Document:

exv10w4

 

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”).

 

 

     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

2

 

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.

3

 

          (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

4

 

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

5

 

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

6

 

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

7

 

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

8

 

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.

9

 

          (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

10

 

          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

 

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]

12

 

     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]

 

 

	 	 	 	 	 

     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]

 

 

	 	 	 	 	 

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	 	 	 	78,744exv10w5

 

Exhibit 10.5

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 Highbridge International LLC (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”).

 

 

          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

2

 

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.

3

 

               (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

4

 

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

5

 

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

6

 

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

7

 

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

8

 

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.

9

 

               (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

10

 

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

 

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]

12

 

          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]

 

 

          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:

HIGHBRIDGE INTERNATIONAL LLC,

By: HIGHBRIDGE CAPITAL 
MANAGEMENT, LLC,  its Trading Manager

 	 
	 	By:  	/s/
Adam J. Chill 	 
	 	 	Name:  	Adam J. Chill 	 
	 	 	Title:  	Managing Director 	 
	 

[Signature Page to Second Amendment and Exchange Agreement]

 

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]