Exhibit 10.4
SECOND AMENDMENT AND EXCHANGE AGREEMENT
     SECOND AMENDMENT AND EXCHANGE AGREEMENT (this “Agreement”), dated as of
March 14, 2008, by and among Cash Systems, Inc., a Delaware corporation, with
headquarters located at 7350 Dean Martin Drive, Suite 309, Las Vegas, NV 89139
(the “Company”), and Highline Capital International, Ltd. (the “Investor”).
     WHEREAS:
     A. The Company, the Investor and certain other investors (the “Other
Investors”, and collectively with the Investor, the “Investors”) are parties to
that certain Securities Purchase Agreement, dated as of October 6, 2006 (the
“Existing Securities Purchase Agreement”), pursuant to which, among other
things, the Investors purchased from the Company (i) senior secured convertible
notes (the “Original Notes”), which were convertible into shares of the
Company’s common stock, par value $0.001 per share (the “Common Stock”) and
(ii) warrants (the “Original Warrants”), which were exercisable into shares of
Common Stock.
     B. The Company and the Investors are parties to certain Amendment and
Exchange Agreements, dated as of August 20, 2007 (the “Amendment and Exchange
Agreements”), pursuant to which, among other things, the Investors exchanged
(i) the Original Notes for amended and restated senior secured convertible notes
(the “Existing Notes”), which are convertible into shares of Common Stock (the
Existing Notes as converted, the “Existing Conversion Shares”), in accordance
with the terms thereof and (ii) the Original Warrants for amended and restated
warrants (the “Existing Warrants”), which are exercisable into shares of Common
Stock (the “Existing Warrant Shares”).
     C. In connection with the execution and delivery of the Existing Securities
Purchase Agreement, the Company entered into that certain Registration Rights
Agreement, dated October 6, 2006 (the “Registration Rights Agreement”), by and
among the Company and the Investors, pursuant to which the Company agreed to
provide certain registration rights with respect to the Registrable Securities
(as defined in the Registration Rights Agreement) under the Securities Act of
1933, as amended (the “1933 Act”), and the rules and regulations promulgated
thereunder, and applicable state securities laws, which was subsequently amended
pursuant to the Amendment and Exchange Agreements.
     D. The Company and the Investor desire to enter into this Agreement,
pursuant to which, among other things, (i) the Company and the Investor shall
amend and restate all of such Investor’s Existing Notes for notes in the form
attached hereto as Exhibit A (the “Second Amended and Restated Notes”) which
shall be convertible into Common Stock (the “Second Amended and Restated
Conversion Shares") and (ii) the Company and the Investor shall amend and
restate all of such Investor’s Existing Warrants for warrants in the form
attached hereto as Exhibit B (the "Second Amended and Restated Warrants”) which
shall be exercisable to acquire that number of shares of Common Stock set forth
opposite the Investor’s name in column (3) on the Securities Schedule attached
hereto (the “Second Amended and Restated Warrant Shares”).

 

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     E. The amendment and restatement of the Existing Notes for the Second
Amended and Restated Notes and the amendment and restatement of the Existing
Warrants for the Second Amended and Restated Warrants is being made in reliance
upon the exemption from registration provided by Section 3(a)(9) of the 1933
Act.
     F. Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings ascribed to them in the Existing Securities
Purchase Agreement, as amended pursuant to the Amendment and Exchange
Agreements.
     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the Company and the Investor hereby agree as
follows:

  1.   AMENDMENT AND RESTATEMENT OF EXISTING NOTES AND EXISTING WARRANTS.

          (a) Amendment and Restatement of Existing Note and Existing Warrants.
Subject to satisfaction (or waiver) of the conditions set forth in Sections 5
and 6 below, at the closing contemplated by this Agreement (the “Closing”),
(i) the Investor shall surrender to the Company its Existing Note and its
Existing Warrants and the Company shall issue and deliver to the Investor (A) a
Second Amended and Restated Note in the principal amount set forth opposite the
Investor’s name in column (3) of the Securities Schedule attached hereto and
(B) the Second Amended and Restated Warrants to acquire that number of Second
Amended and Restated Warrant Shares as is set forth opposite the Investor’s name
in column (4) on the Securities Schedule attached hereto and (ii) the
obligations of the Company pursuant to Section 2 of the Registration Rights
Agreement, as amended by the Amendment and Exchange Agreements, are hereby
terminated.
          (b) Closing Date. The date and time of the Closing (the “Closing
Date”) shall be 10:00 a.m., New York Time, on March 14, 2008, subject to
notification of satisfaction (or waiver) of the conditions to the Closing set
forth in Sections 5 and 6 below (or such other time and date as is mutually
agreed to by the Company and the Investor). The Closing shall occur on the
Closing Date at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New
York, New York 10022.

  2.   AMENDMENTS TO TRANSACTION DOCUMENTS.

          (a) Ratifications. Except as otherwise expressly provided herein, the
Existing Securities Purchase Agreement, as amended pursuant to the Amendment and
Exchange Agreements and this Agreement, each Amendment and Exchange Agreement
and each other Transaction Document is, and shall continue to be, in full force
and effect and is hereby ratified and confirmed in all respects, except that on
and after the Closing Date (i) all references in the Existing Securities
Purchase Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words
of like import referring to the Existing Securities Purchase Agreement shall
mean the Existing Securities Purchase Agreement, as amended by the Amendment and
Exchange Agreements and this Agreement (ii) all references in the other
Transaction Documents to the “Securities Purchase Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Existing
Securities Purchase Agreement shall mean the Existing Securities

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Purchase Agreement, as amended by the Amendment and Exchange Agreements and this
Agreement, (iii) all references in the other Transaction Documents to the
“Registration Rights Agreement”, “thereto”, “thereof”, “thereunder” or words of
like import referring to the Registration Rights Agreement shall mean the
Registration Rights Agreement, as amended by the Amendment and Exchange
Agreements and this Agreement and (iv) this Agreement.
          (b) Amendment to Transaction Documents. Each of the Transaction
Documents are hereby amended as follows:
          (i) All references to “Notes” shall be amended to include the Second
Amended and Restated Notes as defined in this Agreement.
          (ii) All references to “Conversion Shares” shall be amended to include
the Second Amended and Restated Conversion Shares as defined in this Agreement.
          (iii) All references to “Warrants” shall be amended to include the
Second Amended and Restated Warrants as defined in this Agreement.
          (iv) All references to “Warrant Shares” shall be amended to include
the Second Amended and Restated Warrant Shares as defined in this Agreement.
          (v) The defined term “Transaction Documents” is hereby amended to
include this Agreement.
          (c) Amendment to Existing Securities Purchase Agreement.
          (i) Section 4(k) of the Existing Securities Purchase Agreement is
hereby amended by deleting the last sentence thereof and replacing it with the
following:
     From and after the date hereof and until the Additional Optional Redemption
Date (as defined in the Notes), the Company shall not issue any securities in a
Dilutive Issuance unless, contemporaneously with the consummation of such
issuance, the Company obtains an irrevocable letter of credit (each a “Letter of
Credit”) issued in favor of each Buyer, in the amount of such issuance) pro rata
among all Buyers based on the face amount of Notes (up to an aggregate amount of
$12 million for all Buyers) by a bank acceptable to the Required Holders (as
defined in the Notes) and in form and substance acceptable to the Required
Holders, which Letters of Credit may be drawn upon by the applicable Buyer in
connection with any payment obligation by the Company in connection with any
Transaction Document. Any amounts paid by the Company from sources other than
the Letter of Credit in connection with the Holder Initial Redemption or the
Mandatory Redemption shall reduce the Letter of Credit on a dollar for dollar
basis. The Letters of Credit, including any renewals, extensions or replacements
referred to below, shall expire not earlier than ninety (90) days after the
earlier of (x) the Additional Optional Redemption Date, (y) the date when all
Notes have been converted in full by the Buyers and (z) the date when the
balance of the Letters of Credit have been reduced to $0.

