Exhibit 10.6


    
      

    


    
      	
              

               

            	
              NEWS
                RELEASE

            	
              Exhibit
                10.6

            


    

    


    
      	
              CONTACT:

            	
              Leonard
                Carr

            


    

    Vice
      President

    713-783-8200

    lcarr@tidelmail.com

    


    FOR
      RELEASE THURSDAY, JANUARY 19, 2006

    


    


    TIDEL
      ENTERS INTO AGREEMENTS TO SELL CASH SECURITY BUSINESS AND REPURCHASE STOCK
      HELD
      BY LAURUS

     

    


    HOUSTON,
      Texas — Tidel Technologies, Inc. (Other OTC: ATMS.PK) announced today that it
      has executed an asset purchase agreement with Sentinel Operating, L.P., a
      management buyout group led by Mark Levenick, Interim CEO and director of Tidel,
      and Raymond Landry, director of Tidel, for the sale of the assets of Tidel’s
      cash security business for a purchase price of $17.5 million, subject to
      adjustment as provided in the agreement. The asset purchase agreement is subject
      to customary representations and warranties, covenants and the satisfaction
      of
      several customary closing conditions, including approval by Tidel’s
      stockholders. The transaction is expected to close this quarter. After closing,
      Tidel will no longer have any operations. Tidel understands
      that its lender, Laurus Master Fund, Ltd., or its affiliates may provide
      financing to the purchaser, Sentinel Operating, L.P., in connection with the
      asset sale.

    


    The
      sale
      was negotiated on behalf of Tidel by its two independent directors who were
      unaffiliated with the transaction. The unaffiliated directors also received
      an
      opinion from the investment advisory firm of Capitalink, L.C. that the
      transaction was fair from a financial point of view.

    


    CONVERSION
      AND REPAYMENT OF DEBT TO LAURUS

    


    Concurrently
      with the asset sale, Tidel entered into an exercise and conversion agreement
      with Laurus, whereby Laurus converted $5.4 million of Tidel’s convertible debt
      into 18,000,000 shares of common stock, bringing its ownership to 19,251,000
      shares, or 49.8%, of Tidel’s outstanding common stock.

    


    In
      addition, Tidel repaid all of its remaining indebtedness to Laurus in the amount
      of approximately $2.8 million, including accrued interest and prepayment fees,
      from a cash collateral account established by Tidel for the benefit of Laurus
      at
      the closing of the sale of Tidel’s ATM business assets on January 3, 2006. The
      remaining balance of the cash collateral account of $5.4 million will be held
      by
      Laurus until the closing of the sale of the cash security business assets,
      at
      which time it will be released to Tidel. If the asset sale doesn’t close by
      March 31, 2006, however, Tidel has agreed to redeem the 18,000,000 shares from
      Laurus for a price of $5.4 million, which would be paid from the cash collateral
      account.

     

    -more-

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Tidel
      Enters into Agreements to Sell Cash Security Business and


    Repurchase
      Stock Held by Laurus /Page 2

     

     

    REORGANIZATION
      FEE AND REPURCHASE OF LAURUS STOCK

    


    Upon
      closing of the asset sale, Tidel will pay a reorganization fee to Laurus
      pursuant to Section 4 of the Agreement Regarding NCR Transaction and Other
      Asset
      Sales dated November 26, 2004, which is estimated to be in the range of $5
      million to $11 million.

    


    In
      addition, Tidel entered into a stock redemption agreement with Laurus whereby
      upon closing of the asset sale, Tidel will repurchase Laurus’ 19,251,000 shares
      of Tidel common stock at a price of not less than $.20 per share nor greater
      than $.34 per share, following the determination of Tidel’s assets in accordance
      with the formula set forth in the stock redemption agreement. Laurus has also
      agreed to terminate all of its warrants to purchase 4.75 million shares of
      Tidel
      common stock upon the redemption. Following Tidel’s payment of the
      reorganization fee and the stock redemption amount, Laurus will cease to own
      any
      equity interest in Tidel, and Tidel will have no further obligations to Laurus.
      Based on today’s common stock outstanding of 38,677,210 shares, Tidel expects to
      have 19,426,210 shares of common stock outstanding following the repurchase
      of
      Laurus’ shares.

    


    FORM
      8-K
      FILING

    


    The
      summary of the terms of the asset purchase agreement, the exercise and
      conversion agreement, the stock redemption agreement and other related
      agreements presented in this press release is qualified in its entirety by
      reference to the Form 8-K filed today with the Securities and Exchange
      Commission, which contains such agreements filed as exhibits
      thereto.

    


    ABOUT
      TIDEL

    


    Tidel
      Technologies, Inc. is a manufacturer of cash security equipment designed for
      specialty retail marketers.
      More
      information about the company and its products may be found on the company’s web
      site at
      www.tidel.com.

    


     

    Precautionary
      Language Regarding Forward-Looking Statements

     

    This
      press release contains statements that constitute forward-looking statements
      within the meaning of Section 21(E) of the Securities Exchange Act of 1934.
      The
      statements are subject to certain risks and uncertainties, including but not
      limited to the Company’s financial position and working capital availability,
      ability of the Company to obtain shareholder approval for the cash security
      business asset sale; ability of the Company and the purchaser to close the
      cash
      security business asset sale transaction;
      unexpected changes in the Company's relationships with customers or suppliers;
      unanticipated litigation, claims or assessments or unanticipated changes in
      existing litigation, claims or assessments; the Sentinel product’s limited
      operating history; the economic condition of the cash security industry; and
      economic conditions in the United States and worldwide.
      Tidel undertakes no duty to update any of the statements set forth in this
      release.

     

    


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