TIDEL DISTRIBUTOR AGREEMENT
Basic Terms ("Basic Terms")
---------------------------
Part I
General
1. Parties. The Tidel Distributor Agreement ("Agreement") is entered into
by and between ATM Financial Corp., a Nevada corporation, having its principal
place of business at suite 3400, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("Distributor") and Tidel Engineering, L.P., a Delaware
limited partnership, having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
2. Date. The Agreement will be effective upon execution of the Agreement
by the last of the parties hereto to execute the Agreement.
3. Incorporated Sections. The attached Sections I through XXII are
incorporated herein in their entirety.
4. Controlling Agreement. In the event of a conflict between any term or
provision of these Basic Terms and the attached Sections I through XXII, the
terms and provisions of these Basic Terms shall control.
Part II
Distributor Representations, Warranties and Covenants
(complete all blanks)
5. Distributor hereby represents, warrants and covenants to Tidel as
follows:
A. Distributor is a corporation.
B. Distributor is duly organized, existing and in good standing under
the laws of the State of Nevada.
C. Distributor is qualified to do business in the Province of British
Columbia.
D. Distributor's organizational identification number (charter number)
is C30988-02.
E. Distributor's tax identification number (or social security number if
Distributor is an individual) is ▇▇-▇▇▇▇▇▇▇.
F. Distributor's principal place of business is Vancouver, British
Columbia.
G. The Product and proceeds thereof, as well as the accounts receivable
records of Distributor, will be kept at the location(s), in the City
of Vancouver, Province of British Columbia, Country of Canada set
forth below:
(i) The Product will be kept at the following location(s):
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(ii) Distributor's records of its proceeds and accounts
receivable relating to the Collateral (as defined in the
Agreement), including without limitation, the Product, will be
kept at the following location(s): 3400 - ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(iii) Distributor's depository account for cash proceeds will
be kept at the following location(s):
[omitted]
6. Notice Addresses. Addresses for notice shall be as follows, unless
written notice of a changed address is delivered to the other party hereto, in
accordance with the terms of the Agreement:
For Distributor: ATM Financial Corp.
▇▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
For Tidel: Tidel Engineering, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Executive Vice President and C.O.O.
Phone: ▇▇▇.▇▇▇.▇▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
7. Additional Addendum. The following Addendum is hereby attached and
incorporated into the Agreement: (Check if applicable)
Part III
Selection of Warranties
8. (Check Only Those Warranties That Apply)
The following are the only warranties provided by Tidel. Each of these
warranties is subject to the disclaimers, limitations, and exclusions set forth
elsewhere in this Agreement
X LIMITED WARRANTY/TIDEL ATM: Tidel hereby warrants to the BUYER only,
subject to the conditions herein below set forth, that should the Tidel
Automated Teller Machine ("ATM"), exclusive of the ATM Chameleon or Model 3800,
prove defective by reason of improper workmanship or materials, Tidel will
repair or replace with new or factory reconditioned, all necessary electrical,
electronic and mechanical parts, without a charge for the labor for a period of
90 days and without a charge for parts for a period of 18 months after the
original installation of the ATM. (This warranty only applies to the ATM units
installed within the Continental United States. The warranty for units
installed outside the Continental United States may differ. Contact your local
sales representative for details.) In no event shall the parts warranties
given hereunder extend for more than 24 months after the date the ATM has been
shipped from Tidel's factory. Parts considered consumable (such as printer
ribbons, diskettes, paper and cards) are not warranted, except to the extent
that these items are shipped in new, proper working condition from Tidel in
Carrollton, Texas. The remedy described above shall be the EXCLUSIVE remedy
for breach of this warranty and breach of contract.
- LIMITED WARRANTY CHAMELEON: Tidel warrants to the BUYER only, subject
to the conditions herein below set forth, that should the Tidel Automated
Teller Machine Chameleon ("ATM") or the Model 3800 prove defective by reason of
improper workmanship or materials, Tidel will repair or replace with new or
factory reconditioned, all necessary electrical, electronic and mechanical
parts, without a charge for (i) the parts for a period of one (1) year after
the original installation of the ATM; and (ii) the labor for a period of 90
days after the original installation of the ATM. (This warranty only applies
to ATM units installed within the Continental United States. The warranty for
units installed outside the Continental United States may differ. Contact your
local sales representative for details.) In no event shall the warranties
given hereunder, extend for more than 18 months after the date the ATM has been
shipped from Tidel's factory. Parts considered consumable (such as printer
ribbons, diskettes, paper and cards) are not warranted, except to the extent
that these items are shipped in new, proper working condition from Tidel in
Carrollton, Texas. The remedy described above shall be the EXCLUSIVE remedy
for breach of this warranty and breach of contract.
