Document:

REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

     This  Registration  Rights  Agreement (the "Agreement") is made and entered
into  as  of  this  ___  day of May, 2006 by and between CHARYS HOLDING COMPANY,
INC.,  a  Delaware  corporation  (the "Company"), and LUMBERMENS MUTUAL CASUALTY
COMPANY  ("Lumbermens") pursuant to that certain Settlement Agreement and Mutual
Release  by  and among the Company, Lumbermens, Able Telecommunications & Power,
Inc.,  Transportation Safety Controllers, Inc. and Georgia Electric Company (the
"Settlement  Agreement").

     The  parties  hereby  agree  as  follows:

     1.     Certain  Definitions.
            --------------------

     As  used  in  this  Agreement, the following terms shall have the following
meanings:

     "Affiliate"  means,  with  respect  to  any  person, any other person which
      ---------
directly  or  indirectly  controls, is controlled by, or is under common control
with,  such  person.

     "Business Day" means a day, other than a Saturday or Sunday, on which banks
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in  New  York  City  are  open  for  the  general  transaction  of  business.

     "Common  Stock" shall mean the Company's common stock, par value $0.001 per
      -------------
share,  and  any  securities  into  which  such  shares  may  hereinafter  be
reclassified.

     "Prospectus"  shall  mean  (i)  the prospectus included in any Registration
      ----------
Statement, as amended or supplemented by any prospectus supplement, with respect
to  the  terms  of  the  offering  of  any portion of the Registrable Securities
covered  by  such  Registration  Statement  and  by  all  other  amendments  and
supplements  to  the  prospectus,  including  post-effective  amendments and all
material  incorporated  by  reference  in  such  prospectus,  and (ii) any "free
writing  prospectus"  as  defined  in  Rule  405  under  the  1933  Act.

     "Register," "registered" and "registration" refer to a registration made by
      --------    ----------       ------------
preparing  and filing a Registration Statement or similar document in compliance
with  the  1933  Act  (as  defined  below),  and  the declaration or ordering of
effectiveness  of  such  Registration  Statement  or  document.

     "Registrable  Securities"  shall  mean  (i)  the  Shares and (ii) any other
      -----------------------
securities  issued  or  issuable  with respect to or in exchange for Registrable
Securities;  provided, that, a security shall cease to be a Registrable Security
upon  (A)  sale  pursuant to a Registration Statement or Rule 144 under the 1933
Act,  or  (B) such security becoming eligible for sale by Lumbermens pursuant to
Rule  144(k).

     "Registration  Statement"  shall  mean  any  registration  statement of the
      -----------------------
Company  filed  under  the  1933  Act  that  covers  the  resale  of  any of the
Registrable  Securities pursuant to the provisions of this Agreement, amendments
and  supplements  to  such  Registration  Statement,  including  post-effective
amendments,  all  exhibits  and  all  material incorporated by reference in such
Registration  Statement.

<PAGE>
     "SEC"  means  the  U.S.  Securities  and  Exchange  Commission.
      ---

     "Shares"  means  the  shares  of  Common Stock to be issued pursuant to the
      ------
Settlement  Agreement.

     "1933  Act" means the Securities Act of 1933, as amended, and the rules and
      ---------
regulations  promulgated  thereunder.

     "1934  Act"  means the Securities Exchange Act of 1934, as amended, and the
      ---------
rules  and  regulations  promulgated  thereunder.

     2.   Registration.
          ------------

          (a)     Registration  Statement.  Promptly following the execution and
                  -----------------------
delivery of the Settlement Agreement (the "Closing Date") but no later than July
10,  2006  (the  "Filing Deadline"), the Company shall prepare and file with the
SEC  an  amendment  to  the  Company's  Registration  Statement on Form SB-2, as
originally  filed  on  February  15, 2006, as amended by Amendment No. 1 thereto
filed  on  February 27, 2006 (or on such other form of registration statement as
is  then  available  to  effect  a  registration  for  resale of the Registrable
Securities,  subject  to  Lumbermens'  consent),  covering  the  resale  of  the
Registrable  Securities.  Subject  to  any  SEC  comments,  such  Registration
Statement  shall  include the plan of distribution attached hereto as Exhibit A.
                                                                      ---------
Such  Registration Statement also shall cover, to the extent allowable under the
1933  Act  and  the  rules  promulgated  thereunder  (including  Rule 416), such
indeterminate  number  of additional shares of Common Stock resulting from stock
splits,  stock dividends or similar transactions with respect to the Registrable
Securities.  The  Registration  Statement  (and  each  amendment  or  supplement
thereto,  and  each  request for acceleration of effectiveness thereof) shall be
provided  in accordance with Section 3(c) to Lumbermens and its counsel prior to
its  filing  or  other  submission.  If  a  Registration  Statement covering the
Registrable  Securities  is  not  filed  with  the SEC on or prior to the Filing
Deadline,  Lumbermens shall have all of the rights and remedies set forth in the
Settlement  Agreement.

          (b)     Expenses.  The  Company  will pay all expenses associated with
                  --------
each registration, including filing and printing fees, the Company's counsel and
accounting  fees  and  expenses,  costs associated with clearing the Registrable
Securities for sale under applicable state securities laws, listing fees and all
other  fees, but excluding discounts, commissions, fees of underwriters, selling
brokers,  dealer  managers  or  similar  securities  industry professionals with
respect  to  the  Registrable  Securities  being  sold.

          (c)     Effectiveness.
                  -------------

               (i)     The  Company shall use commercially reasonable efforts to
have  the Registration Statement declared effective as soon as practicable.  The
Company  shall  notify  Lumbermens  by  facsimile  or  e-mail  as  promptly  as
practicable,  and  in  any  event,  within  twenty-four  (24)  hours,  after any
Registration  Statement  is  declared effective and shall simultaneously provide
Lumbermens  with  copies of any related Prospectus to be used in connection with
the  sale  or  other  disposition  of  the securities covered thereby.  If (A) a
Registration  Statement  covering  the  Registrable  Securities  is not declared
effective  by  the  SEC prior to the earlier of (i) five (5) Business Days after
the  SEC  shall  have  informed  the  Company  that  no  review  of  the

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<PAGE>
Registration  Statement  will be made or that the SEC has no further comments on
the Registration Statement or (ii) November 27, 2006 or (B) after a Registration
Statement  has been declared effective by the SEC, sales cannot be made pursuant
to  such  Registration Statement for any reason (including without limitation by
reason  of  a  stop  order,  or the Company's failure to update the Registration
Statement),  but  excluding  the  inability ofLumbermens to sell the Registrable
Securities  covered  thereby  due  to  market  conditions  and except as excused
pursuant  to  subparagraph  (ii) below,then the same shall be deemed a breach or
failure  to  perform  under  this Agreement and Lumbermens shall have all of the
rights  and  remedies  set  forth  in  the  Settlement  Agreement.

               (ii)     The  Company  shall not delay the disclosure of material
non-public  information  concerning  the  Company  or  suspend  the  use  of any
Prospectus included in any registration contemplated by this Section for so long
as  the  Shares  are  Registrable  Securities.

     3.   Company  Obligations.  The  Company will use commercially reasonable
          --------------------
efforts  to  effect the registration of the Registrable Securities in accordance
with  the  terms hereof, and pursuant thereto the Company will, as expeditiously
as  possible:

          (a)     use commercially reasonable efforts to cause such Registration
Statement  to become effective and to remain continuously effective for a period
that  will  terminate  upon the earlier of (i) the date on which all Registrable
Securities  covered by such Registration Statement as amended from time to time,
have been sold, and (ii) the date on which all Registrable Securities covered by
such  Registration  Statement  may  be  sold  pursuant  to  Rule  144(k)  (the
"Effectiveness  Period") and advise Lumbermens in writing when the Effectiveness
Period  has  expired;

          (b)     prepare  and  file  with  the  SEC  such  amendments  and
post-effective  amendments  to  the Registration Statement and the Prospectus as
may  be  necessary  to  keep  the  Registration  Statement  effective  for  the
Effectiveness  Period  and to comply with the provisions of the 1933 Act and the
1934  Act  with respect to the distribution of all of the Registrable Securities
covered  thereby;

          (c)     provide  copies to and permit counsel designated by Lumbermens
to review each Registration Statement and all amendments and supplements thereto
no fewer than seven (7) days prior to their filing with the SEC and not file any
document  to  which  such  counsel  reasonably  objects;

          (d)     furnish to Lumbermens and its legal counsel (i) promptly after
the  same  is prepared and publicly distributed, filed with the SEC, or received
by  the Company (but not later than two (2) Business Days after the filing date,
receipt  date  or  sending  date,  as  the  case  may  be)  one  (1) copy of any
Registration  Statement  and  any amendment thereto, each preliminary prospectus
and Prospectus and each amendment or supplement thereto, and (ii) such number of
copies  of  a Prospectus, including a preliminary prospectus, and all amendments
and  supplements  thereto  and such other documents as Lumbermens may reasonably
request  in  order  to  facilitate the disposition of the Registrable Securities
owned  by  Lumbermens  that  are  covered by the related Registration Statement;

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<PAGE>
          (e)     use  commercially  reasonable  efforts  to  (i)  prevent  the
issuance  of  any  stop  order or other suspension of effectiveness and, (ii) if
such  order  is  issued, obtain the withdrawal of any such order at the earliest
possible  moment;

          (f)     prior  to  any  public offering of Registrable Securities, use
commercially  reasonable  efforts  to  register  or  qualify  or  cooperate with
Lumbermens  and its counsel in connection with the registration or qualification
of  such  Registrable Securities for offer and sale under the securities or blue
sky  laws of such jurisdictions requested by Lumbermens and do any and all other
commercially  reasonable  acts  or  things  necessary or advisable to enable the
distribution  in such jurisdictions of the Registrable Securities covered by the
Registration  Statement;  provided,  however,  that  the  Company  shall  not be
required  in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but  for  this  Section  3(f),  (ii)  subject  itself to general taxation in any
jurisdiction  where  it  would  not otherwise be so subject but for this Section
3(f),  or  (iii)  file  a  general  consent  to  service  of process in any such
jurisdiction;

          (g)     use  commercially  reasonable efforts to cause all Registrable
Securities  covered  by a Registration Statement to be listed on each securities
exchange,  interdealer  quotation  system  or  other  market  on  which  similar
securities  issued  by  the  Company  are  then  listed;

          (h)     immediately notify Lumbermens, at any time prior to the end of
the  Effectiveness  Period,  upon  discovery  that, or upon the happening of any
event  as  a  result  of which, the Prospectus includes an untrue statement of a
material  fact or omits to state any material fact required to be stated therein
or  necessary  to  make  the  statements  therein not misleading in light of the
circumstances then existing, and promptly prepare, file with the SEC and furnish
to  such  holder  a  supplement  to or an amendment of such Prospectus as may be
necessary  so  that  such  Prospectus shall not include an untrue statement of a
material  fact or omit to state a material fact required to be stated therein or
necessary  to  make  the  statements  therein  not  misleading  in  light of the
circumstances  then  existing;  and

          (i)     otherwise  use  commercially reasonable efforts to comply with
all  applicable rules and regulations of the SEC under the 1933 Act and the 1934
Act,  including, without limitation, Rule 172 under the 1933 Act, file any final
Prospectus, including any supplement or amendment thereof, with the SEC pursuant
to Rule 424 under the 1933 Act, promptly inform Lumbermens in writing if, at any
time  during  the  Effectiveness  Period,  the  Company  does  not  satisfy  the
conditions  specified  in  Rule  172  and,  as  a  result thereof, Lumbermens is
required  to  deliver  a  Prospectus  in  connection  with  any  disposition  of
Registrable  Securities  and  take  such  other  actions  as  may  be reasonably
necessary  to  facilitate  the  registration  of  the  Registrable  Securities
hereunder;  and  make  available  to its security holders, as soon as reasonably
practicable,  but  not  later  than the Availability Date (as defined below), an
earnings  statement  covering a period of at least twelve (12) months, beginning
after  the  effective  date  of  each  Registration  Statement,  which  earnings
statement  shall  satisfy  the  provisions  of  Section  11(a)  of the 1933 Act,
including  Rule  158  promulgated thereunder (for the purpose of this subsection
3(i),  "Availability  Date"  means  the 45th day following the end of the fourth
fiscal  quarter that includes the effective date of such Registration Statement,
except  that,  if

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<PAGE>
such  fourth  fiscal  quarter  is the last quarter of the Company's fiscal year,
"Availability  Date"  means  the  90th  day  after the end of such fourth fiscal
quarter).

          (j)     with  a view to making available to Lumbermens the benefits of
Rule  144  (or  its  successor rule) and any other rule or regulation of the SEC
that  may  at  any  time permit Lumbermens to sell shares of Common Stock to the
public  without registration, the Company covenants and agrees to:  (i) make and
keep  public information available, as those terms are understood and defined in
Rule  144,  until  the  earlier  of (A) six months after such date as all of the
Registrable  Securities  may be resold pursuant to Rule 144(k) or any other rule
of  similar  effect  or (B) such date as all of the Registrable Securities shall
have  been  resold;  (ii)  file  with the SEC in a timely manner all reports and
other documents required of the Company under the 1934 Act; and (iii) furnish to
Lumbermens  upon request, as long as Lumbermens owns any Registrable Securities,
(A)  a  written statement by the Company that it has complied with the reporting
requirements  of  the  1934  Act, (B) a copy of the Company's most recent Annual
Report  on  Form  10-K  or  Quarterly  Report  on  Form 10-Q, and (C) such other
information  as  may  be reasonably requested in order to avail such Investor of
any  rule  or  regulation  of  the  SEC  that  permits  the  selling of any such
Registrable  Securities  without  registration.

     4.     Due  Diligence  Review;  Information
            ------------------------------------

     The  Company  shall  not  disclose  material  nonpublic  information  to
Lumbermens,  or to advisors to or representatives of Lumbermens, unless prior to
disclosure  of such information the Company identifies such information as being
material  nonpublic  information  and  provides  Lumbermens,  such  advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic  information  for  review and Lumbermens, if its wishes to obtain such
information,  enters  into  an  appropriate  confidentiality  agreement with the
Company  with  respect  thereto.

     5.     Obligations  of  Lumbermens.
            ---------------------------

          (a)     Lumbermens  shall  furnish  in  writing  to  the  Company such
information  regarding  itself,  the  Registrable  Securities held by it and the
intended  method  of  disposition  of  the Registrable Securities held by it, as
shall  be  reasonably  required  to  effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.  At least five (5) Business Days prior to
the  first  anticipated  filing  date of any Registration Statement, the Company
shall  notify Lumbermens of the information the Company requires from Lumbermens
shall  provide  such  information  to the Company at least two (2) Business Days
prior  to  the  first  anticipated  filing  date of such Registration Statement.

          (b)     Lumbermens,  by  its  acceptance of the Registrable Securities
agrees  to  cooperate with the Company as reasonably requested by the Company in
connection  with  the  preparation  and  filing  of  a  Registration  Statement
hereunder, unless Lumbermens has notified the Company in writing of its election
to  exclude  all of its Registrable Securities from such Registration Statement.

                                      - 5 -
<PAGE>
          (c)     Lumbermens  agrees  that,  upon receipt of any notice from the
Company of the happening of an event pursuant to Section 3(h) hereof, Lumbermens
will  immediately  discontinue disposition of Registrable Securities pursuant to
the  Registration  Statement  covering  such  Registrable  Securities,  until
Lumbermens  is  advised by the Company that such dispositions may again be made.

     6.     Indemnification.
            ---------------

          (a)     Indemnification  by  the  Company.  The Company will indemnify
                  ---------------------------------
and hold harmless Lumbermens and its officers, directors, members, employees and
agents,  successors  and  assigns,  and  each other person, if any, who controls
Lumbermens  within  the  meaning  of  the  1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the  1933  Act  or  otherwise,  insofar  as  such  losses,  claims,  damages  or
liabilities  (or actions in respect thereof) arise out of or are based upon: (i)
any  untrue statement or alleged untrue statement of any material fact contained
in  any  Registration Statement, any preliminary Prospectus or final Prospectus,
or  any  amendment or supplement thereof; (ii) any blue sky application or other
document  executed  by  the  Company specifically for that purpose or based upon
written  information  furnished  by  the  Company  filed  in  any state or other
jurisdiction  in order to qualify any or all of the Registrable Securities under
the  securities  laws  thereof  (any  such  application, document or information
herein  called a "Blue Sky Application"); (iii) the omission or alleged omission
to  state  therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; (iv) any violation by the Company or
its  agents  of any rule or regulation promulgated under the 1933 Act applicable
to  the Company or its agents and relating to action or inaction required of the
Company  in connection with such registration; or (v) any failure to register or
qualify  the  Registrable  Securities  included  in any such Registration in any
state  where the Company or its agents has affirmatively undertaken or agreed in
writing  that  the  Company will undertake such registration or qualification on
Lumbermens behalf and will reimburse Lumbermens, and each such officer, director
or  member  and  each  such  controlling  person for any legal or other expenses
reasonably  incurred  by  them in connection with investigating or defending any
such  loss,  claim,  damage,  liability  or  action; provided, however, that the
                                                     --------  -------
Company  will  not be liable in any such case if and to the extent that any such
loss,  claim,  damage  or  liability  arises  out  of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity  with  information  furnished  by  Lumbermens or any such controlling
person  in  writing  specifically  for  use  in  such  Registration Statement or
Prospectus.

          (b)     Indemnification  byLumbermens.  Lumbermens agrees to indemnify
                  -----------------------------
and  hold  harmless,  to  the  fullest extent permitted by law, the Company, its
directors,  officers,  employees,  stockholders and each person who controls the
Company  (within  the  meaning  of  the  1933  Act)  against any losses, claims,
damages,  liabilities and expense (including reasonable attorney fees) resulting
from  any untrue statement of a material fact or any omission of a material fact
required to be stated in the Registration Statement or Prospectus or preliminary
Prospectus  or  amendment  or  supplement  thereto  or  necessary  to  make  the
statements  therein  not  misleading, to the extent, but only to the extent that
such  untrue  statement or omission is contained in any information furnished in
writing  by  Lumbermens  to  the  Company  specifically  for  inclusion  in such
Registration  Statement or Prospectus or amendment or supplement thereto.  In no
event  shall  the  liability  of Lumbermens be greater in amount than the dollar
amount  of  the  proceeds

                                      - 6 -
<PAGE>
(net  of all expense paid by Lumbermens in connection with any claim relating to
this  Section  6  and  the  amount  of any damages Lumbermens has otherwise been
required  to  pay  by  reason  of such untrue statement or omission) received by
Lumbermens  upon  the  sale  of  the  Registrable  Securities  included  in  the
Registration  Statement  giving  rise  to  such  indemnification  obligation.

          (c)     Conduct  of  Indemnification Proceedings.  Any person entitled
                  ----------------------------------------
to  indemnification  hereunder  shall (i) give prompt notice to the indemnifying
party  of  any  claim  with  respect  to which it seeks indemnification and (ii)
permit  such indemnifying party to assume the defense of such claim with counsel
reasonably  satisfactory  to  the  indemnified  party;  provided that any person
                                                        --------
entitled  to  indemnification  hereunder shall have the right to employ separate
counsel  and  to  participate  in  the  defense  of such claim, but the fees and
expenses  of  such counsel shall be at the expense of such person unless (a) the
indemnifying  party  has  agreed  to  pay  such  fees  or  expenses,  or (b) the
indemnifying  party  shall  have  failed to assume the defense of such claim and
employ  counsel  reasonably satisfactory to such person or (c) in the reasonable
judgment  of  any  such  person,  based  upon  written  advice of its counsel, a
conflict  of interest exists between such person and the indemnifying party with
respect  to  such claims (in which case, if the person notifies the indemnifying
party  in  writing  that  such  person  elects to employ separate counsel at the
expense  of  the  indemnifying  party, the indemnifying party shall not have the
right  to  assume  the  defense  of  such  claim  on behalf of such person); and
provided,  further,  that the failure of any indemnified party to give notice as
--------   -------
provided  herein  shall  not  relieve  the indemnifying party of its obligations
hereunder,  except  to  the  extent  that  such  failure  to  give  notice shall
materially  adversely  affect  the indemnifying party in the defense of any such
claim or litigation.  It is understood that the indemnifying party shall not, in
connection  with  any proceeding in the same jurisdiction, be liable for fees or
expenses  of  more  than one separate firm of attorneys at any time for all such
indemnified parties.  No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that  does  not  include  as  an  unconditional  term  thereof the giving by the
claimant  or plaintiff to such indemnified party of a release from all liability
in  respect  of  such  claim  or  litigation.

          (d)     Contribution.  If  for any reason the indemnification provided
                  ------------
for  in  the  preceding  paragraphs (a) and (b) is unavailable to an indemnified
party  or  insufficient  to  hold it harmless, other than as expressly specified
therein,  then  the  indemnifying  party  shall contribute to the amount paid or
payable  by  the  indemnified  party  as a result of such loss, claim, damage or
liability  in such proportion as is appropriate to reflect the relative fault of
the  indemnified party and the indemnifying party, as well as any other relevant
equitable  considerations.  No  person  guilty  of  fraudulent misrepresentation
within  the  meaning  of  Section  11(f)  of  the  1933 Act shall be entitled to
contribution  from  any  person not guilty of such fraudulent misrepresentation.
In  no  event  shall  the  contribution  obligation  of  a holder of Registrable
Securities  be  greater in amount than the dollar amount of the proceeds (net of
all  expenses  paid by such holder in connection with any claim relating to this
Section  6 and the amount of any damages such holder has otherwise been required
to  pay  by  reason  of  such  untrue or alleged untrue statement or omission or
alleged  omission)  received  by  it upon the sale of the Registrable Securities
giving  rise  to  such  contribution  obligation.

                                      - 7 -
<PAGE>
     7.     Miscellaneous.
            -------------

          (a)     Amendments and Waivers.  This Agreement may be amended only by
                  ----------------------
a writing signed by the Company and Lumbermens.  The Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it,  only  if  the  Company  shall  have  obtained  the  written consent to such
amendment,  action  or  omission  to  act,  of  Lumbermens.

          (b)     Notices.  All notices and other communications provided for or
                  -------
permitted  hereunder  shall  be  made  as set forth in the Settlement Agreement.

