Exhibit 10.5
WAIVER
     This WAIVER (this “Waiver”) is entered into as of August 9, 2007 by and
between CASH SYSTEMS, INC., a Delaware corporation (the “Company”), and HIGHLINE
CAPITAL INTERNATIONAL, LTD. (the "Investor”), with reference to the following
facts:
     A. The Company entered into that certain Securities Purchase Agreement,
dated as of October 6, 2006 (the “Agreement”) by and among the Company and the
Buyers (as defined in the Agreement), whereby the Company issued, among other
things, certain Senior Secured Convertible Notes (the "Notes”) convertible into
the Company’s common stock, par value $0.001 per share (the “Common Stock”), in
accordance with the terms of the Notes.
     B. As of June 30, 2007, the Company failed to meet certain financial
thresholds set forth in Section 14(f) of the Notes (the “Default Test Failure”).
     C. The Company has requested that the Investor, as a holder of Notes, waive
such Default Test Failure and, subject to the terms hereof, Investor has agreed
during the Waiver Period (as defined below) to waive such Default Test Failure
on the terms and subject to the conditions set forth herein.
     D. Concurrently herewith, the Company has also requested waivers from the
other holders of Notes pursuant to waivers in form and substance identical to
this Waiver (the “Other Waivers”, and together with this Waiver, the “Waivers”).
     NOW, THEREFORE, in consideration of the premises set forth above, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
     1. Defined Terms. Capitalized terms used and not otherwise defined in this
Waiver shall have the meanings given to them in the Agreement.
     2. Waiver of Default Test Failure. During the period (the “Waiver Period”)
commencing on June 30, 2007 and ending on August 20, 2007 (the “Waiver
Termination Date”), the Investor hereby waives any Event of Default (as defined
in the Notes) arising under the Notes or any other Transaction Document as a
result of the Default Test Failure (the “Waiver Defaults”). The Company hereby
acknowledges and agrees that nothing contained herein shall constitute any
agreement by the Investor to waive any failure by the Company to meet the
financial thresholds set forth in Section 14(f) of the Notes for any period
subsequent to June 30, 2007 or any agreement by the Investor to waive the Waiver
Defaults, if any, after the Waiver Period or any agreement by the Investor to
waive any other Event of Default. Notwithstanding the foregoing, the Company
acknowledges and agrees that if the transactions contemplated by the Amendments
(as defined below) have not been consummated by the Waiver Termination Date, the
Waiver Defaults shall constitute Events of Default under the Notes as of the
original default date as if the Waiver contained herein was not granted.

 

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     3. Amendment to the Transaction Documents. The Company and the Investor
each agree to use reasonable best efforts to enter into an amendment to the
Transaction Documents to reflect the terms set forth on Exhibit A attached
hereto (the “Amendments”) as soon as reasonably practicable and in no event
later than the Waiver Termination Date.
     4. Reaffirmation of Obligations. The Company hereby confirms and agrees
that, except as set forth in Section 2 above, (i) the Agreement, the
Registration Rights Agreement, the Securities, the Security Documents 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, (ii) to the extent
that the Agreement or any other Transaction Document purports to assign or
pledge to the Buyers and the holders of the Securities, or to grant to the
Collateral Agent a security interest in or lien on, any collateral as security
for the obligations of the Company from time to time existing in respect of the
Notes and any other Transaction Document, such pledge, assignment and/or grant
of the security interest or lien is hereby ratified and confirmed in all
respects, and shall apply with respect to the obligations under the Notes, and
(iii) the execution, delivery and effectiveness of this Waiver shall not operate
as an amendment of any right, power or remedy of the Buyers under any
Transaction Document, nor constitute an amendment of any provision of any
Transaction Document.
     5. Fees and Expenses. The Company shall pay or cause to be paid all legal
fees and expenses of counsel for Portside Growth and Opportunity Fund incurred
in connection with the transactions contemplated by the Waivers and the
Amendments on the earlier to occur of (x) the Waiver Termination Date and
(y) the date of the consummation of the transactions contemplated by the
Amendments. Except as otherwise set forth in this Agreement and the Transaction
Documents, each party to this Agreement shall bear its own expenses in
connection with transactions contemplated hereby.
     6. Effectiveness. Upon execution of Waivers by the Company and the Required
Holders, this Waiver shall become effective as of the date first written above
(the “Effective Date”).
     7. Disclosure of Transactions and Other Material Information. On or before
5:30 p.m., New York City time, on the first Business Day following the date of
this Waiver, 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 Waiver
in the form required by the 1934 Act and attaching this Waiver (including
Exhibit A attached hereto) as an exhibit to such filing (including all
attachments, the “8-K Filing”). From and after the filing of the 8-K Filing with
the SEC, no Buyer shall be in possession of any material, nonpublic information
received from the Company, any of its Subsidiaries or any of their respective
officers, directors, employees or agents, that is not disclosed in the 8-K
Filing.
     8. 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 Waiver 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

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Waiver 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 Waiver, 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.
     9. Independent Nature of Investor’s Obligations and Rights. The obligations
of the Investor under this Waiver or any other Transaction Document are several
and not joint with the obligations of any other Buyer, and the Investor shall
not be responsible in any way for the performance of the obligations of any
other Buyer under any Transaction Document or Other Waiver. Nothing contained
herein or in this Waiver, any Other Waiver or any other Transaction Document,
and no action taken by the Investor pursuant hereto, shall be deemed to
constitute the Investor and other Buyers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investor and other Buyers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Waiver, any
Other Waiver or any other Transaction Document and the Company acknowledges that
the Buyers are not acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Waiver, any Other Waiver
and any other Transaction Document. The Company and the Investor confirm 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
Waiver, any Other Waiver or out of any other Transaction Documents, and it shall
not be necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose.
     10. No Third Party Beneficiaries. This Waiver 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.
     11. Counterparts. This Waiver may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
     12. Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Waiver 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

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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 Waiver 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 WAIVER OR ANY TRANSACTION CONTEMPLATED
HEREBY.
[Signature Page Follows]

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     IN WITNESS WHEREOF, this Waiver has been executed as of the date first
written above.

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

           
AGREED TO AND ACCEPTED BY:

CASH SYSTEMS, INC.
      By:   /s/ Michael Rumbolz        Name:   Michael Rumbolz        Title:  
Chief Executive Officer     

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Exhibit A

         
Face Amount
  $22,000,000
(10% increase in face amount)
Coupon
    7.5 %
Warrants
  487,500
(175,000 share increase)
 
  Adjusted to 20% premium to trailing 3-day VWAP ending August 14, 2007
Warrant strike
  Floor price of $7.25 and ceiling price of $8.00
Additional put date
  § Up to $8mm of face value putable on 10/10/08 @ par
Call date
  § Up to $8mm of face value callable on 10/10/08 @ 130%

Covenant adjustments
($ millions)

                                                                      Jun    
Sep     Dec     Mar     Jun     Sep     Dec             2007     2007     2007  
  2008     2008     2008     2008     Thereafter  
Consolidated EBITDA
  $ 0.25     $ 0.25     $ 0.25     $ 0.50     $ 1.00     $ 1.25     $ 1.50     $
1.75  
Total Debt to EBITDA Ratio
  NA     NA     NA     NA     NA     NA     NA     $ 4.75