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          (ii) Each reference to the “tenth (10th) Business Day” in the second
line and in the last line of Section 4(o)(iii)(2) of the Existing Securities
Purchase Agreement is hereby amended to instead refer to the “fifth (5th)
Business Day.”

  3.   REPRESENTATIONS AND WARRANTIES

          (a) Investor Bring Down. The Investor hereby represents and warrants
to the Company with respect to itself only as set forth in Section 2 of the
Existing Securities Purchase Agreement as if such representations and warranties
were made as of the date hereof and set forth in their entirety in this
Agreement. Such representations and warranties to the transactions thereunder
and the securities issued thereby are hereby deemed for purposes of this
Agreement to be references to the transactions hereunder and the issuance of the
securities hereby.
          (b) Company Bring Down. Except as set forth on the Amended and
Restated Schedules attached hereto, which shall amend and restate the Schedules
attached to the Existing Securities Purchase Agreement the Company represents
and warrants to the Investor as set forth in Section 3 of the Existing
Securities Purchase Agreement, as amended by Section 2(c) above, as if such
representations and warranties were made as of the date hereof and set forth in
their entirety in this Agreement. Such representations and warranties to the
transactions thereunder and the securities issued thereby are hereby deemed for
purposes of this Agreement to be references to the transactions hereunder and
the issuance of the securities hereby, references therein to “Closing Date”
being deemed references to the Closing Date as defined in Section 1(b) above,
and references to “the date hereof” being deemed references to the date of this
Agreement.
          (c) No Event of Default. The Company represents and warrants to the
Investor that upon execution of this Agreement and the Other Agreements (as
defined below), no Event of Default (as defined in the Second Amended and
Restated Notes) shall have occurred and be continuing as of the date hereof.
          (d) Holding Period. For the purposes of Rule 144, the Company
acknowledges that the holding period of (i) the Second Amended and Restated
Notes (including the corresponding Second Amended and Restated Conversion
Shares) may be tacked onto the holding period of the Existing Notes and (ii) the
Second Amended and Restated Warrants (including the corresponding Second Amended
and Restated Warrant Shares) may be tacked onto the holding period of the
Existing Warrants (in the case of Cashless Exercise (as defined in the Second
Amended and Restated Warrants)), and the Company agrees not to take a position
contrary to this Section 3(d). The Second Amended and Restated Notes and the
Second Amended and Restated Warrants are being issued without any restrictive
legend. The Company agrees to take all actions, including, without limitation,
the issuance by its legal counsel of any necessary legal opinions, necessary to
issue the Second Amended and Restated Conversion Shares and Second Amended and
Restated Warrant Shares (so long as such Warrants are exercised by way of a
Cashless Exercise) that are freely tradable on an Eligible Market without
restriction and not containing any restrictive legend (without the need for any
action by the Investor); provided, however, that to the extent the
representation and warranty of the Investor in Section 3(f) of this Agreement
does not continue to be accurate on the date of such issuance and

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during the preceding three-month period (except for purposes of this proviso,
references in Section 3(f) to “the date hereof” shall be deemed to be references
to “the date of such issuance”), the trading of such shares shall be subject to
compliance with Rule 144.
          (e) No Dilutive Issuance. From the date of the execution of the
Existing Securities Purchase Agreement, the Company hereby represents and
warrants that no Dilutive Issuances (as defined in each of the Existing Notes
and the Existing Warrants) has occurred.
          (f) Investor Status. As of the date hereof and during the preceding
three-month period, such Investor, together with any other person with whom such
Investor must aggregate sales under Rule 144, does not, and has not,
(i) beneficially owned in excess of 10% of the Common Stock, (ii) appointed any
member to the board of directors of the Company or (iii) participated in the
management or daily operations of the Company.