          (c)     Assignments  and Transfers Lumbermens.  The provisions of this
                  -------------------------------------
Agreement  shall  be binding upon and inure to the benefit of Lumbermens and its
successors  and  assigns.  Lumbermens  may  transfer or assign, in whole or from
time  to time in part, to one or more persons its rights hereunder in connection
with  the  transfer  of  Registrable  Securities  by  Lumbermens to such person,
provided  that Lumbermens complies with all laws applicable thereto and provides
written  notice  of  assignment to the Company promptly after such assignment is
effected.

          (d)     Assignments  and Transfers by the Company.  This Agreement may
                  -----------------------------------------
not  be  assigned  by  the  Company  (whether  by operation of law or otherwise)
without  the  prior  written  consent of Lumbermens, provided, however, that the
Company may assign its rights and delegate its duties hereunder to any surviving
or  successor  corporation  in  connection with a merger or consolidation of the
Company  with  another  corporation, or a sale, transfer or other disposition of
all or substantially all of the Company's assets to another corporation, without
the  prior written consent of Lumbermens, after notice duly given by the Company
to  Lumbermens.

          (e)     Benefits  of  the Agreement.  The terms and conditions of this
                  ---------------------------
Agreement  shall  inure  to  the  benefit  of and be binding upon the respective
permitted  successors  and  assigns  of the parties.  Nothing in this Agreement,
express  or implied, is intended to confer upon any party other than the parties
hereto  or  their  respective  successors  and  assigns  any  rights,  remedies,
obligations,  or  liabilities  under  or  by reason of this Agreement, except as
expressly  provided  in  this  Agreement.

          (f)     Counterparts; Faxes.  This Agreement may be executed in two or
                  -------------------
more  counterparts,  each of which shall be deemed an original, but all of which
together  shall constitute one and the same instrument.  This Agreement may also
be  executed  via  facsimile,  which  shall  be  deemed  an  original.

          (g)     Titles  and  Subtitles.  The titles and subtitles used in this
                  ----------------------
Agreement  are  used  for  convenience  only  and  are  not  to be considered in
construing  or  interpreting  this  Agreement.

          (h)     Severability.  Any  provision  of  this  Agreement  that  is
                  ------------
prohibited  or unenforceable in any jurisdiction shall, as to such jurisdiction,
be  ineffective  to  the  extent of such prohibition or unenforceability without
invalidating  the  remaining provisions hereof but shall be interpreted as if it
were  written  so  as  to  be  enforceable  to  the  maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall  not  invalidate  or  render  unenforceable  such  provision  in any other
jurisdiction.  To  the  extent

                                      - 8 -
<PAGE>
permitted by applicable law, the parties hereby waive any provision of law which
renders  any  provisions  hereof  prohibited  or  unenforceable  in any respect.

          (i)     Further Assurances.  The parties shall execute and deliver all
                  ------------------
such  further  instruments  and documents and take all such other actions as may
reasonably  be required to carry out the transactions contemplated hereby and to
evidence  the  fulfillment  of  the  agreements  herein  contained.

          (j)     Entire  Agreement.  This  Agreement is intended by the parties
                  -----------------
as  a  final  expression  of  their  agreement and intended to be a complete and
exclusive  statement of the agreement and understanding of the parties hereto in
respect  of  the subject matter contained herein.  This Agreement supersedes all
prior  agreements  and  understandings  between the parties with respect to such
subject  matter.

          (k)     Governing  Law; Consent to Jurisdiction; Waiver of Jury Trial.
                  -------------------------------------------------------------
This  Agreement  shall  be  governed  by,  and construed in accordance with, the
internal  laws  of  the  State  of  Georgia  without regard to the choice of law
principles  thereof.  Each  of  the  parties  hereto  irrevocably submits to the
exclusive  jurisdiction  of the courts of the State of Georgia located in Fulton
County  for  the purpose of any suit, action, proceeding or judgment relating to
or  arising  out  of  this  Agreement  and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served  on  each  party  hereto anywhere in the world by the same methods as are
specified  for  the giving of notices under this Agreement.  Each of the parties
hereto  irrevocably  consents  to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court.  Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action  or  proceeding  brought  in such courts and irrevocably waives any claim
that  any  such  suit,  action  or proceeding brought in any such court has been
brought  in  an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT
TO  REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS  THAT  COUNSEL  HAS  BEEN  CONSULTED  SPECIFICALLY AS TO THIS WAIVER.

                                      - 9 -
<PAGE>
     IN  WITNESS  WHEREOF,  the  parties  have executed this Agreement or caused
their  duly  authorized  officers to execute this Agreement as of the date first
above  written.

The  Company:                           CHARYS  HOLDING  COMPANY,  INC.

                                        By:
                                           --------------------------------
                                          Name:
                                          Title:

Lumbermens:                             LUMBERMENS  MUTUAL  CASUALTY  COMPANY

                                        By:
                                           --------------------------------
                                          Name:
                                          Title:

                                     - 10 -
<PAGE>
                                                                       Exhibit A
                                                                       ---------

                              PLAN OF DISTRIBUTION

     The  selling  stockholders, which as used herein includes donees, pledgees,
transferees  or  other  successors-in-interest selling shares of common stock or
interests  in  shares of common stock received after the date of this prospectus
from  a selling stockholder as a gift, pledge, partnership distribution or other
transfer,  may, from time to time, sell, transfer or otherwise dispose of any or
all  of  their  shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in  private  transactions.  These  dispositions  may  be  at  fixed  prices,  at
prevailing  market  prices  at  the  time  of  sale,  at  prices  related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated  prices.

     The  selling  stockholders may use any one or more of the following methods
when  disposing  of  shares  or  interests  therein:

     -  ordinary  brokerage  transactions  and  transactions  in  which  the
broker-dealer  solicits  purchasers;

     -  block  trades in which the broker-dealer will attempt to sell the shares
as  agent,  but  may  position and resell a portion of the block as principal to
facilitate  the  transaction;

     - purchases by a broker-dealer as principal and resale by the broker-dealer
for  its  account;

     -  an  exchange distribution in accordance with the rules of the applicable
exchange;

     -  privately  negotiated  transactions;

     -  short  sales effected after the date the registration statement of which
this  Prospectus  is  a  part  is  declared  effective  by  the  SEC;

     -  through  the  writing  or  settlement  of  options  or  other  hedging
transactions,  whether  through  an  options  exchange  or  otherwise;

     -  broker-dealers  may  agree  with  the  selling  stockholders  to  sell a
specified  number  of  such  shares  at  a  stipulated  price  per  share;  or

     -  a  combination  of  any  such  methods  of  sale.

     The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties  may offer and sell the shares of common stock, from time to time, under
this  prospectus,  or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act amending the list of selling
stockholders  to include the pledgee, transferee or other successors in interest
as  selling  stockholders  under this prospectus.  The selling stockholders also
may  transfer  the  shares

                                     - 11 -
<PAGE>
of  common stock in other circumstances, in which case the transferees, pledgees
or  other  successors  in  interest  will  be  the selling beneficial owners for
purposes  of  this  prospectus.

     In  connection  with the sale of our common stock or interests therein, the
selling  stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which  may in turn engage in short sales of the
common  stock  in  the course of hedging the positions they assume.  The selling
stockholders  may  also  sell shares of our common stock short and deliver these
securities  to  close  out  their  short positions, or loan or pledge the common
stock  to  broker-dealers  that  in turn may sell these securities.  The selling
stockholders  may  also  enter  into  option  or  other  transactions  with
broker-dealers  or  other  financial institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution  of  shares offered by this prospectus, which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus  (as  supplemented  or  amended  to  reflect  such  transaction).

     The  aggregate  proceeds  to  the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any.  Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole  or  in part, any proposed purchase of common stock to be made directly or
through  agents.  We  will  not  receive any of the proceeds from this offering.
Upon  any  exercise of the warrants by payment of cash, however, we will receive
the  exercise  price  of  the  warrants.

     The  selling stockholders also may resell all or a portion of the shares in
open  market  transactions in reliance upon Rule 144 under the Securities Act of
1933,  provided  that  they meet the criteria and conform to the requirements of
that  rule.

     The  selling  stockholders  and  any underwriters, broker-dealers or agents
that  participate  in  the  sale of the common stock or interests therein may be
"underwriters"  within  the meaning of Section 2(11) of the Securities Act.  Any
discounts,  commissions,  concessions  or  profit they earn on any resale of the
shares  may  be underwriting discounts and commissions under the Securities Act.
Selling  stockholders who are "underwriters" within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the  Securities  Act.

     To  the  extent  required,  the  shares of our common stock to be sold, the
names  of  the  selling  stockholders, the respective purchase prices and public
offering  prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an  accompanying  prospectus  supplement  or,  if  appropriate, a post-effective
amendment  to  the  registration  statement  that  includes  this  prospectus.

     In  order to comply with the securities laws of some states, if applicable,
the  common  stock may be sold in these jurisdictions only through registered or
licensed  brokers  or dealers.  In addition, in some states the common stock may
not  be sold unless it has been registered or qualified for sale or an exemption
from  registration  or  qualification  requirements is available and is complied
with.

                                     - 12 -
<PAGE>
     We  have  advised the selling stockholders that the anti-manipulation rules
of  Regulation  M  under  the  Exchange  Act may apply to sales of shares in the
market  and  to the activities of the selling stockholders and their affiliates.
In addition, to the extent applicable we will make copies of this prospectus (as
it  may  be  supplemented or amended from time to time) available to the selling
stockholders  for the purpose of satisfying the prospectus delivery requirements
of the Securities Act.  The selling stockholders may indemnify any broker-dealer
that  participates  in  transactions  involving  the  sale of the shares against
certain  liabilities,  including  liabilities  arising under the Securities Act.

     We  have  agreed to indemnify the selling stockholders against liabilities,
including  liabilities  under  the  Securities  Act  and  state securities laws,
relating  to  the  registration  of  the  shares  offered  by  this  prospectus.

     We  have  agreed  with  the  selling  stockholders to keep the registration
statement  of  which  this  prospectus  constitutes  a  part effective until the
earlier  of  (1)  such time as all of the shares covered by this prospectus have
been  disposed  of pursuant to and in accordance with the registration statement
or  (2)  the date on which the shares may be sold pursuant to Rule 144(k) of the
Securities  Act.Exhibit 10.1

    
      
        

      

    

     

    Exhibit
      10.1

    
       

      
         

         

        AMENDED
          AND RESTATED

        

        ASSET
          PURCHASE AGREEMENT

        

        

        BY
          AND AMONG

        

        

        SENTINEL
          OPERATING, L.P.

        

        

        TIDEL
          TECHNOLOGIES, INC.

        

        

        AND

        

        

        TIDEL
          ENGINEERING, L.P.

        

        

        DATED
          AS OF JUNE 9, 2006 

         

         

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	
                  §1.
                    Definitions.

                	
                  4

                
	 	 	 
	
                  §2.
                    Basic Transaction.

                	
                  11

                
	
                  (a)
                    

                	
                  Purchase
                    and Sale of Assets.

                	
                  11

                
	
                  (b)
                    

                	
                  Assumption
                    of Liabilities.

                	
                  11

                
	
                  (c)
                    

                	
                  Purchase
                    Price.

                	
                  11

                
	
                  (d)
                    

                	
                  Closing.

                	
                  11

                
	
                  (e)
                    

                	
                  Deliveries
                    at Closing.

                	
                  12

                
	
                  (f)
                    

                	
                  December
                    Balance Sheet.

                	
                  12

                
	
                  (g)
                    

                	
                  Cash
                    Adjustments.

                	
                  12

                
	
                  (h)
                    

                	
                  Purchase
                    Price Allocation.

                	
                  12

                
	 	 	 
	
                  §3.
                    Sellers’ Representations and Warranties.

                	
                  13

                
	
                  (a)
                    

                	
                  Organization.

                	
                  13

                
	
                  (b)
                    

                	
                  Authorization
                    of Transaction.

                	
                  13

                
	
                  (c)

                	
                  Non-contravention.

                	
                  14

                
	
                  (d)

                	
                  Brokers’
                    Fees and Fairness Opinion.

                	
                  14

                
	
                  (e)

                	
                  Title
                    to Assets.

                	
                  15

                
	
                  (f)

                	
                  Subsidiaries.

                	
                  15

                
	
                  (g)

                	
                  SEC
                    Filings and Financial Statements.

                	
                  15

                
	
                  (h)

                	
                  Events
                    Subsequent to Most Recent Balance Sheet.

                	
                  16

                
	
                  (i)

                	
                  Undisclosed
                    Liabilities.

                	
                  18

                
	
                  (j)

                	
                  Legal
                    Compliance.

                	
                  18

                
	
                  (k)

                	
                  Tax
                    Matters.

                	
                  18

                
	
                  (l)

                	
                  Real
                    Property.

                	
                  19

                
	
                  (m)

                	
                  Intellectual
                    Property.

                	
                  21

                
	
                  (n)

                	
                  Tangible
                    Assets.

                	
                  23

                
	
                  (o)

                	
                  Inventory.

                	
                  23

                
	
                  (p)

                	
                  Contracts.

                	
                  24

                
	
                  (q)

                	
                  Notes
                    and Accounts Receivable.

                	
                  25

                
	
                  (r)

                	
                  Powers
                    of Attorney.

                	
                  25

                
	
                  (s)

                	
                  Insurance.

                	
                  25

                
	
                  (t)

                	
                  Litigation.

                	
                  25

                
	
                  (u)

                	
                  Product
                    Warranty.

                	
                  25

                
	
                  (v)

                	
                  Product
                    Liability.

                	
                  26

                
	
                  (w)

                	
                  Employees.

                	
                  26

                
	
                  (x)

                	
                  Employee
                    Benefit Plans.

                	
                  27

                
	
                  (y)

                	
                  Guaranties.

                	
                  28

                
	
                  (z)

                	
                  Environmental,
                    Health, and Safety Matters.

                	
                  28

                
	
                  (aa)

                	
                  Certain
                    Business Relationships.

                	
                  29

                
	
                  (bb)

                	
                  Customers
                    and Suppliers.

                	
                  29

                
	 	 	 
	
                  §4.
                    Buyer’s Representations and Warranties.

                	
                  29

                
	
                  (a)

                	
                  Organization
                    of Buyer.

                	
                  30

                
	
                  (b)

                	
                  Authorization
                    of Transaction.

                	
                  30

                
	
                  (c)

                	
                  Non-contravention.

                	
                  30

                
	
                  (d)

                	
                  Brokers’
                    Fees.

                	
                  30

                
	 	 	 
	
                  §5.
                    Pre-Closing Covenants.

                	
                  30

                
	
                  (a)

                	
                  General.

                	
                  30

                
	
                  (b)

                	
                  Notices
                    and Consents.

                	
                  31

                
	
                  (c)

                	
                  Operation
                    of Business.

                	
                  31

                
	
                  (d)

                	
                  Preservation
                    of Business.

                	
                  31

                
	
                  (e)

                	
                  Full
                    Access.

                	
                  31

                
	
                  (f)

                	
                  Notice
                    of Developments.

                	
                  31

                
	
                  (g)

                	
                  Exclusivity.

                	
                  31

                

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	
                  (h)

                	
                  Maintenance
                    of Acquired Assets.

                	
                  33

                
	
                  (i)

                	
                  Parent
                    Stockholders Meeting

                	
                  33

                
	
                  (j)

                	
                  Name
                    Change.

                	
                  34

                
	
                  (k)

                	
                  Perfection
                    of Ownership of Intellectual Property.

                	
                  34

                
	
                  (l)

                	
                  Maintenance
                    of Leased Real Property.

                	
                  34

                
	
                  (m)

                	
                  Leases.

                	
                  34

                
	
                  (n)

                	
                  Claim.

                	
                  34

                
	 	 	 
	
                  §6.
                    Post-Closing Covenants.

                	
                  34

                
	
                  (a)

                	
                  General.

                	
                  34

                
	
                  (b)

                	
                  Litigation
                    Support.

                	
                  35

                
	
                  (c)

                	
                  Transition.

                	
                  35

                
	
                  (d)

                	
                  Confidentiality.

                	
                  35

                
	
                  (e)

                	
                  Covenant
                    Not to Compete or Solicit.

                	
                  35

                
	
                  (f)

                	
                  Defense
                    of CSS Claim.

                	
                  36

                
	
                  (g)

                	
                  Indemnification.

                	
                  36

                
	
                  (h)

                	
                  Directors’
                    and Officers’ Insurance.

                	
                  37

                
	
                  (i)

                	
                  Employee
                    Non-competition and Confidentiality Agreements.

                	
                  37

                
	
                  (j)

                	
                  Bank
                    Accounts.

                	
                  37

                
	 	 	 
	
                  §7.
                    Conditions to Obligation to Close.

                	
                  38

                
	
                  (a)

                	
                  Conditions
                    to Buyer’s Obligation.

                	
                  38

                
	
                  (b)

                	
                  Conditions
                    to Sellers’ Obligation.

                	
                  40

                
	 	 	 
	
                  §8.
                    Survival and Termination.

                	
                  40

                
	
                  (a)

                	
                  Survival
                    of Representations and Warranties.

                	
                  41

                
	
                  (b)

                	
                  Termination
                    of Agreement.

                	
                  41

                
	
                  (c)

                	
                  Effect
                    of Termination.

                	
                  41

                
	 	 	 
	
                  §9.
                    Miscellaneous.

                	
                  41

                
	
                  (a)

                	
                  Press
                    Releases and Public Announcements.

                	
                  41

                
	
                  (b)

                	
                  No
                    Third-Party Beneficiaries.

                	
                  42

                
	
                  (c)

                	
                  Entire
                    Agreement.

                	
                  42

                
	
                  (d)

                	
                  Succession
                    and Assignment.

                	
                  42

                
	
                  (e)

                	
                  Counterparts.

                	
                  42

                
	
                  (f)

                	
                  Headings.

                	
                  42

                
	
                  (g)

                	
                  Notices.

                	
                  42

                
	
                  (h)

                	
                  Governing
                    Law.

                	
                  43

                
	
                  (i)

                	
                  Amendments
                    and Waivers.

                	
                  43

                
	
                  (j)

                	
                  Severability.

                	
                  44

                
	
                  (k)

                	
                  Expenses.

                	
                  44

                
	
                  (l)

                	
                  Construction.

                	
                  44

                
	
                  (m)

                	
                  Incorporation
                    of Exhibits and Schedules.

                	
                  45

                
	
                  (n)

                	
                  Specific
                    Performance.

                	
                  45

                
	
                  (o)

                	
                  Submission
                    to Jurisdiction.

                	
                  45

                
	
                  (p)

                	
                  Tax
                    Matters.

                	
                  45

                
	
                  (q)

                	
                  Tax
                    Disclosure Authorization.

                	
                  45

                

        

         

         

      

      Exhibit
        A—Forms of Assignments

      Exhibit
        B—Form of Opinion of Sellers’ Counsel

      Exhibit
        C—Target Adjusted December 31, 2005 Balance Sheet

      

      Disclosure
        Schedule—Exceptions to Sellers’ Representations and Warranties

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      AMENDED
        AND RESTATED ASSET PURCHASE AGREEMENT

      

      This
        Amended and Restated Asset Purchase Agreement (this “Agreement”)
        is
        entered into as of June 9, 2006, by and among Sentinel Operating, L.P., a
        Texas
        limited partnership (“Buyer”),
        Tidel
        Technologies, Inc., a Delaware corporation (“Parent”),
        and
        Tidel Engineering, L.P., a Delaware limited partnership (“Target”,
        and
        collectively with Parent, “Sellers”,
        and
        individually, a “Seller”).
        Buyer, Parent and Target are referred to collectively herein as the
“Parties”
and
        individually as a “Party”.

      

      RECITALS

      

      WHEREAS,
        Buyer, Parent and Target entered into that certain Asset Purchase Agreement
        dated as of January 12, 2006 (the “Original
        Agreement”)
        which
        contemplated a transaction in which Buyer would purchase all of the Acquired
        Assets (and assume only the Assumed Liabilities) of Division in consideration
        for the Purchase Price; and

      

      WHEREAS,
        pursuant to Section 9(i) of the Original Agreement, the Parties desire to
        enter
        into this Agreement to amend and restate the Original Agreement. 

      

      NOW,
        THEREFORE, in consideration of the premises and the mutual promises herein
        made,
        and in consideration of the representations, warranties, and covenants herein
        contained, the Parties agree as follows:

      

      AGREEMENT

      

      §1.     
        Definitions.  

      

       “Acquired
        Assets”
means
        all right, title, and interest in and to all of the assets constituting
        Division, including
        all of
        the assets of Target and Division’s (a) tangible personal property including,
        but not limited to, computers, servers, office equipment, machinery, equipment,
        inventories of raw materials and supplies, manufactured and purchased parts,
        goods in process and finished goods, furniture, automobiles, trucks, tractors,
        trailers, tools, jigs, and dies, (b) Intellectual Property (including all
        rights
        of Sellers to the names “Tidel” and “Sentinel”), goodwill associated therewith,
        trademarks, service marks and all other marks (whether registered or
        unregistered), licenses and sublicenses granted and obtained with respect
        thereto, and rights thereunder, remedies against infringements thereof, and
        rights to protection of interests therein under the laws of all jurisdictions,
        (c) leases, subleases, and rights thereunder, (d) agreements, contracts,
        indentures, mortgages, instruments, Liens, guaranties, other similar
        arrangements, and rights thereunder, (e) accounts, notes, and other receivables,
        (f) securities, (g) claims, deposits, prepayments, refunds, causes of action,
        choses in action, rights of recovery, rights of set-off, and rights of
        recoupment (including any such item relating to the payment of Taxes), (h)
        franchises, approvals, permits, licenses, orders, registrations, certificates,
        variances, and similar rights obtained from governments and governmental
        agencies, (i) books, records, ledgers, files, documents, correspondence,
        lists,
        plats, architectural plans, drawings, and specifications, creative materials,
        advertising and promotional materials, studies, reports, and other printed
        or
        written materials, and (j) the Key Man Policy; provided,
        however,
        that
        the Acquired Assets shall not include (i) the Excluded Assets, (ii) the
        organizational documents and charters, qualifications to conduct business
        as a
        foreign entity, arrangements with registered agents relating to foreign
        qualifications, taxpayer and other identification numbers, seals, minute
        books,
        stock transfer books, blank stock certificates, and other documents relating
        to
        the organization, maintenance, and existence of Sellers’ legal entities, (iii)
        any of the rights of Sellers under this Agreement (or under any side agreement
        between Sellers and Buyer entered into on or after the date of this Agreement),
        or (iv) commercial liability insurance contracts and policies. 

