Document:

CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

                                      Among

                            TIDEL TECHNOLOGIES, INC.

                                       and

                          THE INVESTOR SIGNATORY HERETO

                         Dated as of September 29, 2000

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         CONVERTIBLE  DEBENTURE PURCHASE AGREEMENT (this "Agreement"),  dated as
of September 29, 2000, among Tidel  Technologies,  Inc., a Delaware  corporation
(the "Company"), and the investor signatory hereto ("Purchaser").

         WHEREAS,  subject  to the  terms  and  conditions  set  forth  in  this
Agreement,  the  Company  desires  to issue  and sell to the  Purchaser  and the
Purchaser desires to purchase from the Company, an aggregate principal amount of
$3,000,000 of the Company's 6%  Convertible  Debentures,  due September 8, 2004,
which  shall be in the form of  Exhibit  A (the  "Debentures"),  and  which  are
convertible into shares of the Company's common stock, $ .01 par value per share
(the "Common Stock").

         NOW,  THEREFORE,  IN CONSIDERATION of the mutual covenants contained in
this Agreement,  and for other good and valuable  consideration  the receipt and
adequacy of which are hereby  acknowledged,  the Company and the Purchaser agree
as follows:

                                    ARTICLE I
                                PURCHASE AND SALE

         1.1      The Closing

                  (a) The Closing.  (i) Subject to the terms and  conditions set
forth in this  Agreement,  the Company shall issue and sell to the Purchaser and
the Purchaser  shall  purchase from the Company the  Debentures for an aggregate
purchase  price of  $3,000,000.  The  closing  of the  purchase  and sale of the
Debentures  (the  "Closing")  shall take place at the offices of Olshan Grundman
Frome  Rosenzweig  & Wolosky LLP, 505 Park  Avenue,  New York,  New York,  10022
("OGFR&W"), immediately following the execution hereof or such later date as the
parties shall agree.  The date of the Closing is hereinafter  referred to as the
"Closing Date."

                           (ii) At the  Closing,  the parties  shall  deliver or
shall cause to be delivered the following:  (A) the Company shall deliver to the
Purchaser:  (1)  Debentures  registered  in the  name  of the  Purchaser  in the
aggregate principal amount indicated below the Purchaser's name on the signature
page to this  Agreement,  (2) a Common Stock  purchase  warrant,  in the form of
Exhibit  D,  registered  in the name of the  Purchaser,  pursuant  to which  the
Purchaser shall have the right to acquire shares of Common Stock, upon the terms
and conditions set forth therein (collectively,  the "Warrants"),  (3) the legal
opinion of OGFR&W, outside counsel to the Company, in the form of Exhibit C, (4)
an executed  Registration  Rights  Agreement,  dated the date hereof,  among the
Company and the Purchaser,  in the form of Exhibit B (the  "Registration  Rights
Agreement"),  and (5)  Transfer  Agent  Instructions,  in the form of Exhibit E,
delivered to and  acknowledged  by the Company's  transfer  agent (the "Transfer
Agent Instructions"), and (B) the Purchaser will deliver to the Company: (1) the
purchase price  indicated  below the  Purchaser's  name on the signature page to
this Agreement in United States dollars in immediately  available  funds by wire
transfer to an

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account  designated  in  writing by the  Company  for such  purpose,  and (2) an
executed Registration Rights Agreement.

         1.2 Certain Defined Terms. For purposes of this Agreement,  "Conversion
Price,"  "Original  Issue Date" and  "Trading  Day" shall have the  meanings set
forth in the  Debentures;  "Business  Day" shall  mean any day except  Saturday,
Sunday and any day which shall be a federal  legal  holiday in the United States
or a day on which  banking  institutions  in the  State of New York or Texas are
authorized or required by law or other  governmental  action to close;  "Person"
means  an  individual  or  corporation,   partnership,  trust,  incorporated  or
unincorporated  association,  joint venture,  limited liability  company,  joint
stock company,  government (or an agency or subdivision thereof) or other entity
of any kind.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

         2.1 Representations  and Warranties of the Company.  The Company hereby
makes the following representations and warranties to the Purchaser:

                  (a)   Organization  and   Qualification.   The  Company  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of Delaware with the requisite  corporate  power and authority
to own and use its  properties  and  assets  and to  carry  on its  business  as
currently conducted.  The Company has no subsidiaries other than as set forth in
Schedule  2.1(a)  (collectively  the  "Subsidiaries").  Except  as set  forth in
Schedule 2.1 (a), each of the  Subsidiaries is an entity,  duly  incorporated or
otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its  incorporation  or organization  (as  applicable),  with the
requisite  power and authority to own and use its  properties  and assets and to
carry on its  business  as  currently  conducted.  Each of the  Company  and the
Subsidiaries  is duly  qualified  to do  business  and is in good  standing as a
foreign  corporation or other entity in each jurisdiction in which the nature of
the  business  conducted  or  property  owned  by it  makes  such  qualification
necessary,  except where the failure to be so qualified or in good standing,  as
the case may be, could not,  individually  or in the  aggregate,  (x)  adversely
affect the legality,  validity or  enforceability  of the Securities (as defined
below) or any of this Agreement, the Registration Rights Agreement, the Transfer
Agent  Instructions,   the  Debentures  or  the  Warrants   (collectively,   the
"Transaction Documents"), (y) have or result in a material adverse effect on the
results of  operations,  assets,  or condition  (financial  or otherwise) of the
Company and the  Subsidiaries,  taken as a whole,  or (z)  adversely  impair the
Company's  ability to perform fully on a timely basis its obligations  under any
of the  Transaction  Documents  (any of (x),  (y) or (z),  a  "Material  Adverse
Effect").

                  (b) Authorization;  Enforcement. The Company has the requisite
corporate  power and authority to enter into and to consummate the  transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations  thereunder.  The execution and delivery of each of the  Transaction
Documents by the Company and the consummation by it of the

                                       -2-

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transactions  contemplated  thereby have been duly  authorized  by all necessary
action on the part of the  Company  and no  further  action is  required  by the
Company. Each of the Transaction Documents has been duly executed by the Company
and, when  delivered in accordance  with the terms hereof,  will  constitute the
valid and binding obligation of the Company  enforceable  against the Company in
accordance with its terms except as enforceability  may be limited by applicable
bankruptcy,  insolvency,  reorganization,  moratorium or similar laws  affecting
creditors' and contracting  parties' rights  generally.  Neither the Company nor
any  Subsidiary  is in  violation  of any of the  provisions  of its  respective
certificate or articles of  incorporation,  by-laws or other  organizational  or
charter documents.

                  (c)  Capitalization.  The  number of  authorized,  issued  and
outstanding capital stock of the Company is set forth in Schedule 2.1(c). Except
as disclosed in Schedule  2.1(c),  the Company owns all of the Capital  Stock of
each Subsidiary. No shares of Common Stock are entitled to preemptive or similar
rights,  nor is any  holder  of  the  securities  of  the  Company  entitled  to
preemptive or similar rights arising out of any agreement or understanding  with
the Company by virtue of any of the Transaction Documents. Except as a result of
the purchase and sale of the Debentures and the Warrants and except as disclosed
in Schedule 2.1(c), there are no outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities,  rights or  obligations  convertible  into or  exchangeable  for, or
giving any Person any right to  subscribe  for or acquire,  any shares of Common
Stock, or contracts,  commitments,  understandings, or arrangements by which the
Company or any Subsidiary is or may become bound to issue  additional  shares of
Common Stock, or securities or rights convertible or exchangeable into shares of
Common Stock.  The issue and sale of the Shares,  Warrants or Underlying  Shares
(as hereinafter defined) will not obligate the Company to issue shares of Common
Stock or other  securities  to any Person other than the  Purchaser and will not
result in a right of any holder of Company  securities to adjust the exercise or
conversion or reset price under such securities.