  4.   CERTAIN COVENANTS AND AGREEMENTS; WAIVER

          (a) Best Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 5
and 6 of this Agreement.
          (b) Disclosure of Transactions and Other Material Information. On or
before 8:30 a.m., New York City time, on the second Business Day following the
date of this Agreement, the Company shall issue a press release and file a
Current Report on Form 8-K describing the terms of the transactions contemplated
by this Agreement in the form required by the 1934 Act and attaching the
material Transaction Documents not previously filed (including, without
limitation, this Agreement, the form of the Second Amended and Restated Notes
and the form of the Second Amended and Restated Warrants) (including all
attachments, the “8-K Filing”). Also included in the 8-K Filing, the Company
shall announce that it has hired an investment banker to explore strategic
alternatives to maximize shareholder value. From and after the filing of the 8-K
Filing with the SEC, the Investor shall not be in possession of any material,
nonpublic information received from the Company, any of its Subsidiaries or any
of its respective officers, directors, employees or agents, that is not
disclosed in the 8-K Filing. The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide the Investor with any material, nonpublic
information regarding the Company or any of its Subsidiaries from and after the
filing of the 8-K Filing with the SEC without the express written consent of the
Investor. If the Investor has, or believes it has, received any such material,
nonpublic information regarding the Company or any of its Subsidiaries, it shall
provide the Company with written notice thereof. The Company shall, within five
(5) Trading Days (as defined in the Notes) of receipt of such notice, make
public disclosure of such material, nonpublic information. In the event of a
breach of the foregoing covenant by the Company, any of its Subsidiaries, or any
of its or their respective officers, directors, employees and agents, in
addition to any other remedy provided herein or in the Transaction Documents,
the Investor shall have the right to make a public disclosure, in the form of a
press release, public advertisement or otherwise, of such material, nonpublic
information without the prior approval by the Company, its Subsidiaries, or any
of its or their respective officers, directors, employees or agents. The
Investor shall not have any

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liability to the Company, its Subsidiaries, or any of its or their respective
officers, directors, employees, stockholders or agents for any such disclosure.
Subject to the foregoing, neither the Company, its Subsidiaries nor the Investor
shall issue any press releases or any other public statements with respect to
the transactions contemplated hereby; provided, however, that the Company shall
be entitled, without the prior approval of the Investor, to make any press
release or other public disclosure with respect to such transactions (i) in
substantial conformity with the 8-K Filing and contemporaneously therewith and
(ii) as is required by applicable law and regulations (provided that in the case
of clause (i) the Investor shall be consulted by the Company in connection with
any such press release or other public disclosure prior to its release). Without
the prior written consent of the Investor, neither the Company nor any of its
Subsidiaries or affiliates shall disclose the name of the Investor in any
filing, announcement, release or otherwise, unless such disclosure is required
by law, regulation or the Principal Market.
          (c) Investor Status. Each Investor, to the extent it is holding any
Second Amended and Restated Notes or Second Amended and Restated Warrants,
agrees to promptly notify the Company (including by way of one or more public
filings), if such Investor beneficially owns in excess of 10% of the Common
Stock, (ii) has a designee as a member of the board of directors of the Company
or (iii) participates in the management or daily operations of the Company.

  5.   CONDITIONS TO COMPANY’S OBLIGATIONS HEREUNDER.

          The obligations of the Company to the Investor hereunder are subject
to the satisfaction of each of the following conditions, provided that these
conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion by providing the Investor with prior written
notice thereof:
          (a) The Investor shall have executed this Agreement and delivered the
same to the Company.
          (b) The Investor shall have delivered to the Company the Investor’s
Existing Note and Existing Warrants for cancellation.
          (c) The representations and warranties of the Investor shall be true
and correct in all material respects (except for those representations and
warranties that are qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such specified date) and the Investor shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Investor at or prior to the Closing Date.