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      “Acquisition
        Proposal”
means,
        other than the transactions contemplated by this Agreement or the NCR Purchase
        Agreement or the exercise of warrants or conversion of debt by Laurus Master
        Fund, Ltd. and its Affiliates pursuant to the Voting Agreements, any offer,
        proposal or inquiry relating to, or any third party indication of interest
        in,
        (a) any acquisition or purchase, direct or indirect, of any assets of Target
        or
        Division or over five percent (5%) of any class of equity or voting securities
        of Parent or any equity or voting securities of any Subsidiaries of Parent
        other
        than AnyCard International, Inc., (b) any tender offer (including a self-tender
        offer) or exchange offer that, if consummated, would result in such third
        party’s beneficially owning five percent (5%) or more of any class of equity or
        voting securities of Parent or any equity or voting securities of any
        Subsidiaries of Parent other than AnyCard International, Inc., (c) a merger,
        consolidation, share exchange, business combination, sale of substantially
        all
        the assets, reorganization, recapitalization, liquidation, dissolution or
        other
        similar transaction involving Sellers or any Subsidiaries of Parent other
        than
        AnyCard International, Inc., or (d) any other transaction the consummation
        of
        which could reasonably be expected to impede, interfere with, prevent or
        materially delay the transaction contemplated hereby or that could reasonably
        be
        expected to dilute materially the benefits to Buyer of the transactions
        contemplated hereby.

      

      "Adverse
        Consequences"
        means
        all damages, penalties, fines, costs, reasonable amounts paid in settlement,
        losses, expenses, and fees, including court costs and reasonable attorneys'
        fees
        and expenses.

      

      “Affiliate”
has
        the
        meaning set forth in Rule 12b-2 of the regulations promulgated under the
        Securities Exchange Act.

      

      “Affiliated
        Group”
means
        any affiliated group within the meaning of Code §1504(a) or any similar group
        defined under a similar provision of state, local, or foreign law.

      

      “Agreement”
has
        the
        meaning set forth in the preface above.

      

      “Amendment”
has
        the
        meaning set forth in §5(i)(i) below.

      

      “Asbestos
        Liabilities”
means
        any Liabilities arising from, relating to, or based on the presence or alleged
        presence of asbestos or asbestos-containing materials in any product or item
        designed, manufactured, sold, marketed, installed, stored, transported, handled,
        or distributed at any time, or otherwise based on the presence or alleged
        presence of asbestos or asbestos-containing materials at any property or
        facility or in any structure, including without limitation, any Liabilities
        arising from, relating to or based on any personal or bodily injury or
        illness.

      

      “Assumed
        Liabilities”
means
        any Liabilities set forth in §1of the Disclosure Schedule under the heading of
“Assumed Liabilities” and any Liability of Sellers in connection with issued and
        outstanding checks drawn on the Bank Accounts that have not cleared the Bank
        Accounts prior to the closing of the Bank Accounts pursuant to §2(g)(ii) below;
provided,
        however,
        that
        the Assumed Liabilities shall not include (a) any Liability of Sellers for
        Taxes
        (with respect to Division or otherwise), (b) any Liability of Sellers for
        income, transfer, sales, use, and other Taxes arising in connection with
        the
        consummation of the transactions contemplated hereby (including any income
        Taxes
        arising because of Sellers transferring the Acquired Assets and Seller’s
        obligations under §9(k) below with respect to Taxes), (c) any Liability of
        Sellers for the unpaid Taxes of any Person under Treasury Regulation §1.1502-6
        (or any similar provision of state, local, or foreign law), as a transferee
        or
        successor, by contract or otherwise, (d) any obligation of Sellers to indemnify
        any Person (including any of partners of Target or stockholders of Parent)
        by
        reason of the fact that such Person was a director, officer, employee, manager,
        partner or agent of Sellers or any of their respective Subsidiaries or was
        serving at the request of any such entity as a partner, trustee, director,
        officer, employee, or agent of another entity (whether such indemnification
        is
        for judgments, damages, penalties, fines, costs, amounts paid in settlement,
        losses, expenses, or otherwise and whether such indemnification is pursuant
        to
        any statute, charter document, bylaw, agreement, or otherwise), (e) any
        Liability of Sellers for costs and expenses incurred in connection with this
        Agreement and the transactions contemplated hereby, (f) any Liability or
        obligation of Sellers under this Agreement (or under any side agreement between
        Sellers and Buyer entered into on or after the date of this Agreement), (g)
        any
        Liabilities for Leases, other than Liabilities for Leases specifically
        identified in §1of the Disclosure Schedule, (h) other than the Termination
        Payments, any Liabilities for payroll, withholdings tax, severance or any
        other
        payments or compensation owed to employees of Sellers or any Subsidiaries
        of
        Parent including any payments that are not deductible under Code §280G, and (i)
        any Liabilities arising out of Employee Benefit Plans, Employee Pension Plans
        or
        Employee Welfare Benefit Plans. 

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      “Bank
        Account Amounts”
has
        the
        meaning set forth in §2(g)(ii) below.

      

      “Bank
        Accounts”
has
        the
        meaning set forth in §2(g)(ii) below.

      

      “Basis”
means
        any past or present fact, situation, circumstance, status, condition, activity,
        practice, plan, occurrence, event, incident, action, failure to act, or
        transaction that forms or could form the basis for any specified
        consequence.

      

      “Buyer”
has
        the
        meaning set forth in the preface above. 

      

      “Cash
        Adjustment”
has
        the
        meaning set forth in §2(g)(i) below.

      

      “Closing”
has
        the
        meaning set forth in §2(d) below.

      

      “Closing
        Date”
has
        the
        meaning set forth in §2(d) below.

      

      “COBRA”
means
        the requirements of Part 6 of Subtitle B of Title I of ERISA and Code §4980B and
        of any similar state law.

      

      “Code”
means
        the Internal Revenue Code of 1986, as amended.

      

      “Confidential
        Information”
means
        any information concerning the business and affairs of Division that is not
        already generally available to the public.

      

      “CSS
        Claim”
has
        the
        meaning set forth in §3(m)(ii) below.

      

      “Disclosure
        Schedule”
has
        the
        meaning set forth in §3 below.

      

      “Division”
means
        Sellers’ electronic cash security systems business, consisting of (a) timed
        access cash controllers (b) the Sentinel products, (c) the servicing,
        maintenance and repair of the timed access cash controllers or Sentinel products
        and (d) all other assets and business operations associated with the
        foregoing.

      

      “Division
        Subsidiary”
has
        the
        meaning set forth in §3(f) below.

      

      “Draft
        Allocation”
has
        the
        meaning set forth in §2(h)(i) below.

      

      “Employee
        Benefit Plan”
means
        any “employee benefit plan” (as such term is defined in ERISA §3(3)) and any
        other employee benefit plan, program or arrangement of any kind.

      

      “Employee
        Pension Benefit Plan”
has
        the
        meaning set forth in ERISA §3(2).

      

      “Employee
        Welfare Benefit Plan”
has
        the
        meaning set forth in ERISA §3(1).

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      “Employment
        Agreements”
means
        (a) the Employment Agreement by and between Target and Mark Levenick dated
        January 1, 2000, (b) the Employment Agreement by and between Target and M.
        Flynt
        Moreland dated January 1, 2000, (c) the Employment Agreement by and between
        Target and Troy D. Richard dated June 26, 2002, and (d) the Employment Agreement
        by and between Target and Robert M. Gutierrez dated January 1,
        2000.

      

      “Environmental,
        Health, and Safety Requirements”
shall
        mean, as amended and as now and hereafter in effect, all federal, state,
        local,
        and foreign statutes, regulations, ordinances, and other provisions having
        the
        force or effect of law, all judicial and administrative orders and
        determinations, all contractual obligations, and all common law concerning
        public health and safety, worker health and safety, pollution, or protection
        of
        the environment, including, without limitation, all those relating to the
        presence, use, production, generation, handling, transportation, treatment,
        storage, disposal, distribution, labeling, testing, processing, discharge,
        release, threatened release, control, or cleanup of any hazardous materials,
        substances, or wastes, chemical substances or mixtures, pesticides, pollutants,
        contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
        polychlorinated biphenyls, noise, or radiation. 

      

      “ERISA”
means
        the Employee Retirement Income Security Act of 1974, as amended.

      

      “ERISA
        Affiliate”
means
        each entity that is treated as a single employer with Sellers for purposes
        of
        Code §414. 

      

      “Excluded
        Assets”
means
        any of Sellers’ (a) cash and cash equivalents on hand or on deposit in banks,
        (including, without limitation, certificates of deposit, commercial paper,
        treasury bills, and money market accounts), marketable securities, or
        inter-company or inter-affiliate accounts, and any similar accounts, (b)
        life
        insurance contracts or policies (other than the Key Man Policy) and any
        insurance proceeds or insurance claims made by Sellers relating to Acquired
        Assets that are repaired, replaced or restored to substantially the same
        or an
        improved condition as compared to their respective conditions prior to the
        casualty by Sellers prior to the Closing and conveyed to Buyer hereunder;
        (c)
        promissory notes, amounts due from employees, bonds, letters of credit,
        certificates of deposit, other similar items, and any cash surrender value
        in
        regard thereto; (d) any Employee Benefit Plan, Employee Pension Benefit Plan
        and
        any Employee Welfare Benefit Plan; (e) all tax returns and supporting materials,
        all original financial statements and supporting materials, all books and
        records that Sellers are required by law to retain, and all records relating
        to
        the sale of the Acquired Assets; (f) any interest in and to any refunds or
        overpayments of federal, or local franchise, income, or other taxes for periods
        prior to the Closing Date; (g) all claims, rights and interest in and to
        any
        refunds of federal, state or local franchise, income or other taxes or fees
        for
        any period prior to the Closing Date; (h) any contract, lease, or agreement
        other than the agreements set forth on §1 of the Disclosure Schedule (excluding
        the Employment Agreements, which are Excluded Assets); (i) duplicate copies
        of
        the books and records necessary to enable Sellers to file their tax returns
        and
        reports; and (j) assets to be sold pursuant to the NCR Purchase
        Agreement.

      

      “Expenses”
has
        the
        meaning set forth in §9(k)(ii) below.

      

      “Fiduciary”
has
        the
        meaning set forth in ERISA §3(21).

      

      “Final
        Allocation”
has
        the
        meaning set forth in §2(h)(ii) below.

      

      “Financial
        Statements”
has
        the
        meaning set forth in §3(g)(ii)(A) below.

      

      “GAAP”
means
        United States generally accepted accounting principles as in effect from
        time to
        time, consistently applied.

      

      “Improvements”
has
        the
        meaning set forth in §3(l)(iv) below.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      “Indemnity
        Period”
has
        the
        meaning set forth in §6(g)(i) below.

      

      “Intellectual
        Property”
means
        all of the following used by, or relating to, Division in any jurisdiction
        throughout the world: (a) all inventions (whether patentable or unpatentable
        and
        whether or not reduced to practice), all improvements thereto, and all patents,
        patent applications, and patent disclosures, together with all reissuances,
        continuations, continuations-in-part, revisions, extensions, and reexaminations
        thereof, (b) all trademarks, service marks, trade dress, logos, slogans,
        trade
        names, corporate names, Internet domain names and subdomains (including
“tidel.com”), and rights in telephone numbers, together with all translations,
        adaptations, derivations, and combinations thereof and including all goodwill
        associated therewith, and all applications, registrations, and renewals in
        connection therewith, (c) all copyrightable works, all copyrights, and all
        applications, registrations, and renewals in connection therewith, (d) all
        mask
        works and all applications, registrations, and renewals in connection therewith,
        (e) all trade secrets and confidential business information (including ideas,
        research and development, know-how, formulas, compositions, manufacturing
        and
        production processes and techniques, technical data, designs, drawings,
        specifications, customer and supplier lists, pricing and cost information,
        and
        business and marketing plans and proposals), (f) all computer software, firmware
        and applications (including source code, executable code, data, databases,
        and
        related documentation), (g) all advertising and promotional materials, (h)
        all
        other proprietary rights, and (i) all copies and tangible embodiments thereof
        (in whatever form or medium).

      

      “Key
        Man Policy”
means
        Sellers’ key man life insurance policy insuring the life of Mark K.
        Levenick.

      

      “Knowledge”
means
        actual knowledge after reasonable investigation. 

      

      “Leased
        Real Property”
means
        all leasehold or subleasehold estates and other rights to use or occupy any
        land, buildings, structures, improvements, fixtures, or other interest in
        real
        property held by Division.

      

      “Leases”
means
        all leases, subleases, licenses, concessions and other agreements (written
        or
        oral), including all amendments, extensions, renewals, guaranties, and other
        agreements with respect thereto, pursuant to which Division holds any Leased
        Real Property, including the right to all security deposits and other amounts
        and instruments deposited by or on behalf of Sellers thereunder.

      

      “Liability”
means
        any liability (whether known or unknown, whether asserted or unasserted,
        whether
        absolute or contingent, whether accrued or unaccrued, whether liquidated
        or
        unliquidated, and whether due or to become due), including any liability
        for
        Taxes.

      

      “Lien”
means
        any mortgage, pledge, lien, charge, conditional sales contract, interests
        of
        third parties, attachment, hypothecation, liability, judgment, easement,
        other
        security interest or any encumbrance of any kind.

      

      “Material
        Adverse Effect”
or
        “Material
        Adverse Change”
means
        any effect or change that would be (or could be reasonably expected to be)
        materially adverse to the business, assets, condition (financial or otherwise),
        operating results, operations, or business prospects of Sellers or Division
        (regardless of whether or not such adverse effect or change can be or has
        been
        cured at any time or whether Buyer has knowledge of such effect or change
        on the
        date hereof); provided,
        however,
        that the
        financial condition, operating results or business prospects of Sellers or
        Division of which Buyer has knowledge as of the date of this Agreement shall
        not
        be deemed a Material Adverse Effect or Material Adverse Change.

      

      “Most
        Recent Balance Sheet”
means
        the balance sheet contained in the quarterly report filed by Parent on Form
        10-Q
        for the quarter ended December31, 2005.

      

      “Motion”
has
        the
        meaning set forth in §5(i)(i) below.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      “NCR
        Purchase Agreement”
means
        the Asset Purchase Agreement entered into on February 19, 2005 by and among
        NCR
        EasyPoint LLC (f/k/a NCR Texas LLC), NCR Corporation, Parent and Target,
        as
        amended.

      

      “Non-Affiliated
        Directors”
means
        directors of Parent who are not Affiliates of Buyer.

      

      “Ordinary
        Course of Business”
means
        the ordinary course of business of Sellers and Division consistent with past
        custom and practice (including with respect to quantity and
        frequency).

      

      “Original
        Agreement”
has
        the
        meaning set forth in the recitals above.

      

      “Owned
        Real Property”
means
        all land, together with all buildings, structures, improvements and fixtures
        located thereon, including all electrical, mechanical, plumbing and other
        building systems, fire protection, security and surveillance systems,
        telecommunications, computer wiring, and cable installations, utility
        installations, water distribution systems, and landscaping, together with
        all
        easements and other rights and interests appurtenant thereto (including air,
        oil, gas, mineral, and water rights), owned by Division or Sellers.

      

      “Parent”
has
        the
        meaning set forth in the preface above.

      

      “Parent
        Indemnified Parties”
has
        the
        meaning set forth in §6(g)(i) below.

      

      “Parent
        Payment Event”
means
        (a) the termination of this Agreement pursuant to §8(b)(iv) or §8(b)(v), or (b)
        Sellers consummate, publicly announce, or execute documentation providing
        for
        any Acquisition Proposal; provided
        that
        such consummation, announcement or execution occurs prior to the 18 month
        anniversary of the date of the termination of this Agreement pursuant to
        §8(b)(ii) or §8(b)(iii)(B).

      

      “Parent
        Proxy Statement”
has
        the
        meaning set forth in §3(g)(i)(C) below.

      

      “Parent
        Stockholders Meeting”
has
        the
        meaning set forth in §5(i)(i) below.

      

      “Party”
has
        the
        meaning set forth in the preface above.

      

      “Patent
        Agencies”
has
        the
        meaning set forth in §5(k) below.

      

      “Person”
means
        an individual, a partnership, a corporation, a limited liability company,
        an
        association, a joint stock company, a trust, a joint venture, an unincorporated
        organization, any other business entity, or a governmental entity (or any
        department, agency, or political subdivision thereof).

      

      “Prohibited
        Transaction”
has
        the
        meaning set forth in ERISA §406 and Code §4975.

      

      “Purchase
        Price”
has
        the
        meaning set forth in §2(f)(i) below.

      

      “Real
        Property Laws”
has
        the
        meaning set forth in §3(l)(vi) below.

      

      “Real
        Property Permits”
has
        the
        meaning set forth in §3(l)(vii) below.

      

      “Reimbursement
        Amount”
has
        the
        meaning set forth in §9(k)(ii) below.

      

      “Representatives”
has
        the
        meaning set forth in §5(g)(i) below

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      “SEC”
means
        the United States Securities and Exchange Commission. 

      

      “SEC
        Documents”
has
        the
        meaning set forth in §3(g)(i)(A) below.

      

      “Securities
        Act”
means
        the Securities Act of 1933, as amended.

      

      “Securities
        Exchange Act”
means
        the Securities Exchange Act of 1934, as amended.

      

      “Stockholder
        Approval”
has
        the
        meaning set forth in §7(a)(xvii) below.

      

      “Subsidiary”
means,
        with respect to any Person, any corporation, limited liability company,
        partnership, association, or business entity of which (a) if a corporation,
        a
        majority of the total voting power of shares of stock entitled (without regard
        to the occurrence of any contingency) to vote in the election of directors,
        managers, or trustees thereof is at the time owned or controlled, directly
        or
        indirectly, by that Person or one or more of the other Subsidiaries of that
        Person or a combination thereof or (b) if a limited liability company,
        partnership, association, or other business entity (other than a corporation),
        a
        majority of the partnership or other similar ownership interests thereof
        is at
        the time owned or controlled, directly or indirectly, by that Person or one
        or
        more Subsidiaries of that Person or a combination thereof and for this purpose,
        a Person or Persons own a majority ownership interest in such a business
        entity
        (other than a corporation) if such Person or Persons shall be allocated a
        majority of such business entity’s gains or losses or shall be or control any
        managing director or general partner of such business entity (other than
        a
        corporation). The term “Subsidiary”
shall
        include all Subsidiaries of such Subsidiary.

      

      “Superior
        Proposal”
means
        any bona fide, unsolicited written Acquisition Proposal on terms that a majority
        of the Non-Affiliated Directors determine in good faith, after considering
        the
        written advice of the financial advisor and outside legal counsel to Parent’s
        board of directors, and taking into account all of the terms and conditions
        of
        the Acquisition Proposal, including any break-up fees, expense reimbursement
        provisions and conditions to consummation, are more favorable and provide
        greater value to all of the Parent’s stockholders than as provided under this
        Agreement and which is reasonably likely to be consummated on such terms
        and for
        which financing, to the extent required, is then fully committed.

      

      “Target”
has
        the
        meaning set forth in the preface above.

      

      “Tax”
or
        “Taxes”
means
        any federal, state, local, or foreign income, gross receipts, license, payroll,
        employment, excise, severance, stamp, occupation, premium, windfall profits,
        environmental (including taxes under Code §59A), customs duties, capital stock,
        franchise, profits, withholding, social security (or similar), unemployment,
        disability, real property, personal property, sales, use, transfer,
        registration, value added, alternative or add-on minimum, estimated, or other
        tax of any kind whatsoever, whether computed on a separate or consolidated,
        unitary or combined basis or in any other manner, including any interest,
        penalty, or addition thereto, whether disputed or not and including any
        obligation to indemnify or otherwise assume or succeed to the Tax liability
        of
        any other Person.

      

      “Tax
        Return”
means
        any return, declaration, report, claim for refund, or information return
        or
        statement relating to Taxes, including any schedule or attachment thereto,
        and
        including any amendment thereof.

      

      “Termination
        Payments”
means
        the payments to be made by Buyer at Closing on behalf of and as directed
        by
        Sellers as set forth by Sellers on §1 of the Disclosure Schedule under the
        heading of “Termination Payments” to be paid as consideration on behalf of and
        as directed by Sellers for termination of the Employment Agreements, but
        shall
        include only the obligation to make such payments and shall not include any
        other liabilities or obligations in connection therewith, including without
        limitation tax or withholding liabilities or obligations.

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      “Third
        Party”
means
        any Person as defined in §13(d) of the Securities Exchange Act, other than
        Parent, Target and their respective Subsidiaries and Affiliates.

      

      “Transaction
        Agreements”
has
        the
        meaning set forth in §3(b) below.

      

      “Treasury
        Regulations”
means
        the Treasury Regulations promulgated under the Code.

      

      “Voting
        Agreements”
means
        that certain Exercise and Conversion Agreement dated as of the date of this
        Agreement by and among Buyer, Sentinel Technologies, Inc., a Delaware
        corporation (“Sentinel
        Technologies”),
        Parent, and Laurus Master Fund, Ltd, a Cayman Islands company (“Laurus”);
        that
        certain Voting Agreement dated as of the date of this Agreement by and among
        Buyer, Sentinel Technologies, Parent, and Laurus; and that certain Voting
        Agreement dated as of the date of this Agreement by and among Buyer, Sentinel
        Technologies, Parent and the officers and directors of Parent.

      

      §2.
            
Basic
        Transaction. 

      

      (a)
        Purchase
        and Sale of Assets.  

      

      On
        and
        subject to the terms and conditions of this Agreement, Buyer agrees to purchase
        from Sellers, and Sellers agree to sell, transfer, convey, and deliver to
        Buyer,
        all of the Acquired Assets, free and clear of all Liens, at the Closing for
        the
        consideration specified below in this §2.

      

      (b)
        Assumption
        of Liabilities.  

      

      On
        and
        subject to the terms and conditions of this Agreement, Buyer agrees to assume
        and become responsible for only the Assumed Liabilities at the Closing. Buyer
        will not assume or have any responsibility, however, with respect to any
        Liability of Sellers or any Subsidiaries of Parent not included within the
        definition of Assumed Liabilities.