                  (d) Issuance of the Debentures  and the Warrants.  The Company
will  have (and  will,  at all  times  while  Debentures  and the  Warrants  are
outstanding,  maintain) an adequate reserve of duly authorized  shares of Common
Stock,  reserved for issuance to the holders of such Debentures and Warrants, to
enable it to perform its conversion,  exercise and other  obligations under this
Agreement.  Such number of reserved and  available  shares of Common Stock shall
not be less than the sum of 175% of the number of shares of Common  Stock  which
would be issuable upon (I)  conversion in full of the  Debentures  assuming such
conversion   occurred  on  the  Original  Issue  Date,  the  Debentures   remain
outstanding  for four years and all  interest is paid in shares of Common  Stock
and (ii)  exercise  in full of the  Warrants  (such  number  of shares of Common
Stock, the "Initial Minimum").  All such authorized shares of Common Stock shall
be duly reserved for issuance to the holders of the Debentures and the Warrants.
The shares of Common Stock  issuable upon  conversion of the Debentures and upon
exercise of the Warrants are collectively  referred to herein as the "Underlying
Shares." The Debentures, the Warrants and the Underlying Shares are collectively
referred  to herein as, the  "Securities".  When issued in  accordance  with the
Debentures  and the Warrants,  the  Underlying  Shares will be duly  authorized,
validly issued, fully paid and

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nonassessable,  free and clear of all  liens,  encumbrances  and rights of first
refusal of any kind (collectively, "Liens").

                  (e) No Conflicts.  The execution,  delivery and performance of
the Transaction  Documents by the Company and the consummation by the Company of
the transactions  contemplated  thereby do not and will not (I) conflict with or
violate any  provision  of the  Company's  or any  Subsidiary's  certificate  or
articles of  incorporation,  bylaws or other charter  documents (each as amended
through the date hereof),  or (ii) subject to obtaining  the Required  Approvals
(as defined  below),  conflict  with, or constitute a default (or an event which
with notice or lapse of time or both would become a default)  under,  or give to
others any rights of termination,  amendment, acceleration or cancellation (with
or without notice,  lapse of time or both) of, any agreement,  credit  facility,
debt or other instrument  (evidencing a Company or Subsidiary debt or otherwise)
or other  understanding  to which the Company or any Subsidiary is a party or by
which  any  property  or  asset of the  Company  or any  Subsidiary  is bound or
affected,  or (iii) result in a violation of any law, rule,  regulation,  order,
judgment,  injunction, decree or other restriction of any court or govern-mental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company  or a  Subsidiary  is bound or  affected;  except in the case of each of
clauses (ii) and (iii), as could not, individually or in the aggregate,  have or
result in a Material  Adverse  Effect.  The business of the Company is not being
conducted in violation of any law,  ordinance or regulation of any  governmental
authority,  except for violations which, individually or in the aggregate, could
not have or result in a Material Adverse Effect.

                  (f) Filings,  Consents and Approvals.  Neither the Company nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or  registration  with,  any court or
other federal,  state, local or other govern-mental authority or other Person in
connection  with the execution,  delivery and  performance by the Company of the
Transaction  Documents,  other than (I) the filings required pursuant to Section
3.10,  (ii)  the  filing  with  the  Securities  and  Exchange  Commission  (the
"Commission")of  a registration  statement meeting the requirements set forth in
the  Registration  Rights  Agreement  and covering the resale of the  Underlying
Shares by the Purchaser (the "Underlying Shares Registration Statement"),  (iii)
the  application(s) to the Nasdaq National Market (the "NASDAQ") for the listing
of the underlying  shares for trading on the NASDAQ (and with any other national
securities  exchange or market on which the Common  Stock is then listed) in the
time and manner required thereby,  (iv) applicable Blue Sky filings,  and (v) in
all other cases where the failure to obtain such consent, waiver,  authorization
or order, or to give such notice or make such filing or  registration  could not
have or result in,  individually or in the aggregate,  a Material Adverse Effect
(collectively, the "Required Approvals").

                  (g)  Litigation;   Proceedings.  There  is  no  action,  suit,
inquiry,  notice of violation,  proceeding or  investigation  pending or, to the
knowledge of the Company,  threatened against or affecting the Company or any of
its Subsidiaries or any of their respective  properties  before or by any court,
arbitrator,  governmental  or  administrative  agency  or  regulatory  authority
(federal, state,

                                       -4-

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county,  local or  foreign)  (collectively,  an  "Action")  which (I)  adversely
affects or challenges  the legality,  validity or  enforceability  of any of the
Transaction  Documents  or the  Securities  or  (ii)  could,  if  there  were an
unfavorable  decision,  individually  or in the  aggregate,  have or result in a
Material  Adverse  Effect.  Neither  the  Company  nor any  Subsidiary,  nor any
director or officer thereof,  is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary  duty. The Company does not have pending before the
Commission any request for confidential treatment of information and the Company
has no knowledge  of any  expected  such request that would be made prior to the
Effectiveness Date (as defined in the Registration Rights Agreement).  There has
not been,  and to the best of the  Company's  knowledge  there is not pending or
contemplated,  any investigation by the Commission  involving the Company or any
current or former director or officer of the Company.

                  (h) No Default  or  Violation.  Neither  the  Company  nor any
Subsidiary (I) is in default under or in violation of (and no event has occurred
which has not been waived  which,  with  notice or lapse of time or both,  would
result in a default by the Company or any Subsidiary under), nor has the Company
or any Subsidiary received notice of a claim that it is in default under or that
it is in  violation  of, any  indenture,  loan or credit  agreement or any other
agreement  or  instrument  to  which  it is a party or by which it or any of its
properties is bound, (ii) is in violation of any order of any court,  arbitrator
or  governmental  body,  or  (iii)  is in  violation  of any  statute,  rule  or
regulation of any governmental  authority,  in each case of clauses (i), (ii) or
(iii)  above,  except as could not  individually  or in the  aggregate,  have or
result in a Material Adverse Effect.

                  (i)   Private   Offering.   Assuming   the   accuracy  of  the
representations   and   warranties  of  the  Purchaser  set  forth  in  Sections
2.2(b)-(g),  the offer,  issuance and sale of the Securities to the Purchaser as
contemplated  hereby  are  exempt  from  the  registration  requirements  of the
Securities Act of 1933, as amended (the "Securities  Act").  Neither the Company
nor any Person  acting on its behalf  has taken or is, to the  knowledge  of the
Company,  contemplating  taking any action  which could  subject  the  offering,
issuance  or sale of the  Securities  to the  registration  requirements  of the
Securities  Act including  soliciting any offer to buy or sell the Securities by
means of any form of general solicitation or advertising.