- LIMITED WARRANTY FOR THE TACC IIa: Tidel warrants to the BUYER only,
subject to the conditions herein below set forth, that should the Tidel Timed
Access Cash Controller IIa ("TACC"), prove defective by reason of improper
workmanship or materials, Tidel will repair or replace with new or factory
reconditioned, all necessary electrical, electronic and mechanical parts,
without a charge for the parts or the labor for a period of two (2) years after
the original installation of the TACC. (This warranty only applies to TACC
units installed within the Continental United States. The warranty for units
installed outside the Continental United States may differ. Contact your local
sales representative for details.) In no event shall the warranties given
hereunder, extend for more than 30 months after the date the TACC has been
shipped from Tidel's factory. Parts considered consumable (such as printer
ribbons and paper, dipsticks, vend tubes, and envelopes) are not warranted,
except to the extent that these items are shipped in new, proper working
condition from Tidel in Carrollton, Texas. The remedy described above shall be
the EXCLUSIVE remedy for breach of this warranty and breach of contract.
- LIMITED WARRANTY FOR THE TACC Cii and TACC IV: Tidel warrants to the
BUYER only, subject to the conditions herein below set forth, that should the
Tidel Timed Access Cash Controller Cii or IV ("TACC") prove defective by reason
of improper workmanship or materials, Tidel will repair or replace with new or
factory reconditioned, all necessary electrical, electronic and mechanical
parts, without a charge for the parts or the labor for a period of one (1) year
after the original installation of the TACC. (This warranty only applies to
TACC units installed within the Continental United States. The warranty for
units installed outside the Continental United States may differ. Contact your
local sales representative for details.) In no event shall the warranties
given hereunder, extend for more than 18 months after the date the TACC has
been shipped from Tidel's factory. Parts considered consumable (such as
printer ribbons and paper, diskettes, vend tubes, and envelopes) are not
warranted, except to the extent that these items are shipped in new, proper
working condition from Tidel in Carrollton, Texas. The remedy described above
shall be the EXCLUSIVE remedy for breach of this warranty and breach of
contract.
- LIMITED PARTS WARRANTY: Tidel hereby warrants to the BUYER only,
subject to the conditions herein below set forth, that should the replacement
parts for the Tidel Automated Teller Machine ("ATM") and/or Timed Access Cash
Controller ("TACC") prove defective by reason of improper workmanship or
materials, Tidel will repair or replace with new or factory reconditioned, all
such replacement parts, without a charge for the parts or labor for a period of
ninety (90) days after the original installation of such ATM and/or TACC
replacement part. (This warranty only applies to the ATM and/or TACC units
installed within the Continental United States. The warranty for units
installed outside the Continental United States may differ. Contact your local
sales representative for details.) Parts considered consumable (such as
printer ribbons, diskettes, paper and cards) are not warranted, except to the
extent that these items are shipped in new, proper working condition from Tidel
in Carrollton, Texas. The remedy described above shall be the EXCLUSIVE remedy
for breach of this warranty and breach of contract.
Part IV
Service Dealer Appointment
9. - (Optional/Check if Applicable)
If this Section is checked, the attached Section II, Service Dealer Appointment
is hereby elected by the parties hereto, and will be deemed to be a part of the
Agreement. If this Section is not checked, the attached Section II, Service
Dealer Appointment is not elected by the parties, and will not be deemed to be
a part of the Agreement.
Part V
Territory
10. X (Optional/Check if Applicable - International Only)
Distributor's non-exclusive territory ('Territory") is British Columbia.
SECTION I. APPOINTMENT OF DISTRIBUTOR
1.01 Subject to the terms and under the conditions set forth in this
Agreement, Tidel appoints Distributor as the non-exclusive distributor for the
solicitation of orders and the selling and distribution of Product. In
connection with the appointment of the Distributor for the Product, Tidel
grants to Distributor the right to identify itself as an authorized
distributor of Tidel and to display, in the conduct of its duties, the
various trademarks, services marks and other word and design marks that Tidel
uses in connection with the Product.