      

      (c)
        Purchase Price. 

      

      At
        the
        Closing, Buyer agrees to pay to Sellers a purchase price for the Acquired
        Assets
        calculated as set forth below in this §2(c), payable in cash by wire transfer or
        delivery of other immediately available funds (the “Purchase
        Price”).
        The
        Purchase Price shall be an amount equal to $15,500,000 (i) minus $100,000
        as
        consideration for Buyer’s potential liability in connection with the CSS Claim
        if the CSS Claim has not been dismissed pursuant to a final non-appealable
        court
        order prior to the Closing, and (ii) minus $1,629,968 representing the Target’s
        negative working capital at December 31, 2005; resulting in a final Purchase
        Price of $13,770,032. In addition, at the Closing Buyer shall pay the Cash
        Adjustment to Sellers and Sellers shall pay the Bank Account Amount to Buyer
        as
        set forth in Section 2(g) below.

      

      (d)
        Closing.  

      

      The
        closing of the transactions contemplated by this Agreement (the “Closing”)
        shall
        take place at the offices of Hensley Kim & Edgington, LLC, 1660 Lincoln
        Street, Suite 3050, Denver, Colorado 80264, commencing at 9:00 a.m. local
        time
        on the business day following the satisfaction or waiver of all conditions
        to
        the obligations of the Parties to consummate the transactions contemplated
        hereby (other than conditions with respect to actions the respective Parties
        will take at the Closing itself) and the determination of the Purchase Price
        pursuant to this §2 or such other date as the Parties may mutually determine
        (the “Closing
        Date”).

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      (e)
        Deliveries at Closing.  

      

      At
        the
        Closing, (i) Sellers will deliver to Buyer the various certificates,
        instruments, and documents referred to in §7(a) below; (ii) Buyer will deliver
        to Sellers the various certificates, instruments, and documents referred
        to in
§7(b) below; (iii) Sellers will execute, acknowledge (if appropriate), and
        deliver to Buyer (A) assignments (including Intellectual Property transfer
        documents) in the forms attached hereto as Exhibit A and (B) such other
        instruments of sale, transfer, conveyance, and assignment as Buyer and its
        counsel may reasonably request; (iv) Buyer will deliver to Sellers the Purchase
        Price and the Cash Adjustment; (v) Sellers shall deliver to Buyer the Bank
        Account Amount; and (vi) Buyer will make the Termination Payments.

      

      (f)
        December
        Balance Sheet.  

      

      The
        Parties agree that the balance sheet attached hereto as Exhibit C is an accurate
        balance sheet prepared in accordance with GAAP for the Target as of December
        31,
        2005, as adjusted to reflect assumptions and agreements of the Parties with
        respect to the Acquired Assets and Assumed Liabilities. 

      

       (g)
        Cash
        Adjustments. 

      

      (i)
        At
        the Closing, Buyer agrees to pay to Sellers the amount of cash Parent has
        provided to Target to operate since December 31, 2005 calculated as set forth
        below in this §2(g), payable in cash by wire transfer or delivery of other
        immediately available funds (the “Cash
        Adjustment”).
        The
        Cash Adjustment shall be an amount equal to $1,941,718 as the amount of Target’s
        cash on hand at December 31, 2005 (A) plus $467,000 advanced by Parent to
        Target
        in January 2006, and (B) plus $50,000 as an allocation to Seller of Target’s
        profits for the first fiscal quarter of 2006; resulting in a final Cash
        Adjustment of $2,458,718. 

      

      (ii)
        At
        the Closing, Sellers agree to close all of the Division’s bank accounts with JP
        Morgan Chase Bank, N.A., as well as all other accounts with any other banking
        or
        similar institutions (the “Bank
        Accounts”)
        and to
        pay to Buyer by wire transfer or delivery of other immediately available
        funds
        an amount equal to the amount of cash in the Bank Accounts as of the Closing
        (the “Bank
        Account Amount”).
        Buyer
        and Sellers shall jointly instruct the banks at which the Bank Accounts were
        located to honor all checks drawn on the Bank Accounts subsequent to the
        closing
        of the Bank Accounts with proceeds from the Buyer’s bank accounts and Sellers
        shall have no further liability for such checks.

      

       (h)
        Purchase
        Price Allocation. 

      

      (i)
        Within 60 days after the Closing Date, Buyer will prepare an allocation of
        the
        Purchase Price (and all other capitalized costs) among the Acquired Assets
        in
        accordance with Code §1060 and the Treasury Regulations thereunder (and any
        similar provision of state, local or foreign law, as appropriate), and deliver
        to Parent a written draft of the allocation (the “Draft
        Allocation”).
        Sellers shall timely and properly prepare, execute, file and deliver all
        such
        documents, forms and other information as Buyer may reasonably request to
        prepare the Draft Allocation. 

      

      (ii)
        If
        Parent has any objections to the Draft Allocation, Parent shall deliver a
        written detailed statement describing its objections to Buyer within 15 days
        after receiving the Draft Allocation. Buyer and Parent shall use reasonable
        efforts to resolve any such objections themselves. If the Parties do not
        obtain
        a final resolution within 30 days after Buyer has received the statement
        of
        objections, however, Buyer and Parent shall select an accounting firm mutually
        acceptable to the Parties to resolve any remaining objections. If Buyer and
        Parent are unable to agree on the choice of an accounting firm, they will
        select
        a nationally-recognized accounting firm by lot (after excluding their respective
        regular outside accounting firms). The determination of any accounting firm
        so
        selected shall be set forth in writing and shall be conclusive and binding
        upon
        the Parties. Buyer shall revise the Draft Allocation in writing as appropriate
        to reflect the resolution of any objections thereto pursuant to this §2(h)(ii).
        The “Final
        Allocation”
shall
        mean the written Draft Allocation together with any revisions thereto pursuant
        to this §2(h)(ii).

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      (iii)
        In
        the event the Parties submit any unresolved objections to an accounting firm
        for
        resolution as provided in §2(h)(ii) above, Buyer and Sellers shall equally share
        responsibility for the fees and expenses of the accounting firm.

      

      (iv)
        Buyer and Sellers and their Affiliates shall report, act, and file Tax Returns
        (including, but not limited to Internal Revenue Service Form 8594) in all
        respects and for all purposes consistent with the Final Allocation. Neither
        Buyer nor Sellers shall take any position (whether in audits, tax returns
        or
        otherwise) that is inconsistent with the Final Allocation unless required
        to do
        so by applicable law. 

      

        §3.    Sellers’
        Representations and Warranties.  

      

      Each
        of
        Sellers jointly and severally represents and warrants to Buyer that the
        statements contained in this §3 are correct and complete as of the date of the
        Original Agreement and will be correct and complete as of the Closing Date
        (as
        though made then and as though the Closing Date were substituted for the
        date of
        this Agreement throughout this §3), except as set forth in the disclosure
        schedule accompanying this Agreement (the “Disclosure
        Schedule”).
        The
        Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
        and numbered paragraphs contained in this §3.

      

      (a)
        Organization.  

      

      Other
        than Target, each of Parent and Parent’s Subsidiaries is a corporation duly
        organized, validly existing and in good standing under the laws of the State
        of
        Delaware. Target is a limited partnership duly organized, validly existing,
        and
        in good standing under the laws of the State of Delaware. Sellers are duly
        authorized to conduct business and are in good standing under the laws of
        each
        jurisdiction where such qualification is required except to the extent that
        any
        failure to be so qualified would not result in a Material Adverse Effect.
        Sellers have full power and authority and all licenses, permits, consents,
        approvals and authorizations necessary to carry on the businesses in which
        they
        are engaged and in which they presently propose to engage and to own and
        use the
        properties owned and used by them, except for those licenses, authorizations,
        permits, consents and approvals the absence of which would not reasonably
        be
        expected to have, individually or in the aggregate, a Material Adverse Effect
        on
        Sellers. §3(a) of the Disclosure Schedule lists the directors and officers each
        of Sellers. Sellers have delivered or made available to Buyer correct and
        complete copies of the certificate of incorporation and bylaws of Parent
        and the
        certificate of limited partnership and limited partnership agreement of Target
        (each as amended to date). The minute books (containing the records of meetings
        or actions of the stockholders, partners, board of directors, and any
        committees), the stock certificate books, the stock record books and other
        records detailing the actions of each of Sellers, as applicable, are correct
        and
        complete. Parent is not in violation of any provision of its certificate
        of
        incorporation or bylaws. Target is not in violation of any provision of its
        certificate of limited partnership or limited partnership
        agreement.

      

      (b)
        Authorization
        of Transaction.  

      

      Parent
        has full power and authority (including full corporate power and authority)
        to
        execute and deliver this Agreement, the Voting Agreements and all other
        agreements contemplated hereunder (collectively, the “Transaction
        Agreements”)
        and to
        perform its obligations thereunder. Other than the Voting Agreements, Target
        has
        full power and authority (including full limited partnership power and
        authority) to execute and deliver the Transaction Agreements and to perform
        its
        obligations thereunder. Other than compliance with any applicable requirements
        of the Securities Act or the Securities Exchange Act and as set forth on
§3(b)
        of the Disclosure Schedule, Sellers need not give any notice to, make any
        filing
        with, or obtain any authorization, consent, or approval of any government,
        governmental agency or any third party in order to enter into the Transaction
        Agreements or to consummate the transactions contemplated thereunder. Tidel
        Cash
        Systems, Inc. and Tidel Services, Inc. have full power and authority as the
        partners of Target to approve and adopt this Agreement and the transactions
        contemplated hereby. The execution, delivery and performance of the Transaction
        Agreements and the consummation of the transactions contemplated thereby
        have
        been duly authorized by all necessary action on the part of Sellers and
        Subsidiaries of Parent (including, without limitation, approval of Parent’s
        board of directors and the approval Tidel Cash Systems, Inc. and Tidel Services,
        Inc. as the partners of Target), subject only to the approval and adoption
        of
        this Agreement and the transactions contemplated hereby at the Parent
        Stockholders Meeting. Each of the Transaction Agreements have been, or will
        be,
        duly executed and delivered by each of Sellers and constitute, or will
        constitute when executed and delivered, the legal, valid and binding obligation
        of each of Sellers, enforceable against each of Sellers in accordance with
        their
        terms, except that such enforceability may be limited by bankruptcy, insolvency,
        moratorium or other similar laws affecting or relating to creditors’ rights
        generally, and is subject to general principles of equity. The board of
        directors of Parent has (A) declared this Agreement and the transactions
        contemplated hereby advisable and fair to and in the best interest of Sellers
        and stockholders of Parent, (B) approved this Agreement and the other
        Transaction Agreements in accordance with the law of the State of Delaware,
        (C) resolved to recommend the approval of this Agreement by stockholders of
        Parent and (D) directed that this Agreement be submitted to the
        stockholders of Parent for approval at the Parent Stockholders
        Meeting.

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      (c)
        Non-contravention.  

      

      Neither
        the execution and the delivery of this Agreement, nor the consummation of
        the
        transactions contemplated hereby (including the assignments and assumptions
        referred to in §2 above), will (i) violate any constitution, statute,
        regulation, rule, injunction, judgment, order, decree, ruling, charge, or
        other
        restriction of any government, governmental agency, or court to which Sellers
        are subject or any provision of the certificate of incorporation or bylaws
        of
        Parent or the certificate of limited partnership or the limited partnership
        agreement of Target or (ii) conflict with, result in a breach of, constitute
        a
        default under, result in the acceleration of, create in any party the right
        to
        accelerate, terminate, modify, or cancel, or require any notice under any
        material agreement, contract, lease, license, instrument, or other arrangement
        to which either of Sellers is party or by which either of Sellers is bound
        or to
        which any of their respective assets is subject (or result in the imposition
        of
        any Lien upon any of its assets). 

      

      (d)
        Brokers’
        Fees and Fairness Opinion.

      

      Except
        for Capitalink, L.C., a copy of whose engagement agreement has been provided
        to
        Buyer, there is no investment banker, broker, finder or other intermediary that
        has been retained by or is authorized to act on behalf of Sellers who might
        be
        entitled to any fee or commission from Sellers or any of their Affiliates
        in
        connection with the transactions contemplated by this Agreement. Parent has
        received the opinion of Capitalink, L.C., financial advisor to Sellers, to
        the
        effect that, as of the date of this Agreement, the transactions contemplated
        by
        this Agreement are fair to the stockholders of Parent from a financial point
        of
        view.

      
        
          
          

        

        
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      (e)
        Title
        to Assets.  

      

      Subject
        to the approval of this Agreement and the transactions contemplated hereby
        by
        the stockholders of Parent and except as set forth on §3(e) of the Disclosure
        Schedule, Sellers have good and marketable title to all of the Acquired Assets,
        free and clear of any Liens or restrictions on transfer. The Acquired Assets
        constitute all material assets required to operate, and currently used in
        the
        operation of Division.

      

      (f)
        Subsidiaries. 

      

      Other
        than Target, each of Parent’s direct or indirect Subsidiaries other than AnyCard
        International, Inc. (each a “Division
        Subsidiary”)
        is a
        corporation or limited partnership duly organized, validly existing, and
        in good
        standing under the laws of the jurisdiction of its organization. Each Division
        Subsidiary is duly authorized to conduct business and is in good standing
        under
        the laws of each jurisdiction where such qualification is required except
        to the
        extent that the failure to be so qualified would not constitute a Material
        Adverse Effect. Each Division Subsidiary has full corporate or limited
        partnership power and authority and all licenses, permits, and authorizations
        necessary to carry on the business in which it is engaged and in which it
        presently proposes to engage and to own and use the properties owned and
        used by
        it. Sellers have delivered to Buyer correct and complete copies of the charter,
        bylaws, certificate of limited partnership and limited partnership agreement
        of
        each Division Subsidiary (as amended to date). Target has no Subsidiaries.
        Other
        than Target, none of the Acquired Assets are owned or held by any Subsidiaries
        of Parent. Other than administrative functions, the business and operations
        of
        Division have been solely conducted through Target.

      

      (g)
        SEC
        Filings and Financial
        Statements.  

      

      (i)
        SEC
        Filings. 

      

      (A)
        Parent has delivered or made available to Buyer true and complete copies
        of
        Parent’s (i) combined annual report on Form 10-K for its fiscal years ended
        September 30, 2004 and 2003, (ii) quarterly reports on Form 10-Q for its
        fiscal
        quarters ended June 30, 2005, March 31, 2005 and December 31, 2004, (iii)
        its
        proxy or information statements relating to meetings of, or actions taken
        without a meeting by, the stockholders of Parent held since June 30, 2002,
        and
        (iv) all of its other reports, statements, schedules and registration statements
        (and all exhibits, attachments, schedules and appendixes filed with the
        foregoing) filed with the SEC since September 30, 2004 (collectively, the
        “SEC
        Documents”).
        

      

      (B)
        As of
        its filing date (or, if amended or superseded by a filing prior to the date
        hereof, on the date of such filing), each SEC Document filed pursuant to
        the
        Securities Exchange Act did not, and each such SEC Document filed subsequent
        to
        the date hereof will not, contain any untrue statement of a material fact
        or
        omit to state any material fact necessary in order to make the statements
        made
        therein, in the light of the circumstances under which they were made, not
        misleading.

      

      (C)
        The
        proxy statement of Parent to be filed with the SEC in connection with the
        Parent
        Stockholders Meeting (the “Parent
        Proxy Statement”)
        and
        any amendments or supplements thereto will, when filed, comply as to form
        in all
        material respects with the applicable requirements of the Securities Exchange
        Act. At the time the Parent Proxy Statement or any amendment or supplement
        thereto is first mailed to stockholders of Parent, and at the time such
        stockholders vote on the approval and adoption of this Agreement and the
        transactions contemplated hereby, the Amendment and the Motion, and at the
        Closing, the Parent Proxy Statement, as supplemented or amended, if applicable,
        will not contain any untrue statement of a material fact or omit to state
        any
        material fact necessary in order to make the statements made therein, in
        the
        light of the circumstances under which they were made, not misleading. The
        representations and warranties contained in this subsection will not apply
        to
        statements or omissions included in the Parent Proxy Statement based upon
        information furnished to Parent in writing by Buyer specifically for use
        therein.

      
        
          
          

        

        
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      (ii)
        Financial Statements. 

      

      (A)
        The
        audited consolidated financial statements and unaudited consolidated interim
        financial statements of Parent included in the SEC Documents (the “Financial
        Statements”)
        complied as to form in all material respects with the applicable rules and
        regulations of the SEC with respect thereto and fairly present, in conformity
        with GAAP applied on a consistent basis (except as may be indicated in the
        notes
        thereto), the consolidated financial position of Parent and its consolidated
        Subsidiaries as of the dates thereof and their consolidated results of
        operations and cash flows for the periods then ended (subject to normal year-end
        adjustments in the case of any unaudited interim financial
        statements).

      

      (B)
        Except as set forth in the SEC Documents, the books and records of Parent
        (i) have been maintained in accordance with good business practices on a
        basis consistent with prior years, (ii) state in reasonable detail the
        material transactions and dispositions of the assets of Parent and Parent’s
        Subsidiaries and (iii) accurately and fairly reflect the basis for the
        consolidated financial statements of Parent filed with the SEC with each
        of
        Parent’s reports on Forms 10-K and 10-Q set forth in §3(g)(i) above.

      

      (h)
        Events
        Subsequent to Most Recent Balance Sheet.  

      

      Since
        the
        date of the Most Recent Balance Sheet, there has not been any Material Adverse
        Change. Without limiting the generality of the foregoing and solely with
        respect
        to the Division and except as set forth on §3(h) of the Disclosure Schedule,
        since that date: 

      

      (i)
        Sellers have not sold, leased, transferred, or assigned any of their assets,
        tangible or intangible, other than for a fair consideration in the Ordinary
        Course of Business;

      

      (ii)
        Sellers have not entered into any agreement, contract, lease, or license
        (or
        series of related agreements, contracts, leases, and licenses) either involving
        more than $10,000 or outside the Ordinary Course of Business;

      

      (iii)
        no
        party (including Sellers) has accelerated, terminated, modified, or cancelled
        any agreement, contract, lease, or license (or series of related agreements,
        contracts, leases, and licenses) involving more than $10,000 to which either
        of
        Sellers is a party or by which either of them is bound;

      

      (iv)
        Sellers have not imposed or permitted to exist any Lien upon any of its assets,
        tangible or intangible;

      

      (v)
        Sellers have not made any capital expenditure (or series of related capital
        expenditures) either involving more than $10,000 or outside the Ordinary
        Course
        of Business;

      
        
          
          

        

        
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      (vi)
        Sellers have not made any capital investment in, any loan to, or any acquisition
        of the securities or assets of, any other Person (or series of related capital
        investments, loans, and acquisitions) either involving more than $10,000
        or
        outside the Ordinary Course of Business;

      

      (vii)
        Sellers have not delayed or postponed the payment of accounts payable and
        other
        Liabilities outside the Ordinary Course of Business;

      

      (viii)
        Sellers have not cancelled, compromised, waived, or released any right or
        claim
        (or series of related rights and claims) either involving more than $10,000
        or
        outside the Ordinary Course of Business;

      

      (ix)
        Sellers have not transferred, assigned, or granted any license or sublicense
        of
        any rights under or with respect to any Intellectual Property;

      

      (x)
        there
        has been no change made or authorized in the certificate of incorporation
        or
        bylaws of Parent or the certificate of limited partnership or limited
        partnership agreement of Target;

      

      (xi)
        Sellers have not experienced any material damage, destruction, or loss (whether
        or not covered by insurance) to their property;

      

      (xii)
        other than the termination of the Employment Agreements, Sellers have not
        made
        any loan to, or entered into any other transaction with, any of the directors,
        officers, and employees of Sellers or any Subsidiaries of Parent;

      

      (xiii)
        other than the termination of the Employment Agreements, Sellers have not
        entered into any employment contract or collective bargaining agreement,
        written
        or oral, or modified the terms of any such existing contract or
        agreement;

      

      (xiv)
        other than the payment of reasonable and customary end of year holiday bonuses,
        Sellers have not granted any increase in the base compensation of any of
        the
        directors, officers, and employees of Sellers outside the Ordinary Course
        of
        Business;

      

      (xv)
        other than the termination of the Employment Agreements, Sellers have not
        adopted, amended, modified, or terminated any bonus, profit sharing, incentive,
        severance, or other plan, contract, or commitment for the benefit of any
        of the
        directors, officers, and employees of Sellers (or taken any such action with
        respect to any other Employee Benefit Plan);

      

      (xvi)
        other than the termination of the Employment Agreements, Sellers have not
        made
        any other change in employment terms for any of the directors, officers,
        and
        employees of Sellers outside the Ordinary Course of Business;

      

      (xvii)
        there has not been any other material occurrence, event, incident, action,
        failure to act, or transaction outside the Ordinary Course of
        Business;

      

      (xviii)
        Sellers have not discharged a material Liability or Lien outside the Ordinary
        Course of Business;

      

      (xix)
        Sellers have not disclosed any Confidential Information except pursuant to
        a
        valid, binding and enforceable non-disclosure agreement; 

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      (xx)
        there has not been any change in any method of accounting or accounting
        principles or practice by Sellers, except for any such change required by
        reason
        of a concurrent change in GAAP or Regulation S-X under the Securities Exchange
        Act; 

      

      (xxi)
        there has not been any Tax election made or changed, any annual Tax accounting
        period changed, any method of Tax accounting adopted or changed, any amended
        Tax
        Returns or claims for Tax refunds filed, any closing agreement entered into,
        any
        Tax claim, audit or assessment settled, or any right to claim a Tax refund,
        offset or other reduction in Tax liability surrendered; and

      

      (xxii)
        Sellers have not committed to any of the foregoing.

      

      (i)
        Undisclosed
        Liabilities. 

      

      Except
        as
        set forth on §3(i) of the Disclosure Schedule, Sellers do not have any Liability
        (and there is no Basis for any present or future action, suit, proceeding,
        hearing, investigation, charge, complaint, claim, or demand against any of
        them
        giving rise to any Liability) relating to Division, except for (i) Liabilities
        set forth on the face of the Most Recent Balance Sheet (rather than in any
        notes
        thereto) and (ii) Liabilities that have arisen after the date of the Most
        Recent
        Balance Sheet in the Ordinary Course of Business (none of which results from,
        arises out of, relates to, is in the nature of, or was caused by any breach
        of
        contract, breach of warranty, tort, infringement, or violation of law).

