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                                                                  EXHIBIT 4.05




                               SECURITY AGREEMENT
                               (PERSONAL PROPERTY)


     This Security Agreement (as amended, supplemented or restated from time to
time, this "Agreement") dated as of April 1, 1999, is by and between TIDEL
ENGINEERING, L.P. (the "Debtor"), whose address is 2310 McDaniel Drive,
Carrollton, Texas 75006, and CHASE BANK OF TEXAS, N.A., a national banking
association, whose address is 2200 Ross Avenue, 6th Floor, Dallas, Texas 75201
(the "Secured Party"), under the Credit Agreement (as amended, restated and
supplemented from time to time, the "Credit Agreement") of even date herewith,
by and among Debtor, Secured Party and Tidel Technologies, Inc.

     Debtor and Secured Party agree as follows:

     Any capitalized term used in this Agreement and not otherwise defined
herein shall have the meaning ascribed to such term in the Credit Agreement. All
principles of construction set forth in Section 1.2 of the Credit Agreement are
incorporated herein by reference for all purposes.

                                    ARTICLE 1
                          CREATION OF SECURITY INTEREST

     1.1 In order to secure the prompt and unconditional payment of the
indebtedness herein referred to and the performance of the obligations,
covenants, agreements and undertakings herein described, Debtor hereby grants to
Secured Party a security interest in, and mortgage, collaterally assign as
security and pledge to Secured Party, all of Debtor's rights, titles and
interests of every kind and character now owned or hereafter acquired, created
or arising in and to the following:

                                    ACCOUNTS

     (a)  all accounts, receivables, accounts receivable, reports, customer
          lists, purchase orders, monies due or recoverable from pension funds,
          tax refunds, book debts, contract rights and rights to payment no
          matter how evidenced;

     (b)  all chattel paper, notes, drafts, acceptances, payments under leases
          of equipment or sale of inventory, and other forms of obligations
          received by or belonging to Debtor for goods sold or leased and/or
          services rendered by Debtor;

     (c)  all purchase orders, instruments and other documents (including all
          documents of title) evidencing obligations to Debtor, including those
          for or representing obligations for goods sold or leased and/or
          services rendered by Debtor;

     (d)  all monies due or to become due to Debtor under all contracts for or
          arising from the sale or lease of goods and/or performance of services
          by Debtor no matter how evidenced and whether or not earned by
          performance;



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     (e)  all accounts, receivables, accounts receivable and contract rights
          arising as a result of Debtor's having paid accounts payable (or
          having had goods sold or leased to Debtor or services performed for
          Debtor giving rise to accounts payable) which accounts payable were
          paid for or were incurred by Debtor on behalf of any third parties
          pursuant to an agreement or otherwise;

     (f)  all goods, the sale and delivery of which give rise to any of the
          foregoing, including any such goods which are returned to Debtor for
          credit;

                                    INVENTORY

     all goods, merchandise, raw materials, work in process, finished goods, and
     other tangible personal property of whatever nature now owned by Debtor or
     hereafter from time to time existing or acquired, wherever located and held
     for sale or lease, including those held for display or demonstration or out
     on lease or consignment, or furnished or to be furnished under contracts of
     service or used or usable or consumed or consumable in Debtor's business or
     which are finished or unfinished goods and all accessions and appurtenances
     thereto, together with all warehouse receipts and other documents
     evidencing any of the same and all containers, packing, packaging, shipping
     and similar materials;

                                    EQUIPMENT

     all machinery, apparatus, equipment, fittings, furniture, fixtures, motor
     vehicles and other tangible personal property (other than Inventory) of
     every kind and description owned by Debtor or in which Debtor has an
     ownership interest, whether now owned or hereafter acquired by Debtor and
     wherever located, and all parts, accessories and special tools and all
     increases and accessions thereto and substitutions and replacements
     therefor;

                               GENERAL INTANGIBLES

     all general intangibles of Debtor, whether now owned or hereafter created
     or acquired by Debtor, including all choses in action, causes of action,
     corporate or other business records, deposit accounts, inventions,
     blueprints, designs, patents, patent applications, trademarks, trademark
     applications, trade names, trade secrets, service marks, goodwill, brand
     names, copyrights, registrations, licenses, franchises, customer lists, tax
     refund claims, computer programs, operational manuals, all claims under
     guaranties, security interests or other security held by or granted to
     Debtor to secure payment of any of the Accounts by an account debtor, all
     rights to indemnification and all other intangible property of every kind
     and nature (other than Accounts);

                    CASH, CASH EQUIVALENTS AND OTHER PROPERTY

     all property or interests in property now owned or hereafter acquired by
     Debtor, and all property or interests in property now owned or hereafter
     acquired by Debtor in the


SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 2
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     possession, custody or control of Secured Party or any agent or Affiliate
     of Secured Party for any purpose (whether for safekeeping, deposit,
     custody, pledge, transmission, collection or otherwise) and all rights and
     interests of Debtor, now existing or hereafter arising and however and
     wherever arising, in respect of any and all (i) notes, drafts, letters of
     credit, stocks, bonds, and debt and equity securities, whether or not
     certificated, and warrants, options, puts and calls and other rights to
     acquire or otherwise relating to the same; (ii) money; (iii) proceeds of
     loans, including, without limitation, all of the Loans made to Debtor under
     the Credit Agreement; and (iv) insurance proceeds;

together with all accessions, appurtenances and additions to and substitutions
for any of the foregoing; all products and proceeds of any of the foregoing; all
renewals and replacements of any of the foregoing; and all accounts,
instruments, notes, chattel paper, documents (including all documents of title),
books, records, computer programs, computer tapes, computer discs, contract
rights and other general intangibles arising from any of the foregoing
(including all insurance and claims for insurance affected or held for the
benefit of Debtor or Secured Party in respect of any of the foregoing). All of
the properties and interests described in this Section 1.1 are herein
collectively called the "Collateral." The inclusion of proceeds does not
authorize Debtor to sell, dispose of or otherwise use the Collateral in any
manner not otherwise authorized herein.