  6.   CONDITIONS TO INVESTOR’S OBLIGATIONS HEREUNDER.

          The obligations of the Investor hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Investor’s sole benefit

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and may be waived by the Investor at any time in its sole discretion by
providing the Company with prior written notice thereof:
          (a) The Company shall have executed this Agreement and delivered the
same to the Investor.
          (b) The Company shall have executed and delivered to the Investor the
Second Amended and Restated Notes and the Second Amended and Restated Warrants
being issued to such Investor at the Closing.
          (c) Each of the Other Investors shall have (i) executed agreements
identical to this Agreement (the “Other Agreements”) (other than
(i) proportional changes (the “Proportionate Changes”) in the numbers reflecting
the different dollar amount of such Investor’s Notes and the number of Second
Amended and Restated Warrant Shares underlying such Investor’s Second Amended
and Restated Warrants and (ii) Section 4(c)), (ii) satisfied or waived all
conditions to the closings contemplated by such agreements and (iii) surrendered
their Existing Notes and Existing Warrants for Second Amended and Restated Notes
and Warrants identical to the Second Amended and Restated Notes and Second
Amended and Restated Warrants of the Investor hereunder (other than the
Proportionate Changes).
          (d) The Investor shall have received the opinion of Manatt, Phelps &
Phillips, LLP, the Company’s outside counsel, and Zev Kaplan, Esq., the
Company’s internal general counsel, each dated as of the Closing Date, in
substantially the form of Exhibit C attached hereto.
          (e) The Company shall have delivered to the Company’s transfer agent,
with a copy to the Investors, Irrevocable Transfer Agent Instructions in the
form of Exhibit D attached hereto.
          (f) The Company shall have delivered to such Buyer a certificate (or a
fax or pdf copy of such certificate) evidencing the formation and good standing
of the Company and each of its Subsidiaries in such entity’s jurisdiction of
formation issued by the Secretary of State (or comparable office) of such
jurisdiction, as of a date within 10 days of the Closing Date.
          (g) The Company shall have delivered to such Buyer a certificate (or a
fax or pdf copy of such certificate) evidencing the Company’s qualification as a
foreign corporation and good standing issued by the Secretary of State (or
comparable office or a bring-down certificate from Corporation Service Company)
of each jurisdiction in which the Company conducts business and is required to
so qualify, as of a date within 10 days of the Closing Date.
          (h) The Company shall have delivered to the Investor a certified copy
of the Certificate of Incorporation as certified by the Secretary of State of
the State of Delaware (or a fax or pdf copy of such certificate) within ten
(10) days of the Closing Date.
          (i) The Company shall have delivered to the Investor a certificate,
executed by the Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions approving the transactions contemplated hereby as adopted by
the Board in a form

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reasonably acceptable to the Investor, (ii) the Certificate of Incorporation and
(iii) the Bylaws, each as in effect as of the Closing, in the form attached
hereto as Exhibit E.
          (j) The representations and warranties of the Company hereunder shall
be true and correct in all material respects (except for those representations
and warranties that are qualified by materiality or Material Adverse Effect,
which shall be true and correct in all respects) as of the date when made and as
of the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct as
of such specified date) and the Company shall have performed, satisfied and
complied in all respects with the covenants, agreements and conditions required
by this Agreement and the other Transaction Documents to be performed, satisfied
or complied with by the Company at or prior to the Closing Date and after giving
effect to the terms of this Agreement and the Other Agreements, no default or
Event of Default shall have occurred and be continuing as of the Closing Date.
The Investor shall have received a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by the Investor in
the form attached hereto as Exhibit F.
          (k) The Common Stock (I) shall be designated for quotation or listed
on the Principal Market and (II) shall not have been suspended, as of the
Closing Date, by the SEC or the Principal Market from trading on the Principal
Market nor shall suspension by the SEC or the Principal Market have been
threatened, as of the Closing Date, either (A) in writing by the SEC or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.
          (l) The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the sale of the
Securities.
          (m) The Company shall have delivered to the Investor such other
documents relating to the transactions contemplated by this Agreement as the
Investor or its counsel may reasonably request.