      

      (j)
        Legal
        Compliance.  

      

      Each
        of
        Sellers, and their respective predecessors and Affiliates has complied in
        all
        material respects with all applicable laws (including rules, regulations,
        codes,
        plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder
        and including the Foreign Corrupt Practices Act, 15 U.S.C. §78dd-1, et seq.) of
        federal, state, local, and foreign governments (and all agencies thereof),
        and
        no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
        demand, or notice has been filed or commenced against any of them alleging
        any
        failure so to comply.

      

      (k)
        Tax
        Matters. 

      

      (i)
        Sellers have timely filed all Tax Returns that Sellers were required to file.
        All such Tax Returns were correct and complete in all material respects.
        All
        Taxes owed by Sellers (whether or not shown on any Tax Return) have been
        paid
        unless they are currently being contested in good faith as set forth on §3(k)(i)
        of the Disclosure Schedule and a reserve therefore is set forth on the Most
        Recent Balance Sheet. Sellers are not beneficiaries of any extension of time
        within which to file any Tax Return. No claim has ever been made by an authority
        in a jurisdiction in which Sellers do not file Tax Returns that Sellers are
        or
        may be subject to taxation by that jurisdiction. There are no Liens on any
        of
        the assets of Division or Sellers that arose in connection with any failure
        (or
        alleged failure) to pay any Tax.

      

      (ii)
        Sellers have withheld and paid all Taxes required to have been withheld and
        paid
        in connection with amounts paid or owing to any employee, independent
        contractor, creditor, stockholder, or other third party and all Forms W-2
        and
        1099 required with respect thereto have been properly completed and timely
        filed.

      

      (iii)
        Sellers do not, and no officer or director of Sellers or any Subsidiaries
        of
        Parent (or any employee responsible for Tax matters expect any authority
        to
        assess any additional Taxes with respect to Sellers for any period for which
        Tax
        Returns have been filed. There is no dispute or claim concerning any Tax
        Liability of Sellers either (A) claimed or raised by any authority in writing
        or
        (B) as to which Sellers, or any officer or director of Sellers or any
        Subsidiaries of Parent (or employees responsible for Tax matters), has Knowledge
        based upon personal contact with any agent of such authority. §3(k)(iii) of the
        Disclosure Schedule lists all federal, state, local, and foreign income Tax
        Returns filed by Sellers for taxable periods ended on or after September
        30,
        2002, indicates those Tax Returns that have been audited, and indicates those
        Tax Returns that currently are the subject of audit. Sellers have delivered
        or
        made available to Buyer correct and complete copies of all income Tax Returns,
        examination reports, and statements of deficiencies assessed against or agreed
        to by Sellers since September 30, 2002.

      
        
          
          

        

        
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      (iv)
        Sellers have not waived any statute of limitations in respect of Taxes or
        agreed
        to any extension of time with respect to a Tax assessment or
        deficiency.

      

      (v)
        None
        of the Assumed Liabilities or the Termination Payments is, or will become,
        an
        obligation to make a payment that is not deductible under Code §280G.

      

      (l)
        Real
        Property. 

      

      (i)
        Sellers have no Owned Real Property and no Owned Real Property or any interest
        therein is used by Division in operating its business as currently conducted
        or
        as proposed to be conducted. Division is not a party to any agreement or
        option
        to purchase any real property or interest therein.

      

      (ii)
        §3(l)(ii) of the Disclosure Schedule sets forth the address of each parcel
        of
        Leased Real Property, and a true and complete list of all Leases for each
        such
        Leased Real Property (including the date and name of the parties to such
        Lease
        document). Sellers have delivered to Buyer a true and complete copy of each
        such
        Lease document, and in the case of any oral Lease, a written summary of the
        material terms of such Lease. With respect to each of the Leases: 

      

      (A)
        such
        Lease is legal, valid, binding, enforceable and in full force and
        effect;

      

      (B)
        the
        transactions contemplated by this Agreement do not require the consent of
        any
        other party to such Lease, will not result in a breach of or default under
        such
        Lease, and will not otherwise cause such Lease to cease to be legal, valid,
        binding, enforceable and in full force and effect on identical terms following
        the Closing;

      

      (C)
        Sellers’ possession and quiet enjoyment of the Leased Real Property under such
        Lease has not been disturbed and there are no disputes with respect to such
        Lease;

      

      (D)
        Neither Sellers, nor any other party to the Lease is in breach of or default
        under such Lease, and no event has occurred or circumstance exists that,
        with
        the delivery of notice, the passage of time or both, would constitute such
        a
        breach or default, or permit the termination, modification or acceleration
        of
        rent under such Lease;

      

      (E)
        no
        security deposit or portion thereof deposited with respect to such Lease
        has
        been applied in respect of a breach of or default under such Lease that has
        not
        been redeposited in full;

      

      (F)
        Sellers do not owe, and will not owe in the future, any brokerage commissions
        or
        finder's fees with respect to such Lease;

      

      (G)
        the
        other party to such Lease is not an Affiliate of, and otherwise does not
        have
        any economic interest in, Sellers;

      
        
          
          

        

        
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      (H)
        Sellers have not subleased, licensed or otherwise granted any Person the
        right
        to use or occupy the Leased Real Property or any portion thereof;

      

      (I)
        Sellers have not collaterally assigned or granted any other Lien in such
        Lease
        or any interest therein; and 

      

      (J)
        there
        are no Liens on the estate or interest created by such Lease. 

      

      (iii)
        The
        Leased Real Property identified in §3(l)(iii) of the Disclosure Schedule
        comprises all of the real property used or intended to be used in Division's
        business. 

      

      (iv)
        To
        Sellers’ Knowledge, all buildings, structures, fixtures, building systems and
        equipment, and all components thereof, including the roof, foundation,
        load-bearing walls and other structural elements thereof, heating, ventilation,
        air conditioning, mechanical, electrical, plumbing and other building systems,
        environmental control, remediation and abatement systems, sewer, storm and
        waste
        water systems, irrigation and other water distribution systems, parking
        facilities, fire protection, security and surveillance systems, and
        telecommunications, computer wiring, and cable installations, included in
        the
        Leased Real Property (the “Improvements”)
        are in
        good condition and repair and sufficient for the operation of Division's
        business. To Sellers’ Knowledge, there are no structural deficiencies or latent
        defects affecting any of the Improvements and there are no facts or conditions
        affecting any of the Improvements that would, individually or in the aggregate,
        interfere in any respect with the use or occupancy of the Improvements or
        any
        portion thereof in the operation of Division's business as currently conducted
        thereon.

      

      (v)
        To
        Sellers’ Knowledge, there is no condemnation, expropriation or other proceeding
        in eminent domain, pending or threatened, affecting any parcel of Leased
        Real
        Property or any portion thereof or interest therein. To Sellers’ Knowledge,
        there is no injunction, decree, order, writ or judgment outstanding, nor
        any
        claim, litigation, administrative action or similar proceeding, pending or
        threatened, relating to the ownership, lease, use or occupancy of the Leased
        Real Property or any portion thereof, or the operation of Division's business
        as
        currently conducted thereon.

      

      (vi)
        The
        Leased Real Property is in material compliance with all applicable building,
        zoning, subdivision, health and safety and other land use laws, including
        the
        Americans with Disabilities Act of 1990, as amended, and all insurance
        requirements affecting the Leased Real Property (collectively, the “Real
        Property Laws”),
        and
        the current use and occupancy of the Leased Real Property and operation of
        Division's business thereon does not materially violate any Real Property
        Laws.
        Sellers have not received any notice of violation of any Real Property Law
        and,
        to Sellers’ Knowledge, there is no Basis for the issuance of any such notice or
        the taking of any action for such violation.

      

      (vii)
        To
        Sellers’ Knowledge, all material water, oil, gas, electrical, steam, compressed
        air, telecommunications, sewer, storm and waste water systems and other utility
        services or systems for the Leased Real Property have been installed and
        are
        operational and sufficient for the operation of Division's business as currently
        conducted thereon. 

      

      (viii)
        All material certificates of occupancy, permits, licenses, franchises, approvals
        and authorizations (collectively, the “Real
        Property Permits”)
        of all
        governmental authorities, board of fire underwriters, association or any
        other
        entity having jurisdiction over the Leased Real Property that are required
        or
        appropriate to use or occupy the Leased Real Property or operate Division's
        business as currently conducted thereon, have been issued and are in full
        force
        and effect. §3(l)(viii) of the Disclosure Schedule lists all material Real
        Property Permits held by Sellers with respect to each parcel of Leased Real
        Property. Sellers have delivered to Buyer a true and complete copy of all
        Real
        Property Permits. Sellers have not received any notice from any governmental
        authority or other entity having jurisdiction over the Leased Real Property
        threatening a suspension, revocation, modification or cancellation of any
        Real
        Property Permit and, to Sellers’ Knowledge, there is no Basis for the issuance
        of any such notice or the taking of any such action. The Real Property Permits
        are transferable to Buyer without the consent or approval of the issuing
        governmental authority or entity; no disclosure, filing or other action by
        Sellers is required in connection with such transfer, and Buyer shall not
        be
        required to assume any additional liabilities or obligations under the Real
        Property Permits as a result of such transfer.

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

      (ix)
        To
        Sellers’ Knowledge, the classification of each parcel of Leased Real Property
        under applicable zoning laws, ordinances and regulations permits the use
        and
        occupancy of such parcel and the operation of Division's business as currently
        conducted thereon, and permits the Improvements located thereon as currently
        constructed, used and occupied. 

      

      (m)
        Intellectual
        Property. 

      

      (i)
        Sellers own and possess or have the right to use pursuant to a valid and
        enforceable written license, sublicense, agreement, or permission all
        Intellectual Property necessary or desirable for the operation of Division
        as
        presently conducted and as presently proposed to be conducted. Each item
        of
        Intellectual Property owned or used by Sellers immediately prior to the Closing
        will be owned or available for use by Buyer on identical terms and conditions
        immediately subsequent to the Closing. Sellers have taken all necessary and
        desirable action to maintain and protect each item of Intellectual Property
        that
        it owns or uses.

      

      (ii)
        Sellers have not interfered with, infringed upon, misappropriated, or otherwise
        come into conflict with any Intellectual Property rights of third parties.
        Other
        than the complaint filed by Corporate Safe Specialists, Inc. against Sellers
        on
        June 9, 2005 (the “CSS
        Claim”),
        none
        of Sellers, any Subsidiaries of Parent or any of their officers and directors
        (and employees with responsibility for Intellectual Property matters) have
        ever
        received any charge, complaint, claim, demand, or notice alleging any such
        interference, infringement, misappropriation, or violation (including any
        claim
        that Sellers must license or refrain from using any Intellectual Property
        rights
        of any third party) that has not been resolved pursuant to a final
        non-appealable court order or binding effective settlement and release agreement
        that does not have a Material Adverse Effect. To Sellers’ Knowledge, no third
        party has interfered with, infringed upon, misappropriated, or otherwise
        come
        into conflict with any Intellectual Property rights of Sellers.

      

      (iii)
        §3(m)(iii) of the Disclosure Schedule identifies each patent or registration
        which has been issued to Sellers with respect to any of their Intellectual
        Property, identifies each pending patent application or application for
        registration Sellers have made with respect to any of their Intellectual
        Property, and identifies each license, sublicense, agreement, or other
        permission that Sellers have granted to any third party with respect to any
        of
        their Intellectual Property (together with any exceptions). Sellers have
        delivered or made available to Buyer correct and complete copies of all such
        patents, registrations, applications, licenses, sublicenses, agreements,
        and
        permissions (as amended to date) and have made available to Buyer correct
        and
        complete copies of all other written documentation evidencing ownership and
        prosecution (if applicable) of each such item. §3(m)(iii) of the Disclosure
        Schedule also identifies each registered or unregistered trademark, service
        mark, trade name, corporate name or Internet domain name, computer software
        item
        (other than commercially available off-the-shelf software purchased or licensed
        for less than a total cost of $10,000 in the aggregate) and each material
        registered or unregistered copyright used by Sellers in connection with the
        business of Division. With respect to each item of Intellectual Property
        required to be identified in §3(m)(iii) of the Disclosure Schedule:

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      (A)
        Sellers own and possess all right, title, and interest in and to the item,
        free
        and clear of any Lien, license, or other restriction or limitation regarding
        use
        or disclosure;

      

      (B)
        the
        item is not subject to any outstanding injunction, judgment, order, decree,
        ruling, or charge;

      

      (C)
        except for the CSS Claim, no action, suit, proceeding, hearing, investigation,
        charge, complaint, claim, or demand is pending or, to Sellers’ Knowledge, is
        threatened that challenges the legality, validity, enforceability, use, or
        ownership of the item, and there are no grounds for the same;

      

      (D)
        Sellers have not agreed to indemnify any Person for or against any interference,
        infringement, misappropriation, or other conflict with respect to the item;
        and

      

      (E)
        no
        loss or expiration of the item is threatened, pending, or reasonably
        foreseeable, except for patents or copyrights expiring at the end of their
        statutory terms (and not as a result of any act or omission by Sellers,
        including, without limitation, a failure by Sellers to pay any required
        maintenance fees).

      

      (iv)
        §3(m)(iv) of the Disclosure Schedule identifies each item of Intellectual
        Property that any third party owns and that Division uses pursuant to license,
        sublicense, agreement, or permission. Sellers have delivered or made available
        to Buyer correct and complete copies of all such licenses, sublicenses,
        agreements, and permissions (as amended to date). With respect to each item
        of
        Intellectual Property required to be identified in §3(m)(iv) of the Disclosure
        Schedule: 

      

      (A)
        the
        license, sublicense, agreement, or permission covering the item is legal,
        valid,
        binding, enforceable, and in full force and effect;

      

      (B)
        the
        license, sublicense, agreement, or permission will continue to be legal,
        valid,
        binding, enforceable, and in full force and effect on identical terms following
        the consummation of the transactions contemplated hereby (including the
        assignments and assumptions referred to in §2 above);

      

      (C)
        Sellers are not and, to Sellers’ Knowledge, no other party to the license,
        sublicense, agreement, or permission is in breach or default, and no event
        has
        occurred that with notice or lapse of time would constitute a breach or default
        or permit termination, modification, or acceleration thereunder;

      

      (D)
        no
        party to the license, sublicense, agreement, or permission has repudiated
        any
        provision thereof;

      

      (E)
        with
        respect to each sublicense, the representations and warranties set forth
        in
        subsections (A) through (D) above are true and correct with respect to the
        underlying license;

      

      (F)
        to
        Sellers’ Knowledge, the underlying item of Intellectual Property is not subject
        to any outstanding injunction, judgment, order, decree, ruling, or
        charge;

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      (G)
        no
        action, suit, proceeding, hearing, investigation, charge, complaint, claim,
        or
        demand is pending or, to Seller’s Knowledge, is threatened that challenges the
        legality, validity, or enforceability of the underlying item of Intellectual
        Property, and, to Sellers’ Knowledge, there are no grounds for the same;
        and

      

      (H)
        Sellers have not granted any sublicense or similar right with respect to
        the
        license, sublicense, agreement, or permission.

      

      (v)
        Except for the CSS Claim, to Sellers’ Knowledge: (A) Sellers have not in the
        past nor will interfere with, infringe upon, misappropriate, or otherwise
        come
        into conflict with, any Intellectual Property rights of third parties as
        a
        result of the continued operation of the business of Division as presently
        conducted and as presently proposed to be conducted; (B) there are no facts
        that
        indicate a likelihood of any of the foregoing; and (C) no notices regarding
        any
        of the foregoing (including, without limitation, any demands or offers to
        license any Intellectual Property from any third party) have been
        received.

      

      (vi)
        Sellers have taken all necessary and desirable actions to maintain and protect
        all of the Intellectual Property and will continue to maintain and protect
        all
        of the Intellectual Property so as not to adversely affect the validity or
        enforceability thereof. To the Knowledge of Sellers, the owners of any of
        the
        Intellectual Property licensed to Sellers in connection with the business
        of
        Division have taken all necessary and desirable actions to maintain and protect
        the Intellectual Property covered by such license.

      

      (vii)
        Sellers have complied with and are presently in compliance in all material
        respects with all foreign, federal, state, local, governmental (including,
        but
        not limited to, the Federal Trade Commission and State Attorneys General),
        administrative or regulatory laws, regulations, guidelines and rules applicable
        to any Intellectual Property and Sellers shall take all steps necessary to
        ensure such compliance until the Closing.

      

      (n)
        Tangible
        Assets.  

      

      Sellers
        own or lease all buildings, machinery, equipment, and other tangible assets
        necessary for the conduct of the business of Division as presently conducted
        and
        as presently proposed to be conducted. Each such tangible asset is free from
        all
        defects (patent and latent), has been maintained in accordance with normal
        industry practice, is in good operating condition and repair (subject to
        normal
        wear and tear), and is suitable for the purposes for which it presently is
        used
        and presently is proposed to be used.

      

      (o)
        Inventory.  

      

      The
        inventory of Division is owned by Sellers and consists of raw materials and
        supplies, manufactured and purchased parts, goods in process, and finished
        goods, all of which is merchantable and fit for the purpose for which it
        was
        procured or manufactured, and none of which is slow-moving, obsolete, damaged,
        or defective, subject only to the reserve for inventory writedown set forth
        on
        the face of the Most Recent Balance Sheet (rather than in any notes thereto)
        as
        adjusted for the passage of time through the Closing Date in accordance with
        the
        past custom and practice of Division.

      

      (p)
        Contracts.  

      

      §3(p)
        of
        the Disclosure Schedule lists the following contracts and other agreements
        relating to Division: 

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      (i)
        any
        agreement (or group of related agreements) for the lease of personal property
        to
        or from any Person providing for lease payments in excess of $10,000 per
        annum;

      

      (ii)
        any
        agreement (or group of related agreements) for the purchase or sale of raw
        materials, commodities, supplies, products, or other personal property, or
        for
        the furnishing or receipt of services, the performance of which will extend
        over
        a period of more than one year, result in a loss to Division, or involve
        consideration in excess of $10,000;

      

      (iii)
        any
        agreement concerning a partnership or joint venture;

      

      (iv)
        any
        agreement (or group of related agreements) under which it has created, incurred,
        assumed, or guaranteed any indebtedness for borrowed money, or any capitalized
        lease obligation, in excess of $10,000 or under which it has imposed a Lien
        on
        any of its assets, tangible or intangible;

      

      (v)
        any
        agreement concerning confidentiality or non-competition;

      

      (vi)
        any
        material agreement involving either Seller on the one hand and any Affiliate
        of
        Parent or Parent’s Subsidiaries on the other hand;

      

      (vii)
        any
        profit sharing, stock option, stock purchase, stock appreciation, deferred
        compensation, severance, or other plan or arrangement for the benefit of
        the
        current or former directors, officers, and employees of Sellers or any
        Subsidiaries of Parent;

      

      (viii)
        any collective bargaining agreement;

      

      (ix)
        any
        agreement for the employment of any individual on a full-time, part-time,
        consulting, or other basis providing annual compensation in excess of $50,000
        or
        providing any severance benefits;

      

      (x)
        any
        agreement under which it has advanced or loaned any amount to any of the
        directors, officers, and employees of Sellers or Subsidiaries of Parent outside
        the Ordinary Course of Business;

      

      (xi)
        any
        agreement under which the consequences of a default or termination could
        have a
        Material Adverse Effect;

      

      (xii)
        any
        settlement, conciliation or similar agreement, the performance of which will
        involve payment after the Closing Date of consideration in excess of
        $10,000;

      

      (xiii)
        any agreement under which Sellers have advanced or loaned any other Person
        amounts in the aggregate exceeding $10,000; or

      

      (xiv)
        any
        other agreement (or group of related agreements) the performance of which
        involves consideration in excess of $10,000.

      

      Sellers
        have delivered or made available to Buyer a correct and complete copy of
        each
        agreement (as amended to date) listed in §3(p) of the Disclosure Schedule. With
        respect to each such agreement: (A) the agreement is legal, valid, binding,
        enforceable, and in full force and effect; (B) the agreement will continue
        to be
        legal, valid, binding, enforceable, and in full force and effect on identical
        terms following the consummation of the transactions contemplated hereby
        (including the assignments and assumptions referred to in §2 above); (C) no
        party is in breach or default, and no event has occurred that with notice
        or
        lapse of time would constitute a breach or default, or permit termination,
        modification, or acceleration, under the agreement; and (D) no party has
        repudiated any provision of the agreement. Other than as explicitly identified
        in §3(p) of the Disclosure Schedule, all such contracts are freely assignable
        to
        Buyer.

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      (q)
        Notes
        and Accounts Receivable.  

      

      All
        notes
        and accounts receivable of Sellers relating to Division are reflected properly
        on their books and records, are valid receivables subject to no setoffs or
        counterclaims, are current and collectible, and will be collected in accordance
        with their terms at their recorded amounts except as set forth on §3(q) of the
        Disclosure Schedule, subject only to the reserve for bad debts set forth
        on the
        face of the Most Recent Balance Sheet (rather than in any notes thereto)
        as
        adjusted for the passage of time through the Closing Date in accordance with
        the
        past custom and practice of Division.

      

      (r)
        Powers
        of Attorney.  

      

      There
        are
        no outstanding powers of attorney executed on behalf of Sellers.

      

      (s)
        Insurance. 

      

      Sellers
        have in full force and effect insurance policies insuring the properties
        and
        assets of Division (including the Acquired Assets). With respect to each
        such
        insurance policy: (A) the policy is legal, valid, binding, enforceable, and
        in
        full force and effect; (B) neither Sellers nor, to Sellers’ Knowledge, any other
        party to the policy is in breach or default (including with respect to the
        payment of premiums or the giving of notices), and no event has occurred
        that,
        with notice or the lapse of time, would constitute such a breach or default,
        or
        permit termination, modification, or acceleration, under the policy; and
        (C)
        neither Sellers nor, to Sellers’ Knowledge, any other party to the policy has
        repudiated any provision thereof. Sellers currently are covered, and have
        been
        covered during the past five (5) years, by insurance in scope and amount
        customary and reasonable for the business in which it has engaged during
        the
        aforementioned period. 

      

      (t)
        Litigation.  