     1.2 Debtor acknowledges, agrees and confirms that value has been given to
Debtor by Secured Party and that Debtor and Secured Party have not agreed to
postpone the time for attachment of the security interests in and assignments of
the Collateral which are evidenced hereby.

                                    ARTICLE 2
                              SECURED INDEBTEDNESS

     2.1 This Agreement is made to secure all of the following debt and
obligations:

          (a) All Indebtedness at any time evidenced by the Notes, the
Applications, and any and all modifications, extensions, renewals,
rearrangements, replacements and increases of each thereof.

          (b) All other Obligations of Debtor or any other party under or in
connection with the Credit Agreement, this Agreement and the other Loan
Documents owed to Secured Party.

     2.2  The term "Debt" means and includes all of the Indebtedness and other
Obligations described or referred to in Section 2.1. The Debt includes interest
and all other Obligations accruing or arising after (a) commencement of any case
under any bankruptcy or similar laws by or against Debtor or any Guarantor
(Debtor and each such Guarantor being herein called individually an "Obligor"
and collectively, "Obligors") or (b) the obligations of any Obligor shall cease
to exist by operation of law or for any other reason (it being the intention of
Secured Party to not reinstate the liability of any discharged Obligor, but only
to confirm that the discharge of any Obligor from liability for the Debt shall
not effect all remaining Obligors' liability for


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interest and other Obligations accruing or arising with respect to the Debt
after any such discharged Obligor has been released from liability for all or
any portion of the Debt. The Debt also includes all reasonable attorneys' fees
and any other reasonable expenses incurred by Secured Party in enforcing any of
the Loan Documents.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

     Debtor represents and warrants as follows:

     (a) Debtor is the legal and equitable owner and holder of marketable title
to the Collateral free of any material adverse claim and free of any Lien except
only for the Liens granted hereby and those other Liens (if any) expressly
referred to, described in or permitted by this Agreement or any other Loan
Documents. Except with respect to Liens permitted by this Agreement or by the
terms of the other Loan Documents, Debtor has not heretofore signed any
financing statement or other similar instrument directly or indirectly affecting
the Collateral or any part of it which has not been completely terminated of
record, and no such financing statement or other similar instrument signed by
Debtor is now on file in any public office.

     (b) As of the date of this Agreement, the location of Debtor is the address
set forth at the beginning of this Agreement and in this regard, Debtor's
location is defined to mean (i) Debtor's place of business if Debtor has only
one such place of business; or (ii) Debtor's chief executive office if Debtor
has more than one place of business. As of the date of this Agreement, the
primary books and records of Debtor with regard to the Collateral are maintained
and kept at such address of Debtor set forth at the beginning of this Agreement.

     (c) No part of the Collateral consists or will consist of consumer goods,
farm products or timber and the like or accounts resulting from the sale
thereof.

     (d) Debtor has the right to use, assign and pledge, without payment of any
amounts to any third parties (other than normal licensing fees payable to
licensors of prefabricated software programs currently utilized by Debtor, if
any), any and all accounting, monitoring, billing, recordkeeping or other
similar types of systems, together with all related software, currently utilized
by Debtor in its operations. Prior to commencement of any use by Debtor of any
custom designed or similar types of accounting, monitoring, billing,
recordkeeping or other similar types of systems, together with all related
software, Debtor shall cause any and all licensors thereof to consent in writing
to the use by Secured Party of such systems and related software upon payment by
Secured Party to such licensors of the amounts normally due and payable on a
periodic basis by Debtor to such licensors in connection with Debtor's day to
day use and implementation of such systems and related software (the form of
such consents from the applicable licensors to be upon terms and conditions
reasonably acceptable to Secured Party).

     (e) As of the date of this Agreement, Debtor has not ever changed its name
whether by amendment of its organizational documents or otherwise, except as
disclosed in the Organizational Documents of Debtor delivered to Secured Party
in connection with the execution and delivery of the Credit Agreement and all
other Loan Documents.


SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 4

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     (f) The Collateral is free from damage caused by fire or other casualty.

     (g) None of the products manufactured and sold, nor any processes or
know-how used by Debtor, presently infringe or are alleged to infringe, in any
material respect, any patent, trade secret, trademark, service mark, tradename,
copyright or other proprietary right of any other Person.

     (h) Except for Liens expressly permitted by this Agreement or any of the
other Loan Documents, the Liens of this Agreement will constitute valid and
perfected first and prior Liens on the Collateral when a financing statement
covering the Collateral is duly filed for record in the offices of the Secretary
of State of the State of Texas.

     (i) As of the date hereof, other than Inventory of Debtor which is in
transit, all of the Inventory and Equipment of Debtor is located at the
locations described on Schedule 1 attached hereto.

                                    ARTICLE 4
                                    COVENANTS

     4.1 Debtor covenants and agrees with Secured Party as follows:

          (a) Debtor shall furnish to Secured Party such instruments as may be
required by Secured Party to assure the transferability of any Collateral when
and as often as may be reasonably requested by Secured Party.

