hereby.
(b) Unless an Event of Default shall have occurred and be
continuing, the Pledgors shall be entitled to receive all distributions
made pursuant to the Partnership Agreements and exercise all voting rights
and take all action it is authorized to take thereunder, provided that no
distribution shall be made which is prohibited by any Purchase Document,
the relevant Partnership Agreement or any of the other documents executed
in connection with the transactions contemplated hereby; and, provided
further, that no vote or other action taken shall impair any of the
Collateral provided to Laurus pursuant to this Agreement.
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10. Remedies; Rights Upon Default.
(a) If an Event of Default shall occur and be continuing, Laurus may
exercise in addition to all other rights and remedies granted to it in
this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Secured Obligations, all rights and remedies
of a secured party under the Code. Without limiting the generality of the
foregoing, Laurus, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or
upon the Pledgors or any other person or entity (all and each of which
demands, presentment, protest, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate
and realize upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver said Collateral or any part thereof (or contract to
do any of the foregoing), in one or more parcels at public or private sale
or sales, at any exchange, broker's board or office of Laurus or elsewhere
upon such terms and conditions as it may deem advisable and at such prices
as it may deem advisable and at such prices as it may deem best, for cash
or on credit or for future delivery without assumption of any credit risk.
Laurus shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of said Collateral so sold, free of any
right or equity of redemption in the Pledgors, which right or equity of
redemption is hereby waived or released. The Pledgors further agree, at
Laurus's request, to assemble the Collateral and make it available to
Laurus at places which Laurus shall reasonably select, whether at the
Pledgor's premises or elsewhere. Laurus shall apply the proceeds of any
such collection, recovery, receipt, appropriation, realization or sale as
follows: first, to all reasonable costs and expenses of Laurus (including
without limitation reasonable attorneys' fees and expenses) incurred in
connection with the implementation and/or enforcement of this Pledge
Agreement and/or any of the other Purchase Documents; second, to the
principal amount of the Secured Obligations; third, to such of the Secured
Obligations consisting of accrued but unpaid interest and fees; fourth, to
all other amounts payable with respect to the Secured Obligations; and
fifth, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus. Pledgor shall remain liable to Laurus
for any deficiency. To the extent permitted by applicable law, the
Pledgors waive all claims, damages, and demands against Laurus arising out
of the repossession, retention or sale of the Collateral. Each Pledgor
further waives any and all rights under the Partnership Agreement which,
whether exercised by such Pledgor or not, would prevent, inhibit or
interfere with the granting of a security interest in the Collateral to
Laurus, the foreclosure of such security interest in the Collateral by
Laurus or the full realization by Laurus of any of its other rights under
this Pledge Agreement or the other Purchase Documents. If any notice of a
proposed sale or disposition of Collateral shall be required by law, such
notice shall be deemed reasonably and properly given if given (effective
upon dispatch) in any manner provided in the Purchase Agreement at least
10 days before such sale or disposition.
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(b) If an Event of Default shall occur and be continuing, Laurus may
(but need not), upon notice to the Pledgors, exercise all voting and
other rights of the Pledgors as a general, as the case may be, partner
of the Partnership and exercise all other rights as a general partner
provided under the Partnership Agreements in respect of the Partnership
Interest(s) and Laurus shall receive all permitted distributions, if
any, made for the account of the Pledgors as a general partner under
the Partnership Agreement.
11. Limitation on Laurus' Duties in Respect of Collateral. Laurus'
sole duty, with respect to the custody, safekeeping and physical
preservation of any Collateral in its possession, under the Code or
otherwise, shall be to deal with it in the same manner as Laurus deals
with similar property for its own account. Neither Laurus nor any of its
directors, officers, employees or agents shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for
any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Pledgors or
otherwise.
12. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
13. Notices. Notices hereunder shall be given in accordance with
subsection 12.7 of the Purchase Agreement.
14. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or enforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
15. Section Headings. The paragraph headings used in this Agreement
are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
16. No Waiver; Cumulative Remedies. Laurus shall not by any act
(except pursuant to the execution of a written instrument pursuant to
Section 17 hereof), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on
the part of Laurus, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. A waiver by Laurus
of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Laurus would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive
of any rights or remedies provided by law.
17. Waivers and Amendments; Successors and Assigns. None of the
terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified
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except by a written instrument executed by the Pledgors and Laurus;
provided that any provision of this Agreement may be waived by Laurus in a
letter or agreement executed by Laurus or by facsimile transmission from
Laurus. This Agreement shall be binding upon the successors and assigns of
the Pledgors and shall inure to the benefit of Laurus, and the successors
and assigns of Laurus.
18. Governing Law; Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE
PROVISIONS OF THE PURCHASE AGREEMENT RELATING TO CONSENT TO JURISDICTION
AND WAIVER OF JURY TRIAL ARE HEREBY INCORPORATED BY REFERENCE HEREIN,
MUTATIS MUTANDIS.
[Remainder of page intentionally blank.]
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IN WITNESS WHEREOF, the Pledgors have caused this Partnership Interest
Pledge Agreement to be duly executed and delivered as of the date first above
written.
TIDEL CASH SYSTEMS, INC.
By: /s/ James T. Rash
--------------------------------
Name: James T. Rash
Title: CEO
TIDEL SERVICES, INC.
By: /s/ James T. Rash
--------------------------------
Name: James T. Rash
Title: CEO
LAURUS MASTER FUND, LTD.
By: /s/ Eugene Grin
--------------------------------
Name: Eugene Grin
Title: Director
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Schedules
Schedule 1 - Description of Partnership Interests
Schedule 2 - Form of Transfer Power
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SCHEDULE 1
DESCRIPTION OF PARTNERSHIP INTERESTS
1) All limited and general partnership interests in the Partnerships held by
the Pledgors from time to time.
Type of
Partnership Partnership Percent
Issuer Owner Interest Ownership
- ----------------------------------- --------------------------- ------------------- ---------
Tidel Engineering, L.P., a Delaware Tidel Cash Systems, Inc., a General Partnership 1%
corporation Delaware corporation
Tidel Engineering, L.P., a Delaware Tidel Services, Inc., a Limited Partnership 99%
limited partnership Delaware corporation
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SCHEDULE 2
IRREVOCABLE TRANSFER POWER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
________________ ____________ the following equity interest in __________
, a ______________.
Certificate No. No. of Interests
and irrevocably appoints
its agent and attorney-in-fact to transfer all or any part of such equity
interest and to take all necessary and appropriate action to effect any such
transfer. The agent and attorney-in-fact may substitute and appoint one or more
persons to act for him. The effectiveness of a transfer pursuant to this
transfer power shall be subject to any and all transfer restrictions referenced
on the face of the certificates evidencing such interest or in the certificate
of incorporation or bylaws of the subject corporation, to the extent they may
from time to time exist.
Date:______________ PLEDGOR:
By: ______________________
Name:
Witness by:
___________________ Signature Guaranteed
___________________
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