                  (j) SEC Documents; Financial Statements. The Company has filed
all reports  required  to be filed by it under the  Securities  Exchange  Act of
1934,  as amended (the  "Exchange  Act"),  including,  without  limitation,  all
filings required pursuant to Sections 13(a) and 15(d) thereof, for the two years
preceding the date hereof (or such shorter period as the Company was required by
law to file such material) (the foregoing materials being collectively  referred
to  herein as the "SEC  Documents"  and,  together  with the  Schedules  to this
Agreement, the "Disclosure Materials") on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC  Documents  prior to
the expiration of any such  extension.  As of their  respective  dates,  the SEC
Documents  complied  in all  material  respects  with  the  requirements  of the
Securities  Act  and the  Exchange  Act and the  rules  and  regulations  of the
Commission promulgated  thereunder,  and none of the SEC Documents,  when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated  therein or necessary in order to make the statements
therein,

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in light of the  circumstances  under which they were made, not misleading.  All
material  agreements to which the Company is a party or to which the property or
assets of the  Company  are  subject  have  been  filed as  exhibits  to the SEC
Documents as required  under the Exchange Act. The  financial  statements of the
Company  included in the SEC  Documents  comply in all  material  respects  with
applicable  accounting  requirements  and  the  rules  and  regulations  of  the
Commission  with  respect  thereto  as in  effect  at the time of  filing.  Such
financial  statements have been prepared in accordance  with generally  accepted
accounting  principles applied on a consistent basis during the periods involved
("GAAP"),  except as may be otherwise specified in such financial  statements or
the notes  thereto,  and fairly  present in all material  respects the financial
position  of the  Company and its  consolidated  subsidiaries  as of and for the
dates thereof and the results of operations  and cash flows for the periods then
ended,  subject,  in the case of unaudited  statements,  to normal,  immaterial,
year-end  audit  adjustments.  Since  June  30,  2000,  except  as  specifically
disclosed  in the SEC  Documents,  (a) there has been no  event,  occurrence  or
development that has or that could result in a Material Adverse Effect,  (b) the
Company has not incurred any  liabilities  (contingent or otherwise)  other than
(x) liabilities incurred in the ordinary course of business consistent with past
practice and (y)  liabilities  not  required to be  reflected  in the  Company's
financial  statements  pursuant to GAAP or required to be  disclosed  in filings
made  with the  Commission,  (c) the  Company  has not  altered  its  method  of
accounting  or the identity of its auditors and (d) the Company has not declared
or  made  any  payment  or  distribution  of  cash  or  other  property  to  its
stockholders  or officers or directors  (other than in compliance  with existing
Company  stock option  plans) with respect to its capital  stock,  or purchased,
redeemed  (or made any  agreements  to  purchase  or  redeem)  any shares of its
capital stock.

                  (k)  Investment  Company.  The  Company is not,  and is not an
Affiliate (as defined in Rule 405 under the  Securities  Act) of, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.

                  (l)  Certain  Fees.  Except for  certain  fees  payable by the
Company to Value Investing  Partners,  no fees or commissions will be payable by
the Company to any broker,  financial advisor or consultant,  finder,  placement
agent,  investment banker, bank or other Person with respect to the transactions
contemplated  by this  Agreement.  The Purchaser  shall have no obligation  with
respect to any fees or with  respect to any claims made by or on behalf of other
Persons  for  fees of a type  contemplated  in this  Section  that may be due in
connection with the  transactions  contemplated  by this Agreement.  The Company
shall  indemnify  and hold  harmless the  Purchaser,  its  employees,  officers,
trustees, agents, and partners, and its Affiliates, from and against all claims,
losses,  damages, costs (including the costs of preparation and attorney's fees)
and expenses  suffered in respect of any such claimed or existing  fees, as such
fees and expenses are incurred.

                  (m) Solicitation Materials. Neither the Company nor any Person
acting  on the  Company's  behalf  has  solicited  any  offer to buy or sell the
Securities by means of any form of general solicitation or advertising.

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                  (n) Form S-3 Eligibility.  The Company is eligible to register
securities for resale under Form S-3 promulgated under the Securities Act.

                  (o)  Exclusivity.  The  Company  shall  not issue and sell the
Debentures  to any Person other than the  Purchaser  without the specific  prior
written consent of the Purchaser.

                  (p)  Seniority.  Except as set forth in  Schedule  2.1(p),  no
indebtedness  of the  Company is senior to the  Debentures  in right of payment,
whether  with  respect  to  interest  or upon  liquidation  or  dissolution,  or
otherwise.

                  (q) Listing and Maintenance Requirements Compliance. Except as
set forth in the SEC Documents,  the Company has not, in the two years preceding
the date hereof,  received notice (written or oral) from the NASDAQ or any stock
exchange,  market or trading  facility on which the Common  Stock is or has been
listed (or on which it has been quoted) to the effect that the Company is not in
compliance with the listing or maintenance requirements of such exchange, market
or trading  facility.  The Company is, and has no reason to believe that it will
not in the  foreseeable  future  continue  to be,  in  compliance  with all such
listing and maintenance requirements.

                  (r) Patents and Trademarks.  The Company and its  Subsidiaries
have,  or have rights to use,  all  patents,  patent  applications,  trademarks,
trademark  applications,  service marks, trade names,  copyrights,  licenses and
rights  which  are  necessary  or  material  for use in  connection  with  their
respective businesses as described in the SEC Documents and which the failure to
so have would have a Material Adverse Effect  (collectively,  the  "Intellectual
Property Rights"). Neither the Company nor any Subsidiary has received a written
notice  that  the  Intellectual  Property  Rights  used  by the  Company  or its
Subsidiaries  violates or infringes  upon the rights of any Person.  To the best
knowledge of the Company, all such Intellectual  Property Rights are enforceable
and  there  is no  existing  infringement  by  another  Person  of  any  of  the
Intellectual Property Rights.

                  (s) Registration  Rights;  Rights of Participation.  Except as
set forth on Schedule 6(b) to the Registration Rights Agreement, the Company has
not granted or agreed to grant to any Person any rights (including  "piggy-back"
registration  rights) to have any securities of the Company  registered with the
Commission or any other  governmental  authority  which has not been  satisfied.
Except as set forth on Schedule 6(b) to the Registration  Rights  Agreement,  no
Person has any right of first refusal, preemptive right, right of participation,
or any similar right to  participate  in the  transactions  contemplated  by the
Transaction Documents.

                  (t)  Regulatory  Permits.  The  Company  and its  Subsidiaries
possess all certificates,  authorizations  and permits issued by the appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses  as  described  in the SEC  Documents,  except  where the
failure to possess such permits  could not,  individually  or in the  aggregate,
have or result in a Material Adverse Effect  ("Material  Permits"),  and neither
the Company  nor any such  Subsidiary  has  received  any notice of  proceedings
relating to the revocation or modification of any Material Permit.

                                       -7-

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                  (u) Title.  The  Company  and the  Subsidiaries  have good and
marketable  title in fee  simple  to all real  property  owned by them  which is
material  to the  business  of the  Company  and its  Subsidiaries  and good and
marketable title in all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all
Liens,  except for Liens as do not materially  affect the value of such property
and do not interfere  with the use made and proposed to be made of such property
by the Company and its  Subsidiaries,  except for such  defects  which would not
result in a Material Adverse Effect. Any real property and facilities held under
lease  by the  Company  and its  Subsidiaries  are  held by  them  under  valid,
subsisting and enforceable  leases of which the Company and its Subsidiaries are
in material compliance and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its Subsidiaries.

                  (v) Labor  Relations.  No material labor problem exists or, to
the  knowledge of the Company,  is imminent with respect to any of the employees
of the Company.