      

      §3(t)
        of
        the Disclosure Schedule sets forth each instance in which Sellers (i) are
        subject to any outstanding injunction, judgment, order, decree, ruling, or
        charge relating to Division or (ii) are a party or, to Sellers’ Knowledge, are
        threatened to be made a party to any action, suit, proceeding, hearing, or
        investigation of, in, or before any court or quasi-judicial or administrative
        agency of any federal, state, local, or foreign jurisdiction or before any
        arbitrator. None of the actions, suits, proceedings, hearings, and
        investigations set forth in §3(t) of the Disclosure Schedule would reasonably be
        expected to result in any Material Adverse Change. None of Sellers or the
        directors and officers of Sellers or any Subsidiaries of Parent (and employees
        with responsibility for litigation matters) have any reason to believe that
        any
        such action, suit, proceeding, hearing, or investigation may be brought or
        threatened against Sellers.

      

      (u)
        Product
        Warranty.  

      

      Each
        product manufactured, sold, leased, or delivered by Division has been in
        conformity with all applicable contractual commitments and all express and
        implied warranties, and Sellers do not have any Liability (and there is no
        Basis
        for any present or future action, suit, proceeding, hearing, investigation,
        charge, complaint, claim, or demand against any of them giving rise to any
        Liability) for replacement or repair thereof or other damages in connection
        therewith, subject only to the reserve for product warranty claims set forth
        on
        the face of the Most Recent Balance Sheet (rather than in any notes thereto)
        as
        adjusted for the passage of time through the Closing Date in accordance with
        the
        past custom and practice of Division. No product manufactured, sold, leased,
        or
        delivered by Division is subject to any guaranty, warranty, or other indemnity
        beyond the applicable standard terms and conditions of sale or lease.

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      (v)
        Product
        Liability.  

      

      Sellers
        do not have any Liability (and there is no Basis for any present or future
        action, suit, proceeding, hearing, investigation, charge, complaint, claim,
        or
        demand against any of them giving rise to any Liability) arising out of any
        injury to individuals or property as a result of the ownership, possession,
        or
        use of any product manufactured, sold, leased, or delivered by
        Division.

      

      (w)
        Employees.  

      

      (i)
        With
        respect to the business of Division: 

      

      (A)
        there
        is no collective bargaining agreement or relationship with any labor
        organization;

      

      (B)
        to
        the Knowledge of Sellers, no executive or manager of Division (1) has any
        present intention to terminate his or her employment, or (2) is a party to
        any
        confidentiality, non-competition, proprietary rights or other such agreement
        between such employee and any Person besides Sellers that would be material
        to
        the performance of such employee’s employment duties, or the ability of Sellers
        or Buyer to conduct the business of Division;

      

      (C)
        no
        labor organization or group of employees has filed any representation petition
        or made any written or oral demand for recognition;

      

      (D)
        to
        the Knowledge of Sellers, no union organizing or decertification efforts
        are
        underway or threatened and no other question concerning representation
        exists;

      

      (E)
        no
        labor strike, work stoppage, slowdown, or other material labor dispute has
        occurred, and none is underway or, to the Knowledge of Sellers,
        threatened;

      

      (F)
        there
        is no workman’s compensation liability, experience or matter that would
        reasonably be expected to have a Material Adverse Effect;

      

      (G)
        there
        is no employment-related charge, complaint, grievance, investigation, inquiry
        or
        obligation of any kind, pending or, to Sellers’ Knowledge, threatened in any
        forum, relating to an alleged violation or breach by Sellers (or their officers
        or directors) of any law, regulation or contract; and

      

      (H)
        no
        employee or agent of Sellers has committed any act or omission giving rise
        to
        material liability for any violation or breach identified in subsection (G)
        above.

      

      (ii)
        Except as set forth in §3(w)(ii) of the Disclosure Schedule, (A) there are no
        employment contracts or severance agreements with any employees of Sellers
        engaged in the operation of Division, and (B) there are no written personnel
        policies, rules or procedures applicable to employees of Sellers engaged
        in the
        operation of Division.

      

      (iii)
        With respect to this transaction, any notice required under any law or
        collective bargaining agreement has been given, and all bargaining obligations
        with any employee representative have been, or prior to the Closing Date
        will
        be, satisfied. Sellers have not implemented any plant closing or layoff of
        employees that could implicate the Worker Adjustment and Retraining Notification
        Act of 1988, as amended, or any similar foreign, state, or local law, regulation
        or ordinance, and no such action will be implemented without advance
        notification to Buyer.

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      (iv)
        Buyer will not have as a consequence of any transaction contemplated by the
        Transaction Agreements, any liability or obligation with respect to or under
        any
        agreement between either of Sellers and any employee.

      

      (x)
        Employee
        Benefit Plans. 

      

      (i)
        §3(x)(i) of the Disclosure Schedule lists each Employee Benefit Plan that
        Sellers maintain, to which Sellers contribute or have any obligation to
        contribute, or with respect to which Sellers have any Liability. Sellers
        have
        not, nor has any Subsidiary or Affiliate of Parent, been parties to a
        multi-employer defined benefit plan within the meaning of ERISA.

      

      (A)
        Each
        such Employee Benefit Plan (and each related trust, insurance contract, or
        fund)
        has been maintained, funded and administered in accordance with the terms
        of
        such Employee Benefit Plan and the terms of any applicable collective bargaining
        agreement and complies in form and in operation in all respects with the
        applicable requirements of ERISA, the Code, and other applicable
        laws.

      

      (B)
        All
        required reports and descriptions (including Form 5500 annual reports, summary
        annual reports, and summary plan descriptions) have been timely filed and/or
        distributed in accordance with the applicable requirements of ERISA and the
        Code
        with respect to each such Employee Benefit Plan. The requirements of COBRA
        have
        been met with respect to each such Employee Benefit Plan and each Employee
        Benefit Plan maintained by Sellers or an ERISA Affiliate that is an Employee
        Welfare Benefit Plan subject to COBRA.

      

      (C)
        All
        contributions (including all employer contributions and employee salary
        reduction contributions) that are due have been made within the time periods
        prescribed by ERISA and the Code to each such Employee Benefit Plan that
        is an
        Employee Pension Benefit Plan and all contributions for any period ending
        on or
        before the Closing Date that are not yet due have been made to each such
        Employee Pension Benefit Plan or accrued in accordance with the past custom
        and
        practice of Sellers. All premiums or other payments for all periods ending
        on or
        before the Closing Date have been paid with respect to each such Employee
        Benefit Plan that is an Employee Welfare Benefit Plan.

      

      (D)
        Each
        such Employee Benefit Plan that is intended to meet the requirements of a
        “qualified plan” under Code §401(a) has received a determination from the
        Internal Revenue Service that such Employee Benefit Plan is so qualified,
        and
        nothing has occurred since the date of such determination that could adversely
        affect the qualified status of any such Employee Benefit Plan. All such Employee
        Benefit Plans have been or will be timely amended for the requirements of
        the
        Tax legislation commonly known as “GUST” and “EGTRRA” and have been or will be
        submitted to the Internal Revenue Service for a favorable determination letter
        on the GUST requirements within the remedial amendment period prescribed
        by
        GUST.

      

      (E)
        There
        have been no Prohibited Transactions with respect to any such Employee Benefit
        Plan or any Employee Benefit Plan maintained by Sellers or an ERISA Affiliate.
        No Fiduciary has any Liability for breach of fiduciary duty or any other
        failure
        to act or comply in connection with the administration or investment of the
        assets of any such Employee Benefit Plan. No action, suit, proceeding, hearing,
        or investigation with respect to the administration or the investment of
        the
        assets of any such Employee Benefit Plan (other than routine claims for
        benefits) is pending or, to Sellers’ Knowledge, threatened. 

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      (F)
        Sellers have delivered or made available to Buyer correct and complete copies
        of
        the plan documents and summary plan descriptions, the most recent determination
        letter received from the Internal Revenue Service, the most recent annual
        report
        (Form 5500, with all applicable attachments), and all related trust agreements,
        insurance contracts, and other funding arrangements that implement each such
        Employee Benefit Plan.

      

      (ii)
        Buyer will not have as a consequence of any transaction contemplated by the
        Transaction Agreements, any liability or obligation with respect to or under
        any
        Employee Benefit Plan.

      

      (y)
        Guaranties.  

      

      Neither
        of Sellers is a guarantor or otherwise is liable for any Liability (including
        indebtedness) of any other Person.

      

      (z)
        Environmental,
        Health, and Safety Matters. 

      

      (i)
        Each
        of Sellers, and their respective predecessors and Affiliates has complied
        and is
        in material compliance with all Environmental, Health, and Safety
        Requirements.

      

      (ii)
        Without limiting the generality of the foregoing, each of Sellers and their
        respective Affiliates has obtained and materially complied with, and is in
        material compliance with, all permits, licenses and other authorizations
        that
        are required pursuant to Environmental, Health, and Safety Requirements for
        the
        occupation of its facilities and the operation of its business; a list of
        all
        such permits, licenses and other authorizations is set forth in §3(z)(ii) of the
        Disclosure Schedule.

      

      (iii)
        Neither Sellers nor their respective predecessors or Affiliates have received
        any written or oral notice, report or other information regarding any actual
        or
        alleged violation of Environmental, Health, and Safety Requirements, or any
        Liabilities, including any investigatory, remedial or corrective obligations,
        relating to any of them or their facilities arising under Environmental,
        Health,
        and Safety Requirements.

      

      (iv)
        None
        of the following exists at any property or facility owned or operated by
        Sellers: (1) underground storage tanks, (2) asbestos-containing material
        in any
        form or condition, (3) materials or equipment containing polychlorinated
        biphenyls, or (4) landfills, surface impoundments, or disposal
        areas.

      

      (v)
        Neither Sellers nor their respective predecessors or Affiliates have treated,
        stored, disposed of, arranged for or permitted the disposal of, transported,
        handled, manufactured, distributed, or released any substance, including
        without
        limitation any hazardous substance, or owned or operated any property or
        facility (and no such property or facility is contaminated by any such
        substance) so as to give rise to any current or future Liabilities, including
        any Liability for fines, penalties, response costs, corrective action costs,
        personal injury, property damage, natural resources damages or attorney’s fees,
        pursuant to the Comprehensive Environmental Response, Compensation and Liability
        Act of 1980, as amended, the Solid Waste Disposal Act, as amended, or any
        other
        Environmental, Health, and Safety Requirements.

      

      (vi)
        Neither this Agreement nor the consummation of the transactions that are
        subject
        of this Agreement will result in any obligations for site investigation or
        cleanup, or notification to or consent of government agencies or third parties,
        pursuant to any of the so-called “transaction-triggered” or “responsible
        property transfer” Environmental, Health, and Safety
        Requirements.

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      (vii)
        Neither Sellers nor any of their respective predecessors or Affiliates have
        designed, manufactured, sold, marketed, installed, or distributed products
        or
        other items containing asbestos and none of such entities is or will become
        subject to any Asbestos Liabilities.

      

      (viii)
        Neither Sellers nor any of their respective predecessors or Affiliates have
        assumed or otherwise become subject to, any Liability including without
        limitation any obligation for corrective or remedial action, of any other
        Person
        relating to Environmental, Health, and Safety Requirements.

      

      (ix)
        To
        Sellers’ Knowledge, no facts, events or conditions relating to the past or
        present facilities, properties or operations of Sellers or any of their
        respective predecessors or Affiliates will prevent, hinder or limit continued
        compliance with Environmental, Health, and Safety Requirements, give rise
        to any
        investigatory, remedial or corrective obligations pursuant to Environmental,
        Health, and Safety Requirements, or give rise to any other Liabilities pursuant
        to Environmental, Health, and Safety Requirements, including without limitation
        any Liability relating to on-site or off-site releases or threatened releases
        of
        hazardous materials, substances or wastes, personal injury, property damage
        or
        natural resources damage.

      

      (x)
        Sellers have furnished or made available to Buyer all environmental audits,
        reports and other material environmental documents relating to their or their
        respective predecessors’ or Affiliates’ past or current properties, facilities,
        or operations that are in their possession or under their reasonable
        control.

      

      (aa)
        Certain
        Business Relationships.  

      

      Other
        than this Agreement and the limited partnership agreement of Target, none
        of
        Parent’s stockholders, Subsidiaries of Parent, directors and officers of Sellers
        or any Subsidiaries of Parent, or any of their Affiliates has been involved
        in
        any business arrangement or relationship with Sellers or any Subsidiary of
        Parent within the past 12 months, and other than Target, none of Parent’s
        stockholders, Subsidiaries of Parent, directors and officers of Sellers or
        any
        Subsidiaries of Parent, or any of their Affiliates own any asset, tangible
        or
        intangible, that is used in the business of Division as currently conducted
        or
        as currently proposed to be conducted.

      

      (bb)
        Customers
        and Suppliers. 

      

      Since
        the
        date of the Most Recent Balance Sheet, no material supplier of Division has
        indicated that it shall stop, or decrease the rate of, supplying materials,
        products or services to Division, and no customer of Division has indicated
        that
        it shall stop, or decrease the rate of, buying materials, products or services
        from Division.

      

      §4.  
           Buyer’s
        Representations and Warranties.  

      

      Buyer
        represents and warrants to Sellers that the statements contained in this
§4 are
        correct and complete as of the date of this Agreement and will be correct
        and
        complete as of the Closing Date (as though made then and as though the Closing
        Date were substituted for the date of this Agreement throughout this §4).

      

      (a)
        Organization
        of Buyer.  

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      Buyer
        is
        a limited partnership duly organized, validly existing, and in good standing
        under the laws of the State of Delaware.

      

      (b)
        Authorization
        of Transaction.  

      

      Buyer
        has
        full power and authority to execute and deliver this Agreement and the other
        Transaction Agreements to which it is a party and to perform its obligations
        thereunder. Buyer
        need not give any notice to, make any filing with, or obtain any authorization,
        consent, or approval of any government, governmental agency or any third
        party
        in order to enter into the Transaction Agreements or to consummate the
        transactions contemplated thereunder. The execution, delivery and performance
        of
        the Transaction Agreements and the consummation of the transactions contemplated
        thereby have been duly authorized by all necessary action on the part of
        Buyer.
        Each of the Transaction Agreements have been, or will be, duly executed and
        delivered by Buyer and constitute, or will constitute when executed and
        delivered, the legal, valid and binding obligation of Buyer, enforceable
        against
        Buyer in accordance with their terms, except that such enforceability may
        be
        limited by bankruptcy, insolvency, moratorium or other similar laws affecting
        or
        relating to creditors’ rights generally, and is subject to general principles of
        equity.

      

      (c)
        Non-contravention.  

      

      Neither
        the execution and delivery of this Agreement, nor the consummation of the
        transactions contemplated hereby (including the assignments and assumptions
        referred to in §2 above), will (i) violate any constitution, statute,
        regulation, rule, injunction, judgment, order, decree, ruling, charge, or
        other
        restriction of any government, governmental agency, or court to which Buyer
        is
        subject or its certificate of limited partnership or its limited partnership
        agreement, or other governing documents or (ii) conflict with, result in
        a
        breach of, constitute a default under, result in the acceleration of, create
        in
        any party the right to accelerate, terminate, modify, or cancel, or require
        any
        notice under any agreement, contract, lease, license, instrument, or other
        arrangement to which Buyer is a party or by which it is bound or to which
        any of
        its assets are subject. Buyer does not need to give any notice to, make any
        filing with, or obtain any authorization, consent, or approval of any government
        or governmental agency in order for the Parties to consummate the transactions
        contemplated by this Agreement (including the assignments and assumptions
        referred to in §2 above). 

      

      (d)
        Brokers’
        Fees.

      

      There
        is
        no investment banker, broker, finder or other intermediary that has been
        retained by or is authorized to act on behalf of Buyer who might be entitled
        to
        any fee or commission from Buyer or any of its Affiliates in connection with
        the
        transactions contemplated by this Agreement. 

      

      §5.    
        Pre-Closing
        Covenants.   

      

      The
        Parties agree as follows with respect to the period between the execution
        of
        this Agreement and the Closing:

      

      (a)
        General.  

      

      Each
        of
        the Parties will use, and will cause each of their respective Subsidiaries
        to
        use, their best efforts to take all actions and to do all things necessary
        in
        order to consummate and make effective the transactions contemplated by this
        Agreement (including satisfaction, but not waiver, of the Closing conditions
        set
        forth in §7 below).

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      (b)
        Notices
        and Consents.  

      

      Sellers
        shall give any notices to third-parties, and Sellers shall use their best
        efforts to obtain any third party consents that Buyer may request in connection
        with the matters referred to in §3(c) above. Each of the Parties shall give any
        notices to, make any filings with, and use their best efforts to obtain any
        authorizations, consents, and approvals of governments and governmental agencies
        in connection with the matters referred to in §3(c) and §4(c)
        above.

      

      (c)
        Operation
        of Business.  

      

      Other
        than the termination of the Employment Agreements, Sellers shall not engage
        in
        any practice, take any action, or enter into any transaction outside the
        Ordinary Course of Business. Without limiting the generality of the foregoing,
        Sellers shall not otherwise engage in any practice, take any action, or enter
        into any transaction of the sort described in §3(h) above. 

      

      (d)
        Preservation
        of Business.  

      

      Sellers
        shall, and shall cause Division to, keep their business and properties
        substantially intact, including their present operations, physical facilities,
        working conditions, and relationships with lessors, licensors, suppliers,
        customers, and employees. 

      

      (e)
        Full
        Access.  

      

      Sellers
        shall permit representatives of Buyer to have full access at all reasonable
        times upon reasonable notice, and in a manner so as not to interfere with
        the
        normal business operations of Sellers, to all premises, properties, personnel,
        books, records (including Tax records), contracts, and documents of
        Sellers.

      

      (f)
        Notice
        of Developments.  

      

      Each
        Party will give prompt written notice to the other Parties of any material
        adverse development causing a breach of any of its own representations and
        warranties in §3 and §4 above. No disclosure by any Party pursuant to this
§5(f), however, shall be deemed to amend or supplement the Disclosure Schedule
        or to prevent or cure any misrepresentation, breach of warranty, or breach
        of
        covenant. 

      

      (g)
        Exclusivity.  

      

      (i)
        Neither of Sellers shall, nor shall any of their officers, directors, employees,
        partners, stockholders, Affiliates, Subsidiaries, investment bankers, attorneys,
        accountants, consultants or other agents or advisors (the “Representatives”),
        directly or indirectly, (A) solicit, initiate or take any action to facilitate
        or encourage the submission of any Acquisition Proposal, (B) enter into or
        participate in any discussions or negotiations with, furnish any information
        relating to Sellers or Division or afford access to the business, properties,
        assets, books or records of Sellers or Division or otherwise cooperate in
        any
        way with, or knowingly assist, participate in, facilitate or encourage any
        effort by any third party that is seeking to make, or has made, an Acquisition
        Proposal, (C) grant any waiver or release under any standstill or similar
        agreement with respect to any class of equity securities of Sellers or any
        Subsidiary of Parent or (D) enter into any agreement with respect to an
        Acquisition Proposal.

      

      (ii) Notwithstanding
        §5(g)(i) above and subject to §5(g)(iv) below, if Sellers and the
        Representatives have not breached or violated any provision of this §5(g), the
        board of directors of Parent, directly or indirectly through the
        Representatives, may engage in negotiations or discussions with any Third
        Party
        that, without prior solicitation by or negotiation with Parent, has made
        a
        Superior Proposal and furnish to such Third Party nonpublic information relating
        to Parent or any of its Subsidiaries pursuant to a confidentiality agreement
        (a
        copy of such confidentiality agreement being provided for informational purposes
        only to Buyer); provided
        that
        Buyer shall be furnished with such nonpublic information prior to or
        simultaneously with the furnishing thereof to such Third Party (to the extent
        such nonpublic information has not been previously furnished by Sellers to
        Buyer). Following receipt of such Superior Proposal, Parent’s board of directors
        may fail to make, withdraw or modify in a manner adverse to Buyer its
        recommendation to its stockholders referred to in §5(i)(i) below, submit such
        Superior Proposal to a vote of its stockholders, and/or take any non-appealable,
        final action that any court of competent jurisdiction orders Parent to take,
        but
        in each case referred to in the foregoing subsections (A) through (D) of
        §5(g)(i) above only if a majority of the Non-Affiliated Directors determine
        in
        good faith, after considering written advice of the outside legal counsel
        and
        financial advisor to Parent’s board of directors that the board must take such
        action to comply with its fiduciary duties under applicable law. Nothing
        contained herein shall prevent Parent’s board of directors from complying with
        Rule 14e-2(a) or Rule 14d-9 under the Securities Exchange Act with regard
        to an
        Acquisition Proposal or from making other disclosures to Parent’s stockholders
        if required under applicable law; provided,
        however,
        that
        any such actions shall comply with the other requirements of this §5(g).

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      (iii) Parent’s
        board of directors shall not take any of the actions referred to in subsections
        (A) through (D) of §5(g)(i) above unless Parent shall have delivered to Buyer a
        prior written notice advising Buyer that it intends to take such action,
        and
        Parent shall continue to keep Buyer informed, on a current basis, with respect
        to such Superior Proposal after taking such action. In addition, Parent shall
        notify Buyer promptly (but in no event later than 24 hours) after receipt
        by
        Parent (or any of its Representatives) of any Acquisition Proposal, any
        indication that a third party is considering making an Acquisition Proposal
        or
        of any request for information relating to Parent or any of its Subsidiaries
        or
        for access to the business, properties, assets, books or records of Parent
        or
        any of its Subsidiaries by any third party that may be considering making,
        or
        has made, an Acquisition Proposal. Parent shall provide such notice orally
        and
        within one (1) business day in writing and shall identify the third party
        making, and the terms and conditions of, any such Acquisition Proposal,
        indication or request. Parent shall provide within one (1) business day of
        receipt a copy of any documentation of the terms of any such inquiry, proposal
        or offer, and thereafter shall keep Buyer informed, on a current basis, of
        the
        status and terms of any such proposals or offers and the status of any such
        discussions or negotiations (including by delivering any further documentation
        of the type referred to above). Parent shall, and shall cause the
        Representatives to, cease immediately and cause to be terminated any and
        all
        existing activities, discussions or negotiations, if any, with any third
        party
        conducted prior to the date hereof with respect to any Acquisition Proposal
        and
        shall use all reasonable efforts to cause any such third party (or its agents
        or
        advisors) in possession of confidential information about Parent or its
        Subsidiaries to return or destroy all such information.

