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                                                                    EXHIBIT 4.12

                          PLEDGE AND SECURITY AGREEMENT
                         (LIMITED PARTNERSHIP INTEREST)

         THIS PLEDGE AND SECURITY AGREEMENT (this "Agreement") is executed as of
the 1st day of April, 1999 by TIDEL SERVICES, INC., a Delaware corporation
("Pledgor"), in favor of CHASE BANK OF TEXAS, N.A., a national banking
association ("Pledgee").

                                    RECITALS:

         A. Tidel Engineering, L.P., a Delaware limited partnership (the
"Borrower"), Tidel Technologies, Inc. ("TTI") and Pledgee have entered into that
certain Credit Agreement dated of even date herewith (as amended, modified or
supplemented from time to time, the "Loan Agreement"), pursuant to which Pledgee
has agreed to make available to Borrower a credit facility subject to the terms
and conditions contained therein.

         B. Pledgor is the legal, record and beneficial owner of TELP
Partnership Interest (defined below).

         C. It is a condition precedent to the obligations of Pledgee under the
Loan Agreement that Pledgor shall have executed and delivered this Agreement to
Pledgee.

         D. Pledgor, by virtue of its ownership of the TELP Partnership
Interest, deems it to be in its best interest, based on sound judgment, in that
valuable benefits will be derived by the Pledgor by virtue of the Loans, to
execute and deliver to Pledgee this Agreement.

         E. In consideration of these premises and in order to induce Pledgee to
extend the credit pursuant to the Loan Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Pledgor and Pledgee hereby agree as follows:

                                   AGREEMENTS:

         1. Defined Terms. Unless otherwise defined herein, terms defined in the
Loan Agreement shall have such defined meanings when used herein.

         2. Pledge. The Pledgor hereby pledges, assigns, hypothecates, transfers
to the Pledgee, and hereby grants to Pledgee a first lien on, and security
interest in the following property whether now owned or hereafter acquired:

                  (a) all of the right, title and interest, now and hereafter
existing, of Pledgor, as a limited partner (the "TELP Partnership Interest"), in
and to the Borrower, which was formed pursuant to that certain Agreement of
Limited Partnership of Tidel Engineering, L.P. (as the same may be amended,
modified, or restated from time to time, the "TELP Partnership Agreement") dated
as of March 24, 1999;


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                  (b) any and all proceeds and distributions made pursuant to
the TELP Partnership Agreement (the "Proceeds"), due or to become due to Pledgor
under the TELP Partnership Agreement; and

                  (c) any and all present and future accounts, certificates of
deposit, securities, general intangibles, chattel paper and other proceeds
arising from, or by virtue of, or from the disposition of, or claims against any
other person or entities with respect to, all or any part of the property
described in clauses (a) or (b) preceding (all of the property described in
clauses (a), (b), and (c) being referred to collectively as the "Collateral"),

as collateral security for (i) the due and punctual payment and performance by
Pledgor of its obligations, covenants, agreements and liabilities, absolute or
contingent, liquidated or unliquidated, now existing or hereinafter incurred
under, arising out of or in connection with this Agreement, (ii) the prompt and
complete payment when due (whether at the stated due date, by acceleration or
otherwise) of the unpaid principal of and interest on the Notes issued to
evidence the Loans made by Pledgee pursuant to the Loan Agreement as well as
collection costs therefor, and (iii) the due and punctual payment and
performance of all Obligations (as defined in the Loan Agreement) by Borrower
(and any other party liable therefor) to Pledgee, absolute or contingent,
liquidated or unliquidated, now existing or hereinafter incurred (all the
foregoing being hereinafter called the "Obligations"). Notwithstanding anything
to the contrary herein, the pledge by Pledgee of any and all proceeds and
distributions made pursuant to the TELP Partnership Agreement is not intended to
prohibit any distributions permitted under the Loan Agreement.

         3. Distributions, etc. Any sums paid upon or in respect of the TELP
Partnership Interest upon the liquidation or dissolution of Borrower shall be
paid over to the Pledgee, to be held by it in trust as additional collateral
security for the Obligations; and in case any distribution of capital shall be
made on or in respect of the TELP Partnership Interest or any property shall be
distributed upon or with respect to the TELP Partnership Interest pursuant to
the recapitalization of Borrower or pursuant to the reorganization thereof, the
property so distributed shall be delivered to the Pledgee, to be held by it as
additional collateral security for the Obligations. All sums of money and
property so paid or distributed in respect of the TELP Partnership Interest
which are received by the Pledgor shall, until paid or delivered to the Pledgee,
be held by the Pledgor in trust, segregated from the other assets of the
Pledgor, as additional collateral security for the Obligations.

