Document:

exv10w1

 

EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

by and between

Ruthann Melbourne

and

IndyMac Bank, F.S.B.

dated as of January 1, 2006

 

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	1.	 	Term
	 	 	1	 
	2.	 	Position, Duties and Responsibilities 
	 	 	1	 
	3.	 	Outside Affiliations 
	 	 	1	 
	4.	 	Compensation and Benefits 
	 	 	1	 
	 	 	4.1  Base Salary 
	 	 	1	 
	 	 	4.2  Cash Incentive Compensation 
	 	 	1	 
	 	 	4.3   Equity Incentive Compensation 
	 	 	2	 
	 	 	4.4  Additional Benefits 
	 	 	2	 
	5.	 	Termination of Employment 
	 	 	2	 
	 	 	5.1  Grounds for Termination 
	 	 	2	 
	 	 	5.1.1  Disability 
	 	 	2	 
	 	 	5.1.2  Death 
	 	 	2	 
	 	 	5.1.3  Cause 
	 	 	2	 
	 	 	5.1.4  Poor Performance 
	 	 	3	 
	 	 	5.1.5   Without Cause 
	 	 	3	 
	 	 	5.1.6  Resignation 
	 	 	3	 
	 	 	5.2   Benefits Upon Termination 
	 	 	3	 
	 	 	5.2.1  Disability 
	 	 	4	 
	 	 	5.2.2  Death 
	 	 	4	 
	 	 	5.2.3  Cause 
	 	 	5	 
	 	 	5.2.4  Poor Performance 
	 	 	5	 
	 	 	5.2.5  Without Cause 
	 	 	5	 
	 	 	5.2.6  Resignation 
	 	 	6	 
	 	 	5.2.7  Change in Control 
	 	 	6	 
	 	 	5.2.8  Other Employment 
	 	 	7	 
	 	 	5.2.9  Excise Tax 
	 	 	8	 
	 	 	5.2.10  Release of Claims 
	 	 	8	 
	6.	 	Restrictive Covenants 
	 	 	8	 
	 	 	6.1  No Solicitation 
	 	 	8	 
	 	 	6.2  Basis for Non-Solicitation Agreement 
	 	 	9	 
	 	 	6.3  Confidentiality 
	 	 	9	 
	 	 	6.3.1  Trade Secrets 
	 	 	9	 
	 	 	6.3.2  Confidential Information 
	 	 	9	 
	 	 	6.3.3  Non-Disclosure 
	 	 	9	 
	 	 	6.4  Conditional Payment 
	 	 	10	 

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	 	 	 	 	Page	 
	7.	 	Reimbursement of Business Expenses 
	 	 	10	 
	8.	 	Miscellaneous 
	 	 	10	 
	 	 	8.1  Notice of Termination and Termination Date 
	 	 	10	 
	 	 	8.2  Successorship 
	 	 	10	 
	 	 	8.3  Notices 
	 	 	11	 
	 	 	8.4  Entire Agreement 
	 	 	11	 
	 	 	8.5  Waiver 
	 	 	11	 
	 	 	8.6  California Law 
	 	 	11	 
	 	 	8.7  Injunctive Relief 
	 	 	11	 
	 	 	8.8  Claims Procedures 
	 	 	12	 
	 	 	8.9  Severability 
	 	 	12	 
	 	 	8.10  Regulatory Intervention 
	 	 	12	 
	 	 	8.11  Counsel 
	 	 	13	 

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EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is entered into effective as of January 1, 2006,
by and between IndyMac Bank, F.S.B. (“IndyMac”) and Ruthann Melbourne (“Employee”).

     1. Term. IndyMac agrees to employ Employee, and Employee agrees to serve IndyMac, in
accordance with the terms and conditions of this Agreement, for a period of three (3) years,
commencing on the date first set forth above, unless Employee’s employment is earlier terminated as
herein provided.

     2. Position, Duties and Responsibilities. Employee initially shall serve as EVP, Chief Risk
Officer of IndyMac and shall have such duties and responsibilities as shall be assigned to him by
IndyMac. Employee acknowledges and agrees that from time to time IndyMac may assign Employee to
different or additional positions with IndyMac or one of IndyMac’s affiliated companies (including
its parent companies and subsidiaries), with such title, duties, and responsibilities as determined
by IndyMac in its sole discretion. Employee agrees to serve any and all such positions without
additional compensation. As used in this Agreement, the term “Employer” includes IndyMac and any
such affiliated companies to which Employee may be assigned.