                  (w) Disclosure.  The Company  confirms that neither it nor any
other Person  acting on its behalf has  provided the  Purchaser or its agents or
counsel with any  information  that  constitutes  or might  constitute  material
non-public information.  The Company understands and confirms that the Purchaser
shall be relying on the foregoing  representations in effecting  transactions in
securities of the Company.  All disclosure  provided to the Purchaser  regarding
the Company, its business and the transactions  contemplated  hereby,  including
the  Schedules to this  Agreement,  furnished by or on behalf of the Company are
true and correct and do 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  light  of the  circumstances  under  which  they  were  made,  not
misleading.

         2.2  Representations  and  Warranties of the  Purchaser.  The Purchaser
hereby for itself represents and warrants to the Company as follows:

                  (a) Organization;  Authority. The Purchaser is a Massachusetts
business trust duly organized,  validly  existing and in good standing under the
laws the state of Massachusetts  with the requisite power and authority to enter
into  and  to  consummate  the  transactions  contemplated  by  the  Transaction
Documents and otherwise to carry out its obligations thereunder. The purchase by
the  Purchaser  of the  Securities  hereunder  has been duly  authorized  by all
necessary  action on the part of the  Purchaser.  Each of this Agreement and the
Registration Rights Agreement has been duly executed by the Purchaser,  and when
delivered by the Purchaser in accordance with the terms hereof,  will constitute
the valid and legally binding obligation of the Purchaser,  enforceable  against
it in accordance with its terms.

                  (b)  Investment   Intent.   The  Purchaser  is  acquiring  the
Securities as principal for its own account for investment purposes only and not
with a view to or for  distributing  or reselling  such  Securities  or any part
thereof,  without prejudice,  however, to the Purchaser's right,  subject to the
provisions of this Agreement,  the Registration Rights Agreement, the Debentures
and the

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Warrant,  at all times to sell or  otherwise  dispose of all or any part of such
Securities pursuant to an effective  registration statement under the Securities
Act or  under  an  exemption  from  such  registration  and in  compliance  with
applicable  federal and state securities laws. Nothing contained herein shall be
deemed a representation  or warranty by the Purchaser to hold the Securities for
any period of time. The Purchaser is acquiring the  Securities  hereunder in the
ordinary  course of its business.  The Purchaser  does not have any agreement or
understanding,  directly  or  indirectly,  with any  Person  to  distribute  the
Securities.

                  (c)  Purchaser  Status.  At the time the Purchaser was offered
the Securities, it was, and at the date hereof it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act.

                  (d) Experience of the Purchaser.  The Purchaser,  either alone
or together with its  representatives,  has such knowledge,  sophistication  and
experience in business and  financial  matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment.

                  (e) Ability of the Purchaser to Bear Risk of  Investment.  The
Purchaser is able to bear the economic risk of an  investment in the  Securities
and, at the pre-sent time, is able to afford a complete loss of such investment.

                  (f) Access to Information.  The Purchaser acknowledges that it
has reviewed the Disclosure  Materials and has been afforded (I) the opportunity
to ask such  questions  as it has deemed  necessary  of, and to receive  answers
from,  representatives of the Company concerning the terms and conditions of the
offering  of the  Securities  and the  merits  and  risks  of  investing  in the
Securities;  (ii) access to  information  about the  Company  and the  Company's
financial condition, results of operations,  business,  proper-ties,  management
and prospects sufficient to enable it to evaluate its investment;  and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without  unreasonable effort or expense that is necessary to make an
informed  investment  decision with respect to the  investment and to verify the
accuracy  and  completeness  of the  information  contained  in  the  Disclosure
Materials. Neither such inquiries nor any other investigation conducted by or on
behalf of the Purchaser or its representatives or counsel shall modify, amend or
affect the Purchaser's right to rely on the truth,  accuracy and completeness of
the  Disclosure  Materials  and the  Company's  representations  and  warranties
contained in the Transaction Documents.

                  (g) General Solicitation.  The Purchaser is not purchasing the
Securities as a result of or subsequent to any advertisement, article, notice or
other  communication  regarding  the  Securities  published  in  any  newspaper,
magazine or similar media or broadcast over  television or radio or presented at
any seminar or any other general solicitation or general advertisement.

                  (h) Reliance.  The Purchaser understands and acknowledges that
(I) the Securities are being offered and sold to it without  registration  under
the Securities Act in a private placement

                                       -9-

<PAGE>

that is exempt from the  registration  provisions of the Securities Act and (ii)
the  availability  of such  exemption,  depends in part on, and the Company will
rely upon the accuracy and truth-fulness of, the foregoing  representations  and
the Purchaser hereby consents to such reliance.

                  The Company  acknowledges  and agrees that the Purchaser  does
not make and has not made any  representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in this
Section 2.2.

                                   ARTICLE III
                         OTHER AGREEMENTS OF THE PARTIES

         3.1 Transfer  Restrictions.  (a) The Securities may only be disposed of
pursuant to an effective  registration  statement  under the  Securities  Act or
pursuant to an available  exemption from or in a transaction  not subject to the
registration  requirements  of the  Securities  Act, and in compliance  with any
applicable federal and state securities laws. In connection with any transfer of
Securities other than pursuant to an effective  registration statement or to the
Company,  except as  otherwise  set forth  herein,  the  Company may require the
transferor  thereof to provide to the Company an opinion of counsel  selected by
the  transferor,  the form and  substance of which  opinion  shall be reasonably
satisfactory  to the Company,  to the effect that such transfer does not require
registration of such  transferred  Securities under the Securities Act. Any such
transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights of the Purchaser under this Agreement and the Registration
Rights Agreement.

                  (b) The  Purchaser  agrees  to the  imprinting,  so long as is
required by this Section 3.1(b), of the following legend on the Securities:

                  NEITHER THESE  SECURITIES NOR THE SECURITIES  INTO WHICH THESE
         SECURITIES ARE  [CONVERTIBLE]  [EXERCISABLE]  HAVE BEEN REGISTERED WITH
         THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES  COMMISSION OF
         ANY STATE IN RELIANCE  UPON AN EXEMPTION  FROM  REGISTRATION  UNDER THE
         SECURITIES  ACT OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND,
         ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
         REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR  PURSUANT  TO AN
         AVAILABLE  EXEMPTION  FROM,  OR IN A  TRANSACTION  NOT  SUBJECT TO, THE
         REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
         APPLICABLE STATE SECURITIES LAWS.

                  The  Underlying  Shares shall not contain the legend set forth
above nor any other legend if the  conversion  of  Debentures or the exercise of
the Warrants,  as the case may be, occurs at any time while an Underlying Shares
Registration  Statement is effective  under the  Securities Act or the holder is
relying  on Rule 144  promulgated  under  the  Securities  Act  ("Rule  144") in
connection

                                      -10-

<PAGE>

with the  resale of such  Underlying  Shares,  or in the  event  there is not an
effective  Underlying Shares  Registration  Statement,  and Rule 144 is not then
available for resale of the  Underlying  Shares,  at such time as such legend is
not required  under  applicable  requirements  of the  Securities Act (including
judicial   interpretations  and  pronouncements  issued  by  the  staff  of  the
Commission).  The Company  shall  cause its  counsel to issue the legal  opinion
included in the Transfer Agent  Instructions to the Company's  transfer agent on
the date that an Underlying Shares Registration  Statement is declared effective
by the Commission  (such date, the  "Effective  Date").  The Company agrees that
following  the  Effective  Date,  it will,  no later  than  three  Trading  Days
following  the  delivery by the  Purchaser  to the Company of a  certificate  or
certificates  representing  Underlying Shares issued with a restrictive  legend,
deliver to the Purchaser certificates  representing such Underlying Shares which
shall be free from all restrictive  and other legends.  The Company may not make
any notation on its records or give  instructions  to any transfer  agent of the
Company which enlarge the restrictions of transfer set forth in this Section.

