<PAGE>

                                                                    EXHIBIT 4.36

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO TIDEL TECHNOLOGIES, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

                                                                        $400,000

                              CONVERTIBLE TERM NOTE

                                NOVEMBER 25, 2003

      FOR VALUE RECEIVED, TIDEL TECHNOLOGIES, INC., a Delaware corporation (the
"BORROWER"), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o Ironshore
Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate House, South Church
Street, Grand Cayman, Cayman Islands, Fax: 345-949-9877 (the "HOLDER") or its
registered assigns or successors in interest, on order, the aggregate principal
sum of FOUR HUNDRED THOUSAND DOLLARS ($400,000), or such lesser amount as shall
equal the outstanding principal amount hereof (the "PRINCIPAL AMOUNT"), together
with any accrued and unpaid interest hereon, on November 24, 2004 (the "MATURITY
DATE") if not sooner paid.

      Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT"),
pursuant to which this Note has been issued.

      The following terms shall apply to this Note:

                                    ARTICLE I
                                    INTEREST

      1.1. Interest Rate and Payment. Subject to Section 5.1 hereof, interest
payable on the unpaid principal balance of this Note shall accrue at a rate per
annum (the "CONTRACT RATE") equal to the "prime rate" published in The Wall
Street Journal from time to time, plus two percent (2%), computed on the basis
of the actual number of days elapsed and a year of 360 days. Interest shall be
payable on the Maturity Date, whether by acceleration or otherwise. The prime
rate shall be increased or decreased as the case may be for each increase or
decrease in the prime rate in an amount equal to such increase or decrease in
the prime rate; each change to be effective as of the day of the change in such
rate. In no event shall the Contract Rate be less than six percent (6.00%).

<PAGE>

      1.2. Mandatory Prepayment. Upon receipt by the Borrower of $1,800,000 or
more in the aggregate in additional funds from a financing as contemplated
pursuant to Section 6.15 of the Purchase Agreement prior to December 1, 2004,
the Borrower shall make a mandatory prepayment of the entire outstanding
Principal Amount and all accrued and unpaid interest thereon and obligations
relating thereto; provided, however, that the Borrower shall not have to pay any
premium, as set forth in Section 2.1, at the time of such mandatory prepayment.

                                   ARTICLE II
                            BORROWER PAYMENT OPTIONS

      2.1. Optional Redemption in Cash. Subject to satisfaction of the
Prepayment Conditions (as hereafter defined) and Section 2.2 hereof, the
Borrower will have the option of prepaying this Note in full ("OPTIONAL
REDEMPTION") by paying to the Holder a sum of money equal to one hundred and one
percent (101%) of the principal amount outstanding at such time of this Note
together with accrued but unpaid interest thereon and any and all other sums
due, accrued or payable to the Holder arising under this Note or the Purchase
Agreement or any Related Document (as defined in the Purchase Agreement) (the
"REDEMPTION AMOUNT") outstanding on the day written notice of redemption (the
"NOTICE OF REDEMPTION") is given to the Holder, which Notice of Redemption shall
specify the date for such Optional Redemption (the "REDEMPTION PAYMENT DATE"). A
Notice of Redemption shall not be effective with respect to any portion of this
Note for which the Holder has a pending election to convert pursuant to Section
3.1 and the Redemption Amount shall be determined as if such election to convert
had been completed immediately prior to the date of the Notice of Redemption.
The Redemption Payment Date shall not be earlier than the day after the date of
the Notice of Redemption and not later than seven (7) days after the date of the
Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must
be paid in immediately available funds to the Holder. In the event the Borrower
fails to pay the Redemption Amount by the Redemption Payment Date, then such
Redemption Notice will be null and void. For purposes hereof, the term
"PREPAYMENT CONDITIONS" means satisfaction of each of the following: (a) the
average closing bid price of the Common Stock on the Principal Market (as
hereafter defined) during the twenty (20) consecutive trading days immediately
prior to the Redemption Payment Date shall exceed an amount equal to three (3)
times the Fixed Conversion Price (as hereafter defined), (b) the market price of
the Common Stock on the Principal Market (as hereafter defined) on the
Redemption Payment Date shall be supported by a price-to-earnings ratio with
respect to the Common Stock and the Borrower, respectively, of not greater than
twenty (20) times fully diluted earnings per share of the Common Stock,
excluding extraordinary gains, (c) the average daily trading volume of the
Common Stock for a period of twenty (20) consecutive trading days immediately
prior to the Redemption Payment Date shall not be less than 100,000 shares, (d)
the conditions set forth in 2.3(i) and 2.3(ii) hereof shall have been satisfied,
and (e) the Holder shall have determined that no shareholder derivative lawsuits
are then outstanding against the Borrower. For purposes hereof, the "FIXED
CONVERSION PRICE" means $0.40, subject to adjustment in accordance with the
terms of this Note. The Fixed Conversion Price shall also be adjusted downward
immediately following the occurrence of a Specified Event (as defined below) to
an amount equal to the lesser of (1) $0.40 or (2) the volume weighted average
closing prices for the Common Stock on the Principal Exchange, or on any
securities exchange or other