          (b) If the validity or priority of this Agreement or of any material
rights, titles, security interests or other interests created or evidenced
hereby shall be attacked, endangered or questioned or if any legal proceedings
are instituted with respect thereto, Debtor will give prompt written notice
thereof to Secured Party and at Debtor's own cost and expense will diligently
endeavor to cure any defect that may be developed or claimed, and will take all
necessary and proper steps for the defense of such legal proceedings, and
Secured Party (whether or not named as a party to legal proceedings with respect
thereto) is hereby authorized and empowered to take such additional steps as in
its reasonable judgment and discretion may be necessary or proper for the
defense of any such legal proceedings or the protection of the validity or
priority of this Agreement and the rights, titles, security interests and other
interests created or evidenced hereby, and all expenses so incurred of every
kind and character shall constitute sums advanced pursuant to Section 4.2 of
this Agreement.

          (c) Notwithstanding the security interest in proceeds granted herein,
Debtor will not, except as otherwise expressly permitted herein or in the other
Loan Documents, sell, lease, exchange, lend, rent, assign, license, transfer or
otherwise dispose of, or pledge, hypothecate or grant any Lien in, or permit to
exist any Lien against, all or any part of the Collateral or any interest
therein or permit any of the foregoing to occur or arise or permit title to the
Collateral, or any interest therein, to be vested in any other party, in any
manner whatsoever, by operation of law or otherwise, without the prior written
consent of Secured Party. Except as


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provided by the Loan Documents or as otherwise permitted herein, Debtor shall
not, without the prior written consent of Secured Party, (i) acquire any such
Collateral under any arrangement whereby the seller or any other person retains
or acquires any security interest in such Collateral or (ii) return or give
possession of any such Collateral to any supplier or any other Person except in
the ordinary course of business. Subject to the exercise of Secured Party's
rights and remedies granted herein or in any other Loan Document, Debtor may use
the Collateral in any lawful manner not inconsistent with this Agreement or the
other Loan Documents or with the terms or conditions of any policy of insurance
thereon and may also sell or lease such Collateral in the ordinary course of
business except as otherwise provided under the other Loan Documents. A sale in
the ordinary course of business does not include a transfer in partial or total
satisfaction of a debt. Subject to the exercise of Secured Party's rights and
remedies granted herein or in any other Loan Document, Debtor may also use and
consume any raw materials or supplies, the use and consumption of which are
necessary to carry on the business of Debtor.

          (d) If any portion of the Collateral is now or hereafter evidenced by
any promissory notes, trade acceptances or other instruments for the payment of
money having an original principal or face amount in excess of $10,000, Debtor
will immediately deliver them to Secured Party, appropriately endorsed to
Secured Party's order. Regardless of the form of endorsement, Debtor waives
presentment, demand, notice of dishonor, protest and notice of protest. After an
Event of Default which is continuing, but prior to such delivery, such
Collateral shall be held in trust for the benefit of Secured Party and subject
to the Liens granted herein.

          (e) Debtor shall maintain property and liability insurance policies
covering the Collateral and claims related to the Collateral ("Collateral
Insurance") in accordance with the requirements of Section 6.7 of the Credit
Agreement. Debtor shall deliver certificates evidencing renewal of the
Collateral Insurance before termination of any insurance policies representing
Collateral Insurance. Upon request, Debtor shall deliver certificates evidencing
the Collateral Insurance and copies of the underlying policies as they are
available. Promptly upon obtaining knowledge thereof, Debtor shall notice
Secured Party of any casualty to the Collateral which exceeds $100,000
("Material Casualty"). At the request of Secured Party, Debtor shall pursue
claims for payment related to the Material Casualty.

          (f) Upon the receipt by Secured Party or Debtor of any insurance
proceeds from insurance policies required to be maintained pursuant to Section
6.7 of the Credit Agreement on account of (1) each separate loss, damage or
injury to any Collateral in excess of $100,000 if no Default or Event of Default
shall have occurred which is continuing or (2) any separate loss, damage or
injury to any Collateral (regardless of the amount of loss, damage or injury) if
a Default or Event of Default shall have occurred which is continuing, such
insurance proceeds shall be promptly delivered and turned over to Secured Party
(if the same have not been previously received by Secured Party), and except as
otherwise specified below, such insurance proceeds shall be promptly applied by
Secured Party in payment of the Debt (such order and manner of application to he
at the discretion of Secured Party). With respect to such net insurance
proceeds, Debtor may elect, by written notice delivered to Secured Party, not
later than the tenth day after receipt of such net proceeds by Secured Party or
Debtor, to utilize and apply all or a portion of such net proceeds for the
purpose of replacing, repairing or restoring the


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     relevant Collateral, and in such event, any required application of such
     net proceeds against the Debt in accordance with the preceding sentence
     shall be reduced dollar for dollar by the amount of such election by
     Debtor. Such an election by Debtor shall not be effective, however, unless
     (1) at the time of such election no Default or Event of Default shall have
     occurred which is continuing, (2) Debtor shall have certified to Secured
     Party that the net proceeds of the insurance adjustment for such loss,
     damage or injury to Collateral, together with other funds available to
     Debtor, shall be sufficient to complete such contemplated replacement,
     repair or restoration in accordance with all applicable laws, regulations
     and ordinances, and (3) if the amount of the net proceeds in question
     exceeds $100,000, Debtor shall have obtained the written consent of the
     Secured Party to such use and application of such insurance proceeds.