         3.2  Acknowledgment  of  Dilution.  The Company  acknowledges  that the
issuance of  Underlying  Shares upon the  conversion of the  Debentures  and the
exercise of the Warrants  will result in dilution of the  outstanding  shares of
Common Stock, which dilution may be substantial under certain market conditions.
The Company further  acknowledges that its obligation to issue Underlying Shares
upon   conversion  of  the  Debenture  and  the  exercise  of  the  Warrants  is
unconditional  and  absolute,  subject  to  the  limitations  set  forth  in the
Debentures or the Warrants,  as the case may be, regardless of the effect of any
such dilution.

         3.3  Furnishing  of   Information.   As  long  as  the  Purchaser  owns
Securities,  the  Company  covenants  to timely  file (or obtain  extensions  in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed by the Company  after the date hereof  pursuant to Section
13(a) or 15(d) of the Exchange Act. As long as the Purchaser owns Securities, if
the Company is not required to file reports  pursuant to such sections,  it will
prepare and furnish to the Purchaser  and make publicly  available in accordance
with Rule 144(c)  promulgated  under the Securities  Act such  information as is
required for the  Purchaser to sell the  Securities  under Rule 144  promulgated
under the Securities Act. The Company  further  covenants that it will take such
further action as any holder of Securities may  reasonably  request,  all to the
extent  required  from time to time to  enable  such  Person to sell  Underlying
Shares  without  registration  under the Securities Act within the limitation of
the  exemptions  provided  by Rule 144  promulgated  under the  Securities  Act,
including causing its attorneys to render and deliver any legal opinion required
in  order  to  permit a  Purchaser  to  receive  Underlying  Shares  free of all
restrictive  legends and to subsequently  sell Underlying  Shares under Rule 144
upon receipt of a notice of an intention to sell or other form of notice  having
a similar effect. Upon the request of any such Person, the Company shall deliver
to such  Person a  written  certification  of a duly  authorized  officer  as to
whether it has complied with such requirements.

         3.4 Integration.  The Company shall not, and shall use its best efforts
to ensure  that,  no  Affiliate of the Company  shall,  sell,  offer for sale or
solicit  offers to buy or  otherwise  negotiate  in respect of any  security (as
defined in Section 2 of the Securities Act) that would be integrated with

                                      -11-

<PAGE>

the  offer  or sale  of the  Securities  in a  manner  that  would  require  the
registration  under  the  Securities  Act of the sale of the  Securities  to the
Purchaser.

         3.5 Increase in Authorized Shares. If on any date the Company would be,
if a notice of  conversion or exercise (as the case may be) were to be delivered
on such date, precluded from issuing (a) 175% of the number of Underlying Shares
as would then be issuable  upon a conversion in full of the  Debentures  and (b)
the number of Underlying  Shares  issuable upon exercise in full of the Warrants
(the "Current Required Minimum"), in either case, due to the unavailability of a
sufficient number of authorized but unissued or reserved shares of Common Stock,
then the Board of Directors of the Company  shall  promptly  prepare and mail to
the  stockholders of the Company proxy  materials  requesting  authorization  to
amend the Company's  certificate  or articles of  incorporation  to increase the
number of shares of Common Stock which the Company is  authorized to issue to at
least such number of shares as reasonably requested by the Purchaser in order to
provide for such number of  authorized  and  unissued  shares of Common Stock to
enable  the  Company  to  comply  with its  issuance,  conversion  exercise  and
reservation of shares obligations as set forth in this Agreement, the Debentures
and the  Warrants  (the sum of (x) the  number of shares  of Common  Stock  then
outstanding  plus all  shares of Common  Stock  issuable  upon  exercise  of all
outstanding options,  warrants and convertible instruments,  and (y) the Current
Required Minimum,  shall be a reasonable number). In connection  therewith,  the
Board of Directors shall (a) adopt proper resolutions authorizing such increase,
(b)  recommend to and otherwise use its best efforts to promptly and duly obtain
stockholder  approval to carry out such  resolutions (and hold a special meeting
of the  stockholders  no later than the earlier to occur of the sixtieth  (60th)
day after  delivery  of the proxy  materials  relating  to such  meeting and the
ninetieth (90th) day after request by a holder of Securities to issue the number
of Underlying  Shares in  accordance  with the terms hereof) and (c) within five
(5)  Business  Days  of  obtaining  such  stockholder  authorization,   file  an
appropriate  amendment to the Company's certificate or articles of incorporation
to evidence such increase.

         3.6 Reservation and Listing of Underlying Shares. (a) The Company shall
(I) in the time and manner required by any national securities exchange, market,
trading or quotation facility on which the Common Stock is then traded,  prepare
and file with such national securities  exchange,  market,  trading or quotation
facility on which the Common Stock is then traded an additional  shares  listing
application  covering a number of shares of Common  Stock which is not less than
the  Initial  Minimum,  (ii) take all steps  necessary  to cause such  shares of
Common  Stock  to be  approved  for  listing  on any  such  national  securities
exchange,  market or trading or quotation  facility on which the Common Stock is
then listed as soon as possible  thereafter,  and (iii) provide to the Purchaser
evidence of such  listing,  and the Company  shall  maintain  the listing of its
Common Stock  thereon.  If the number of  Underlying  Shares  issuable  upon (x)
conversion in full of the then  outstanding  Debentures and (y) exercise in full
of the then unexercised  portion of the Warrants,  exceeds  eighty-five  percent
(85%) of the number of Underlying  Shares  previously  listed on account thereof
with any such  required  exchanges,  then the Company  shall take the  necessary
actions to immediately list a number of Underlying Shares as equals no less than
the then Current Required Minimum.

                                      -12-

<PAGE>

                  (b) The Company  shall  maintain a reserve of shares of Common
Stock for issuance upon  conversion of the  Debentures in full and upon exercise
in full of the Warrants in accordance with this Agreement, in such amount as may
be required to fulfill its obligations in full under the Transaction  Documents,
which reserve shall equal no less than the then Current Required Minimum.

         3.7   Conversion   and  Exercise   Procedures.   The   Transfer   Agent
Instructions,  the Conversion Notice (as defined in the Debentures) and the Form
of Election to Purchase (as defined in the Warrants)  sets forth the totality of
the procedures with respect to the conversion of the Debentures and the exercise
of the Warrants,  including the form of legal opinion, if necessary,  that shall
be rendered  to the  Company's  transfer  agent and such other  information  and
instructions  as may be reasonably  necessary to enable the Purchaser to convert
their Debentures and their Warrants, as the case may be.

         3.8  Conversion and Exercise  Obligations  of the Company.  The Company
shall honor  conversions  of the  Debentures  and  exercises of the Warrants and
shall  deliver  Underlying  Shares  in  accordance  with the  respective  terms,
conditions and time periods set forth in the Debentures.