         4. Voting Rights. As long as an Event of Default has not occurred and
is not continuing, Pledgor shall be entitled to exercise all voting rights with
respect to the TELP Partnership Interest; provided, however, that no vote shall
be cast or consent, waiver or ratification given or action taken which would
impair the Collateral or violate any provision of this Agreement, the Loan
Agreement or the Loan Documents. After the occurrence and during the continuance
of an Event of Default, the right to vote the TELP Partnership Interest and all
other rights pertaining to the TELP Partnership Interest shall be vested
exclusively in Pledgee, including any and all rights to vote and to give
consents, waivers or ratifications with respect to the TELP Partnership Interest
as if Pledgee were the absolute owner thereof, including, without


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limitation, the right to take any action to enforce the TELP Partnership
Interest, but the Pledgee shall have no duty to exercise any of the aforesaid
rights, privileges or options or be responsible for any failure to do so or
delay in so doing. To this end, Pledgor hereby irrevocably constitutes and
appoints Pledgee the attorney-in-fact of Pledgor, with full power of
substitution, to vote, and to act with respect to, the TELP Partnership Interest
standing in the name of Pledgor or with respect to which Pledgor is entitled to
vote and act, subject to the understanding that such appointment may not be
exercised unless an Event of Default has occurred and is continuing. The
appointment as attorney-in-fact herein granted is coupled with an interest, is
irrevocable, and shall continue until the Obligations have been paid and
performed in full.

         5. Limitations on Pledgee's Obligations. The Pledgee shall not be
liable for failure to collect or realize upon the Obligations or any collateral
security or guarantee therefor, or any part thereof, or for any delay in so
doing nor shall the Pledgee be under any obligation to take any action
whatsoever with regard thereto.

         6. The Pledgee's Appointment as Attorney-in-Fact. (a) In addition to,
and without limiting the scope of any other provision in this Agreement, the
Pledgor hereby irrevocably constitutes and appoints the Pledgee and any officer
or agent thereof, 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 the Pledgee's discretion, for the purpose of carrying out the
actions 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, hereby gives the Pledgee the power and
right, on behalf of the Pledgor, without notice to or assent by the Pledgor to
do the following upon the occurrence and during the continuance of an Event of
Default: (i) to ask, demand, collect, receive and give acquittances and receipts
for any and all monies due and to become due under the Collateral; (ii) in the
name of the 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 the Collateral; (iii) to file any claim or
to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Pledgee for the purpose of collecting any
and all such moneys due under the Collateral whenever payable; (iv) to pay or
discharge taxes, liens, security interests or other encumbrances levied or
placed on or threatened against the Collateral; (v) to direct any party liable
for any payment under the Collateral to make payment of any and all moneys due
and to become due thereunder directly to the Pledgee or as the Pledgee shall
direct; (vi) to receive payment of and receipt for any and all moneys, claims
and other amounts due and to become due at any time in respect of or arising out
of any Collateral; (vii) 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; (viii) to defend any suit, action or proceeding
brought against the Pledgor with respect to any Collateral; (ix) to settle,
compromise or adjust any suit, action or proceeding described above and, in
connection therewith, to give such discharges or releases as the Pledgee may
deem appropriate; (x) exercise voting rights attributable to the TELP
Partnership Interest pursuant to SECTION 4; and (xi) generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral as fully and completely as though the


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Pledgee were the absolute owner thereof for all purposes, and to do, at the
Pledgee's option and the Pledgor's expense, at any time, or from time to time,
all acts and things which the Pledgee deems necessary to protect, preserve or
realize upon the Collateral and the Pledgee's security interest therein, in
order to effect the intent of this Agreement, all as fully and effectively as
the Pledgor might do.

         The 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) The powers conferred on the Pledgee hereunder are solely
to protect its interests in the Collateral and shall not impose any duty upon it
to exercise any such powers. Pledgee 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 Pledgor for any act or failure to act.