                                       2

<PAGE>

securities market on which the Common Stock is then being listed or traded, for
the ten (10) trading days immediately following the Borrower's public press
release of its 2004 fiscal year results of operations. For purposes hereof, the
term "SPECIFIED EVENT" means the occurrence of the following: (1) the Borrower's
failure to attain earnings before interest, taxes, depreciation and amortization
for the Borrower's fiscal year ended September 30, 2004 of more than $2,000,000
and (2) at the time of the aforementioned press release, the market price of
Borrower's Common Stock shall be less than $0.40.

      2.2. Occurrence of a Fundamental Event.

      (a) "FUNDAMENTAL EVENT" shall be deemed to have occurred if, within 90
days of the Redemption Payment Date, the Company announces any of the following
transaction(s) (each, a "TRANSACTION") and all components of such Transaction
are consummated within two hundred seventy (270) days of such announcement:

      (i) its intention to merge or consolidate, or effect any merger or
consolidation of, the Company with or into another entity;

      (ii) its intention to effect any sale of all or substantially all of its
assets in one or a series of related transactions;

      (iii) its intention to effect any tender offer or exchange offer (whether
by the Company or another entity) pursuant to which holders of Common Stock are
permitted to tender their shares for other securities, cash or property; or

      (iv) its intention to effect any reclassification of the Common Stock or
any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property.

      (b) If a Fundamental Event occurs, then the Company shall pay to the
Holder, simultaneously with the closing of the Transaction to which such
Fundamental Event relates, an amount equal to the Fundamental Event Payment (as
defined below), calculated as follows:

      (i) The "FUNDAMENTAL EVENT PAYMENT" shall be equal to (i) the Per Share
Consideration, multiplied by the Holder Share Amount, minus (ii) the Redemption
Amount.

      (ii) The "PER SHARE CONSIDERATION" shall be the quotient of:

            (A) The Consideration; divided by

            (B) The number of shares of Common Stock outstanding immediately
prior to the consummation of the Transaction, plus the Holder Share Amount.

      (iii) THE "CONSIDERATION" shall mean (i) if the consideration paid in the
Transaction is paid to the shareholders, the aggregate value of all such
payments received by the shareholders of the Borrower in the Transaction; (ii)
if the consideration paid in the Transaction is paid to the Borrower, the
aggregate value of all consideration received by the Borrower in the
Transaction.

                                       3

<PAGE>

The value of any consideration not paid in cash shall be determined by an
independent valuation firm as appointed by the Holder in its reasonable
discretion.

      (iv) The "HOLDER SHARE AMOUNT" shall mean (A) the principal and interest
outstanding under this Note on the Redemption Payment Date, divided by (B) the
Fixed Conversion Price as of the Redemption Payment Date.