         3.9 Certain Securities Laws Disclosures;  Publicity. The Company shall:
(I) on the Closing  Date,  issue a press  release  reasonably  acceptable to the
Purchaser  disclosing the transactions  contemplated  hereby, (ii) file with the
Commission a Report on Form 8-K disclosing the transactions  contemplated hereby
within ten Business Days after the Closing Date,  and (iii) timely file with the
Commission a Form D promulgated  under the Securities Act. The Company shall, no
less than two Business  Days prior to the filing of any  disclosure  required by
clauses (ii) and (iii) above,  provide a copy thereof to the  Purchaser  for its
review.  The Company and the Purchaser  shall consult with each other in issuing
any other press  releases or otherwise  making public  statements or filings and
other  communications  with the  Commission  or any  regulatory  agency or stock
market or trading facility with respect to the transactions  contemplated hereby
and neither party shall issue any such press release or otherwise  make any such
public  statement,  filings or other  communications  without the prior  written
consent of the other, except that if such disclosure is required by law or stock
market  regulation,  in which  such case the  disclosing  party  shall  promptly
provide the other party with prior  notice of such public  statement,  filing or
other  communication.  Notwithstanding  the  foregoing,  the  Company  shall not
publicly  disclose  the  name  of the  Purchaser,  or  include  the  name of the
Purchaser in any filing with the Commission,  or any regulatory agency,  trading
facility or stock market  without the prior  written  consent of the  Purchaser,
except  to  the  extent  such  disclosure  (but  not  any  disclosure  as to the
controlling Persons thereof) is required by law or stock market regulations,  in
which case the Company  shall  provide the  Purchaser  with prior notice of such
disclosure.

         3.10 Transfer of  Intellectual  Property  Rights.  Except in connection
with  the sale of all or  substantially  all of the  assets  of the  Company  or
licensing  arrangements  in the ordinary course of the Company's  business,  the
Company  shall not  transfer,  sell or  otherwise  dispose  of any  Intellectual
Property  Rights,  or allow any of the  Intellectual  Property  Rights to become
subject to any Liens, or

                                      -13-

<PAGE>

fail to renew  such  Intellectual  Property  Rights (if  renewable  and it would
otherwise  lapse if not  renewed),  without  the prior  written  consent  of the
Purchaser.

         3.11 Use of Proceeds.  Except as set forth in Schedule 3.11 hereto, the
Company shall use the net proceeds from the sale of the Securities hereunder for
working  capital  purposes  and not for the  satisfaction  of any portion of the
Company's debt (other than payment of trade  payables in the ordinary  course of
the Company's  business and prior  practices),  to redeem any Company  equity or
equity-equivalent securities or to settle any outstanding litigation.

         3.12  Reimbursement.  If the Purchaser becomes involved in any capacity
in any action,  proceeding  or  investigation  brought by or against any Person,
including  stockholders  of the  Company,  solely as a result of  acquiring  the
Securities  under this  Agreement,  the Company will reimburse the Purchaser for
its reasonable legal and other expenses (including, but not limited to, the cost
of any investigation,  preparation or travel) incurred in connection  therewith,
as such  expenses are incurred.  The  reimbursement  obligations  of the Company
under this paragraph shall be in addition to any liability which the Company may
otherwise  have,  shall  extend  upon  the  same  terms  and  conditions  to any
Affiliates of the Purchaser who are actually named in such action, proceeding or
investigation,  and  partners,  directors,  agents,  employees  and  controlling
persons (if any), as the case may be, of the  Purchaser and any such  Affiliate,
and shall be binding upon and inure to the benefit of any  successors,  assigns,
heirs and personal  representatives  of the Company,  the Purchaser and any such
Affiliate  and any such  Person.  The  Company  also  agrees  that  neither  the
Purchaser nor any such Affiliates,  partners,  directors,  agents,  employees or
controlling  persons  shall  have any  liability  to the  Company  or any Person
asserting  claims on behalf of or in right of the Company  solely as a result of
acquiring the Securities under this Agreement.

         3.13 Certain Trading Restrictions. The Purchaser agrees that during the
five  Trading Days  preceding  each Put Date (as defined in the  Debentures)  it
shall not enter into any Short Sales (as defined  herein).  For purposes of this
Section 3.13, a "Short Sale" by the Purchaser  shall mean a sale of Common Stock
by the Purchaser  that is marked as a short sale and that is made at a time when
there is no  equivalent  offsetting  long  position in Common  Stock held by the
Purchaser. For purposes of determining whether there is an equivalent offsetting
long position in Common Stock held by the Purchaser,  Underlying Shares that are
issuable on  exercise  of the  Warrants or  conversion  of the  Debentures  on a
Trading  Day shall be deemed to be held long by the  Purchaser  on such  Trading
Day.

                                   ARTICLE IV
                                  MISCELLANEOUS

         4.1 Fees and Expenses.  At the Closing, the Company shall reimburse the
Purchaser  for its legal  fees and  expenses  incurred  in  connection  with the
preparation and negotiation of the Transaction Documents by paying to Bell, Boyd
& Lloyd LLC $3,000.00 for the  negotiation  of the  Transaction  Documents.  The
amount  contemplated by the immediately  preceding sentence shall be retained by
the  Purchaser  and shall not be delivered to the Company at the Closing.  Other
than the

                                      -14-

<PAGE>

amount   contemplated   herein,  and  except  as  otherwise  set  forth  in  the
Registration Rights Agreement, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party  incident  to the  negotiation,  preparation,  execution,
delivery and performance of this Agreement.  The Company shall pay all stamp and
other taxes and duties levied in connection with the issuance of the Securities.

         4.2 Entire Agreement;  Amendments. The Transaction Documents,  together
with the Exhibits and Schedules thereto and Transfer Agent Instructions, contain
the entire  understanding  of the parties  with  respect to the  subject  matter
hereof and supersede all prior agreements and  understandings,  oral or written,
with respect to such  matters,  which the parties  acknowledge  have been merged
into such documents, exhibits and schedules.

         4.3 Notices.  Any and all notices or other communications or deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (I) the date of  transmission,  if
such  notice or  communication  is  delivered  via  facsimile  at the  facsimile
telephone  number  specified in this Section  prior to 6:00 p.m.  (New York City
time) on a Business Day,  (ii) the Business Day after the date of  transmission,
if such notice or  communication  is delivered  via  facsimile at the  facsimile
telephone number specified in this Agreement later than 6:00 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by U.S. nationally
recognized  overnight courier service,  or (iv) upon actual receipt by the party
to whom such notice is required  to be given.  The address for such  notices and
communications shall be as follows:

         If to the Company:     Tidel Technologies, Inc.
                                5847 San Felipe, Suite 900
                                Houston, Texas 77057
                                Facsimile No.:  (713) 783-6003
                                Attn: Chief Financial Officer

         With copies to:        Olshan Grundman Frome Rosenzweig & Wolosky LLP
                                505 Park Avenue
                                New York, New York 10022
                                Facsimile No.: (212) 755-1467
                                Attn: David J. Adler

         If                     to the Purchaser: To the address set
                                forth under the Purchaser's  name on
                                the signature page hereto.

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

         4.4 Amendments;  Waivers.  No provision of this Agreement may be waived
or amended except in a written  instrument  signed, in the case of an amendment,
by the Company and the

                                      -15-

<PAGE>

Purchaser or, in the case of a waiver,  by the party against whom enforcement of
any such  waiver is  sought.  No  waiver  of any  default  with  respect  to any
provision,  condition or requirement  of this Agreement  shall be deemed to be a
continuing waiver in the future or a waiver of any other provision, condition or
requirement  hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.

         4.5  Headings.  The headings  herein are for  convenience  only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof.

         4.6  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their successors and permitted  assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without  the prior  written  consent  of the  Purchaser.  Except as set forth in
Section 3.1(a), the Purchaser may not assign this Agreement or any of the rights
or  obligations  hereunder  without the consent of the Company.  This  provision
shall not limit the  Purchaser's  right to  transfer  securities  or transfer or
assign rights under the Registration Rights Agreement.