                  (c) The Pledgor also authorizes the Pledgee, at any time and
from time to time, to execute, in connection with any sale of the Collateral,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

         7. Performance by the Pledgee of the Pledgor's Obligations. If the
Pledgor fails to perform or comply with any of its agreements contained herein
and the Pledgee, as provided for by the terms of this Agreement, shall itself
perform or comply, or otherwise cause performance or compliance, with such
agreement, then the expenses of the Pledgee incurred in connection with such
performance or compliance, together with interest thereon to accrue at a rate of
interest equal to the Highest Lawful Rate from the date such expenses are
incurred, shall be payable by the Pledgor to the Pledgee on demand and shall
constitute Obligations secured hereby.

         8. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement:

                  (a) The Pledgor shall fail to pay its Obligations when due;

                  (b) Any representation, warranty or statement made or deemed
made by the Pledgor herein or in connection herewith shall prove to have been
incorrect or untrue in any material respect on or as of the date made or deemed
made;

                  (c) The Pledgor shall default in the observance or performance
of any term, covenant, or agreement contained herein and Pledgor shall fail to
cure such default within fifteen (15) days after the occurrence of such default;
or

                  (d) An Event of Default (subject to any applicable cure
period), as such term is defined in the Loan Agreement, shall occur and be
continuing.


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         9. Remedies. (a) Upon the occurrence and during the continuance of any
Event of Default, and at any time thereafter, the Pledgee may declare all of the
Obligations or any part thereof immediately due and payable and, without demand
of performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
the Pledgor or any other person (all and each of which demands, advertisements
and/or notices are hereby expressly waived), may forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, assign, give option or options to purchase, contract to sell or
otherwise dispose of and deliver said Collateral, or any part thereof, in one or
more parcels at public or private sale or sales, at any exchange, broker's board
or at the Pledgee's offices or elsewhere upon such terms and conditions 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, with the right to
the Pledgee upon any such sale or sales, public or private, to purchase the
whole or any part of said Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity is hereby expressly waived or
released. The Pledgee shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale, after deducting all
reasonable costs and expenses of every kind incurred therein or incidental to
the care, safekeeping or otherwise of any and all of the Collateral or in any
way relating to the rights of the Pledgee hereunder, including reasonable
attorneys' fees and legal expenses, to the payment in whole or in part of the
Obligations in such order as the Pledgee may elect, the Pledgor remaining liable
for any deficiency remaining unpaid after such application, and only after so
applying such net proceeds and after the payment by the Pledgee of any amount
required by any provision of law, including, without limitation, Section 9-504
(a) (3) of the Uniform Commercial Code of the State of Texas (the "Code"), need
the Pledgee account for the surplus, if any, to the Pledgor. The Pledgor agrees
that, to the extent permitted by law, the Pledgee need not give more than ten
(10) days' notice of the time and place of any public sale or of the time after
which a private sale or other intended disposition is to take place and that
such notice is reasonable notification of such matters. No notification need be
given to the Pledgor if it has signed after default a statement renouncing or
modifying any right to notification of sale or other intended disposition. IN
ADDITION TO THE RIGHTS AND REMEDIES GRANTED TO IT IN THIS AGREEMENT AND IN ANY
OTHER INSTRUMENT OR AGREEMENT SECURING, EVIDENCING OR RELATING TO ANY OF THE
OBLIGATIONS, THE PLEDGEE SHALL HAVE ALL THE RIGHTS AND REMEDIES OF A SECURED
PARTY UNDER THE CODE. All waivers by the Pledgor of rights (including rights to
notice) and all rights and remedies afforded the Pledgor herein, and all other
provisions of this Agreement, are expressly made subject to any applicable
mandatory provisions of law limiting, or imposing conditions (including
conditions as to reasonableness) upon such waivers of the effectiveness thereof
or any such rights and remedies. Any sale or other disposition of the Collateral
shall be in compliance with all provisions of law (including applicable
securities laws, and regulations and applicable provisions of the Code).

                  (b) If Pledgee shall determine to exercise its right to sell
any or all of the TELP Partnership Interest pursuant to this SECTION 9 hereof,
and if in the opinion of counsel for Pledgee it is advisable to have the TELP
Partnership Interest, or that portion thereof to be sold, registered under the
provisions of the Securities Act of 1933, as amended (the "Securities Act"),


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the Pledgor will cause the Borrower to execute and deliver, and cause the
general partner thereof to execute and deliver, all at the Pledgor's expense,
all such instruments and documents, and to do or cause to be done all such other
acts and things as may be necessary to register the TELP Partnership Interest,
or that portion thereof to be sold, under the provisions of the Securities Act
and to cause the registration statement relating thereto to become effective and
to remain effective for a period of 180 days from the date of the first public
offering of the TELP Partnership Interest, or that portion thereof to be sold,
and to make all amendments thereto and/or to the related prospectus which are
necessary, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto. The Pledgor agrees to cause Borrower to comply with the provisions of
the securities or "Blue Sky" laws of any jurisdiction which Pledgee shall
designate and to cause Borrower to make available to its security holders, as
soon as practicable, an earnings statement which will satisfy the provisions of
Section 11(a) of the Securities Act.