      2.3. No Effective Registration. Notwithstanding anything to the contrary
herein, the Borrower shall not repay any part of its obligations to the Holder
hereunder if (i) there fails to exist an effective current Registration
Statement (as defined in the Registration Rights Agreement) covering the shares
of Common Stock to be issued in connection with such payment, or (ii) an Event
of Default hereunder exists and is continuing, unless such Event of Default is
cured within any applicable cure period or is otherwise waived in writing by the
Holder in whole or in part at the Holder's option.

                                   ARTICLE III
                                CONVERSION RIGHTS

      3.1. Holder's Conversion Rights. While any amounts are owed under this
Note, including accrued interest, the Holder shall have the right, but not the
obligation, to convert all or any portion of the then aggregate outstanding
principal amount of this Note, together with all accrued but unpaid interest and
fees due thereon, into shares of Common Stock subject to the terms and
conditions set forth in this Article III (a "CONVERSION"). The Holder may
exercise such right by delivery to the Borrower of a written, executed and
completed notice of conversion in the form of Exhibit A hereto (a "NOTICE OF
CONVERSION") not less than three (3) days prior to the date upon which such
conversion shall occur.

      3.2. Conversion Limitation. Notwithstanding anything contained herein to
the contrary, the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible into that number of Conversion
Shares (as hereafter defined) which would exceed the difference between the
number of shares of Common Stock beneficially owned by such Holder or issuable
upon exercise of warrants held by such Holder and 4.99% of the outstanding
shares of Common Stock of the Borrower. For the purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended and Regulation
13d-3 thereunder. The Holder may void the Conversion Share limitation described
in this Section 3.2 upon 75 days prior notice to the Borrower or without any
notice requirement upon an Event of Default. In addition, notwithstanding
anything contained herein to the contrary, unless an Event of Default shall then
exist, the Holder shall not be entitled to effect a Conversion and/or sell the
Common Stock pursuant to the terms of this Note during the period commencing on
December 23, 2003 and ending on December 31, 2003.

      3.3. Procedure for Conversion. (a) In the event that the Holder elects to
convert this Note into Common Stock, the Holder shall give notice of such
election by delivering a Notice of Conversion to the Borrower and such Notice of
Conversion shall provide a breakdown in

                                       4

<PAGE>

reasonable detail of the Principal Amount, accrued interest and fees being
converted. On each Conversion Date (as hereinafter defined) and in accordance
with its Notice of Conversion, the Holder shall make the appropriate reduction
to the Principal Amount, accrued interest and fees as entered in its records and
shall provide written notice thereof to the Borrower within two (2) business
days after the Conversion Date. Each date on which a Notice of Conversion is
delivered or telecopied to the Borrower in accordance with the provisions hereof
shall be deemed a Conversion Date (the "CONVERSION DATE").

      (b) Pursuant to the terms of the Notice of Conversion, the Borrower shall
cause the transfer agent to transmit the certificates representing the
Conversion Shares to the Holder by crediting the account of the Holder's
designated broker with the Depository Trust Corporation ("DTC") through its
Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business
days after receipt by the Borrower of the Notice of Conversion (the "DELIVERY
DATE"). To the extent the Borrower is not eligible to use the DWAC system, the
Borrower shall give instructions to the Borrower's transfer agent to deliver the
certificates representing the Conversion Shares to the Holder promptly, and in
no event later than the Delivery Date. In the case of the exercise of the
Conversion rights set forth herein the Conversion privilege shall be deemed to
have been exercised and the Conversion Shares issuable upon such Conversion
shall be deemed to have been issued upon the date of receipt by the Borrower of
the Notice of Conversion. The Holder shall be treated for all purposes as the
record holder of such Common Stock, unless the Holder provides the Borrower
written instructions to the contrary.

      3.4. Conversion Mechanics.

      (a) Except as otherwise provided herein, the number of shares of Common
Stock to be issued upon each Conversion of this Note shall be such whole number
of shares of Common Stock as is equal to the quotient of that portion of the
principal and interest and fees to be converted, if any, divided by the Fixed
Conversion Price, subject to adjustment as provided herein (such Common Stock,
the "CONVERSION SHARES").