               (g) In the event of a valid election by Debtor under Section
     4.1(f) above to utilize all or a portion of such insurance proceeds to
     replace, repair or restore the relevant Collateral, upon the request of
     Secured Party, Debtor shall place into an account under Secured Party's
     control (the "Insurance Proceeds Account") the amount of net insurance
     proceeds to be utilized for such contemplated replacement, repair or
     restoration, pursuant to agreements in form, scope and substance reasonably
     satisfactory to Secured Party (including a pledge of such Insurance
     Proceeds Account as additional security for the Debt). The Insurance
     Proceeds Account, including all earnings thereon, if any, shall be
     available to Debtor solely for the replacement, repair or restoration of
     the Collateral suffering the applicable injury, loss or damage; provided,
     however, that at any time that a Default or Event of Default shall occur
     and be continuing, the balance of the Insurance Proceeds Account, together
     with all earnings thereon, may be immediately applied by Secured Party to
     repay the Debt in such order as Secured Party shall elect in its
     discretion. Secured Party shall be entitled to require proof, as a
     condition to Debtor making of any withdrawal from the Insurance Proceeds
     Account, that the amount of such withdrawal is being applied for the
     purposes permitted hereunder. Additionally, any proceeds of the Insurance
     Proceeds Account may be made available and advanced by Secured Party
     directly to Debtor, or directly to suppliers, manufacturers, contractors
     and other persons entitled to payment in accordance with and subject to
     reasonable conditions to disbursements as Secured Party may impose to
     assure that such replacement, repair or restoration of the relevant
     Collateral is paid for and performed and that no Liens arise by reason
     thereof.

               (h) No Inventory nor Equipment shall be located at any location,
     other than the locations set forth on Schedule 1 attached hereto, which has
     not been disclosed in writing to Secured Party in advance of such Inventory
     or Equipment being located at such location and for which Financing
     Statements, and landlord subordinations or warehousemens' agreements, as
     the case may be, (if such locations are not owned by Debtor) covering such
     portion of the Inventory or Equipment, as the case may be, have not been
     executed and delivered by Debtor and filed for record with the appropriate
     Governmental Authority necessary to perfect the Liens granted hereby.

               (i) Debtor agrees to defend the Collateral and its proceeds
     against all claims and demands of any Person at any time claiming the
     Collateral.

          4.2 If Debtor fails to comply with any of its agreements, covenants or
     obligations under this Agreement or any other Loan Document, after giving
     effect to any applicable cure


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period, Secured Party (in Debtor's name or in Secured Party's own name) may
perform them or cause them to be performed for the account and at the expense of
Debtor, but shall have no obligation to perform any of them or cause them to be
performed. Any and all expenses thus incurred or paid by Secured Party shall be
Debtor's obligations to Secured Party due and payable on demand, or if no demand
is sooner made, then they shall be due on or before four (4) years after the
respective dates on which they were incurred, and each shall bear interest from
the date one (1) Business Day after Secured Party demands payment for such
amounts until the date Debtor repays such amounts to Secured Party, at the Past
Due Rate. Upon making any such payment or incurring any such expense, Secured
Party shall be fully and automatically subrogated to all of the rights of the
person, corporation or body politic receiving such payment. Any amounts owing by
Debtor to Secured Party pursuant to this or any other provision of this
Agreement shall automatically and without notice be and become a part of the
Debt and shall be secured by this and all other instruments securing the Debt.
The amount and nature of any such expense and the time when it was paid shall be
fully established by the affidavit of Secured Party or any of Secured Party's
officers or agents. The exercise of the privileges granted to Secured Party in
this Section shall in no event be considered or constitute a cure of the default
or a waiver of Secured Party's right at any time after an Event of Default to
declare the Debt to be at once due and payable, but is cumulative of such right
and of all other rights given by this Agreement, the Credit Agreement, the Notes
and the Loan Documents and of all rights given Secured Party by law.

                                    ARTICLE 5
                     ASSIGNMENT OF PAYMENTS; CERTAIN POWERS
                         OF SECURED PARTY; NO ASSUMPTION

          5.1 Upon the occurrence of an Event of Default and so long as it is
continuing and has not been expressly waived by Secured Party in writing,
Secured Party may request Debtor to notify each account debtor and each other
Person (each a "Collateral Obligor") obligated to make payment in respect of any
of the Collateral of the Liens in such Collateral granted herein and instruct
such Collateral Obligor to pay over to Secured Party, all or any part of the
Collateral without making any inquiries as to the status or balance of Debtor
and without any notice to or further consent of Debtor. If Debtor does not
promptly comply with such request, Secured Party may, but shall not be obligated
to, directly notify each such Collateral Obligor of the Liens in the Collateral
granted herein and instruct such Collateral Obligor to pay over to Secured
Party, all or any part of the Collateral without making any inquiries as to the
status or balance of Debtor and without any notice to or further consent of
Debtor.

          5.2 The powers conferred on Secured Party pursuant to this Article 5
are conferred solely to protect Secured Party's interest in the Collateral and
shall not impose any duty or obligation on Secured Party to perform any of the
powers herein conferred. Additionally, the powers conferred on Secured Party
pursuant to this Article 5 are cumulative of all other similar, related or
additional powers conferred on Secured Party by the terms and provisions of
Section 9.21 of the Credit Agreement and are not intended to limit or restrict
in any manner whatsoever any of such powers and rights conferred on Secured
Party under the terms and provisions of the Credit Agreement or any other Loan
Documents. No exercise of any of such rights provided for in this Article 5 or
in the Credit Agreement shall constitute a retention of


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collateral in satisfaction of the indebtedness as provided for in Section 9.505
of the Uniform Commercial Code of Texas or the state or states where the
applicable Collateral is located.

