Tidel Technologies 8-K 6-9-2006
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
____________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
Report (Date of earliest event reported): June 9, 2006
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TIDEL
TECHNOLOGIES, INC.
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(Exact
name of registrant as specified in its
charter)
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Delaware
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000-17288
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75-2193593
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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2900
Wilcrest Drive, Suite 105, Houston, Texas
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77042
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(Address
of principal executive offices)
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(zip
code)
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Registrant's
telephone number, including area code: (713)
783-8200
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N/A
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(Former
name or former address, if changed since last
report.)
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01.
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Entry
into a Material Definitive
Agreement.
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Tidel
Technologies, Inc. (“We,” “us” or the “Company”) and our subsidiary, Tidel
Engineering, L.P. (“Engineering”), entered into an amended and restated asset
purchase agreement, dated as of June 9, 2006 (the “Asset Purchase Agreement”),
with Sentinel Operating, L.P. (“Buyer”) for the sale of substantially all of the
assets of our electronic cash security 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 (the “Cash
Security Business Sale”) to Buyer. The Asset Purchase Agreement amends and
restates the asset purchase agreement originally entered into as of January
12,
2006.
The
Asset
Purchase Agreement provides for the sale of our cash security business to Buyer
for a cash purchase price of $15,500,000, less $100,000 as consideration for
the
Buyer assuming certain potential liability in connection with ongoing
litigation, and less a working capital deficit adjustment of $1,629,968,
resulting in a net purchase price of $13,770,032. In addition, the purchase
price is subject to a cash adjustment of $2,458,718 payable to the Company
by
the Buyer on closing.
Pursuant
to the Agreement Regarding the NCR Transaction and Other Asset Sales, dated
November 26, 2004 (the “Sale Agreement”), by and between the Company and Laurus
Master Fund Ltd. (“Laurus”), the Company agreed to pay to Laurus a portion of
the excess net proceeds from the Cash Security Business Sale.
On
June
9, 2006, we and Laurus entered into an agreement (the “Laurus Termination
Agreement”) which, among other things, provides for the payment of a sale fee of
$8,508,963 to Laurus (the “Sale Fee”) in full satisfaction of all amounts
payable to Laurus under the Sale Agreement, including fees payable in respect
of
the sale of our ATM business division and the Cash Security Business Sale.
The
Laurus Termination Agreement further provides that, upon payment of the Sale
Fee
and performance by the Company of its obligations under the Stock Redemption
Agreement described below: (i) all warrants to purchase common stock of the
Company held by Laurus will terminate and be of no further force or effect;
and
(ii) thereafter, neither the Company nor any of its subsidiaries will have
any
further obligation to Laurus. Further, each of the Company and Laurus have
granted each other and their respective affiliates and subsidiaries reciprocal
releases from and against any claims and causes of action that may
exist.
We
and
Laurus initially entered a Stock Redemption Agreement on January 12, 2006.
Pursuant to the terms of the Stock Redemption Agreement: (i) we agreed, among
other things, to repurchase from Laurus, upon the closing of the Cash Security
Business Sale, all shares of our common stock held by Laurus, and (ii) Laurus
agreed (a) to the cancellation as of the closing date of the Cash Security
Business Sale of warrants it holds to purchase 4,750,000 shares of our common
stock at an exercise price of $.30 per share, and (b) not to exercise such
warrants prior to the earlier to occur of March 31, 2006 (the “Outside Date”)
and the date on which the Asset Purchase Agreement is terminated. Pursuant
to an
Amendment to the Stock Redemption Agreement entered into as of February 28,
2006, Laurus agreed to extend the Outside Date from March 31, 2006 to May 31,
2006. On June 9, 2006, we and Laurus entered into a Second Amendment to Stock
Redemption Agreement, pursuant to which Laurus has agreed to further extend
the
Outside Date to September 30, 2006. The Second Amendment to Stock Redemption
Agreement is effective as of April 21, 2006.
We
and
Laurus also entered into an Exercise and Conversion Agreement on January 12,
2006. The Exercise and Conversion Agreement provided, among other things, for
Laurus to convert, on or prior to the record date (the “Record Date”) set with
respect to the special meeting of our stockholders to be held for the purpose
of
voting on the Cash Security Business Sale (the “Special Meeting”), $5,400,000 of
indebtedness outstanding under our Convertible Note (as defined below) into
18,000,000 shares of our common stock. As used herein, the term “Convertible
Note” means a certain Convertible Note, dated November 5, 2003, in the original
principal amount of $6,450,000 together with an additional $292,987 added
thereto on November 26, 2004, made by the Company to Laurus. Pursuant to an
Amendment to Exercise and Conversion Agreement dated as of February 28, 2006,
Laurus agreed to extend the latest date that we could set as the Record Date
from January 13, 2006 to April 21, 2006. Laurus also agreed to extend the latest
date by which we could mail proxy materials for the Special Meeting to our
stockholders from February 28, 2006 to April 21, 2006 and the latest date by
which the Cash Security Business Sale must occur from March 31, 2006 to May
31,
2006. On June 9, 2006, we and Laurus entered into a Second Amendment to Exercise
and Conversion Agreement pursuant to which Laurus has agreed to further extend
the latest date that we can set as the Record Date for the Special Meeting
and
the latest date by which we can mail proxy materials for the Special Meeting
to
our stockholders to August 31, 2006 and to further extend the date by which
the
Cash Security Business Sale must occur to September 30, 2006. The Second
Amendment to Exercise and Conversion Agreement is effective as of April 21,
2006.