      (b) Fractional Shares. No fractional shares of Conversion Shares shall be
issued upon any Conversion of this Note. In lieu of any fractional share to
which Holder would otherwise be entitled, the Borrower shall pay Holder cash
equal to the product of such fraction multiplied by the fair market value as of
the date of Conversion of a share of Conversion Shares, as determined in good
faith by the Board of Directors of the Borrower (the "BOARD").

      (c) Adjustment. The Fixed Conversion Price and number and kind of shares
or other securities to be issued upon conversion is subject to adjustment from
time to time upon the occurrence of certain events, as follows:

            (i) Reclassification, etc. If the Borrower at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
of securities as would have been issuable as the result of such change with
respect to the Common Stock immediately prior to such reclassification or other
change.

                                       5

<PAGE>

            (ii) Stock Splits, Combinations and Dividends. If the shares of
Common Stock outstanding at any time after the date hereof are subdivided or
combined into a greater or smaller number of shares of Common Stock (other than
a change in par value, from par value to no par value or from no par value to
par value), or if a dividend is paid on the Common Stock in shares of Common
Stock, the Fixed Conversion Price or the Conversion Price, as the case may be,
shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.

            (iii) Share Issuances. If the Borrower shall at any time prior to
the conversion or repayment in full of the Principal Amount issue any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock ("EQUIVALENTS") to a person other than the Holder (except (A)
pursuant to Sections 3.4(c) (i) or (ii) hereof; or (B) pursuant to options,
warrants, or other obligations to issue shares outstanding on the date hereof as
set forth in the Schedules to the Purchase Agreement (the "NEW SHARES") for a
consideration per share or having an exercise, conversion or exchange price (the
"OFFER PRICE") less than the Fixed Conversion Price in effect at the time of
such issuance), then the Fixed Conversion Price shall be immediately reset to
such lower Offer Price. For purposes hereof, the issuance of any security of the
Borrower convertible into or exercisable or exchangeable for Common Stock shall
result in an adjustment to the Fixed Conversion Price only upon the conversion,
exercise or exchange of such securities.

                  (A) In the case of the issuance of New Shares for a
consideration in whole or in part for cash, the consideration received by the
Borrower upon such issuance will be deemed to be the amount of cash paid
therefor plus the value of any property other than cash received by the
Borrower, determined as provided in subsection 3.4 (c) (iv)(B) hereof.

                  (B) In the case of the issuance of New Shares for a
consideration in whole or in part in property other than cash, the value of such
property other than cash will be deemed to be the fair market value of such
property as determined in good faith by the Board, irrespective of any
accounting treatment.

                  (C) In the case of the issuance of Equivalents, the aggregate
maximum number of shares of New Stock deliverable upon exercise, exchange or
conversion, as the case may be, of such Equivalents will be deemed to have been
issued at the time such Equivalents were issued and for a consideration equal to
the consideration, if any, received by the Borrower upon the issuance of such
Equivalents plus the maximum purchase price provided in such Equivalents (the
consideration in each case to be determined in the manner provided in
subsections 3.4(c)(iv)(A) and 3.4(c)(iv)(B) hereof);

                  (D) During the period the conversion right exists, the
Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of Common Stock upon the full
conversion of this Note. The Borrower represents that upon issuance, such shares
will be duly and validly issued, fully paid and non-

                                       6

<PAGE>

assessable. The Borrower agrees that its issuance of this Note shall constitute
full authority to its officers, agents, and transfer agents who are charged with
the duty of executing and issuing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon the conversion of this
Note.