                                    ARTICLE 6
                                EVENTS OF DEFAULT

     An Event of Default under the Credit Agreement shall constitute an Event of
Default (herein so called) under this Agreement.

                                    ARTICLE 7
                          REMEDIES IN EVENT OF DEFAULT

     7.1 In addition to the other rights and remedies provided for in the Credit
Agreement, upon the occurrence and during the continuation of an Event of
Default:

               (a) Secured Party is authorized, in any legal manner and without
breach of the peace, to take possession of the Collateral (DEBTOR HEREBY WAIVES
ALL CLAIMS FOR DAMAGES ARISING FROM OR CONNECTED WITH ANY SUCH TAKING, EXCEPT AS
MAY BE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SECURED PARTY)
and of all books, records and accounts relating thereto and to exercise without
interference from Debtor any and all rights which Debtor has with respect to the
management, possession, operation, protection, preservation, distribution or
resale of the Collateral, including the right to sell or rent the same for the
account of Debtor and to deduct from such sale proceeds or such rents all costs,
expenses and liabilities of every character incurred by Secured Party in
collecting such sale proceeds or such rents, and in managing, operating,
maintaining, protecting or preserving the Collateral and to apply the remainder
of such sales proceeds or such rents on the Debt in such manner as Secured Party
may elect. Before any sale, Secured Party may, at its option, complete the
processing of any of the Collateral and/or repair or recondition the same to
such extent as Secured Party may deem advisable and any reasonable sums expended
therefor by Secured Party shall be reimbursed by Debtor. Secured Party may take
possession of Debtor's premises to complete such processing, repairing and/or
reconditioning, using the facilities and other property of Debtor to do so, to
store any Collateral and to conduct any sale as provided for herein, all without
compensation to Debtor. All costs, expenses, and liabilities incurred by Secured
Party in collecting such sales proceeds or such rents, or in managing,
operating, maintaining, protecting or preserving such properties, or in
processing, repairing and/or reconditioning the Collateral if not paid out of
such sales proceeds or such rents as hereinabove provided, shall constitute a
demand obligation owing by Debtor and shall bear interest from the date of
expenditure until paid at the Past Due Rate, all of which shall constitute a
portion of the Debt. If necessary to obtain the possession provided for above,
Secured Party may invoke any and all legal remedies to dispossess Debtor,
including specifically one or more actions for forcible entry and detainer. In
connection with any action taken by Secured Party pursuant to this paragraph,
Secured Party shall not be liable for any loss sustained by Debtor resulting
from any failure to sell or let the Collateral, or any part thereof, or from any
other act or omission of Secured Party with respect to the Collateral unless
such loss is caused by the gross negligence or willful misconduct of Secured
Party, nor shall Secured Party be obligated to perform or discharge any
obligation, duty, or liability under any sale or lease


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agreement covering the Collateral or any part thereof or under or by reason of
this instrument or the exercise of rights or remedies hereunder.

               (b) Secured Party may, without notice except as hereinafter
provided, sell the Collateral or any part thereof at public or private sale
(with or without appraisal or having the Collateral at the place of sale) for
cash, upon credit, or for future delivery, and at such price or prices as
Secured Party may deem best, and Secured Party may be the purchaser of any and
all of the Collateral so sold and may apply upon the purchase price therefor any
of the Debt and thereafter hold the same absolutely free from any right or claim
of whatsoever kind. In any such public or private sale, Secured Party may (but
shall not be obligated to) submit a bid in the form of a credit against the Debt
owed to Secured Party, and Secured Party or its designee may accept title to
property purchased at such public or private sale. Upon any such sale Secured
Party shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
property sold absolutely free from any claim or right of whatsoever kind,
including any equity or right of redemption, stay or appraisal which Debtor has
or may have under any rule of law or statute now existing or hereafter adopted.
To the extent notice is required by applicable law, Secured Party shall give
Debtor written notice at the address set forth herein (which shall satisfy any
requirement of notice or reasonable notice in any applicable statute) of Secured
Party's intention to make any such public or private sale. Such notice (if any
is required by applicable law) shall be personally delivered or mailed, postage
prepaid, at least ten (10) calendar days before the date fixed for a public
sale, or at least (10) calendar days before the date after which the private
sale or other disposition is to be made, unless the Collateral is of a type
customarily sold on a recognized market, is perishable or threatens to decline
speedily in value. Such notice (if any is required by applicable law), in case
of public sale, shall state the time and place fixed for such sale or, in case
of private sale or other disposition other than a public sale, the time after
which the private sale or other such disposition is to be made. Any public sale
shall be held at such time or times, within the ordinary business hours and at
such place or places, as Secured Party may fix in the notice of such sale. At
any sale, the Collateral may be sold in one lot as an entirety or in separate
parcels as Secured Party may determine. Secured Party shall not be obligated to
make any sale pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at any time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by Secured Party
until the selling price is paid by the purchaser thereof, but Secured Party
shall not incur liability in case of the failure of such purchaser to take up
and pay for the Collateral so sold, and in case of any such failure, such
Collateral may again be sold upon like notice. Each and every method of
disposition described in this Section shall constitute disposition in a
commercially reasonable manner. Each Obligor, to the extent applicable, shall
remain liable for any deficiency.

