Exhibit 10.1


    
      

    

    Exhibit
      10.1

     

    AMENDMENT
      TO EXERCISE AND CONVERSION AGREEMENT

     

    THIS
      AMENDMENT TO EXERCISE AND CONVERSION AGREEMENT is made and entered into as
      of
      February 28, 2006 (the “Amendment”) by and among Sentinel Technologies, Inc., a
      Delaware corporation (“STI”); Sentinel Operating, L.P., a Texas limited
      partnership and an affiliate of STI (“Sentinel”); Tidel Technologies, Inc., a
      Delaware corporation (the “Company”); and Laurus Master Fund, Ltd., a Cayman
      Island company (the “Security Holder”). 

     

    Reference
      is made to the Exercise and Conversion Agreement dated as of January 12, 2006
      (the “Agreement”) among the parties hereto. Capitalized terms used but not
      defined herein shall have the meanings ascribed to such terms in the
      Agreement.

     

    The
      parties hereto agree that the Agreement be and is hereby amended as
      follows.

     

    1.   Section
      1.2(a) is amended by deleting the reference to the date “January 13, 2006” and
      inserting in lieu thereof the date “April 21, 2006”;

     

    2.   Section
      4.1(a) is amended by deleting the reference to the date “January 13, 2006” and
      inserting in lieu thereof the date “April 21, 2006”;

     

    3.   Section
      4.1(g) is amended by deleting the reference to the date “February 28, 2006” and
      inserting in lieu thereof the date “April 21, 2006”;

     

    4.   Section
      5.1 is amended by deleting the two references to “March 31, 2006” therein and
      inserting in lieu thereof the date “May 31, 2006.”

     

    Except
      as
      specifically amended hereby, the Agreement shall remain in full force and effect
      and hereby is ratified and confirmed as so amended. This Amendment shall not
      constitute a novation, satisfaction and accord, cure, release or satisfaction
      of
      the Agreement, but shall constitute an amendment thereof. The parties hereto
      agree to be bound by the terms and conditions of the Agreement as amended by
      this Amendment, as though such terms and conditions were set forth herein and
      therein in full. Each reference in the Agreement to "this Agreement,"
      "hereunder," "hereof," "herein" or words of similar import shall mean and be
      a
      reference to the Agreement as amended by this Amendment.

     

    This
      Amendment shall be governed by and construed and interpreted in accordance
      with
      the choice of law provisions set forth in, and shall be subject to the notice
      provisions of, the Agreement.

     

    This
      Amendment 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 Amendment.

     

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    IN
      WITNESS WHEREOF, STI, Sentinel, the Company and the Security Holder have caused
      this Amendment to be executed as of the date first written above.

     

    
      	 	
              SENTINEL
                TECHNOLOGIES, INC.

            
	 	 	 	 
	 	 	 	 
	 	
              /s/
                Raymond P. Landry

            
	 	
              By:
                Raymond P. Landry

            
	 	
              Title:
                Chief Executive Officer

            
	 	 	 	 
	 	 	 	 
	 	
              SENTINEL
                OPERATING, L.P.

            
	 	 	 	 
	 	 	 	 
	 	 	
              By:

            	
              Sentinel
                Cash Systems, L.L.C.,

            
	 	 	 	
              its
                general partner

            
	 	 	 	 
	 	 	 	 
	 	 	 	
              /s/
                Raymond P. Landry

            
	 	 	 	
              By:
                Raymond P. Landry

            
	 	 	 	
              Title:
                President

            
	 	 	 	 
	 	 	 	 
	 	
              TIDEL
                TECHNOLOGIES, INC.

            
	 	 	 	 
	 	 	 	 
	 	
              /s/
                Mark K. Levenick

            
	 	
              By:
                Mark. K. Levenick

            
	 	
              Title:
                Interim Chief Executive Officer

            
	 	 	 	 
	 	 	 	 
	 	
              LAURUS
                MASTER FUND, LTD.

            
	 	 	 	 
	 	/s/
              David Grin
	 	
              By:

            	David
              Grin
	 	
              Title:

            	Director