  7.   TERMINATION.

          In the event that the Closing does not occur on or before five
(5) Business Days from the date hereof, due to the Company’s or the Investor’s
failure to satisfy the conditions set forth in Sections 5 and 6 hereof (and the
nonbreaching party’s failure to waive such unsatisfied conditions(s)), the
nonbreaching party shall have the option to terminate this Agreement with
respect to such breaching party at the close of business on such date without
liability of any party to any other party. Upon such termination, the terms
hereof shall be null and void and the parties shall continue to comply with all
terms and conditions of the Transaction Documents, as in effect prior to the
execution of this Agreement.

  8.   MISCELLANEOUS.

          (a) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other

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party; provided that a facsimile signature shall be considered due execution and
shall be binding upon the signatory thereto with the same force and effect as if
the signature were an original, not a facsimile signature.
          (b) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
          (c) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
          (d) Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. 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 brought in an inconvenient forum or that the
venue of 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 for such 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. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
          (e) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
          (f) Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
          (g) No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

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          (h) Entire Agreement; Effect on Prior Agreements; Amendments. Except
for the Transaction Documents in effect prior to this Agreement (to the extent
any such Transaction Document is not amended by this Agreement), this Agreement
supersedes all other prior oral or written agreements between the Investor, the
Company, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be amended other than by an instrument in writing signed by
the Company. No provision hereof may be waived other than by an instrument in
writing signed by the party against whom enforcement is sought. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of the Transaction Documents unless the
same consideration also is offered to all of the parties to the Transaction
Documents, holders of Second Amended and Restated Notes or holders of the Second
Amended and Restated Warrants, as the case may be. The Company has not, directly
or indirectly, made any agreements with any of the Investors relating to the
terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents.
          (i) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
          If to the Company:
Cash Systems, Inc.
7350 Dean Martin Drive, Suite 309
Las Vegas, NV 89139
Telephone: (702) 987-7169
Facsimile: (702)987-7168
Attention: Andrew Cashin
          Copy to:
Zev Kaplan
7350 Dean Martin Drive, Suite 309
Las Vegas, NV 89139
Telephone: (702)987-7169
Facsimile: (702)266-9061

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          Copy to:
Manatt, Phelps & Phillips, LLP
11355 West Olympic Boulevard
Los Angeles, CA 90064
Telephone: (310)312-4100
Facsimile: (310)312-4224
Attention: Barbara Polsky, Esq.
If to the Investor, to its address and facsimile number set forth in the
Securities Schedule attached hereto;
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or
(C) provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively.
          (j) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns
in accordance with the terms of the Existing Securities Purchase Agreement.
          (k) Survival. Unless this Agreement is terminated under Section 7, the
representations and warranties of the Company and the Investor contained herein
and the agreements and covenants set forth herein shall survive the Closing.
          (l) Remedies. The Investor and each holder of the Securities shall
have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which such holders have under
any law. Any Person having any rights under any provision of this Agreement
shall be entitled to enforce such rights specifically (without posting a bond or
other security), to recover damages by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under this Agreement, any remedy at law
may prove to be inadequate relief to the Investor. The Company therefore agrees
that the Investor shall be entitled to seek temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages and
without posting a bond or other security.
          (m) Indemnification. In consideration of the Investor’s execution and
delivery of the Transaction Documents, acquiring the Securities thereunder and
entering into this Agreement and in addition to all of the Company’s other
obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless the Investor and each other holder of the Securities
and all of their stockholders, partners, members, officers,