1.02 By its signature to this Agreement, Distributor accepts such
appointment. Furthermore, Distributor will not solicit orders, sell or
distribute any other product or item manufactured by Tidel unless otherwise
set forth in a separate written agreement with Tidel.
SECTION II. SERVICE DEALER APPOINTMENT
2.01 In the event that this Section is checked under the Basic Terms,
and subject to the terms and under the conditions set forth in this Agreement,
Tidel additionally appoints Distributor as a non-exclusive dealer for
solicitation of orders for the support and servicing of the Product. In
connection with the appointment of Distributor as a service dealer, Tidel
grants to Distributor the right to identify itself as an authorized service
dealer of Tidel. By its signature below, Distributor accepts such appointment.
2.02 In the event this Section is checked under the Basic Terms,
Distributor shall maintain service personnel to offer installation, repair,
warranty and after-sale technical support service directly to its customers.
Distributor agrees to have all such personnel certified by Tidel. Distributor
agrees to provide training to its key personnel with respect to the
installation, programming and maintenance procedures for the Product and to
cause such key personnel to attend Tidel service training seminars as required.
SECTION III. RELATIONSHIP OF THE PARTIES
3.01 The relationship between Tidel and Distributor shall be solely
that of an independent contractor and Distributor shall in no way act as or
represent that it has the authority to act as an employee, agent, or legal
representative of Tidel for any purposes whatsoever. As an independent
contractor, Distributor shall be responsible for all costs and expenses
which it incurs in pursuing its obligations under this Agreement. Any agents
or employees of Distributor shall be agents or employees solely of Distributor
and in no circumstances shall they be agents or employees of Tidel, nor
shall Tidel in any circumstances be liable to such agents or employees or
responsible for their acts.
SECTION IV. TERM
4.01 This Agreement shall have an initial term of one (1) year,
commencing on the date hereof, subject to the conditions described herein.
Thereafter, subject to the conditions described herein, this Agreement shall
continue in effect for successive one (1) year terms in the absence of a
written notice of termination as described in Section XX, herein.
SECTION V. OBLIGATIONS OF DISTRIBUTOR
5.01 Distributor agrees to actively promote the sale of the Product
through direct sales and to maintain a mutually agreed upon inventory of the
Product and spare parts for timely delivery, sales demonstration, training and
support.
5.02 Distributor agrees to include the Product in promotional
literature and to furnish such literature, technical information and related
assistance to prospective customers. Any advertising media for the Product
must be approved by Tidel prior to publication and/or use.
5.03 Distributor, at Distributor's sole responsibility, hereby
acknowledges that all Tidel products will be installed by only certified and
authorized service personnel and/or dealer(s) who hold a currently assigned
Tidel certification number.
5.04 Distributor agrees to be solely responsible for compliance with
all state, municipal and local laws, codes, regulations, ordinances and orders
applicable to Distributor's business.
SECTION VI. OBLIGATIONS OF TIDEL
6.01 So long as Distributor has not breached any of the terms or
conditions of this Agreement, including but not limited to its obligations set
forth in the preceding Section IV, Tidel agrees to the following:
A. Tidel will use commercially reasonable efforts to supply
Distributor's requirements for the Product under the terms and conditions of
this Agreement, including, but not limited to available literature, sales aids,
and applicable price lists.
B. Tidel will offer on a periodic basis, service training seminars
in Carrollton, Texas which Distributor and its key personnel may attend at its
own expense. Tidel may, at its sole discretion, provide periodic sales
support and sales training for the Product at Distributor's location.
C. Tidel will keep Distributor informed of all modifications to the
Product and all new products which may be offered for sale by Tidel in lieu of
the Product.
SECTION VII. PRICES AND TERMS OF ORDERS
7.01 The purchase price paid by Distributor for the Product, ordered
by Distributor shall be at the prices and discounts, and subject to Tidel's
standard terms and conditions as set forth on Exhibit "B" attached hereto and
incorporated herein by reference. From time to time Distributor shall submit
purchase orders for the Product. Any terms of such purchase orders which in
any way conflict with the terms and provisions of this Agreement are of no
force and effect and the provisions of this Agreement shall in all cases
control the relationship between the parties.
