Exhibit 10.5


    
      

    

    Exhibit
      10.5

     

    REAFFIRMATION,
      RATIFICATION AND CONFIRMATION AGREEMENT

    


    January
      12, 2006

    


    Laurus
      Master Fund, Ltd.

    c/o
      Laurus Capital Management LLC

    825
      Third
      Avenue

    New
      York,
      New York 10022

    


    Ladies
      and Gentlemen:

    


    Reference
      is made to the Agreement Regarding NCR Transaction and Other Asset Sales, dated
      as of November 26, 2004 (as amended, modified or supplemented from time to
      time,
      the “NCR Agreement”), by and between Tidel Technologies, Inc., a Delaware
      corporation (the “Company”), and Laurus Master Fund, Ltd., a Cayman Islands
      company (“Laurus”).

    


    To
      induce
      Laurus to enter into (a) the Exercise and Conversion Agreement, dated as of
      the
      date hereof, among Sentinel Technologies, Inc. (“STI”), Sentinel Operating,
      L.P., a Texas limited partnership and an affiliate of STI (“Sentinel”), the
      Company and Laurus, (b) the Voting Agreement, dated as of the date hereof,
      among
      STI, Sentinel, the Company and Laurus, and (c) the Stock Redemption Agreement,
      dated as of the date hereof, by and between the Company and Laurus, the
      undersigned hereby: 

    


    (a)     acknowledges,
      ratifies and confirms that all of the terms, conditions, representations and
      covenants contained in the NCR Agreement are in full force and effect and shall
      remain in full force and effect prior to and after the consummation and closing
      of the transactions contemplated by that certain Asset Purchase Agreement,
      dated
      as of the date hereof (the “Asset Purchase Agreement”), by and among Sentinel,
      the Company and Tidel Engineering, L.P.; 

    


    (b)     acknowledges,
      ratifies and confirms that the Reorganization Fee (as defined in the NCR
      Agreement) and all other obligations due and owing from the Company to Laurus
      under the NCR Agreement are secured by the collateral granted by the Company
      and
      its subsidiaries to Laurus under any and all security agreements and pledge
      agreements at any time entered into by the Company and/or any such subsidiaries
      in favor of Laurus; and

    


    (c)     acknowledges,
      ratifies and confirms that the Company shall be obligated to pay to Laurus
      (the
“Payment”) simultaneously with the consummation and closing of the transactions
      contemplated by the Asset Purchase Agreement (the “Closing”), the amounts
      payable pursuant to Section 4 of the NCR Agreement based upon the calculation
      set forth therein. The calculation, based on estimates known on the date hereof,
      is set forth on Exhibit A hereto. For avoidance of doubt, the amount of the
      actual payment shall be re-calculated based upon the actual closing numbers.
      In
      no event shall such payment be less than $5,000,000 or greater than
      $11,000,000.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    This
      agreement may be executed by facsimile signatures and in any number of
      counterparts, each of which shall be an original, but all of which together
      shall constitute one agreement.

     

    [The
      remainder of this page intentionally left blank.]


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    This
      agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York.

    


    


    
      	 	
              Very
                truly yours,

            
	 	 
	 	
              TIDEL
                TECHNOLOGIES, INC.

            
	 	 	 
	 	
              By:

            	 /s/
              Jerrell G. Clay
	 	
              Name:

            	 Jerrell
              G. Clay
	 	
              Title:

            	 Director
	 	Address: 	
              2900
                Wilcrest Drive, Suite 205 

            
	 	 	
              Houston,
                Texas 77042 

            


    

    


    


    
      	
              ACCEPTED
                AND AGREED TO:

            	 
	 	 
	
              LAURUS
                MASTER FUND, LTD.

            	 
	 	 
	
              By:

            	 /s/
              Eugene Grin	 
	
              Name:

            	 Eugene
              Grin	 
	
              Title:

            	 Director	 


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      EXHIBIT
        A

    

    

      
        	
                NCR
                  sales price

              	 	 	 	 	
                $

              	
                10,175,000

              	 
	
                Add:
                  adjustment for 2 key employees

              	 	 	 	 	
                $

              	
                260,000

              	 
	
                Plus:
                  net asset adjustment

              	 	 	 	 	 	 	 
	
                NET
                  ASSETS

              	 	 	
                6,400,000
                  

              	 	 
	
                 
                  

              	 
	
                EXCESS
                  OF 6.825 OR LESS OF 6.175

              	 	 	
                (6,825,000

              	
                )

              	
                $

              	
                -

              	 
	 	 	 	 	 	 
	
                 
                  

              	 
	
                Total
                  Sale Price

              	 	 	 	 	
                $

              	
                10,435,000

              	 
	
                Less:

              	 	 	 	 	 	 	 
	
                Purchase
                  Price Holdback

              	 	 	 	 	 	
                (500,000

              	
                )

              
	
                Hudson
                  bonus

              	 	 	 	 	 	
                (175,000

              	
                )

              
	
                Moving
                  allowance for TACC

              	 	 	 	 	 	
                (250,000

              	
                )

              
	
                Adjustment
                  for key employees

              	 	 	 	 	 	
                (260,000

              	
                )

              
	
                Fairness
                  opinion

              	 	 	 	 	 	
                (150,000

              	
                )

              
	
                Legal
                  fees

              	 	 	 	 	 	
                (250,000

              	
                )

              
	
                Total
                  NCR Net Proceeds

              	 	 	 	 	 	
                8,850,000
                  

              	 
	 	 	 	 	 	 	 	 
	
                TACC
                  sales price

              	 	 	 	 	
                $

              	
                17,500,000

              	 
	
                Plus:
                  working capital est 12-31 BS

              	 	 	 	 	 	 	 
	
                CURRENT
                  ASSETS

              	 	 	
                3,890,801
                  

              	 	 	 	 
	
                LIABILITIES

              	 	 	
                (4,298,113

              	
                )

              	 	 	 
	 	 	 	 	 	 	
                (407,312

              	
                )

              
	
                Less:

              	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
                Legal
                  allowance - patent lawsuit

              	 	 	 	 	 	
                (100,000

              	
                )

              
	
                Taxes

              	 	 	 	 	 	
                (75,000

              	
                )

              
	
                Fairness
                  opinion

              	 	 	 	 	 	
                (75,000

              	
                )

              
	
                Legal
                  fees

              	 	 	 	 	 	
                (250,000

              	
                )

              
	
                Banking
                  fees

              	 	 	 	 	 	 	 
	
                Consulting
                  fees /other

              	 	 	 	 	 	
                (220,000

              	
                )

              
	
                Stay
                  bonuses

              	 	 	 	 	 	 	 
	
                Employee
                  contract payouts/settlements

              	 	 	 	 	 	
                (750,000

              	
                )

              
	
                Total
                  TACC Net Proceeds

              	 	 	 	 	 	
                15,622,688
                  

              	 
	 	 	 	 	 	 	 	 
	
                Total
                  Net Proceeds

              	 	 	 	 	
                $

              	
                24,472,688

              	 
	 	 	 	 	 	 	 	 
	
                Payment
                  To Laurus due to NCR Purchase Price Holdback 

              	
                $

              	
                283,500

              	 
	
                Payment
                  to Laurus

              	 	 	 	 	
                $

              	
                9,755,065

              	 
	
                TOTAL

              	 	 	 	 	
                $

              	
                10,038,565