                  (c) The Pledgor recognizes that the Pledgee may be unable to
effect a public sale of any or all the TELP Partnership Interest by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, but may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire such securities for their own account for investment
and not with a view to the distribution or resale thereof. The Pledgor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable to the seller than if such sale were a public sale
and, notwithstanding such circumstances, agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner. Pledgee shall
be under no obligation to delay a sale of any of the TELP Partnership Interest
for the period of time necessary to permit the Borrower to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if the Borrower would agree to do so.

                  (d) The Pledgor further agrees to do or cause to be done all
such other acts and things as may be necessary to make such sale or sales of any
portion of all of the TELP Partnership Interest valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at the Pledgor's expense. The Pledgor further agrees
that a breach of any of the covenants contained in this SECTION 9 will cause
irreparable injury to Pledgee, that Pledgee has no adequate remedy at law in
respect of such breach and, as a consequence, agrees that each and every
covenant contained in this paragraph shall be specifically enforceable against
the Pledgor and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no default of the covenants, terms or conditions of the Loan
Agreement has occurred. The Pledgor further acknowledges the impossibility of
ascertaining the amount of damages which would be suffered by Pledgee by reason
of a breach of any such covenants and, consequently, agrees that, if Pledgee
shall sue for damages for breach, Pledgor shall pay, as liquidated damages and
not as a penalty, an amount equal to the value of the TELP Partnership Interest
on the date Pledgee shall demand compliance with this paragraph, but in no event
to exceed the amount of the Obligations.


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         10. Waiver of Subrogation. Notwithstanding anything to the contrary in
this Agreement, unless and until the Obligations have been indefeasibly paid and
performed in full, the Pledgor hereby irrevocably waives all rights Pledgor may
have at law or in equity (including, without limitation, any law subrogating the
Pledgor to the rights of the Pledgee) to seek contribution, indemnification, or
any other form of reimbursement from the Borrower, any other guarantor or
pledgor, or any other person now or hereafter primarily or secondarily liable
for any obligations of the Borrower to the Pledgee, for any disbursement made by
the Pledgor under or in connection with this Agreement or otherwise. The Pledgor
further agrees that, to the extent that the waiver of any such subrogation,
contribution, reimbursement, indemnity or otherwise is found to be void or
voidable for any reason, any such rights which the Pledgor may have shall be
junior and subordinate in all respects to the rights of the Pledgee against the
Borrower.

         11. Actions by Pledgee. No action that the Pledgee may take or omit to
take in connection with the Loan Agreement or any of the Loan Documents, any
indebtedness owing by Borrower to the Pledgee (including, without limitation,
renewals, extensions, modifications and increases thereof), or any security for
the payment of any indebtedness of Borrower to the Pledgee, or for the
performance of any obligation or undertaking of Borrower, nor any course of
dealing with Borrower or any other Person, shall release the Pledgor from his
obligations hereunder, affect this Agreement in any way, or afford the Pledgor
any recourse against the Pledgee. By way of example, but not in limitation of
the foregoing, the Pledgor hereby expressly agrees that the Pledgee may, from
time to time, without notice to the Pledgor:

                  (a) sell, assign, transfer or grant participations in the
Loans and/or any right held by the Pledgee pursuant to or in connection with the
Loan Agreement and the Loan Documents;

                  (b) amend, change, or modify, in whole or in part, any
documents or instruments evidencing, securing or relating to any indebtedness or
undertaking of Borrower or TTI to the Pledgee;

                  (c) accelerate, change, extend, or renew the time for payment
of the Notes or any other indebtedness arising under any documents or
instruments evidencing, securing or relating to any indebtedness or undertaking
of Borrower or TTI to the Pledgee;

                  (d) compromise or settle any amount due or owing, or claimed
to be due or owing, under the Notes or under any documents or instruments
evidencing, securing or relating to any indebtedness or undertaking of Borrower
or TTI to the Pledgee;

                  (e) surrender, release, or subordinate any or all security for
any indebtedness or undertaking of Borrower or TTI to the Pledgee or accept
additional or substituted security therefor;

                  (f) release any guarantor or pledgor of any indebtedness or
undertaking of the Borrower or TTI to the Pledgee, or substitute or add
additional guarantors or pledgors; and


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                  (g) apply collateral securing the Notes to other indebtedness
also secured by such collateral.