7.02 Provided that Distributor has complied with the terms and
conditions of this Agreement, including without limitation Section XVIII.,
Security Agreement, and at Tidel's sole discretion, Distributor's payment
terms shall be net price due within thirty (30) days from date of invoice.
In the event Distributor is late in the payment of any invoice or
Distributor's credit standing deteriorates (as determined by Tidel), Tidel may
discontinue shipments or place Distributor on a C.O.D. or prepayment basis.
Interest at the rate of the lesser of 1.5% per month or the highest rate
allowed by applicable law will be assessed for over-due accounts.
7.03 Tidel agrees to provide Distributor at least thirty (30) days
prior notice of any increase in the Distributor price of the Product.
SECTION VIII. PRODUCT SPECIFICATION CHANGES
8.01 Tidel reserves the right, without prior approval from or notice
to Distributor, to make changes in design or improvements to the Product.
Tidel is not obligated to make any such changes to the Product previously
delivered to Distributor.
SECTION IX. SOFTWARE PRODUCT LICENSE
9.01 Unless otherwise stated, Tidel grants Distributor a
nontransferable, non-exclusive license to use its software programs for the
purpose of demonstration of the Product to its customers only. The software
provided by Tidel is subject to the following provisions:
A. Tidel retains title to all software and/or firmware programs.
B. Distributor agrees not to copy, duplicate or otherwise reproduce,
disclose, sub license or sell any Tidel-supplied software and/or firmware
programs.
SECTION X. TAXES
10.01 In addition to the prices stated in Exhibit "B" attached hereto,
the Distributor agrees to pay any and all sales taxes applicable to sales of
the Product hereunder. Distributor shall also bear any personal property
taxes assessable on the Product on or after the time title to the Product
passes to Distributor.
SECTION XI. TITLE; RISK OF LOSS
11.01 Each accepted purchase order constitutes a separate sales
contract based on the prices, terms and conditions set forth in this Agreement
or as amended from time to time in accordance with this Agreement. Title to
the Product, sold under each purchase order and the risk of loss or damage to
the Product will pass from Tidel to Distributor at the time that the Product
is properly loaded on a carrier for shipment.
SECTION XII. SHIPMENT
12.01 All purchase orders shall provide for shipment of the Product,
F.O.B., Tidel's facility in Carrollton, Texas. Distributor agrees to reimburse
Tidel for all shipping costs, including insurance, within ten (10) days after
Distributor's receipt of proper bills evidencing such payments by Tidel.
SECTION XIII. CONFIDENTIAL INFORMATION
13.01 Distributor, during the term of this Agreement, shall have
access to and become familiar with various trade secrets and confidential
information of Tidel including, but not limited to, customer contracts,
customer lists, customer prospect lists, invoices, customer requirements,
sales procedures, research data, design data, marketing and pricing
information and data, marketing plans, financial information of Tidel and/or
its customers, and other technical, marketing and/or business information.
This information shall collectively be referred to as the "Confidential
Information" of Tidel, and Distributor recognizes and acknowledges that this
Confidential Information gives Tidel a competitive advantage in the industry.
Distributor agrees that he/she/it shall not use in any way or disclose to any
person or entity any of Tidel's Confidential Information, either directly or
indirectly, either during the term of this Agreement or at any time thereafter,
except as required in the course of his/her/its services under this Agreement.
Distributor shall further take reasonable precautions and act in such a manner
as to ensure against unauthorized disclosure or use of the Confidential
Information. Such information shall be promptly delivered to Tidel (without
Distributor retaining any copies) upon termination of this Agreement.
13.02 The parties to this Agreement recognize and acknowledge that
the remedy at law for a breach by either party of any of the covenants
contained in this Section XIII shall be inadequate, and each party agrees that
the other party, in addition to all remedies each may have, shall have the
right to injunctive relief to enforce the provisions of this Agreement if
there is such a breach or threatened breach.
SECTION XIV. WARRANTY
14.01 The Product sold by Tidel and purchased by Distributor under
this Agreement is covered by Tidel's standard warranties, as applicable, as
such warranties may be amended by Tidel from time to time. A copy of Tidel's
standard current warranties have been attached and incorporated into the Basic
Terms, together with the Disclaimers, Limitations, and Exclusions to Tidel's
Warranties, attached and hereby incorporated as Exhibit "C". Tidel reserves
the right to modify such warranties from time to time on prior written notice
to Distributor, and Distributor agrees to be bound by the terms of any such
amended warranties.