      

      (iv) In
        the
        event Parent receives a Superior Proposal, Parent and its board of directors
        shall not take any actions referred to under §5(g)(ii) above until Parent has
        negotiated in good faith with Buyer with respect to the terms of the
        transactions contemplated by this Agreement for a period of 10 business days
        from the date Buyer receives written notice of all material terms and conditions
        of the Superior Proposal (including any documents related thereto) as set
        forth
        in §5(g)(iii) above. In the event Parent subsequently receives any amendments
        or
        changes to such Superior Proposal, Parent and its board of directors shall
        not
        take any actions referred to under §5(g)(ii) above until Parent has negotiated
        in good faith with Buyer with respect to the terms of the transactions
        contemplated by this Agreement for a period of 10 business days from the
        date
        Buyer receives written notice of all material terms and conditions of such
        original Superior Proposal, as amended or changed (including any documents
        related thereto) as set forth in §5(g)(iii) above and such written notice shall
        specify if Parent and its board of directors intend to take any actions referred
        to under §5(g)(ii) above.

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      (h)
        Maintenance
        of Acquired Assets.  

      

      Sellers
        shall maintain the Acquired Assets in substantially the same condition as
        existed on the date of this Agreement, ordinary wear and tear
        excepted.

      

      (i)
        Parent Stockholders Meeting

      

      (i)
        Parent shall cause a meeting of its stockholders (the “Parent
        Stockholders Meeting”)
        to be
        duly called and held as soon as reasonably practicable for the purpose of
        voting
        on the approval and adoption of (A) this Agreement and the transactions
        contemplated hereby, (B) an amendment to Parent’s certificate of incorporation
        to change Parent’s name such that it does not contain the terms “Tidel” or
“Sentinel” or any derivations thereof (the “Amendment”)
        and
        (C) any motion for adjournment or postponement of the Parent Stockholder
        Meeting
        to another time or place to permit, among other things, further solicitation
        of
        proxies if necessary to establish a quorum or to obtain additional votes
        in
        favor of this Agreement and the transactions contemplated hereby and the
        Amendment (the “Motion”).
        Subject to §5(g)(ii) above, the board of directors of Parent shall recommend
        approval and adoption of the items set forth in subsections (A), (B) and
        (C) of
        this §5(i)(i). The only matters on the ballot at the Parent Stockholders Meeting
        shall be the matters set forth above in subsections (A), (B) and (C) of this
        §5(i)(i). In connection with the Parent Stockholders Meeting, Parent shall
        Error!
        Bookmark not defined.
        promptly
        prepare and file with the SEC, use its commercially reasonable best efforts
        to
        have cleared by the SEC and thereafter mail to its stockholders as promptly
        as
        practicable, the Parent Proxy Statement and all other proxy materials for
        such
        meeting, Error!
        Bookmark not defined.
        use its
        commercially reasonable best efforts to obtain the necessary approvals by
        its
        stockholders of this Agreement and the transactions contemplated hereby and
        the
        Amendment, (3) otherwise comply with all legal requirements applicable to
        such
        meeting, and (4) hire MacKenzie Partners, Inc., or another proxy solicitor
        of
        equivalent stature, to assist Parent in the solicitation of votes and proxies
        for the Parent Stockholder Meeting.

      

      (ii)
        Notwithstanding anything to the contrary contained in this Agreement, unless
        this Agreement shall be terminated in accordance with §8 hereof, and in
        accordance with the applicable provisions of the law of the State of Delaware,
        (A) Parent shall be obligated to call, give notice of and hold the Parent
        Stockholders Meeting regardless of the commencement, disclosure, announcement
        or
        submission to it of any Acquisition Proposal, or of any failure to make,
        withdrawal or modification by Parent’s board of directors of its recommendation
        as required by §5(i)(i) above and (B) subject to §5(g) above, Parent shall not
        submit to the vote of its stockholders any Acquisition Proposal, or propose
        to
        do so. 

      

      (iii)
        The
        Parent Proxy Statement and any amendments or supplements thereto will, when
        filed, comply as to form in all material respects with the applicable
        requirements of the Securities Exchange Act. At the time the Parent Proxy
        Statement or any amendment or supplement thereto is first mailed to stockholders
        of Parent, and at the time such stockholders vote on the approval and adoption
        of this Agreement and the transactions contemplated hereby, the Amendment
        and
        the Motion, and at the Closing, the Parent Proxy Statement, as supplemented
        or
        amended, if applicable, will not contain any untrue statement of a material
        fact
        or omit to state any material fact necessary in order to make the statements
        made therein, in the light of the circumstances under which they were made,
        not
        misleading. The covenants contained in this subsection will not apply to
        statements or omissions included in the Parent Proxy Statement based upon
        information furnished to Parent in writing by Buyer specifically for use
        therein.

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

      (j)
        Name
        Change.  

      

      Parent
        shall change its name and shall cause Tidel Cash Systems, Inc., Tidel Services,
        Inc. and Target to change their respective names such that their respective
        names do not contain the terms “Tidel” or “Sentinel” or any derivations thereof.
        Parent and its subsidiaries shall amend any authorization to conduct business
        as
        foreign entity in any jurisdiction and any assumed names to reflect the
        foregoing name changes. 

      

      (k)
        Perfection
        of Ownership of Intellectual Property.

      

      Sellers
        shall take all necessary and advisable actions to perfect Sellers’ chain of
        title and sole ownership of all rights, title and interests, free and clear
        of
        all interests of third parties and Liens, in all Intellectual Property,
        including (i) obtaining and recording with the United States Patent and
        Trademark Office or other similar agencies in foreign jurisdictions
        (collectively, “Patent
        Agencies”)
        any
        necessary and advisable assignments from any inventors or prior owners of
        any
        Intellectual Property and (ii) recording the change of ownership with any
        applicable Patent Agencies of any Intellectual Property to Target. 

      

      (l)
        Maintenance
        of Leased Real Property.  

      

      Sellers
        will maintain the Leased Real Property, including all of the Improvements,
        in
        substantially the same condition as existed on the date of this Agreement,
        ordinary wear and tear excepted, and shall not demolish or remove any of
        the
        existing Improvements, or erect new improvements on the Leased Real Property
        or
        any portion thereof, without the prior written consent of Buyer.

      

      (m)
        Leases. 

      

      Sellers
        will not amend, modify, extend, renew or terminate any Lease or enter into
        any
        new lease, sublease, license or other agreement for the use or occupancy
        of any
        real property without the prior written consent of Buyer. 

      

      (n)
        Claim. 

      

      Sellers
        shall take all actions that a reasonably prudent person would undertake with
        respect to the CSS Claim and shall diligently defend the CSS Claim; provided,
        however,
        that
        any material actions with respect to the CSS Claim shall require the prior
        written consent of Buyer, which consent shall not be unreasonably withheld.
        

      

      §6.
            
Post-Closing
        Covenants.  

      

      The
        Parties agree as follows with respect to the period following the
        Closing:

      

      (a)
        General.  

      

      In
        case
        at any time after the Closing any further actions are necessary or desirable
        to
        carry out the purposes of the Transaction Agreements, each of the Parties
        will
        take such further actions (including the execution and delivery of such further
        instruments and documents) as another Party may reasonably request, all at
        the
        sole cost and expense of the requesting Party. Sellers shall not, and Parent
        shall cause its Subsidiaries not to, use the term“Tidel”
or
        “Sentinel” or any derivations thereof as part of their respective names. Sellers
        acknowledge and agree that from and after the Closing, Buyer will be entitled
        to
        possession of all documents, books, records (including Tax records), agreements,
        and financial data of any sort relating to Division.

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      (b)
        Litigation
        Support.  

      

      In
        the
        event and for so long as any Party is actively contesting or defending against
        any action, suit, proceeding, hearing, investigation, charge, complaint,
        claim,
        or demand in connection with (i) the transactions contemplated under the
        Transaction Agreements, (ii) the CSS Claim, (iii) the Bank Accounts, or (iv)
        any
        fact, situation, circumstance, status, condition, activity, practice, plan,
        occurrence, event, incident, action, failure to act, or transaction on or
        prior
        to the Closing Date involving Sellers, the other Party will cooperate with
        the
        contesting or defending Party and its counsel in the contest or defense,
        make
        available its personnel, and provide such testimony and access to its books
        and
        records as shall be necessary in connection with the contest or defense,
        all at
        the sole cost and expense of the contesting or defending Party.

      

      (c)
        Transition.  

      

      Sellers
        shall not, nor shall any of Parent’s Subsidiaries or any of their officers and
        directors, take any action that is designed or intended to have the effect
        of
        discouraging any lessor, licensor, customer, supplier, vendor or other business
        associate of Division from maintaining the same business relationships with
        Buyer after the Closing as it maintained with Division prior to the Closing.
        Sellers shall refer all customer inquiries relating to Division to Buyer
        from
        and after the Closing. After the Closing, Sellers shall direct any inquiries
        regarding payment of any accounts receivable that were included in the Acquired
        Assets to Buyer and shall immediately remit any amounts received by Sellers
        in
        payment of such accounts receivable to Buyers by in cash by wire transfer
        or
        other immediately available funds.

      

      (d)
        Confidentiality. 

      

      Sellers
        shall treat and hold as such all of the Confidential Information, refrain from
        using any of the Confidential Information except in connection with this
        Agreement, and deliver promptly to Buyer or destroy, at the request and option
        of Buyer, all tangible embodiments (and all copies) of the Confidential
        Information that are in its possession. In the event either of Sellers is
        requested or required (by oral question or request for information or documents
        in any legal proceeding, interrogatory, subpoena, civil investigative demand,
        or
        similar process) to disclose any Confidential Information, Sellers will notify
        Buyer promptly of the request or requirement so that Buyer may seek an
        appropriate protective order or waive compliance with the provisions of this
        §6(d). If, in the absence of a protective order or the receipt of a waiver
        hereunder, Sellers are, on the advice of counsel, compelled to disclose any
        Confidential Information to any tribunal or else stand liable for contempt,
        Sellers may disclose the Confidential Information to the tribunal; provided,
        however,
        that
        Sellers shall use their best efforts to obtain, at the reasonable request
        of
        Buyer, an order or other assurance that confidential treatment will be accorded
        to such portion of the Confidential Information required to be disclosed
        as
        Buyer shall designate.

      

      (e)
        Covenant
        Not to Compete or Solicit. 

      

      For
        a
        period of five years from and after the Closing Date, Sellers shall not,
        nor
        allow any of their Subsidiaries to, engage directly or indirectly in any
        business that Division conducts as of the Closing Date; provided,
        however,
        that no
        owner of less than one percent (1%) of the outstanding stock of any publicly
        traded corporation shall be deemed to engage solely by reason thereof in
        its
        business. For a period of five years from and after the Closing Date, Sellers
        shall not, nor allow any of their Subsidiaries, to solicit any employee of
        Buyer
        to leave the employment of Buyer or solicit any customer or potential customer
        of Buyer to cease or reduce its business with Buyer; provided,
        however,
        that no
        owner of less than one percent (1%) of the outstanding stock of any publicly
        traded corporation shall be deemed to be soliciting any employees, customers
        or
        potential customers of Buyer solely by reason thereof. If the final judgment
        of
        a court of competent jurisdiction declares that any term or provision of
        this
§6(e) is invalid or unenforceable, the Parties agree that the court making
        the
        determination of invalidity or unenforceability shall have the power to reduce
        the scope, duration, or area of the term or provision, to delete specific
        words
        or phrases, or to replace any invalid or unenforceable term or provision
        with a
        term or provision that is valid and enforceable and that comes closest to
        expressing the intention of the invalid or unenforceable term or provision,
        and
        this Agreement shall be enforceable as so modified after the expiration of
        the
        time within which the judgment may be appealed.

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

      (f)
        Defense
        of CSS Claim. 

      

      (i)
        Buyer
        shall undertake, and shall have the sole right to direct on behalf of itself
        and
        Sellers, the defense of the CSS Claim for Sellers with counsel of its
        choice.

      

      (ii)
        Sellers shall not take any action, consent to the entry of any judgment or
        enter
        into any settlement with respect to the CSS Claim without the prior written
        consent of Buyer. 

      

      (iii)
        In
        the
        event Sellers shall incur any Adverse Consequences in connection with the
        CSS
        Claim subsequent to the Closing Date, then Buyer shall indemnify Sellers
        from
        and against the entirety of any such Adverse Consequences;
        provided,
        however,
        that
        Buyer shall not be obligated to indemnify Seller for any Adverse Consequences
        incurred as a result of the breach of this Agreement or the negligent action
        or
        inaction of Sellers.

      

       (g)
        Indemnification. 

      

      (i)
        Parent agrees that all rights to indemnification or exculpation now existing
        in
        favor of the employees, agents, directors or officers of Parent and its
        Subsidiaries (the “Parent
        Indemnified Parties”)
        as
        provided in their respective charter documents, bylaws, certificate of limited
        partnership or limited partnership agreement as in effect on the date of
        this
        Agreement shall continue in full force and effect for a period of six (6)
        years
        from and after the Closing Date (the “Indemnity
        Period”);
        provided,
        however,
        that,
        in the event any claim or claims are asserted or made within the Indemnity
        Period, all rights to indemnification in respect of any such claim or claims
        shall continue to final and non-appealable disposition of any and all such
        claims. Any determination required to be made with respect to whether the
        Parent
        Indemnified Party’s conduct complies with the standards set forth in such
        charter documents, bylaws , certificate of limited partnership or limited
        partnership agreement or otherwise shall be made by independent counsel selected
        by the Parent Indemnified Parties, which counsel shall be reasonably
        satisfactory to Parent (whose fees and expenses shall be paid by Parent),
        which
        such determination shall be final and binding on the parties thereto.

      

      (ii)
        During the Indemnity Period, Parent shall indemnify and hold harmless the
        Parent
        Indemnified Parties in respect of acts or omissions occurring at or prior
        to the
        Closing to the fullest extent permitted by Delaware law or any other applicable
        laws or provided under Parent’s and its Subsidiaries’ charter, bylaws,
        certificate of limited partnership or limited partnership agreement in effect
        on
        the date of this Agreement; provided
        that
        such indemnification shall be subject to any limitation imposed from time
        to
        time under applicable law.

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

      (iii)
        If
        Parent or any of its successors or assigns (A) consolidates with or merges
        into
        any other Person and shall not be the continuing or surviving corporation
        or
        entity of such consolidation or merger, or (B) transfers or conveys all or
        substantially all of its properties and assets to any Person, then, and in
        each
        such case, to the extent necessary, proper provision shall be made so that
        the
        successors and assigns of Parent shall assume the obligations set forth in
        this
§6(g).

      

      (iv)
        The
        rights of each Parent Indemnified Party under this §6(g) shall be in addition to
        any rights such Person may have under the charter, bylaws, certificate of
        limited partnership or limited partnership agreement of Parent or any of
        its
        Subsidiaries, or under Delaware law or any other applicable laws or under
        any
        agreement of any Parent Indemnified Party with Parent or any of its
        Subsidiaries. These rights shall survive consummation of the transactions
        contemplated by this Agreement and are intended to benefit, and shall be
        enforceable by, each Parent Indemnified Party.

      

      (h)
        Directors’
        and Officers’ Insurance. 

      

      During
        the Indemnity Period, Parent shall maintain in effect directors’ and officers’
and fiduciaries’ liability insurance covering the officers and directors of
        Parent and its Subsidiaries as of the date of this Agreement on comparable
        terms
        and conditions and with comparable insurance coverage as is then in effect
        for
        the current officers and directors of Parent and its Subsidiaries. Parent
        agrees
        that if Parent is dissolved or ceases to exist for any reason prior to the
        termination of the Indemnity Period, prior to such dissolution or cessation
        Parent shall extend Parent’s then in effect directors’ and officers’ and
        fiduciaries’ liability insurance policy on commercially reasonable terms and
        conditions and with insurance coverage as comparable as possible with the
        insurance policy then in effect for the current officers and directors of
        Parent
        and Subsidiaries, and such extension shall provide such insurance coverage
        to
        all directors and officers of Parent as of the date of this Agreement. Parent
        shall prepay all premiums in connection with such extension. These rights
        shall
        survive consummation of the transactions contemplated by this Agreement and
        are
        intended to benefit, and shall be enforceable by, each Parent Indemnified
        Party.

      

      (i)
        Employee
        Non-competition and Confidentiality Agreements. 

      

      Sellers
        agree that any and all non-competition and confidentiality agreements between
        Sellers and their Affiliates on the one hand and employees of Sellers and
        their
        Affiliates on the other hand shall be null and void and of no further force
        and
        effect with respect to such employees who become employees of Buyer and its
        Affiliates. 

      

      (j)
        Bank
        Accounts. 

      

      In
        the
        event Sellers shall incur any Adverse Consequences in connection with checks
        drawn on and properly presented for payment from the Bank Accounts subsequent
        to
        the Closing, then Buyer shall indemnify Sellers from and against the entirety
        of
        any such Adverse Consequences. If any such Adverse Consequences result from
        an
        act of fraud for which Sellers are insured, then Buyer’s obligation to indemnify
        Sellers for any such Adverse Consequences shall be reduced by the amount
        of
        insurance proceeds received by Sellers in connection therewith; provided,
        however,
        that if
        Sellers have not received any such insurance proceeds within three months
        after
        the commission of the act of fraud at issue, Buyer shall pay to Seller the
        entire amount of such Adverse Consequences; provided
        further
        that if
        Sellers shall subsequently receive any such insurance proceeds, Seller shall
        promptly pay all such insurance proceeds to Buyer.
        Sellers
will
        take
        such further actions (including the execution and delivery of such further
        instruments and documents and the filing and pursuit of insurance claims)
        as
        Buyer may reasonably request in connection with the Bank Accounts. 

      
        
          
          

        

        
          37

          
            

          

        

        
          
          

        

      

      §7.    
        Conditions
        to Obligation to Close.   

      

      (a)
        Conditions
        to Buyer’s Obligation.  

      

      Buyer’s
        obligation to consummate the transactions to be performed by it in connection
        with the Closing is subject to satisfaction of the following conditions:
        

      

      (i)
        the
        representations and warranties set forth in §3 above shall be true and correct
        in all material respects at and as of the Closing Date, except to the extent
        that such representations and warranties are qualified by the term “material,”
or contain terms such as “Material Adverse Effect” or “Material Adverse Change,”
in which case such representations and warranties (as so written, including
        the
        term “material” or “Material”) shall be true and correct in all respects at and
        as of the Closing Date; 

      

      (ii)
        Sellers shall have performed and complied with all of the covenants hereunder
        in
        all material respects through the Closing, except to the extent that such
        covenants are qualified by the term “material,” or contain terms such as
“Material Adverse Effect” or “Material Adverse Change,” in which case Sellers
        shall have performed and complied with all of such covenants (as so written,
        including the term “material” or “Material”) in all respects through the
        Closing; 

      

      (iii)
        Sellers and Division shall have procured all of the third-party consents
        specified in §5(b) above; 

      

      (iv)
        no
        action, suit, or proceeding shall be pending or threatened before any court
        or
        quasi-judicial or administrative agency of any federal, state, local, or
        foreign
        jurisdiction or before any arbitrator wherein an unfavorable injunction,
        judgment, order, decree, ruling, or charge would (A) prevent consummation
        of any
        of the transactions contemplated by this Agreement, (B) cause any of the
        transactions contemplated by this Agreement to be rescinded following
        consummation, (C) adversely affect the right of Buyer to own the Acquired
        Assets
        and to operate the former business of Division, or (D) have a Material Adverse
        Effect; 

      

      (v)
        there
        shall not have been, or the occurrence of any events which could reasonably
        be
        expect to have, a Material Adverse Effect;

      

      (vi)
        there shall not have been, or the occurrence of any events which could
        reasonably be expected to have, an adverse change or impact with respect
        to
        Sellers or Buyer in connection with the CSS Claim;

      

      (vii)
        this Agreement and the transactions contemplated hereby and the Amendment
        shall
        have been approved and adopted by the stockholders of Parent in accordance
        with
        the laws of the State of Delaware (the “Stockholder
        Approval”);

      

      (viii)
        Sellers shall have delivered to Buyer a certificate to the effect that each
        of
        the conditions specified above in §7(a)(i)-(vii) is satisfied in all
        respects;

      

      (vix)
        Sellers shall have executed and delivered the Assignments in substantially
        the
        forms attached hereto as Exhibit A to Buyer; 

      

      (x)
        Buyer
        shall have received from counsel to Sellers an opinion in form and substance
        as
        set forth in Exhibit B attached hereto, addressed to Buyer and on which Buyer’s
        lenders shall be entitled to rely, and dated as of the Closing
        Date;

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

       (xi)
        Sellers shall have provided to Buyer evidence of the release of the following
        Liens, such evidence to be satisfactory to Buyer in its sole discretion:
        (A)
        Lien of Laurus Master Fund Ltd. on all of the assets of Sellers, Tidel Cash
        Systems, Inc. and Tidel Services, Inc. filed with the Secretary of State
        of the
        State of Delaware; (B) state tax Lien on Parent filed with the Clerk of Harris
        County, Texas; (C) Lien of Wallis State Bank on all accounts, inventory,
        equipment, intangibles, cash, cash equivalents and other property of Sellers
        and
        Tidel Cash Systems, Inc. filed with the Secretary of State of the State of
        Delaware; (D) Lien of JP Morgan Chase Bank on all accounts, inventory,
        equipment, intangibles, cash, cash equivalents and other property of Sellers
        filed with the Clerk of Harris County, Texas; and (E) Lien of Chase Bank
        of
        Texas on all accounts, inventory, equipment, intangibles, cash and other
        property of Tidel Cash Systems, Inc. filed with the Clerk of Dallas County,
        Texas;

      

      (xii)
        Sellers shall have provided to Buyer evidence of the release, such evidence
        to
        be satisfactory to Buyer in its sole discretion, of all liens recorded at
        the
        United States Patent and Trademark Office on any Intellectual Property,
        including, but not limited to the liens held by Saudi International Bank,
        Al-Bank Al-Saudi Al-Alami Limited; Wallis State Bank; The Frost National
        Bank
        d/b/a Creekwood Capital Group; and Creekwood Capital Corporation;

      

      (xiii)
        Sellers shall have provided to Buyer evidence of assignments perfecting Sellers’
sole ownership of all rights, title and interests, free and clear of all
        interests of third parties and Liens, in all Intellectual Property, such
        evidence to be satisfactory to Buyer in its sole discretion, including (A)
        evidence of recordation with Patent Agencies of any necessary and advisable
        assignments from any inventors or prior owners of any Intellectual Property
        (including without limitation all patent applications included in the
        Intellectual Property) and (B) evidence of the recordation with any applicable
        Patent Agencies of the change of ownership of any Intellectual Property to
        Target;

      

      (xiv)
        Parent, Target, Tidel Cash Systems, Inc. and Tidel Services, Inc. shall have
        changed their respective names such that they do not contain the terms “Tidel”
or “Sentinel” or any derivations thereof and shall have provided to Buyer
        evidence thereof reasonably satisfactory to Buyer; and further shall have
        amended any authorizations to conduct business as foreign entity in any
        jurisdiction and any assumed names to reflect the foregoing and provided
        to
        Buyer evidence thereof reasonably satisfactory to Buyer;

      

      (xv)
        Sellers shall have terminated the Employment Agreements on terms reasonably
        satisfactory to Buyer;

      

      (xvi)
        all
        actions to be taken by Sellers in connection with consummation of the
        transactions contemplated hereby and all certificates, opinions, instruments,
        and other documents required to effect the transactions contemplated hereby
        shall be reasonably satisfactory in form and substance to Buyer;

      

      (xvii)
        Sellers shall deliver to Buyer a non-foreign affidavit dated as of the Closing
        Date, sworn under penalty of perjury and in form and substance required under
        the Treasury Regulations issued pursuant to Code §1445 stating that neither of
        Sellers are a “foreign person” as defined in Code §1445; and

      

      (xviii)
        Sellers shall have delivered to Buyer a certificate of the secretary or an
        assistant secretary of each of Sellers, dated the Closing Date, in form and
        substance reasonably satisfactory to Buyer, as to: (A) no amendments to the
        certificate of incorporation and bylaws of Parent or the certificate of limited
        partnership and limited partnership agreement of Target since the date of
        this
        Agreement; (B) the resolutions of the board of directors (or other authorizing
        body) (or a duly authorized committee thereof) of Sellers authorizing the
        execution, delivery, and performance of this Agreement and the transactions
        contemplated hereby and the closing of the Bank Accounts and the transfer
        of the
        Bank Account Amount to Buyer; (C) incumbency and signatures of the officers
        of
        Sellers executing this Agreement or any other agreement contemplated by this
        Agreement; and (D) the requisite number of votes of the Parent’s stockholders
        approved and adopted this Agreement, the transactions contemplated by this
        Agreement and the Amendment at the Parent Stockholders Meeting.