The provisions of this Agreement shall extend and be applicable to all renewals,
increases, amendments, extensions, modifications of and substitutions for the
Loan Agreement and the Loan Documents, and all references herein to the Loan
Agreement and the Loan Documents shall be deemed to include any renewal,
increase, extension, amendment or modification thereof or substitution therefor.

         12. No Impairment. The obligations, guaranties, undertakings,
covenants, agreements and duties of the Pledgor under this Agreement shall not
be affected or impaired by any of the following, although without notice to or
consent of the Pledgor:

                  (a) any failure, omission or delay on the part of the Pledgee
(i) to enforce, assert or exercise any right, power or remedy conferred on the
Pledgee by the provisions of the Loan Agreement and the Loan Documents or
otherwise inuring to the holders of the rights of the Pledgee under the Loan
Agreement and the Loan Documents, or (ii) to make demand first upon Borrower or
TTI or to proceed against Borrower or TTI;

                  (b) the voluntary or involuntary liquidation, dissolution,
sale of all or substantially all assets, marshalling of assets or liabilities,
receivership, conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, composition or other
proceedings under laws for the protection of debtors affecting Borrower or TTI
or any of the assets of Borrower or TTI, or any discharge from liability or
rejection of burdensome contracts or obligations in the course of or resulting
from any such proceedings;

                  (c) the release, by operation of law or otherwise, of Borrower
or TTI or any guarantor from any obligation under the Loan Agreement or any of
the Loan Documents;

                  (d) the invalidity, deficiency, illegality or unenforceability
of the Loan Agreement and the Loan Documents, in whole or in part, or of any of
the provisions thereof, or failure to perfect or maintain perfection of any
security, or any defense or excuse for failure to perform on account of force
majeure, act of God, casualty, impossibility, impracticability, or other defense
or excuse whatsoever; or

                  (e) without limiting the foregoing, any fact or event (whether
or not similar to any of the foregoing) which in the absence of this provision
would or might constitute or afford a legal or equitable discharge or release of
or defense to a guarantor or surety.

None of the foregoing shall be a defense to this Agreement, and this Agreement
is a primary obligation of the Pledgor.

         13. Other Pledgors or Guarantors. The liabilities and obligations of
the Pledgor hereunder shall not be reduced or limited by reason of any guaranty
or pledge executed in favor


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of the Pledgee by any other Person, and this Agreement shall be enforceable
against the Pledgor without regard to any such guaranty or pledge.

         14. Representations, Warranties and Covenants of the Pledgor. The
Pledgor represents and warrants that:

                  (a) it is the legal, record and beneficial owner of, and has
good and, subject to applicable securities laws described in SECTION 9 hereof,
marketable title to, the TELP Partnership Interest, subject to no pledge, lien,
mortgage, hypothecation, security interest, charge, option, or other encumbrance
whatsoever, except the existing lien and security interest created by this
Agreement;

                  (b) it is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has full power,
authority and legal right to pledge the TELP Partnership Interest pursuant to
this Agreement;

                  (c) this Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes a legal, valid and binding obligation of
the Pledgor, and is enforceable in accordance with its terms;

                  (d) other than the approvals, if any, required under the TELP
Partnership Agreement, no consent of any other party (including, without
limitation, the stockholders or creditors of the Pledgor) and no consent,
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any Governmental Authority,
domestic or foreign, is required to be obtained by the Pledgor or the Pledgee in
connection with the execution, delivery or performance of this Agreement or the
pledge of the TELP Partnership Interest hereunder, in each case which has not
been obtained or made, as the case may be, and is not in full force and effect;

                  (e) the execution, delivery and performance of this Agreement
will not violate any provision of any applicable law, or of any mortgage,
indenture, lease, contract, or other agreement, instrument or undertaking to
which Pledgor is a party or which purports to be binding upon Pledgor or upon
any of its assets and will not result in the creation or imposition of any lien,
charge or encumbrance on or security interest in any of the assets of Pledgor
except as contemplated by this Agreement or the Loan Agreement;

                  (f) the TELP Partnership Interest is not a security, as
defined in Article 8 of the Texas Business and Commerce Code; and

                  (g) the pledge and assignment of the Collateral pursuant to
this Agreement constitutes and will constitute a valid first lien on and a first
perfected security interest in the Collateral, and the proceeds thereof, subject
to no prior Lien, or to any agreement purporting to grant to any third party
other than Pledgee a security interest in the property or assets of the Pledgor
which would include the Collateral.