     3. Outside Affiliations. Employee agrees to devote Employee’s business time, attention,
skill, and best efforts exclusively to the business and affairs of Employer and its affiliates, to
faithfully perform such duties as may be assigned to Employee, and to diligently promote the
business, affairs and interests of Employer and its affiliates. Employee agrees to conduct himself
or herself in compliance with Employer’s Code of Business Conduct and Ethics.

     4. Compensation and Benefits. During the term of this Agreement, Employer or its affiliates
shall provide to Employee the following compensation and benefits; provided that Employee meets the
eligibility requirements under the terms and conditions of the relevant benefit plans. All
compensation paid, or benefits provided, to Employee by Employer or by any of its affiliates shall
be aggregated in determining whether Employee has received the compensation and benefits described
herein.

          4.1 Base Salary. Employer shall pay to Employee a base salary at the annual rate set forth in
Appendix A. Employee’s base salary shall be payable in equal installments no less frequently than
every month. Employer may, in its sole discretion, increase Employee’s base salary during the term
of this Agreement, but Employer will not decrease Employee’s base salary below the amount set forth
in Appendix A.

          4.2 Cash Incentive Compensation. During the term of this Agreement, Employee will be eligible
to receive annual or quarterly cash bonuses, based upon performance criteria established from time
to time by the Board of Directors of Employer, a committee of the Board, or its authorized
delegate, in its sole discretion, and administered pursuant to Employer’s Senior Manager Cash
Incentive Plan policy, which is incorporated herein by this reference. The initial performance
criteria relating to Employee’s cash incentive awards outstanding as of the Effective Time are set
forth in Appendix B, but may be changed by Employer from time to time 

 

 

pursuant to such policy. Unless otherwise determined by Employer, any annual or
quarterly bonus shall be prorated to the extent that Employee is employed for less than the full
bonus period.

          4.3 Equity Incentive Compensation. During the term of this Agreement, Employee will be
eligible to participate in any incentive award plan or program, applicable generally to employees
at a management level similar to Employee’s level at the time of grant (“Peer Employees”), that is
maintained by Employer’s public company affiliate, IndyMac Bancorp, Inc., or any successor public
company (“Public Company”), and administered pursuant to Employer’s Stock Incentive Compensation
policy, which is incorporated herein by this reference. Any awards granted under such plan or
program will be issued, and will have such terms and conditions, as determined in the sole
discretion of the Board of Directors of Employer, a committee of the Board, or its authorized
delegate.

          4.4 Additional Benefits. During the term of this Agreement, Employee shall be entitled to
paid vacation and fringe benefits in accordance with, and subject to the terms and conditions of,
Employer’s policies and procedures in effect for Peer Employees from time to time. Employee shall
also be eligible to enroll and participate in any health and welfare benefit (medical, dental,
vision, life, disability, flexible spending accounts), stock purchase, profit-sharing, deferred
compensation, or other benefit plans provided by Employer from time to time to the extent generally
applicable to Peer Employees and subject to the eligibility criteria and terms and conditions of
such plans. Any additional benefits above those noted above are set forth in Appendix C. This
Agreement does not affect or otherwise modify the provisions of any other compensation, retirement
or other benefit program or plan of Employer.

     5. Termination of Employment. This Agreement, the compensation and benefits provided under
this Agreement, and Employee’s employment with Employer, are terminable as herein provided.

          5.1 Grounds for Termination. Employer may, in its sole and absolute discretion, terminate
this Agreement and Employee’s employment on the following grounds:

               5.1.1 Disability. In the event of Employee’s inability to perform the essential functions of
his or her position (with or without reasonable accommodation) because of illness, injury or
similar incapacity (“Disability”), this Agreement and Employee’s employment may be terminated by
Employer by giving Notice of Termination as provided in Section 8.1. For purposes of this
Agreement, Employee shall not be considered to have a Disability if he or she is considered to be a
“qualified individual with a disability” under the Americans with Disabilities Act.