On
January 12, 2006, we and Laurus entered into a Voting Agreement with Sentinel
Technologies, Inc., an affiliate of Buyer (“STI”), which provides, among other
things, for Laurus to vote all of the shares of Company common stock that Laurus
owns and any shares over which Laurus exercises voting control in favor of
the
approval and adoption of the Asset Purchase Agreement, the Cash Security
Business Sale and related transactions and against any competing transactions
proposed to the Company’s stockholders. An Amendment to Voting Agreement was
entered into as of February 28, 2006 whereby Laurus agreed to extend the latest
date that we could set as the Record Date for the Special Meeting from February
13, 2006 to April 21, 2006 and to extend the date on which Laurus will cease
to
be bound by its obligations under the Voting Agreement from February 28, 2006
to
May 31, 2006. On June 9, 2006, we, Laurus and STI entered into a Second
Amendment to Voting Agreement pursuant to which the latest date we can set
as
the Record Date for the Special Meeting has been further extended from March
31,
2006 to August 31, 2006 and the date on which Laurus will cease to be bound
by
its obligations under the Voting Agreement was further extended from May 31,
2006 to September 30, 2006. The Second Amendment to Voting Agreement is
effective as of April 21, 2006.
On
June
9, 2006, Engineering entered into an agreement with Mark K. Levenick under
which
Engineering agreed to make a payment of $350,000 to Mr. Levenick upon the
closing of the Cash Security Business Sale in consideration for Engineering
terminating Mr. Levenick’s employment agreement and all rights thereunder
(including any rights to vacation pay or other benefits) other than
for accrued pay. This payment had previously been approved by the Company’s
compensation committee, subject to the review and approval of definitive
documentation. This payment would represent a stay bonus in respect of Mr.
Levenick continuing his employment with the Company until the closing of
the
sale of the Company’s ATM business division and the Cash Security Business Sale.
Under the terms of the agreement, Mr. Levenick agrees that all stock
options held by him to purchase the Company’s common stock, to the extent
exercisable and not previously terminated, may be exercised by him at any
time
prior to 90 days following the closing of the Cash Security Business Sale.
In
addition, Mr. Levenick and Engineering agreed that in the event the Asset
Purchase Agreement is terminated or the Cash Security Business Sale is not
consummated, the agreement would have no effect and his employment agreement
would continue in accordance with its terms.
This
summary of the Asset Purchase Agreement, the Laurus Termination Agreement,
the
Second Amendment to Stock Redemption Agreement, the Second Amendment to Exercise
and Conversion Agreement, the Second Amendment to Voting Agreement and the
Levenick agreement is qualified in its entirety by reference to the agreements
filed as exhibits hereto.
On
May
30, 2006, the Company received a settlement payment of $4,489,963.58 arising
out
of the Company’s ownership of 698,889 shares of the common stock of 3CI Complete
Compliance Corporation (“3CI”) under a class action settlement paid out to
minority shareholders of 3CI. Under the terms of the settlement and in order
to
participate in the settlement, the Company tendered all 698,889 shares to
Stericycle, Inc., the majority shareholder of 3CI and the defendant under the
class action, and accordingly the Company no longer holds any ownership interest
in 3CI. Although the Company has been advised that it may receive further
disbursements as part of the settlement, it believes that the May 30, 2006
disbursement represents the principal portion of the amounts that will be paid
to the Company under the settlement and there can be no assurance that the
Company will in fact receive further settlement disbursements.
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Item
9.01.
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Financial
Statements and Exhibits
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Exhibit
No.
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Exhibit
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Amended
and Restated Asset Purchase Agreement, dated as of June 9, 2006,
by and
among Sentinel Operating, L.P., Tidel Technologies, Inc. and Tidel
Engineering, L.P.
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Agreement,
dated as of June 9, 2006, by and between Tidel Technologies, Inc.
and
Laurus Master Fund, Ltd.
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Second
Amendment to Stock Redemption Agreement, dated as of June 9, 2006,
by and
between Tidel Technologies, Inc. and Laurus Master Fund,
Ltd.
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Second
Amendment to Exercise and Conversion Agreement, dated as of June
9, 2006,
by and between Sentinel Technologies, Inc., Sentinel Operating, L.P.,
Tidel Technologies, Inc. and Laurus Master Fund, Ltd.
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Second
Amendment to Voting Agreement, dated as of June 9, 2006, by and between
Tidel Technologies, Inc., Sentinel Technologies, Inc., Sentinel Operating,
L.P. and Laurus Master Fund, Ltd.
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Agreement,
dated as of June 9, 2006, between Tidel Engineering, L.P. and Mark
K.
Levenick.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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TIDEL
TECHNOLOGIES, INC.
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Dated:
June 14, 2006
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By:
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/s/
Mark K. Levenick |
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Name:
Mark K. Levenick
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Title:
Interim Chief Executive Officer
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