Exhibit 10.2
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 Partners, LP (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 PARTNERS, LP
      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
  c/o Ramius Capital Group, L.L.C.   $13,310,000   268,125   Schulte Roth &
Zabel LLP
and Opportunity Fund
  666 Third Avenue, 26th Floor
New York, New York 10017           919 Third Avenue
New York, New York 10022
 
  Attention: Jeffrey Smith
          Attention: Eleazer Klein, Esq.

 
                     Owen Littman
          Facsimile: (212) 593-5955

 
  Facsimile: (212) 201-4802
          Telephone: (212) 756-2376
 
                  (212) 845-7995
           
 
  Telephone: (212) 845-7955
           
 
                 (212) 201-4841
           
 
  Residence: Cayman Islands            
 
               
Highbridge International
LLC
  c/o Highbridge Capital
Management, LLC
9 West 57th Street, 27th Floor   $4,840,000   97,500    
 
  New York, New York 10019
           
 
  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   $523,749   10,551    
 
  Attention: Howard Singer
           
 
  Facsimile: 212-332-2259            
 
  Telephone: 212-332-2250            
 
               
Highline Capital Partners QP, LP
  1 Rockefeller Plaza, 30th Floor
New York, NY 10020   $1,617,322   32,580    
 
  Attention: Howard Singer
           
 
  Facsimile: 212-332-2259
           
 
  Telephone: 212-332-2250            
 
               
Highline Capital
  1 Rockefeller Plaza, 30th Floor
  $3,908,929   78,744    
International, Ltd.
  New York, NY 10020
           
 
  Attention: Howard Singer
           
 
  Facsimile: 212-332-2259
           
 
  Telephone: 212-332-2250