14.02 THE WARRANTIES REFERENCED ABOVE ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY REGARDING MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, RELATING TO THE USE OR PERFORMANCE OF THE
PRODUCT AND THE PARTS THEREFORE. TIDEL WILL NOT BE LIABLE FOR PERSONAL INJURY
OR PROPERTY DAMAGE (UNLESS CAUSED SOLELY BY TIDEL'S NEGLIGENCE), LOSS OF PROFIT
OR OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OR
INABILITY TO USE THE PRODUCT, OR FOR ANY DAMAGES (REGARDLESS OF THEIR NATURE)
CAUSED BY THE DISTRIBUTOR'S FAILURE TO FULFILL ITS RESPONSIBILITIES AS SET
FORTH HEREIN.
14.03 Distributor shall not make any other direct or indirect
representations or warranties, expressed or implied, on behalf of Tidel. In
the event Distributor does make any such unauthorized representations or
warranties, expressed or implied, in connection with the sale, distribution or
handling of the Product, Distributor shall hold harmless and indemnify Tidel
for any expenses (including counsel fees), claims, damages, settlements or
liability of any nature whatsoever arising out of such unauthorized
representation of Distributor.
SECTION XV. LIMITATION OF REMEDIES
15.01 Tidel's liability for damages to Distributor for any cause
whatsoever, and regardless of the form of action, whether in contract or in
tort including negligence, shall be limited to the amount (including purchase
price, taxes, insurance, freight and other costs) actually paid by Distributor
to Tidel in connection with the sale of the Product which was faulty or
defective.
15.02 In no event will Tidel be liable for any damages caused by
Distributor's failure to perform Distributor's responsibilities, or for any
lost profits or savings or other consequential damages, regardless of the form
of action, whether in contract or in tort including negligence, even if Tidel
has been advised of the possibilities of such damages, or for any claim against
Distributor by any other party. Additionally, Tidel will not be liable for any
loss of funds contained in, dispensed by or associated with any Product.
15.03 Distributor hereby agrees that Tidel shall not be liable for any
acts or omissions to act on the part of Distributor, nor shall Distributor bind
or attempt to bind or obligate Tidel in any manner.
15.04 Distributor is an independent contractor and is not an agent of
Tidel. Tidel does not have authority to control the details and manner of
performance of Distributor's work. Distributor agrees that it does not have
authority to and will not hold itself out to any third party as an agent of
Tidel.
SECTION XVI. NOTICES
16.01 Any notice which may be required under this Agreement shall be
either in writing or telegraphic. Notices shall be sent to the address set
forth in the Basic Terms, or such other address of which one party shall give
written notice to the other party in accordance with the terms of this
Agreement. Any written notice shall be sent by registered mail or certified
mail, postage prepaid, return receipt requested. Telegraphic notices must be
followed within three (3) days by written notice of an authorized agent. All
such notices are considered given when such notices are properly addressed and
sent. Additionally, notices actually received, regardless of the method of
sending, shall be deemed properly received as of the date of receipt.
SECTION XVII. INSURANCE
17.01 Distributor, at its sole cost and expense, shall maintain
Business Automobile Liability Insurance for all operations of the Distributor
including owned, non-owned and hired vehicles with limits of liability of not
less than a combined single limit of $1,000,000 for bodily injury and property
damage, unless otherwise agreed to by Tidel, at its sole and complete
discretion. In addition, Distributor shall purchase and maintain during the
term of this Agreement commercial general liability insurance with limits of
$1,000,000 each occurrence and $1,000,000 general aggregate, or its equivalent.
Distributor shall also carry Worker's Compensation Insurance to the extent
required by law and regulations applicable to and covering employees of
Distributor. Tidel shall be furnished with a copy of such policies or
certificates of insurance.
17.02 In addition, all polices of insurance carried by Distributor
shall: (1) name Tidel as an additional insured (excluding worker's compensation
insurance), (2) state that coverage is primary to any insurance held by Tidel,
and (3) contain a provision that such policies of insurance cannot be canceled
except upon thirty (30) days prior written notice to Tidel.
