Exhibit 10.7
VOTING
AGREEMENT
THIS VOTING
AGREEMENT is made and entered into as of this 12 th day
of January, 2006 (the “Agreement”) by and among
Sentinel Technologies, Inc., a Delaware corporation
(“STI”); Sentinel Operating, L.P., a Texas limited
partnership and an affiliate of LLG (“Sentinel”); Tidel
Technologies, Inc., a Delaware corporation (the
“Company”); and Laurus Master Fund, Ltd., a Cayman
Island company (the “Stockholder”). Capitalized terms
used but not defined herein shall have the meanings ascribed to
such terms in the Purchase Agreement (defined below).
RECITALS
A. Prior to or
contemporaneously with the execution and delivery of this Voting
Agreement, Sentinel, the Company and Tidel Engineering, L.P., a
Delaware limited partnership and an affiliate of the Company
(“Engineering”), are entering into an Asset Purchase
Agreement, dated as of dated the date hereof (the “Purchase
Agreement”), which provides that, upon the terms and subject
to the conditions set forth therein, Sentinel will purchase the
assets of the company’s cash security TACC business from the
Company and Engineering (the “Transaction”).
B. As of the
date hereof, Stockholder and its affiliates who are controlled by
or under common control with Stockholder other than investors or
affiliates of such investors who do not exercise managerial control
of Stockholder (collectively, “Stockholder Affiliates”)
hold (i) the number of shares of common stock, par value $.01 per
share, of the Company (“Common Stock”) and (ii)
securities exercisable for, or convertible into, the number of
shares of Common stock, set forth on Schedule I hereto (all
such shares so owned and which may hereafter be acquired by the
Stockholder or Stockholder Affiliates prior to the termination of
this Voting Agreement, whether upon the exercise of options or
warrants, conversion of debt, or by any other means of purchase,
acquisitions, dividend, distribution or otherwise, being referred
to herein as the “Shares”).
C. Pursuant to
the Exercise and Conversion Agreement by and among the parties
hereto, dated as of dated the date hereof (the “Exercise
Agreement”), the Stockholder has agreed to, subject to the
terms and conditions contained therein, convert, on or prior to the
record date (the “Record Date”) an aggregate of
$5,400,000 of convertible indebtedness (the “Conversion
Amount”) evidenced by the Convertible Term Note in the
initial principal amount of $6,450,000, dated November 25, 2003
(the “Note”) together with an additional $292,987
principal amount added thereto on November 26, 2004, made by the
Company in favor of the Seller into 18,000,000 shares of Common
Stock. For avoidance of doubt, no warrants are being exercised and
no other portion of any note is being converted pursuant to the
Exercise Agreement.
D. In
connection with the Transaction, Stockholder has agreed to vote the
Shares in favor of the approval and adoption of (i) the Purchase
Agreement, as the same may be amended from time to time, and the
transactions contemplated thereby, (ii) the amendment to the
Company’s certificate of incorporation such that it does not
contain the terms “Tidel” or Sentinel” or any
derivation thereof (the “Amendment”), and (iii) any
motion for adjournment or postponement of the Meeting (as hereafter
defined) to another time or place to permit, among other things,
further solicitation of proxies if necessary to establish a quorum
or to obtain additional votes in favor of the Purchase Agreement
and the transactions contemplated thereby and the Amendment (the
“Motion”) (each of items (i), (ii) and (iii) above are
collectively referred to as the “Transaction
Matters”).
E. As a
condition to their willingness to enter into the Purchase
Agreement, Sentinel has requested that the Stockholder enter into
this Voting Agreement.