      3.5. Reorganizations, Consolidations, etc.

            In the event, at any time after the date hereof, of any capital
reorganization, or any reclassification of the capital stock of the Borrower
(other than a change in par value or from par value to no par value or from no
par value to par value or as a result of a stock dividend or subdivision,
split-up or combination of shares), or the consolidation or merger of the
Borrower with or into another person (other than a consolidation or merger in
which the Borrower is the continuing corporation and which does not result in
any change in the powers, designations, preferences and rights (or the
qualifications, limitations or restrictions, if any) of the capital stock of the
Borrower as amended from time to time) (any such transaction, an "EXTRAORDINARY
TRANSACTION"), then all of the amounts owed under this Note shall be exercisable
for the kind and number of shares of stock or other securities or property of
the Borrower, or of the corporation resulting from or surviving such
Extraordinary Transaction, that a holder of the number of shares of Conversion
Shares deliverable (immediately prior to the effectiveness of the Extraordinary
Transaction) upon conversion of the amounts owed under this Note would have been
entitled to receive upon such Extraordinary Transaction. The provisions of
Section 3.4(c)(iii) shall similarly apply to successive Extraordinary
Transactions. The provisions of this Section 3.5 shall not be deemed Holder's
consent to any transaction otherwise prohibited by the terms of the Purchase
Agreement or any Related Agreement (as defined in the Purchase Agreement).

                                   ARTICLE IV
                                EVENTS OF DEFAULT

      If an Event of Default (as defined below) occurs and is continuing, the
Borrower's rights under Section 2.1 shall immediately cease and be of no further
effect until such time as the Event of Default has been cured, or has been
waived by the Holder. Upon the occurrence and continuance of an Event of Default
beyond any applicable grace period, the Holder may make all sums of principal,
interest and other fees then remaining unpaid hereon and all other amounts
payable hereunder due and payable within five (5) days after written notice from
Holder to Borrower (each occurrence being a "DEFAULT NOTICE PERIOD"). If, with
respect to any Event of Default other than a payment default described in
Section 4.1 below, within the Default Notice Period the Borrower cures the Event
of Default in a manner acceptable to the Holder, the Event of Default will be
deemed to no longer exist and any rights and remedies of Holder pertaining to
such Event of Default will be of no further force or effect. After the
occurrence and during the continuance of an Event of Default which has not been
cured during any applicable grace period, the term "CONTRACT RATE" shall mean
the greater of (a) 18% per annum or (b) the per annum rate set forth in Section
1.1 hereof.

      The occurrence of any of the following events is an "EVENT OF DEFAULT":

                                       7

<PAGE>

      4.1. Failure to Pay Principal, Interest or other Fees. The Borrower fails
to pay when due any installment of principal, interest or other fees hereon in
accordance herewith, within the grace period set forth in Section 5.1 hereof or
the Borrower fails to pay when due any amount due under any other promissory
note issued by the Borrower, within ten (10) business days following the due
date for such amount.

      4.2. Breach of Covenant. The Borrower breaches any material covenant or
other term or condition of this Note, the Convertible Note (as defined in the
Purchase Agreement) or the Purchase Agreement in any material respect.

      4.3. Breach of Representations and Warranties. Any material representation
or warranty of the Borrower made herein, in the Purchase Agreement, or in any
Related Agreement (as defined in the Purchase Agreement) shall be materially
false or misleading and shall not be cured for a period of ten (10) days after
the occurrence thereof.

      4.4. Receiver or Trustee. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.

      4.5. Judgments. Except as set forth on Schedule 4.5 hereto, any money
judgment, writ or similar final process shall be entered or filed against the
Borrower or any of its property or other assets for more than $250,000, and
shall remain unvacated, unbonded or unstayed for a period of thirty (30) days.

      4.6. Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower.

      4.7. Stop Trade. An SEC stop trade order or Principal Exchange trading
suspension of the Common Stock shall be in effect for 5 consecutive days or 5
days during a period of 10 consecutive days, excluding in all cases a suspension
of all trading on a Principal Exchange (as defined below), provided that the
Borrower shall not have been able to cure such trading suspension within 30 days
of the notice thereof or list the Common Stock on another Principal Market
within 60 days of such notice. The "PRINCIPAL EXCHANGE" for the Common Stock
shall include the National Quotation Bureau's Pink Sheets (so long as the Common
Stock is permitted to be listed thereon in accordance with the terms of Section
6.2 of the Purchase Agreement), NASD OTC Bulletin Board, NASDAQ SmallCap Market,
NASDAQ National Market System, American Stock Exchange, or New York Stock
Exchange (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock), or any securities exchange or other
securities market on which the Common Stock is then being listed or traded.