17.03 DISTRIBUTOR AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS TIDEL
AND ITS PARTNERS, AFFILIATES, SUBSIDIARIES, AND THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS (COLLECTIVELY THE "INDEMNIFIED PARTIES") FROM
AND AGAINST ANY CLAIMS, DEMANDS, SUITS, LIABILITIES, JUDGMENTS, SETTLEMENTS,
LOSSES AND EXPENSES, INCLUDING WITHOUT LIMITATION ATTORNEYS' FEES AND COSTS OF
LITIGATION, CAUSED BY, ARISING DIRECTLY OR INDIRECTLY OUT OF, OR IN ANY WAY
INCIDENTAL TO, OR IN CONNECTION WITH: (i) DISTRIBUTOR'S PERFORMANCE HEREUNDER;
OR (ii) ANY ACT OR OMISSION OF DISTRIBUTOR, ITS DIRECTORS, OFFICERS, AGENTS,
EMPLOYEES OR CONTRACTORS.
IT IS THE INTENTION OF THE PARTIES THAT THE INDEMNITY OBLIGATIONS SET FORTH
ABOVE ARE WITHOUT REGARD TO WHETHER THE NEGLIGENCE, FAULT, OR STRICT LIABILITY
OF AN INDEMNIFIED PARTY IS A CONCURRENT OR CONTRIBUTORY FACTOR, AND SUCH
OBLIGATIONS ARE INTENDED TO PROTECT THE INDEMNIFIED PARTIES AGAINST THE
CONSEQUENCES OF THEIR OWN NEGLIGENCE, FAULT, OR STRICT LIABILITY. ONLY THOSE
MATTERS WHICH ARE DETERMINED BY A FINAL NON-APPEALABLE JUDGMENT TO BE A RESULT
OF THE SOLE NEGLIGENCE OR FAULT OF AN INDEMNIFIED PARTY SHALL BE EXCLUDED FROM
THE INDEMNITOR'S DUTY TO INDEMNIFY THE INDEMNIFIED PARTIES.
SECTION XVIII. SECURITY AGREEMENT
18.01 Distributor hereby grants to Tidel a security interest in all of
the Product (as the term Product is defined in the Agreement) transferred, sold
or assigned to Distributor under this Agreement, any Product hereinafter
acquired by Distributor, and software license and programming used in
connection with the Product, as well as any and all accounts receivables and
proceeds from the sale or assignment of Product (collectively, the "Collateral")
to secure the payment due from Distributor to Tidel on account of obligations
incurred for the price of the Product or otherwise, presently existing or
hereafter arising, plus all costs of collection, legal expenses and attorney's
fees incurred by Tidel upon the occurrence of any default by Distributor under
the terms of the Agreement or this security agreement.
18.02 Distributor intends to also grant a purchase money security
interest in all of the Product transferred, sold or assigned to Distributor
under this Agreement, and software license and programming used in connection
with the Product, as well as any and all identifiable cash proceeds thereof,
to Tidel, to the fullest extent allowed by applicable law to secure the payment
due from Distributor to Tidel on account of obligations incurred for the price
of the Product.
18.03 Distributor shall not sell, assign, transfer or otherwise
dispose of the Collateral or any interest therein other than in the ordinary
course of Distributor's business pursuant to the terms of the Agreement and
will not otherwise do or permit anything to be done or occur that may impair
the Collateral as security hereunder. Distributor shall do such acts and
execute such documents, including additional security agreements, financing
statements, UCC-1s, renewals or other documents, as Tidel may reasonably
request, to establish and maintain in Tidel a valid security interest in the
Collateral in all jurisdictions in which the Collateral is or may be located
from time to time, including without limitation a purchase money security
interest, as applicable, free of all other liens and claims.
18.04 Distributor represents, warrants and covenants that Distributor's
true, correct and complete legal name is exactly as set forth in the Agreement,
and Distributor does not operate under any trade names or assumed names.
Distributor hereby covenants and agrees to immediately notify Tidel in writing
of any change of Distributor's name, address, principal place of business, form
of entity, state of organization, or the relocation of the Product or
Collateral. Distributor will provide Tidel with a document identifying all
existing lien or encumbrance holders and liens or encumbrances, including all
affected collateral, relating to all or any portion of the Collateral,
including but not limited to the Product, prior to shipment of Product.