F. In order to
induce Sentinel to enter into the Purchase Agreement, the
Stockholder is willing to enter into this Voting
Agreement.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements herein contained,
and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
ARTICLE
I
VOTING
AGREEMENT
Upon satisfaction or waiver of the conditions
set forth in Section 1.2 below and until March 31, 2006 (the
“Termination Date”):
(a) The
Stockholder shall vote the Shares at a meeting of the stockholders
of the Company however called for the purpose of approving the
Transaction Matters (the “Meeting”), and in any action
by written consent of the stockholders of the Company:
(i) in favor of
the approval and adoption of the Transaction Matters;
(ii) against any other
Acquisition Proposal or any negotiations or discussions with
respect to an Acquisition Proposal and against any proposal for
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of
the Company under the Purchase Agreement or any amendment to the
Company’s Certificate of Incorporation or Bylaws, which in
the case of each of the matters referred to in this clause that
could reasonably be expected to impede, interfere with, delay,
postpone or materially adversely affect the transactions
contemplated by the Purchase Agreement or the likelihood of such
transactions being consummated; and
(iii) in favor of any
other matter reasonably necessary for consummation of the
transactions contemplated by the Purchase Agreement and related
agreements which is considered at any such meeting of stockholders
or in such consent, and in connection therewith to execute any
documents which are reasonably necessary in order to effectuate the
foregoing.
1.2. Conditions
Precedent to Effectiveness of Voting Agreement.
The obligations
of the Shareholder under this Voting Agreement are subject to the
fulfillment of each of the following conditions:
(a) The Company
shall have delivered (i) the unanimous written consent of the Board
of Directors of the Company (the “Board”), or (ii)
minutes of a duly called meeting of the Board certified by the
Secretary of the Company, evidencing that the disinterested members
of the Board had duly approved the Purchase Agreement and the
transactions contemplated thereby and shall have established the
Record Date, which shall be no later than January 13, 2006;
and
(b) The Company
shall have delivered a fully executed copy of each of the documents
required to be delivered pursuant to Section 1.2 of the Exercise
Agreement to the Shareholder; and
(c) The Company
shall have prepared and mailed a proxy statement relating to the
approval of the Transaction Matters to the holders of the shares of
Common Stock of the Company on the Record Date in accordance with
Section 14 of the Securities Exchange Act of 1934, as amended, and
shall have provided the Shareholder with an affidavit of mailing
from the person mailing such proxy statement to the stockholders of
the Company; and
(d) Each of the
Exercise Agreement, the Stock Redemption Agreement, Management
Voting Agreement and the Reaffirmation Agreement (as each such
capitalized term is defined in the Exercise Agreement) shall have
become effective and shall not have been terminated or otherwise
rendered ineffective or inoperative; and
(e) The
Stockholder shall have received original stock certificate(s)
representing the number of shares of Common Stock issued pursuant
to the conversion of the Note (up to the Conversion Amount) in the
name of the Stockholder sufficient to give full effect to the
conversion of the Note (up to the Conversion Amount) in accordance
with the terms of the Note and the Exercise Agreement.
1.3. No Proxies for or
Transfers of Shares.
The Stockholder hereby revokes, any and all
prior proxies or powers of attorney given by the Stockholder or
Stockholder Affiliates with respect to the Shares. From the date
hereof until the Termination Date, the Stockholder hereby agrees
that it shall not, directly or indirectly, sell, assign, transfer,
encumber, pledge or otherwise dispose of, or enter into any
contract, option or other agreement, arrangement or understanding
with respect to the direct or indirect sale, assignment, transfer,
encumbrance, pledge or other disposition of, any of the Shares;
provided, however, that the Stockholder may sell or otherwise
assign, with or without consideration, an unlimited amount of the
Shares to any affiliate, member or limited or general partner of
the Stockholder or such affiliate if each such transferee or
assignee, prior to the completion of the sale, transfer or
assignment shall have executed and delivered to STI documents
assuming the obligations of the Stockholder under this Voting
Agreement with respect to the transferred securities, such
documents to be satisfactory to STI in its reasonable discretion.
From the date hereof until the Termination Date, the Stockholder
hereby agrees that it shall not, and shall cause its Stockholder
Affiliates to not, directly or indirectly, grant any proxies or
enter into any voting trust or other agreement, arrangement or
understanding with respect to the voting of any of the Shares;
provided , however , that the Stockholder may grant a
proxy or enter into a voting trust or other agreement, arrangement
or understanding with respect to the voting of the Shares to or
with a third party, if such third party, prior to the grant of such
proxy or entry into such voting trust or agreement, arrangement or
understanding, shall have executed and delivered to STI documents
assuming the obligations of the Stockholder under this Voting
Agreement with respect to such Shares, such documents to be
satisfactory to STI in
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