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                  Pledgor covenants and agrees (a) that at its expense it will
defend the right, title and security interest of the Pledgee in and to the
Collateral against the claims and demands of all persons whomsoever;

                  (b) that it will have like title to and right to pledge any
other property at any time hereafter pledged to the Pledgee as Collateral
hereunder and will likewise defend the right of the Pledgee thereto and security
interest therein;

                  (c) to observe, perform and discharge all obligations,
covenants and warranties provided for under the terms of the TELP Partnership
Agreement to be kept, observed and performed by Pledgor, and to inform Pledgee
promptly in writing of any notice received by Pledgor: (i) with respect to any
obligation to be performed but alleged not to have been performed by Pledgor
under the TELP Partnership Agreement; and (ii) of any default or claimed default
by any party to the TELP Partnership Agreement;

                  (d) to enforce or secure the enforcement, in the name of
Pledgee, of the performance of each and every obligation, term, covenant,
condition and agreement to be performed by any other party under the terms of
the TELP Partnership Agreement;

                  (e) not to vote in favor of, or cause, the termination of the
Borrower, or vote in favor of any modification, extension, renewal, amendment or
material alteration of any term of the TELP Partnership Agreement without, in
each such instance, the prior written consent of Pledgee; and

                  (f) that Pledgee, after the occurrence of an Event of Default,
without notice to Pledgor, shall have the right at any time and from time to
time to notify and direct the general partner, or such other appropriate party,
of the Borrower to thereafter make all disbursements of the Proceeds directly to
Pledgee; such general partner or other party shall be fully protected in relying
on the written statement of Pledgee that it holds a security interest that
entitles Pledgee to receive any such disbursement, and the receipt by Pledgee of
such disbursements shall be full acquittance thereof to the party making such
disbursements.

         15. No Disposition. Without the prior written consent of the Pledgee,
Pledgor agrees that it will not sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor will it
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
of the Collateral, or any interest therein, or any proceeds thereof, except for
the lien and security interest provided for by this Agreement and except as
permitted by this Agreement or by the Loan Agreement.

         16. Further Assurances. Pledgor agrees that at any time and from time
to time upon the written request of the Pledgee, the Pledgor will execute and
deliver such further documents and do such further acts and things which are
necessary in the reasonable judgment of the Pledgee to effect the purpose of
this Agreement or to obtain, maintain and perfect the security


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<PAGE>   11


interest granted under this Agreement in any applicable jurisdiction, and any
expense of Pledgee so incurred shall be a part of the Obligations.

         17. 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
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         18. No Waiver; Cumulative Remedies. The Pledgee shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Pledgee, and then only to the extent therein set forth. A waiver by the Pledgee
of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which Pledgee would otherwise have on any future
occasion. No failure to exercise nor any delay in exercising on the part of the
Pledgee, any right, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and may be exercised singly or concurrently, and are not
exclusive of any rights or remedies provided by law.

         19. Waivers, Amendments, Entirety. None of the terms or provisions of
this Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by the Pledgee. This Agreement and all
obligations of the Pledgor hereunder shall be binding upon the successors and
assigns of the Pledgor, and shall, together with the rights and remedies of
Pledgee hereunder, inure to the benefit of Pledgee and its successors and
assigns. THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

         20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS
WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS RULES THEREOF.

         21. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts and each such
counterpart shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.

         22. Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against the
Pledgor, Borrower or TTI for liquidation or reorganization, should the Pledgor,
Borrower or TTI become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant part of the Pledgor's assets or the assets of Borrower or TTI and
shall continue to be

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effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount and not so rescinded, reduced, restored
or returned.

         IN WITNESS WHEREOF, Pledgor has caused this Agreement to be duly
executed and delivered as of the day and year first above written.


                                     TIDEL SERVICES, INC.


                                     By:
                                        ------------------------------------
                                        Andrew Panaccione, Vice President


PLEDGE AND SECURITY AGREEMENT - Page 12
(TIDEL SERVICES, INC.)