      4.8. Failure to Deliver Common Stock or Replacement Note. The Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note, or if required, a replacement Note if such failure to
timely deliver Common Stock shall not be

                                       8

<PAGE>

cured within two (2) Business Days or such failure to deliver a replacement Note
is not cured within seven (7) Business Days.

      4.9. Default Under Related Agreement. An Event of Default occurs under and
as defined in the Security Agreement.

                                    ARTICLE V
                           DEFAULT RELATED PROVISIONS

      5.1. Payment Grace Period. The Borrower shall have a three (3) business
day grace period to pay any monetary amounts due under this Note or the Purchase
Agreement or any Related Document, after which grace period the default Contract
Rate set forth in the first paragraph of Article IV hereof shall apply to the
monetary amounts due.

      5.2. Conversion Privileges. The Conversion privileges set forth in Article
III shall remain in full force and effect immediately from the date hereof and
until this Note is paid in full.

                                   ARTICLE VI
                                 MISCELLANEOUS

      6.1. Pari Passu. The Borrower and Holder hereby acknowledge that the debt
created hereunder is pari passu in right of payment to the debt created in
connection with the convertible term note, dated as of the date hereof, made by
the Borrower (as Payor) in favor or Laidlaw Southwest, LLC (as Payee).

      6.2. Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

      6.3. Notices. Any notice herein required or permitted to be given shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
Borrower at the address provided in the Purchase Agreement executed in
connection herewith, with a copy to Olshan Grundman Frome Rosenzweig & Wolosky
LLP, 505 Park Avenue, New York, New York 10022, Attn: Adam W. Finerman, Esq.,
facsimile number (212) 755-1787 and to the Holder at the address provided in the
Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825
Third Avenue, 14th Floor, New York, New York 10022, facsimile number (212)
541-4434, or at such other address as the Borrower or the Holder may designate
by ten days advance written notice to

                                       9

<PAGE>

the other parties hereto. A Notice of Conversion shall be deemed given when made
to the Borrower pursuant to the Purchase Agreement.

      6.4. Amendment Provision. The term "NOTE" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument issued pursuant to Section 3.3
hereof, as it may be amended or supplemented.

      6.5. Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement.

      6.6. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Note shall be brought only in
the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing
party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from bringing suit or taking other legal action against the Borrower in any
other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court order in favor of Holder.

      6.7. Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and the remainder, if any,
refunded to the Borrower.

      6.8. Security Interest. Subject to the provisions of Section 6.1 hereof,
the holder of this Note has been granted a security interest in certain assets
of the Borrower more fully described in the Security Agreement.

      6.9. Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

       [Balance of page intentionally left blank; signature page follows.]

                                       10

<PAGE>

            IN WITNESS WHEREOF, each Borrower has caused this Convertible Term
Note to be signed in its name effective as of this 25 day of November, 2003.

                                            TIDEL TECHNOLOGIES, INC.

                                            By: /s/ James T. Rash
                                                --------------------------------
                                                Name: James T. Rash
                                                Title: CEO

WITNESS:

/s/ Leonard L. Carr
-------------------


ACCEPTED & AGREED

LAURUS MASTER FUND, LTD.

By: /s/ Eugene Grin
    --------------------------------
    Name: Eugene Grin
    Title: Director


WITNESS:

/s/
------------------------------------



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                                    EXHIBIT A

                              NOTICE OF CONVERSION

(To be executed by the Holder in order to convert all or part of the Note into
Common Stock

[Name and Address of Holder]

The Undersigned hereby elects to convert $_________ of the principal due on the
Maturity Date under the Convertible Term Note issued by TIDEL TECHNOLOGIES, INC.
dated _________ __, 2003 by delivery of Shares of Common Stock of TIDEL
TECHNOLOGIES, INC. on and subject to the conditions set forth in Article III of
such Note.

                           (A) Date of Conversion: _______________________

                           (B) Shares To Be Delivered: _______________________

Date: ____________

                                            By: _______________________________
                                            Name: ______________________________
                                            Title: _____________________________

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