11

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directors, employees and direct or indirect investors and any of the foregoing
Persons’ agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the
“Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained
in the Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby or (c) any cause of action, suit or claim brought
or made against such Indemnitee by a third party (including for these purposes a
derivative action brought on behalf of the Company) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance
of the Securities, (iii) any disclosure made by the Investor pursuant to Section
4(b) or (iv) the status of the Investor or holder of the Securities as an
investor in the Company pursuant to the transactions contemplated by the
Transaction Documents. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. Except as otherwise set
forth herein, the mechanics and procedures with respect to the rights and
obligations under this Section 8(m) shall be the same as those set forth in
Section 6 of the Registration Rights Agreement.
          (n) Independent Nature of Investor’s Obligations and Rights. The
obligations of the Investor under any Transaction Document (including this
Agreement) are several and not joint with the obligations of any Other Investor,
and the Investor shall not be responsible in any way for the performance of the
obligations of any Other Investor under any Transaction Document. Nothing
contained herein or in any other Transaction Document, and no action taken by
the Investor pursuant hereto, shall be deemed to constitute the Investor and
Other Investors as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Investor and Other Investors
are in any way acting in concert or as a group, and the Company will not assert
any such claim with respect to the obligations or the transactions contemplated
by the Transaction Documents and the Company acknowledges that the Investor and
Other Investors are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. The
Company acknowledges and the Investor confirms that the Investor has
independently participated in the negotiation of the transactions contemplated
hereby with the advice of its own counsel and advisors. The Investor shall be
entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of any other
Transaction Documents, and it shall not be necessary for any Other Investor to
be joined as an additional party in any proceeding for such purpose.
[Signature Page Follows]

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     IN WITNESS WHEREOF, the Investor and the Company have caused their
respective signature page to this Agreement to be duly executed as of the date
first written above.

            COMPANY:

CASH SYSTEMS, INC.
      By:   /s/ Michael Rumbolz        Name:   Michael Rumbolz        Title:  
CEO   

[Signature Page to Second Amendment and Exchange Agreement]

 

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     IN WITNESS WHEREOF, the Investor and the Company have caused their
respective signature page to this Agreement to be duly executed as of the date
first written above.

            INVESTOR:

HIGHLINE CAPITAL INTERNATIONAL, LTD.
      By:   /s/ Howard M. Singer        Name:   Howard M. Singer        Title:  
COO   

[Signature Page to Second Amendment and Exchange Agreement]

 

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SECURITIES SCHEDULE

                          (1)   (2)   (3)   (4)   (5)         Aggregate        
        Principal             Address and   Amount of   Number of   Legal
Representative's Investor   Facsimile Number   Notes   Warrant Shares   Address
and Facsimile Number  
Portside Growth and Opportunity Fund
  c/o Ramius Capital Group, L.L.C.
666 Third Avenue, 26th Floor
New York, New York 10017
Attention: Jeffrey Smith
                   Owen Littman
Facsimile: (212) 201-4802
                   (212) 845-7995
Telephone: (212) 845-7955
                     (212) 201-4841
Residence: Cayman Islands   $ 13,310,000       268,125     Schulte Roth & Zabel
LLP
919 Third Avenue
New York, New York 10022
Attention: Eleazer Klein, Esq.
Facsimile: (212) 593-5955
Telephone: (212) 756-2376
 
                       
Highbridge International LLC
  c/o Highbridge Capital
Management, LLC
9 West 57th Street, 27th Floor
New York, New York 10019   $ 4,840,000       97,500      
 
  Attention: Ari J. Storch
                   Adam J. Chill
Facsimile: (212) 751-0755
Telephone: (212) 287-4720
Residence: Cayman Islands                    
 
                       
Highline Capital Partners, LP
  1 Rockefeller Plaza, 30th Floor
New York, NY 10020
Attention:  Howard Singer
Facsimile:  212-332-2259
Telephone: 212-332-2250   $ 523,749       10,551      
 
                       
Highline Capital Partners QP, LP
  1 Rockefeller Plaza, 30th Floor
New York, NY 10020
Attention:  Howard Singer
Facsimile:  212-332-2259
Telephone: 212-332-2250   $ 1,617,322       32,580      
 
                       
Highline Capital International, Ltd.
  1 Rockefeller Plaza, 30th Floor
New York, NY 10020
Attention:  Howard Singer
Facsimile:  212-332-2259
Telephone: 212-332-2250   $ 3,908,929       78,744