         4.7 No  Third-Party  Beneficiaries.  This Agreement is intended for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person.

         4.8 Governing Law. All questions concerning the construction, validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by and
construed and enforced in accordance  with the internal laws of the State of New
York,  without regard to the principles of conflicts of law thereof.  Each party
hereby  irrevocably  submits  to the  exclusive  jurisdiction  of the  state and
federal  courts sitting in the City of New York,  borough of Manhattan,  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed herein (including with respect to
the enforcement of the any of the Transaction Documents), and hereby irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit,  action or  proceeding  is improper.  Each party  hereby  irrevocably
waives  personal  service of process and consents to process being served in any
such suit,  action or  proceeding  by mailing a copy thereof via  registered  or
certified  mail or overnight  delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

         4.9 Survival. The representations, warranties, agreements and covenants
contained  herein  shall  survive  the Closing and the  delivery,  exercise  and
conversion of the Warrants or the Debentures, as the case may be.

         4.10  Execution.  This  Agreement  may  be  executed  in  two  or  more
counterparts,  all of which when taken  together shall be considered one and the
same agreement and shall become

                                      -16-

<PAGE>

effective when  counterparts have been signed by each party and delivered to the
other  party,  it being  understood  that  both  parties  need not sign the same
counterpart.  In  the  event  that  any  signature  is  delivered  by  facsimile
transmission,  such signature shall create a valid and binding obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same force and effect as if such  facsimile  signature page were an original
thereof.

         4.11  Severability.  In case any one or more of the  provisions of this
Agreement  shall be invalid or  unenforceable  in any respect,  the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be  affecting  or impaired  thereby and the parties  will  attempt to
agree  upon a valid  and  enforceable  provision  which  shall  be a  reasonable
substitute  therefor,  and upon so agreeing,  shall  incorporate such substitute
provision in this Agreement.

         4.12  Remedies.  In addition to being  entitled to exercise  all rights
provided herein or granted by law, including recovery of damages,  the Purchaser
will be entitled to specific performance of the obligations of the Company under
the Transaction  Documents.  The parties hereto agree that monetary  damages may
not be adequate  compensation  for any loss  incurred by reason of any breach of
its obligations  described in the foregoing  sentence and hereby agrees to waive
in any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.

         4.13 Independent Nature of Purchaser's  Obligations and Rights. Nothing
contained  herein or in any  Transaction  Document,  and no action  taken by the
Purchaser  pursuant  thereto,  shall be deemed to constitute  the Purchaser as a
partnership,  an  association,  a joint venture or any other kind of entity,  or
create a  presumption  that the  Purchaser  is in any way acting in concert with
respect to such obligations or the transactions  contemplated by the Transaction
Document.  The Purchaser shall be entitled to independently  protect and enforce
its  rights,  including  without  limitation  the  rights  arising  out of  this
Agreement  or  out of the  other  Transaction  Documents,  and it  shall  not be
necessary  for  the  Purchaser  to be  joined  as an  additional  party  in  any
proceeding for such purpose.

         4.14  Non-Liability  of  Trustees  and  Shareholders.  A  copy  of  the
Declaration  of Trust of the  Purchaser  is on file  with the  Secretary  of The
Commonwealth of Massachusetts, and notice is hereby given that this agreement is
executed on behalf of the Purchaser by officers of the Purchaser as officers and
not  individually.  All obligations of the Purchaser  hereunder shall be binding
only upon the assets of the Purchaser (or the  appropriate  series  thereof) and
shall not be binding upon any trustee,  officer,  employee, agent or shareholder
of the Purchaser. Neither the authorization of any action by the Trustees of the
Purchaser nor the execution of this  agreement on behalf of the Purchaser  shall
impose any liability upon any trustee, officer or shareholder of the Purchaser.

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGES FOLLOWS]

                                      -17-

<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto have caused this  Convertible
Debenture Purchase Agreement to be duly executed by their respective  authorized
signatories as of the date first indicated above.

                                   TIDEL TECHNOLOGIES, INC.

                                   By: _____________________________________
                                   Name:  James T. Rash
                                   Title: President and Chief Executive Officer

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                      SIGNATURE PAGE FOR PURCHASER FOLLOWS]

<PAGE>

                                   ACORN INVESTMENT TRUST
                                   on behalf of its series Acorn Fund

                                   By:_____________________________________
                                         Name: Kenneth A. Kalina
                                         Title: Assistant Treasurer

                                   Purchase Price:                   $3,000,000

                                   Address for Notice:

                                   Acorn Investment Trust
                                   on behalf of its series Acorn Fund
                                   227 W. Monroe St., #3000
                                   Chicago, IL 60606
                                   Facsimile: 312-634-1919
                                   Attn: Treasurer

         With copies to:           Bell, Boyd & Lloyd LLC
                                   Three First National Plaza, #3300
                                   Chicago, IL 60602
                                   Facsimile: 312-372-2098
                                   Attn: Janet D. Olsen

<PAGE>

                                 Schedule 2.1(a)

The following is a listing of all subsidiaries of the Company:

Tidel Services, Inc.
Tidel Cash Systems, Inc.
Tidel Engineering, L.P.
AnyCard International, Inc.  (1)

Footnote:

(1)      AnyCard  International,  Inc. is neither  validly  existing nor in good
         standing in the State of Delaware. AnyCard International, Inc. does not
         own any assets and is not an operating subsidiary of the Company.

<PAGE>

                                 Schedule 2.1(c)

Total authorized common stock, par value $.01       100,000,000 shares

Common stock issued and outstanding                 17,281,910 shares
Employee stock options outstanding                   1,196,500 shares
Common stock purchase warrants outstanding             545,000 shares
                                                    -----------------
   Total common stock and common stock equivalents  19,023,410 shares (1)
                                                    =================

Tidel Engineering, L.P. is owned 1% by Tidel Cash Systems, Inc. and 99% by Tidel
Services, Inc., both of which are wholly owned subsidiaries of the Company.

(1)      Pursuant to that certain Convertible  Debenture Purchase Agreement (the
         "Agreement")  made as of September 8, 2000,  among Tidel  Technologies,
         Inc. (the "Company") and the investors  signatory  hereto,  the Company
         issued  debentures  due  September 8, 2004 in the  principal  amount of
         $15,000,000  convertible into shares of the Company's Common Stock. The
         Company  also issued  pursuant  to the  Agreement a warrant to purchase
         63,158 shares of the Company's Common Stock.

<PAGE>

                                 Schedule 2.1(p)

Indebtedness  pursuant to that certain  Credit  Agreement  made and entered into
April 1, 1999 by and among Tidel Engineering, L.P., Tidel Technologies, Inc. and
Chase  Bank of Texas,  N.A.,  including  the  Revolving  Loans and the Term Loan
contemplated therein.

<PAGE>

                                  Schedule 3.11

The  Company may make  payments of amounts  payable  under that  certain  Credit
Agreement  made and entered  into April 1, 1999 by and among Tidel  Engineering,
L.P.,  Tidel  Technologies,  Inc. and Chase Bank of Texas,  N.A.,  including the
Revolving Loans and the Term Loan contemplated therein.JOINDER AND AMENDMENT TO
                          REGISTRATION RIGHTS AGREEMENT

                  JOINDER AND AMENDMENT TO REGISTRATION  RIGHTS  AGREEMENT dated
September 29, 2000 (the "Joinder  Agreement")  by and among Tidel  Technologies,
Inc., a Delaware  corporation (the "Company"),  Acorn Investment Trust on behalf
of its series Acorn Fund (the "Subsequent  Purchaser") and Montrose  Investments
Ltd. (the "Existing Purchaser").