               (c) Secured Party shall have all the rights of a secured party
after default under the Uniform Commercial Code of the state or states where the
applicable Collateral is situated, and in conjunction with, in addition to or in
substitution for those rights and remedies:


SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 10
<PAGE>   11


               (i) Secured Party may require Debtor to assemble the Collateral
     and make it available at a place Secured Party designates which is mutually
     convenient to allow Secured Party to take possession or dispose of the
     Collateral; and

               (ii) it shall not be necessary that Secured Party take possession
     of the Collateral or any part thereof before the time that any sale
     pursuant to the provisions of this Article is conducted and it shall not be
     necessary that the Collateral or any part thereof be present at the
     location of such sale; and

               (iii) before application of proceeds of disposition of the
     Collateral to the Debt, such proceeds shall be applied to the reasonable
     expenses of retaking, holding, preparing for sale or lease, selling,
     leasing, licensing, sublicensing and the like, as well as reasonable
     attorneys' fees and legal expenses incurred by Secured Party, each Obligor,
     to the extent applicable, to remain liable for any deficiency; and

               (iv) the sale by Secured Party of less than the whole of the
     Collateral shall not exhaust the rights of Secured Party hereunder, and
     Secured Party is specifically empowered to make successive sale or sales
     hereunder until the whole of the Collateral shall be sold; and, if the
     proceeds of such sale of less than the whole of the Collateral shall be
     less than the aggregate of the Debt, this Agreement and the security
     interest created hereby shall remain in full force and effect as to the
     unsold portion of the Collateral just as though no sale had been made; and

               (v) in the event any sale hereunder is not completed or is
     defective in the reasonable opinion of Secured Party, such sale shall not
     exhaust the rights of Secured Party hereunder and Secured Party shall have
     the right to cause a subsequent sale or sales to be made hereunder; and

               (vi) any and all statements of fact made in any bill of sale or
     assignment or other instrument evidencing any foreclosure sale hereunder
     shall be taken as rebuttable evidence of the truth of the facts so stated;
     and

               (vii) Secured Party may appoint or delegate any one or more
     persons as agent to perform any act or acts necessary or incident to any
     sale held by Secured Party, including the sending of notices and the
     conduct of sale, but in the name and on behalf of Secured Party; and

               (viii) demand of performance, advertisement and presence of
     property at sale are hereby WAIVED and Secured Party is hereby authorized
     to sell hereunder any evidence of debt it may hold as security for the
     Debt. Except as provided herein or in any other Loan Document, all demands
     and presentments of any kind or nature are expressly WAIVED by Debtor.
     Debtor WAIVES the right to require Secured Party to pursue any other remedy
     for the benefit of Debtor and agrees that Secured Party may proceed against
     any Obligor for the amount of the Debt owed to Secured Party without taking
     any action against any other Obligor or any other person or entity and
     without



SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 11
<PAGE>   12

selling or otherwise proceeding against or applying any of the Collateral in
Secured Party's possession.

          (d) Secured Party may apply to a court of competent jurisdiction for
the appointment of a receiver, or a receiver and manager, over Debtor, or any or
all of the Collateral, with such duties, powers and obligations as the court
making such appointment shall confirm, and Debtor hereby irrevocably consents to
the appointment of such receiver or such receiver and manager.

     7.2 All remedies expressly provided for in the Agreement are cumulative of
any and all other remedies existing at law or in equity and are cumulative of
any and all other remedies provided for in any other instrument securing the
payment of the Debt, or any part thereof, or otherwise benefiting Secured Party,
and the resort to any remedy provided for hereunder or under any such other
instrument or provided for by law shall not prevent the concurrent or subsequent
employment of any other appropriate remedy or remedies.

     7.3 Secured Party may resort to any security given by this Agreement or to
any other security now existing or hereafter given to secure the payment of the
Debt, in whole or in part, and in such portions and in such order as may seem
best to Secured Party in its sole and uncontrolled discretion, and any such
action shall not in anywise be considered as a waiver of any of the rights,
benefits or security interests evidenced by this Agreement.

     7.4 To the full extent Debtor may do so, Debtor agrees that Debtor will not
at any time insist upon, plead, claim or take the benefit or advantage of any
law now or hereafter in force providing for any appraisement, valuation, stay,
extension or redemption, and Debtor, for Debtor, Debtor's successors, receivers,
trustees and assigns, and for any and all persons ever claiming any interest in
the Collateral, to the extent permitted by law, hereby WAIVE and release all
rights of redemption, valuation, appraisement, stay of execution, notice of
intention to mature or to declare due the whole of the Debt, notice of election
to mature or to declare due the whole of the Debt and all rights to a marshaling
of the assets of Debtor, including the Collateral, or to a sale in inverse order
of alienation in the event of foreclosure of the security interest hereby
created.

                                    ARTICLE 8
                              ADDITIONAL AGREEMENTS

     8.1 Subject to the automatic reinstatement provisions of Section 8.21
below, upon full satisfaction of the Debt, complete performance of all of the
obligations of the Obligors under the Loan Documents and final termination of
Secured Party's obligations, if any, to make any further advances under any Note
or to provide any other financial accommodations to any Obligor, all rights
under this Agreement shall terminate and the Collateral shall become wholly
clear of the security interest evidenced hereby, and upon written request by
Debtor such security interest shall be released by Secured Party in due form and
at Debtor's cost.