18.05 Tidel hereby retains and Distributor hereby grants to Tidel a
purchase money security interest in all of the Product transferred, sold or
assigned to Distributor under this Agreement, and software license and
programming used in connection with the Product, as well as any and all
identifiable cash proceeds thereof, to the fullest extent allowed by applicable
law, and agrees (A) to execute and deliver to Tidel, from time to time or as
otherwise requested by Tidel, any documents, instruments or writings necessary
to evidence, perfect, maintain or continue that purchase money security
interest, and (B) to perform all actions necessary to evidence, perfect,
maintain and continue the purchase money security interest retained and granted
herein.
18.06 Distributor hereby covenants and agrees that Tidel may execute
and/or file, at Tidel's option, in any UCC or other public records as Tidel
deems necessary, appropriate or convenient, in its sole and absolute
discretion, any initial financing statement or statements, and any similar
statements appropriate to the applicable jurisdiction, together with any
amendment, modification, renewal, continuation, extension, whether one or more
and from time to time, evidencing and securing the security interests set forth
in the Agreement, in form, scope and substance satisfactory to Tidel in its
sole and absolute discretion, without the signature of Distributor, to the
extent allowed by applicable law. Distributor hereby covenants and agrees
that Tidel may give notice of any such lien, execution or filing to other lien
or encumbrance holders, if any.
18.07 Any proceeds of the purchase money security interest are to be
applied to the debt owed by Distributor to Tidel in the following manner:
A. If Distributor has specified a preference delivered in writing to
Tidel, in accordance with the notice provisions of the Agreement,
then the proceeds shall be applied to the invoice specified by
Distributor according to that preference.
B. If Distributor has not specified a preference, then the proceeds
shall be applied to the oldest invoice and then to the next oldest
invoice, and so on, until the proceeds shall have been exhausted or
all of the invoices shall have been paid.
SECTION XIX. ASSIGNMENT
19.01 Distributor shall not sell, transfer, assign or otherwise
dispose of its rights and/or obligations under this Agreement except upon the
express prior written agreement of Tidel.
SECTION XX. TERMINATION
20.01 Tidel or Distributor may terminate this Agreement for any reason
upon thirty (30) days, prior written notice.
20.02 Upon the termination or expiration of this Agreement,
Distributor shall cease all use of the various trademarks, service marks and
other work and design marks of Tidel and shall thereafter duly and promptly
refer to Tidel any and all sales inquiries, orders, correspondence and the
like, whether in written or oral forms, pertaining to the Product.
20.03 Such termination shall not relieve Distributor from any
obligation under this Agreement, including but not limited to payment of any
balance due for the Product previously ordered and the obligations described
under Section XIII.
SECTION XXI. FORCE MAJEURE
21.01 Tidel shall not be responsible to Distributor for Tidel's
failure to supply the Product or any accessories or parts if same is due to
labor troubles, strikes, lockouts, fires, accidents, riots, acts of government
or public enemy, acts of God or for any other cause, including failure of a
manufacturer to deliver any component for the Product to Tidel.
SECTION XXII. GENERAL
22.01 If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not be in any way be affected or impaired thereby
and each provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by applicable law.
22.02 This Agreement shall be binding upon the heirs, successors and
permitted assigns of the parties.
22.03 The headings used in this Agreement are included for convenience
of the parties only and are not to be used in construing or interpreting this
Agreement.
22.04 This Agreement is governed by, and shall be construed in
accordance with, the laws of the State of Texas.
22.05 This Agreement shall not become binding or enforceable until
accepted and agreed to by Tidel as evidenced by the execution of this Agreement
by an authorized officer of Tidel.
22.06 If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to recover its reasonable costs and attorneys' fees from the other party.
22.07 THIS AGREEMENT, TOGETHER WITH ANY OTHER APPLICABLE TIDEL
AGREEMENTS REFERENCING THIS AGREEMENT THAT ARE DULY SIGNED BY THE PARTIES WILL
BE THE COMPLETE AGREEMENT BETWEEN THE PARTIES, SUPERSEDING ALL PROPOSALS OR
PRIOR AGREEMENTS, ORAL OR WRITTEN, AND ALL OTHER PRIOR COMMUNICATIONS
BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
TIDEL ENGINEERING, L.P.
by its General Partner,
Tidel Cash Systems, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President and
Chief Operating Officer
Date: 8/24/04
ATM FINANCIAL CORP.:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
President
Date: August 16, 2004