                               W I T N E S S E T H
                               -------------------

                  WHEREAS,  the Existing Purchaser has entered into that certain
Convertible Debenture Purchase Agreement (the "Montrose Purchase Agreement") and
a Registration Rights Agreement ("Registration Rights Agreement"), each dated as
of  September  8, 2000,  by and among the  Company and the  Existing  Purchaser,
pursuant to which the Existing Purchaser purchased from the Company an aggregate
principal  amount of $15,000,000 of the Company's 6% Convertible  Debentures due
September 8, 2004.

                  WHEREAS,  the  Subsequent  Purchaser  has  entered  into  that
certain Acorn Purchase Agreement (as defined below) of even date herewith by and
among the Company and the Subsequent Purchaser, pursuant to which the Subsequent
Purchaser purchased from the Company an aggregate principal amount of $3,000,000
of the Acorn Debenture.

                  NOW,  THEREFORE,  in  consideration of the premises and of the
mutual  covenants and  agreements of the parties herein  contained,  the parties
hereby agree as follows:

                  Section 1.  Joinder.  Effective  immediately,  the  Subsequent
Purchaser is joined as a party to the Registration  Rights Agreement as a Holder
(as  that  term  is  defined  in the  Registration  Rights  Agreement),  and the
Subsequent  Purchaser  hereby  expressly  assumes  all rights,  liabilities  and
obligations of a Holder under the Registration Rights Agreement.

                  Section 2.        Amendments.

                  (a) Section 1 of the  Registration  Rights Agreement is hereby
amended to restate the definitions listed below:

                      "Debentures"  means (i) the Convertible  Debentures issued
to the Purchasers in accordance  with the Purchase  Agreement and (ii) the Acorn
Debentures  issued to the  Subsequent  Purchaser  in  accordance  with the Acorn
Purchase Agreement.

                      "Warrants"  means  (i) the  Warrants  (as  defined  in the
Montrose  Purchase  Agreement)  and (ii) the  Warrants  (as defined in the Acorn
Purchase Agreement).

                  (b) Section 1 of the  Registration  Rights Agreement is hereby
amended by adding the definitions listed below:

<PAGE>

                      "Acorn  Debenture" means the 6% Convertible  Debenture due
September 8, 2004 in principal  amount of  $3,000,000  issued to the  Subsequent
Purchaser.

                      "Acorn Purchase Agreement" means the Convertible Debenture
Purchase  Agreement  dated as of the date  hereof by and among the  Company  and
Acorn Investment Trust on behalf of its series Acorn Fund.

                  (c) Except as modified  and amended  herein,  all of the terms
and conditions of the  Registration  Rights Agreement shall remain in full force
and effect.

                  Section 3. Capitalized Terms. Unless otherwise defined herein,
all  capitalized  terms  shall have the  meanings  assigned to such terms in the
Registration Rights Agreement, as amended hereby.

                  Section 4. Non-Liability of Trustees and Shareholders.  A copy
of the  Declaration  of Trust of the  Subsequent  Purchaser  is on file with the
Secretary of The Commonwealth of Massachusetts,  and notice is hereby given that
this agreement is executed on behalf of the Subsequent  Purchaser by officers of
the Subsequent  Purchaser as officers and not  individually.  All obligations of
the Subsequent  Purchaser hereunder shall be binding only upon the assets of the
Subsequent  Purchaser  (or the  appropriate  series  thereof)  and  shall not be
binding  upon  any  trustee,  officer,  employee,  agent or  shareholder  of the
Subsequent Purchaser. Neither the authorization of any action by the Trustees of
the  Subsequent  Purchaser nor the execution of this  agreement on behalf of the
Subsequent  Purchaser  shall impose any liability  upon any trustee,  officer or
shareholder of the Subsequent Purchaser.

                  Section 5.        Miscellaneous.

                  (a) Successors and Assigns. This Joinder Agreement shall inure
to the benefit of and be binding upon the  successors  and permitted  assigns of
each of the parties  and shall  inure to the benefit of each party.  The Company
may not assign its rights or  obligations  hereunder  without the prior  written
consent of each party.  Each party may assign their respective  rights hereunder
in the  manner and to the  Persons  as  permitted  under the  Montrose  Purchase
Agreement or the Acorn Purchase Agreement, as the case may be.

                  (b)  Counterparts.  This Joinder  Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together  shall  constitute one and the same
Agreement.   In  the  event  that  any   signature  is  delivered  by  facsimile
transmission,  such  signature  shall create a valid  binding  obligation of the
party  executing  (or on whose behalf such  signature is executed) the same with
the same  force and  effect as if such  facsimile  signature  were the  original
thereof.

                  (c) Governing Law. All questions  concerning the construction,
validity,  enforcement  and  interpretation  of this Joinder  Agreement shall be
governed by and construed  and enforced in accordance  with the internal laws of
the State of New York, without regard to the

                                       -2-

<PAGE>

principles of conflicts of law thereof. Each party hereby irrevocably submits to
the exclusive  jurisdiction  of the state and federal courts sitting in the City
of New York, borough of Manhattan, for the adjudication of any dispute hereunder
or in  connection  herewith  or with  any  transaction  contemplated  hereby  or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding,  any claim that it is not personally  subject to the
jurisdiction  of any such  court,  that  such  suit,  action  or  proceeding  is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy  thereof to such party at the address in effect for notices to it
under this Joinder  Agreement and agrees that such service shall constitute good
and sufficient  service of process and notice thereof.  Nothing contained herein
shall be  deemed to limit in any way any right to serve  process  in any  manner
permitted by law.

                  (d) Notices.  Any and all notices or other  communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and shall be deemed given and effective as provided in the  Registration  Rights
Agreement.  The address for such notices and communications shall be as provided
in the  Registration  Rights  Agreement  with  respect  to the  Company  and the
Existing  Purchaser,  and with respect to Acorn,  to the address set forth under
Acorn's name on the signature pages hereto.

                                       -3-

<PAGE>

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Joinder and Amendment to  Registration  Rights  Agreement as of the day and year
first above written.

                               TIDEL TECHNOLOGIES, INC.

                               By: _________________________________________
                                   Name: James T. Rash
                                   Title: President and Chief Executive Officer

                               THE SUBSEQUENT PURCHASER:

                               ACORN INVESTMENT TRUST
                               on behalf of its series Acorn Fund

                               By: ____________________________________________
                                   Name: Kenneth A. Kalina
                                   Title: Assistant Treasurer

                               Address for Notice:

                               Acorn Investment Trust
                               on behalf of its series Acorn Fund
                               227 W. Monroe St., #3000
                               Chicago, IL 60606
                               Facsimile: 312-634-1919
                               Attn: Treasurer

         With copies to:       Bell, Boyd & Lloyd LLC
                               Three First National Plaza, #3300
                               Chicago, IL 60602
                               Facsimile: 312-372-2098
                               Attn: Janet D. Olsen

<PAGE>

                               THE EXISTING PURCHASERS:

                               MONTROSE INVESTMENTS LTD.

                               By: ____________________________________________
                                   Name:
                                   Title:

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