     8.2 Secured Party may waive any default without waiving any other prior or
subsequent default. Secured Party may remedy any default without waiving the
default


SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 12
<PAGE>   13


remedied. The failure by Secured Party to exercise any right, power or remedy
upon any default shall not be construed as a waiver of such default or as a
waiver of the right to exercise any such right, power or remedy at a later date.
No single or partial exercise by Secured Party of any right, power or remedy
hereunder shall exhaust the same or shall preclude any other or further exercise
thereof, and every such right, power or remedy hereunder may be exercised at any
time and from time to time. No modification or waiver of any provision hereof
nor consent to any departure by Debtor therefrom shall in any event be effective
unless the same shall be in writing and signed by Secured Party, and then such
waiver or consent shall be effective only in the specific instances, for the
purpose for which given and to the extent therein specified. No notice to nor
demand on Debtor in any case shall of itself entitle Debtor to any other or
further notice or demand in similar or other circumstances. Acceptance by
Secured Party of any payment in an amount less than the amount then due on the
Debt shall be deemed an acceptance on account only and shall not in any way
affect the existence of a default hereunder.

     8.3 Subject to Section 9.11 of the Credit Agreement, Secured Party may at
any time and from time to time in writing (a) waive compliance by Debtor with
any covenant herein made by Debtor to the extent and in the manner specified in
such writing; (b) consent to Debtor's doing any act which hereunder Debtor is
prohibited from doing, or consent to Debtor's failing to do any act which
hereunder Debtor is required to do, to the extent and in the manner specified in
such writing; (c) release any part of the Collateral, or any interest therein,
from the security interest of this Agreement; or (d) release any Person liable,
either directly or indirectly, for the Debt or for any covenant herein or in any
other instrument now or hereafter securing the payment of the Debt, without
impairing or releasing the liability of any other Person. No such act shall in
any way impair the rights of Secured Party hereunder except to the extent
specifically agreed to by Secured Party in such writing.

     8.4 Secured Party shall not be required to take any steps necessary to
preserve any rights against prior parties to any of the Collateral.

     8.5 The Liens and other rights of Secured Party hereunder shall not be
impaired by any indulgence, moratorium or release granted by Secured Party,
including but not limited to (a) any renewal, extension or modification which
Secured Party may grant with respect to the Debt; (b) any surrender compromise,
release, renewal, extension, exchange or substitution which Secured Party may
grant in respect of any item of the Collateral, or any part thereof or any
interest therein; or (c) any release or indulgence granted to any endorser,
guarantor or surety of the Debt.

     8.6 A carbon, photographic or other reproduction of this Agreement or of
any financing statement relating to this Agreement shall be sufficient as a
financing statement. Debtor will cause all financing statements and continuation
statements relating hereto to be recorded, filed, re-recorded and refiled in
such manner and in such places as Secured Party shall reasonably request and
will pay all such recording, filing, re-recording, and refiling taxes, fees and
other charges.

     8.7 This Agreement may be executed in several identical counterparts and by
the parties hereto on separate counterparts, and each counterpart, when so
executed and delivered,


SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 13
<PAGE>   14
shall constitute an original instrument, and all such separate counterparts
shall constitute but one and the same instrument.

     8.8 In the event the ownership of the Collateral or any part thereof
becomes vested in a Person other than Debtor, Secured Party may, without notice
to Debtor deal with such successor or successors in interest with reference to
this Agreement and to the Debt in the same manner as with Debtor, without in any
way vitiating or discharging Debtor's liability hereunder or upon the Debt. No
sale of the Collateral, and no forbearance on the part of Secured Party and no
extension of the time for the payment of the Debt given by Secured Party shall
operate to release, discharge, modify, change or affect, in whole or in part,
the liability of Debtor hereunder for the payment of the Debt or the liability
of any other person hereunder for the payment of the Debt, except as agreed to
in writing by Secured Party or as expressly provided in the Credit Agreement.

     8.9 Any other or additional security taken for the payment of any of the
Debt shall not in any manner affect the security given by this Agreement.

     8.10 To the extent that proceeds of the Debt are used to pay indebtedness
secured by any outstanding Lien against the Collateral, such proceeds have been
advanced by Secured Party at Debtor's request, and Secured Party shall be
subrogated to any and all Liens owned by any owner or holder of such outstanding
Lien, irrespective of whether said Lien is released.

     8.11 If any part of the Debt cannot be lawfully secured by this Agreement,
or if the Liens of this Agreement cannot be lawfully enforced to pay any part of
the Debt, then and in either such event, at the option of Secured Party, all
payments on the Debt shall be deemed to have been first applied against that
part of the Debt.

     8.12 Subject to Section 9.11 of the Credit Agreement, this Agreement shall
not be changed orally but shall be changed only by agreement in writing signed
by Debtor and Secured Party. No course of dealing between the parties, no usage
of trade and no parole or extrinsic evidence of any nature shall be used to
supplement or modify any of the terms or provisions of this Agreement.

     8.13 Any notice, request or other communication required or permitted to be
given hereunder shall be given as provided in the Credit Agreement.

     8.14 This Agreement shall be binding upon Debtor, and the trustees,
receivers, successors and assigns of Debtor, including all successors in
interest of Debtor in and to all or any part of the Collateral, and shall
benefit Secured Party and its successors and assigns.

     8.15 If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws, the legality, validity and
enforceability of the remaining provisions of this Agreement shall not be
affected thereby, and this Agreement shall be liberally construed so as to carry
out the intent of the parties to it. Each waiver in this Agreement is subject to
the overriding and controlling rule that it shall be effective only if and to
the extent that (a) it is not


SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 14
<PAGE>   15


prohibited by applicable law and (b) applicable law neither provides for nor
allows any material sanctions to be imposed against Secured Party for having
bargained for and obtained it.