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

      Buyer
        may
        waive any condition specified in this §7(a) if it executes a writing so stating
        at or prior to the Closing.

      

      (b)
        Conditions
        to Sellers’ Obligation.  

      

      Sellers’
        obligation to consummate the transactions to be performed by them in connection
        with the Closing is subject to satisfaction of the following conditions:
        

      

      (i)
        the
        representations and warranties set forth in §4 above shall be true and correct
        in all material respects at and as of the Closing Date, except to the extent
        that such representations and warranties are qualified by the term “material,”
or contain terms such as “Material Adverse Effect” or “Material Adverse Change,”
in which case such representations and warranties (as so written, including
        the
        term “material” or “Material”) shall be true and correct in all respects at and
        as of the Closing Date;

      

      (ii)
        Buyer shall have performed and complied with all of its covenants hereunder
        in
        all material respects through the Closing, except to the extent that such
        covenants are qualified by the term “material,” or contain terms such as
“Material Adverse Effect” or “Material Adverse Change,” in which case Buyer
        shall have performed and complied with all of such covenants (as so written,
        including the term “material” or “Material”) in all respects through the
        Closing;

      

      (iii)
        no
        action, suit, or proceeding shall be pending or threatened before any court
        or
        quasi-judicial or administrative agency of any federal, state, local, or
        foreign
        jurisdiction or before any arbitrator wherein an unfavorable injunction,
        judgment, order, decree, ruling, or charge would (A) prevent consummation
        of any
        of the transactions contemplated by this Agreement or (B) cause any of the
        transactions contemplated by this Agreement to be rescinded following
        consummation; 

      

      (v)
        Buyer
        shall have delivered to Sellers a certificate to the effect that each of
        the
        conditions specified above in §7(b)(i)-(iii) is satisfied in all respects;

      

      (vi)
        the
        Stockholder Approval shall have been obtained; and

      

      (vii)
        all
        actions to be taken by Buyer in connection with consummation of the transactions
        contemplated hereby and all certificates, opinions, instruments, and other
        documents required to effect the transactions contemplated hereby will be
        reasonably satisfactory in form and substance to Sellers.

      

      Sellers
        may waive any condition specified in this §7(b) if they execute a writing so
        stating at or prior to the Closing.

      

        §8.    Survival
        and Termination.   

      

      (a)
        Survival
        of Representations and Warranties. 

      

      None
        of
        the representations and warranties of Buyer and Sellers contained in this
        Agreement shall survive the Closing.

      
        
          
          

        

        
          40

          
            

          

        

        
          
          

        

      

      (b)
        Termination
        of Agreement.  

      

      Subject
        to §9(k) below, certain of the Parties may terminate this Agreement as provided
        below: 

      

      (i)
        Buyer
        and Sellers may terminate this Agreement by mutual written consent at any
        time
        prior to the Closing;

      

      (ii)
        Buyer may terminate this Agreement by giving written notice to Sellers at
        any
        time prior to the Closing (A) subject to §8(b)(iv) and §8(b)(v) below, in the
        event either of Sellers have breached any representation, warranty, or covenant
        contained in this Agreement in any material respect, Buyer has notified Sellers
        of the breach, and the breach has continued without cure for a period of
        30 days
        after the notice of breach or (B) if the Closing shall not have occurred
        on or
        before the date that is the eight month anniversary of the date of this
        Agreement (unless the failure results primarily from Buyer itself breaching
        any
        representation, warranty, or covenant contained in this Agreement);

      

      (iii)
        Sellers may terminate this Agreement by giving written notice to Buyer at
        any
        time prior to the Closing (A) in the event Buyer has breached any
        representation, warranty, or covenant contained in this Agreement in any
        material respect, Sellers have notified Buyer of the breach, and the breach
        has
        continued without cure for a period of 30 days after the notice of breach
        or (B)
        if the Closing shall not have occurred on or before the date that is the
        eight
        month anniversary of the date of this Agreement (unless the failure results
        primarily from Sellers breaching any representation, warranty, or covenant
        contained in this Agreement);

      

      (iv)
        Buyer may terminate this Agreement by giving written notice to Sellers if
        Sellers breach their obligations under §5(g) or §5(i) above; or

      

      (v)
        Buyer
        may terminate this Agreement by giving written notice to Sellers if a majority
        of the Non-Affiliated Directors shall have failed to make or have withdrawn,
        or
        modified in a manner adverse to Buyer, their approval or recommendation of
        this
        Agreement or the transactions contemplated hereby, or shall have failed to
        reaffirm their approval or recommendation of this Agreement or the transactions
        contemplated hereby within five (5) business days after a request
        by Buyer to do so, or shall have approved or recommended an alternative
        Acquisition Proposal.

      

      (c)
        Effect
        of Termination. 

      

      If
        any
        Party terminates this Agreement pursuant to §8(b) above, all rights and
        obligations of the Parties hereunder shall terminate without any Liability
        of
        any Party to the other Party (except for any Liability of any Party then
        in
        breach and as set forth in §9(k) below). The provisions of this §8(c), §6(g),
§6(h) and §9 shall survive any termination of this Agreement pursuant to this
§8. 

      

      §9.     
        Miscellaneous.   

      

      (a)
        Press
        Releases and Public Announcements.  

      

      No
        Party
        shall issue any press release or make any public announcement relating to
        the
        subject matter of this Agreement without the prior written approval of the
        other
        Party;
        provided,
        however,
        that
        any Party may make any public disclosure it believes in good faith is required
        by applicable law or any listing or trading agreement concerning its publicly
        traded securities (in which case the disclosing Party will use its reasonable
        best efforts to advise the other Party prior to making the
        disclosure).

      

      (b)
        No
        Third-Party Beneficiaries.  

      
        
          
          

        

        
          41

          
            

          

        

        
          
          

        

      

      Except
        as
        provided in §6(g) and §6(h) above, this Agreement shall not confer any rights or
        remedies upon any Person other than the Parties and their respective successors
        and permitted assigns.

      

      (c)
        Entire
        Agreement.  

      

      This
        Agreement (including the documents referred to herein) constitutes the entire
        agreement between the Parties and supersedes any prior understandings,
        agreements, or representations by or between the Parties, written or oral,
        to
        the extent they relate in any way to the subject matter hereof.

      

      (d)
        Succession
        and Assignment.  

      

      This
        Agreement shall be binding upon and inure to the benefit of the Parties named
        herein and their respective successors and permitted assigns. No Party may
        assign either this Agreement or any of its rights, interests, or obligations
        hereunder without the prior written approval of the other Party; provided
        however,
        that
        Buyer may (i) assign any or all of its rights and interests hereunder to
        one or
        more of its Affiliates, (ii) designate one or more of its Affiliates to perform
        its obligations hereunder (in any or all of which cases Buyer nonetheless
        shall
        remain responsible for the performance of all of its obligations hereunder),
        or
        (iii) assign its rights and benefits under this Agreement to its lender as
        collateral for such its obligations to such lender and Sellers agree to execute
        a consent and agreement to such assignment in a form reasonably satisfactory
        to
        Sellers.

      

      (e)
        Counterparts.  

      

      This
        Agreement may be executed in two or more counterparts (including by means
        of
        facsimile), each of which shall be deemed an original but all of which together
        will constitute one and the same instrument.

      

      (f)
        Headings.  

      

      The
        section headings contained in this Agreement are inserted for convenience
        only
        and shall not affect in any way the meaning or interpretation of this
        Agreement.

      

      (g)
        Notices.  

      

      All
        notices, requests, demands, claims, and other communications hereunder shall
        be
        in writing. Any notice, request, demand, claim, or other communication hereunder
        shall be deemed duly given (i) when delivered personally to the recipient,
        (ii)
        one business day after being sent to the recipient by reputable overnight
        courier service (charges prepaid), (iii) one business day after being sent
        to
        the recipient by facsimile transmission or electronic mail, or (iv) four
        business days after being mailed to the recipient by certified or registered
        mail, return receipt requested and postage prepaid, and addressed to the
        intended recipient as set forth below: 

      

      If
        to
        Sellers: 

      

      Tidel
        Technologies, Inc.

      2900
        Wilcrest Drive, Suite 205

      Houston,
        Texas 77042

      Facsimile
        Number:

      

      Attn:
        Chief Executive Officer   

      
        
          
          

        

        
          42

          
            

          

        

        
          
          

        

      

      Copy
        to: 

      

      Olshan
        Grundman Frome Rosenzweig & Wolosky LLP

      Park
        Avenue Tower

      65
        East
        55th
        Street

      New
        York,
        New York 10022

      Facsimile
        Number: (212) 451-2222

      Attention:
        Adam Finerman, Esq.

      

      If
        to
        Buyer:

      

      Sentinel
        Operating, L.P.

      c/o
        LLG,
        LLC

      9423
        Desert Willow Road

      Highlands
        Ranch, Colorado 80129

      Attn:
        Chief Financial Officer

      

      Copy
        to: 

      

      Hensley
        Kim & Edgington, LLC

      1660
        Lincoln Street, Suite 3050

      Denver,
        Colorado 80264

      Facsimile
        Number: (720) 377-0777

      Attention:
        John P.J. Kim, Esq.

        
        Darren R. Hensley Esq.

      

      Any
        Party
        may change the address to which notices, requests, demands, claims, and other
        communications hereunder are to be delivered by giving the other Party notice
        in
        the manner herein set forth.

      

      (h)
        Governing
        Law.  

      

      This
        Agreement shall be governed by and construed in accordance with the domestic
        laws of the State of Delaware
        without
        giving effect to any choice or conflict of law provision or rule that would
        cause the application of the laws of any jurisdiction other than the State
        of
Delaware.

      

      (i)
        Amendments
        and Waivers.  

      

      No
        amendment of any provision of this Agreement shall be valid unless the same
        shall be in writing and signed by Buyer and Sellers. Parent may consent to
        any
        such amendment at any time prior to the Closing with the prior authorization
        of
        its board of directors; provided,
        however,
        that any
        amendment effected after Parent’s stockholders have approved this Agreement will
        be subject to the restrictions contained in the applicable provisions of
        the
        laws of the State of Delaware. No waiver by any Party of any default,
        misrepresentation, or breach of warranty or covenant hereunder, whether
        intentional or not, shall be valid unless the same shall be in writing and
        signed by the Party making such waiver nor shall such waiver be deemed to
        extend
        to any prior or subsequent default, misrepresentation, or breach of warranty
        or
        covenant hereunder or affect in any way any rights arising by virtue of any
        prior or subsequent default, misrepresentation, or breach of warranty or
        covenant.

      
        
          
          

        

        
          43

          
            

          

        

        
          
          

        

      

      (j)
        Severability.  

      

      Any
        term
        or provision of this Agreement that is invalid or unenforceable in any situation
        in any jurisdiction shall not affect the validity or enforceability of the
        remaining terms and provisions hereof or the validity or enforceability of
        the
        offending term or provision in any other situation or in any other
        jurisdiction.

      

      (k)
        Expenses.  

      

      (i)
        Except as otherwise provided herein, each of Buyer and Sellers shall bear
        its
        own costs and expenses (including legal fees and expenses) incurred in
        connection with this Agreement and the transactions contemplated hereby.
        Without
        limiting the generality of the foregoing, all transfer, documentary, sales,
        use,
        stamp, registration and other such Taxes, and all conveyance fees, recording
        charges and other fees and charges (including any penalties and interest)
        incurred in connection with the consummation of the transactions contemplated
        by
        this Agreement shall be paid by Sellers when due, and Sellers shall, at their
        own expense, file all necessary Tax Returns and other documentation with
        respect
        to all such Taxes, fees and charges, and, if required by applicable law,
        the
        Parties will, and will cause their Affiliates to, join in the execution of
        any
        such Tax Returns and other documentation.

      

      (ii)
        If a
        Parent Payment Event occurs, Parent shall pay $400,000 to Buyer (by wire
        transfer of immediately available funds) no later than two (2) business days
        after the occurrence of such Parent Payment Event. Nothing contained in this
        §9(k)(ii) shall limit or preclude Buyer from pursuing any other available
        remedies it may have against Sellers.

      

      (iii)
        Sellers acknowledge that the agreement contained in §9(k)(ii) above is an
        integral part of the transactions contemplated by this Agreement and that,
        without this agreement, Buyer would not enter into this Agreement. Accordingly,
        if Sellers fail to promptly pay the amount due pursuant to §9(k)(ii) above,
        Sellers shall also pay any costs and expenses incurred by Buyer in connection
        with a legal action to enforce this Agreement that results in a judgment
        against
        a Seller for such amount; provided, however, that if such legal action results
        in a judgment that neither Seller owes Buyer such amount, Buyer shall pay
        any
        costs and expenses incurred by Seller in connection with the defense of such
        legal action. 

      

       (l)
        Construction.  

      

      The
        Parties have participated jointly in the negotiation and drafting of this
        Agreement. In the event an ambiguity or question of intent or interpretation
        arises, this Agreement shall be construed as if drafted jointly by the Parties
        and no presumption or burden of proof shall arise favoring or disfavoring
        any
        Party by virtue of the authorship of any of the provisions of this Agreement.
        Any reference to any federal, state, local, or foreign statute or law shall
        be
        deemed also to refer to all rules and regulations promulgated thereunder,
        unless
        the context requires otherwise. The word “including” shall mean including
        without limitation. Nothing in the Disclosure Schedule shall be deemed adequate
        to disclose an exception to a representation or warranty made herein unless
        the
        Disclosure Schedule identifies the exception with reasonable particularity
        and
        describes the relevant facts in reasonable detail. Without limiting the
        generality of the foregoing, the mere listing (or inclusion of a copy) of
        a
        document or other item shall not be deemed adequate to disclose an exception
        to
        a representation or warranty made herein (unless the representation or warranty
        has to do with the existence of the document or other item itself). The Parties
        intend that each representation, warranty, and covenant contained herein
        shall
        have independent significance. If any Party has breached any representation,
        warranty, or covenant contained herein in any respect, the fact that there
        exists another representation, warranty, or covenant relating to the same
        subject matter (regardless of the relative levels of specificity) that the
        Party
        has not breached shall not detract from or mitigate the fact that the Party
        is
        in breach of the first representation, warranty, or covenant. 

      
        
          
          

        

        
          44

          
            

          

        

        
          
          

        

      

      (m)
        Incorporation
        of Exhibits and Schedules.  

      

      The
        Exhibits and Schedules identified in this Agreement are incorporated herein
        by
        reference and made a part hereof.

      

      (n)
        Specific
        Performance.  

      

      Each
        Party acknowledges and agrees that the other Party would be damaged irreparably
        in the event any provision of this Agreement is not performed in accordance
        with
        its specific terms or otherwise breached, so that a Party shall be entitled
        to
        injunctive relief to prevent breaches of the provisions of this Agreement
        and to
        enforce specifically this Agreement and the terms and provisions hereof in
        addition to any other remedy to which such Party may be entitled, at law
        or in
        equity. In particular, the Parties acknowledge that the business of Division
        is
        unique and recognize and affirm that in the event Sellers breach this Agreement,
        money damages would be inadequate and Buyer would have no adequate remedy
        at
        law, so that Buyer shall have the right, in addition to any other rights
        and
        remedies existing in its favor, to enforce its rights and the other Parties’
obligations hereunder not only by action for damages but also by action for
        specific performance, injunctive, and/or other equitable relief.

      

      (o)
        Submission
        to Jurisdiction. 

      

      Each
        of
        the Parties submits to the jurisdiction of any state or federal court sitting
        in
        the State of Texas in any action or proceeding arising out of or relating
        to
        this Agreement and agrees that all claims in respect of the action or proceeding
        may be heard and determined in any such court. Each Party also agrees not
        to
        bring any action or proceeding arising out of or relating to this Agreement
        in
        any other court. Each of the Parties waives any defense of inconvenient forum
        to
        the maintenance of any action or proceeding so brought and waives any bond,
        surety, or other security that might be required of any other Party with
        respect
        thereto. Any Party may make service on the other Party by sending or delivering
        a copy of the process to the Party to be served at the address and in the
        manner
        provided for the giving of notices in §9(g) above. Nothing in this §9(o),
        however, shall affect the right of any Party to serve legal process in any
        other
        manner permitted by law or in equity. Each Party agrees that a final judgment
        in
        any action or proceeding so brought shall be conclusive and may be enforced
        by
        suit on the judgment or in any other manner provided by law or in equity.
        

      

      (p)
        Tax
        Matters. 

      

      (i)
        Sellers shall be responsible for the preparation and filing of all Tax Returns
        for Sellers for all periods as to which Tax Returns are due after the Closing
        Date (including the consolidated, unitary, and combined Tax Returns for Sellers
        that include the operations of Division for any period ending on or before
        the
        Closing Date). Sellers shall make all payments required with respect to any
        such
        Tax Return.

      

      (ii)
        Buyer and Sellers agree to utilize, or cause their respective Affiliates
        to
        utilize, the standard procedure set forth in Rev. Proc. 2004-53 with respect
        to
        wage reporting.

      

      (q)
        Tax
        Disclosure Authorization. 

      

      Notwithstanding
        anything herein to the contrary, the Parties (and each Affiliate and Person
        acting on behalf of any Party) agree that each Party (and each employee,
        representative, and other agent of such Party) may disclose to any and all
        Persons, without limitation of any kind, the transaction’s tax treatment and tax
        structure (as such terms are used in Code §§6011 and 6112 and regulations
        thereunder) contemplated by this agreement and all materials of any kind
        (including opinions or other tax analyses) provided to such Party or such
        Person
        relating to such tax treatment and tax structure, except to the extent necessary
        to comply with any applicable federal or state securities laws; provided,
        however,
        that
        such disclosure may not be made until the earlier of date of (A) public
        announcement of discussions relating to the transaction, (B) public announcement
        of the transaction, or (C) execution of an agreement to enter into the
        transaction. This authorization is not intended to permit disclosure of any
        other information including (without limitation) (A) any portion of any
        materials to the extent not related to the transaction’s tax treatment or tax
        structure, (B) the identities of participants or potential participants,
        (C) the
        existence or status of any negotiations, (D) any pricing or financial
        information (except to the extent such pricing or financial information is
        related to the transaction’s tax treatment or tax structure), or (E) any other
        term or detail not relevant to the transaction’s tax treatment or the tax
        structure.

       

      *
        * * *

      
        
          
          

        

        
          45

          
            

          

        

        
          
          

        

      

       

      IN
        WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of
        the
        date first above written.

       

      
        	 	
                SENTINEL
                  OPERATING, L.P. 

              	 
	 	 	 	 	 
	 	
                By:
                  Sentinel Cash Systems, L.L.C.

              	 
	 	
                Its:
                  General Partner

              	 
	 	 	 	 	 
	 	 	By:	/s/
                Raymond P. Landry	 
	 	 	 	
                Raymond
                  P. Landry

              	 
	 	 	 	
                President
                  

              	 
	 	 	 	 	 
	 	
                TIDEL
                  TECHNOLOGIES, INC. 

              	 
	 	 	 	 	 
	 	By:	/s/
                Jerrell G. Clay	 
	 	 	
                Name:
                  Jerrell G. Clay

              	 
	 	 	
                Title:  
                  Director

              	 
	 	 	 	 	 
	 	 	 	 	 
	 	
                TIDEL
                  ENGINEERING, L.P.

              	 
	 	 	 	 	 
	 	
                By: 
                  Tidel Cash Systems, Inc.

              	 
	 	
                Its:  
                  Managing General Partner 

              	 
	 	 	 	 	 
	 	 	By:	/s/
                Leonard Carr	 
	 	 	Name: 
                	Leonard
                Carr	 
	 	 	Title: 	Vice
                President and
                Secretary

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