     8.16 Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of any of the Collateral in its possession if it takes
such action for that purpose as Debtor requests in writing, but failure of
Secured Party to comply with such request shall not of itself be deemed a
failure to have exercised reasonable care, and no failure of Secured Party to
take any action so requested by Debtor shall be deemed a failure to exercise
reasonable care in the custody or preservation of such Collateral. Secured Party
shall not be responsible in any way for any depreciation in the value of the
Collateral, nor shall any duty or responsibility whatsoever rest upon Secured
Party to take any steps to preserve rights against prior parties or to enforce
collection of the Collateral by legal proceedings or otherwise, the sole duty of
Secured Party, its successors and assigns, being to receive collections,
remittances and payments on such Collateral as and when made and received by
Secured Party and, as provided by the Credit Agreement, to apply the amount or
amounts so received, after deduction of any collection costs incurred, as
payment upon any of the Debt or to hold the same for the account and order of
Debtor.

     8.17 In the event Debtor instructs Secured Party, in writing or orally, to
deliver any or all of the Collateral to a third Person, and Secured Party agrees
to do so, the following conditions shall be conclusively deemed to be a part of
Secured Party's agreement, whether or not they are specifically mentioned to
Debtor at the time of such agreement: (i) Secured Party shall not assume any
responsibility for checking the genuineness or authenticity of any Person
purporting to be a messenger, employee or representative of such third Person to
whom Debtor has directed Secured Party to deliver the Collateral, or the
genuineness or authenticity of any document of instructions delivered by such
Person; (ii) Debtor will be considered by requesting any such delivery to have
assumed all risk of loss as to the Collateral; (iii) Secured Party's sole
responsibility will be to deliver the Collateral to the Person purporting to be
such third Person described by Debtor, or a messenger, employee or
representative thereof; and (iv) Secured Party and Debtor hereby expressly agree
that the foregoing actions by Secured Party shall constitute reasonable care.

     8.18 The pronouns used in this Agreement are in the masculine and neuter
genders but shall be construed as feminine, masculine or neuter as occasion may
request. "Secured Party", "Obligor" and "Debtor" as used in this Agreement
include the heirs, devisees, successors, administrators, personal
representatives, trustees, beneficiaries, conservators, receivers, and
successors and assigns of those parties.

     8.19 The section headings appearing in this Agreement have been inserted
for convenience only and shall be given no substantive meaning or significance
whatever in construing the terms and provisions of this Agreement. Terms used in
this Agreement which are defined in the Texas Uniform Commercial Code are used
with the meanings as therein defined. Wherever the term "including" or a similar
term is used in this Agreement, it shall be read as if it were written
"including by way of example only and without in any way limiting the generality
of the clause or concept referred to."


SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 15
<PAGE>   16


     8.20 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS OF THE STATE OF TEXAS (OTHER THAN THE CONFLICTS OF LAWS
PRINCIPLES THEREOF) AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN
EFFECT.

     8.21 Debtor agrees that, if at any time all or any part of any payment
previously applied by Secured Party to the Debt is or must be returned by
Secured Party, or recovered from Secured Party, for any reason (including the
order of any bankruptcy court), this Agreement shall automatically be reinstated
to the same effect, as if the prior application had not been made, and, in
addition, Debtor hereby agrees to indemnify Secured Party against, and to save
and hold Secured Party harmless from any required return by Secured Party, or
recovery from Secured Party, of any such payments because of its being deemed
preferential under applicable bankruptcy, receivership or insolvency laws, or
for any other reason.

     8.22 Secured Party may from time to time and at any time, without any
necessity for any notice to or consent by Debtor or any other Person, release
all or any part of the Collateral from the security interests of this Agreement,
with or without cause, including as a result of any determination by Secured
Party that the Collateral or any portion thereof contains or has been
contaminated by or releases or discharges any hazardous or toxic waste, material
or substance.

     8.23 This Agreement is given in renewal, amendment, replacement, and
restatement in its entirety (but not in novation, extinguishment or
satisfaction) of that certain Security Agreement (Personal Property) dated June
12, 1997, executed by and between Tidel Engineering, Inc. and Secured Party,
successor-in-interest to Texas Commerce Bank National Association, as amended by
that certain First Amendment to Security Agreement dated May 27, 1998, by and
between Tidel Engineering, Inc. and Secured Party (as amended, the "Prior
Agreement"). To the extent of any conflict between the terms of this Agreement
and the terms of the Prior Agreement, the terms of this Agreement shall control.

     8.24 THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES 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.

     EXECUTED as of the date first written hereinabove.

                                    "Debtor"

                                    TIDEL ENGINEERING, L.P.,
                                    a Delaware limited partnership

                                    By:    Tidel Cash Systems, Inc.,
                                           its sole general partner


                                       By:
                                          --------------------------------------
                                          Mark K. Levenick,
                                          President and Chief Executive Officer

SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 16


<PAGE>   17

                                  "Secured Party"

                                  CHASE BANK OF TEXAS, N.A.,
                                  a national banking association


                                  By:
                                     -------------------------------------------
                                     Joanne Bramanti,
                                     Vice President




Schedule 1 - Inventory and Equipment Locations





SECURITY AGREEMENT (PERSONAL PROPERTY) - Page 17
<PAGE>   18
                                   SCHEDULE 1
                                       TO
                     SECURITY AGREEMENT (PERSONAL PROPERTY)


                        Inventory and Equipment Locations



         1.       2310 McDaniel Drive
                  Carrollton, Texas  75006

         2.       1624 Diplomat
                  Carrollton, Texas  75006




                                   SCHEDULE 1