               5.1.2 Death. In the event of Employee’s death during the term of this Agreement (“Death”),
this Agreement and Employee’s employment shall immediately and automatically terminate.

               5.1.3 Cause. Employer may terminate this Agreement and Employee’s employment by giving Notice
of Termination at any time for Cause. “Cause” means, as determined by Employer:

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               (i) Employee’s intentional and material failure to perform Employee’s duties with Employer
(other than any such failure resulting from incapacity due to physical or mental illness), after a
written demand for performance is delivered to Employee by Employer which specifically identifies
the manner in which Employer believes that Employee has intentionally and materially failed to
perform Employee’s duties; or

               (ii) Employee’s engaging in any illegal conduct, gross misconduct, or gross negligence which
is, or is likely to be, injurious to the Company, its financial condition, or its reputation; or

               (iii) Employee’s engaging in any act or omission to act which involves (a) fraud, theft,
misappropriation, embezzlement, or dishonesty, (b) willful violation of any law, rule or regulation
of a governmental authority, other than traffic violations, (c) regular alcohol or drug abuse, or
(d) material violation of Employer’s written policies, including its Code of Business Conduct and
Ethics; or

               (iv) Entry of an order by any state or federal regulatory agency either removing Employee
from Employee’s position with Employer or its affiliates or prohibiting Employee from participating
in the conduct of the affairs of Employer or any of its affiliates; or

               (v) Employee’s breach of the covenants set forth in Section 6 of this Agreement, or material
breach of any other provisions of this Agreement.

               5.1.4 Poor Performance. Employer may terminate this Agreement and Employee’s employment by
giving Notice of Termination at any time for Poor Performance. “Poor Performance” means Employee’s
failure to substantially perform Employee’s duties with Employer (other than any such failure
resulting from incapacity due to physical or mental illness), and Employee’s inability to cure such
failure to Employer’s reasonable satisfaction within 90 days following Employer’s delivery to
Employee of a written demand for substantial performance which specifically identifies the manner
in which Employer believes that Employee has substantially failed to perform Employee’s duties.

               5.1.5 Without Cause. Employer may, in its sole and absolute discretion, terminate this
Agreement and Employee’s employment other than for Cause, Death, Disability, or Poor Performance
(“Without Cause”) by giving Notice of Termination at any time for any reason.

               5.1.6 Resignation. Should Employee voluntarily resign Employee’s employment, either by giving
Notice of Termination during the term of this Agreement or otherwise (“Resignation”), Employee’s
employment shall terminate immediately, unless Employee and Employer mutually agree on a later
effective Termination Date.

          5.2 Benefits Upon Termination. Notwithstanding any other agreements to the contrary, the
following benefits shall be the only termination benefits Employee is entitled to from Employer.
In the event that Employee’s employment terminates for any reason, Employee shall be entitled to
receive (i) all accrued but unpaid Base Salary and vacation benefits as of the

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Termination Date (“Accrued Benefits”) and (ii) any other benefits already vested as of the
Termination Date under any of Employer’s applicable equity compensation, pension, cash incentive
compensation, or similar plans in which Employee participated immediately prior to termination
(“Vested Benefits”).

               5.2.1 Disability. In the event that Employee’s employment terminates by reason of Disability,
Employee shall be entitled to receive (i) the immediate vesting, to the extent not otherwise
vested, of all outstanding equity incentive awards previously granted to Employee by the Public
Company, and (ii) Employee’s target cash incentive compensation award for the period in which the
Termination Date occurs, prorated to the Termination Date and payable in a lump sum promptly
following such termination. Employee shall also be entitled to (iii) payment of an amount equal to
the product obtained by multiplying one-twelfth (1/12) of Employee’s then-current base salary,
reduced by 50%, by the number of whole months remaining from the Termination Date until the end of
the term of this Agreement, with such amount being paid in approximately equal monthly or bi-weekly
installments through the end of the calendar year in which the termination occurs. Such amount
will be reduced by the amount of any cash payments that would become due to Employee under the
terms of Employee’s disability insurance or other disability benefit plan funded by Employer or
Employer’s tax-qualified Defined Benefit Pension Plan during the period from the Termination Date
until the end of the term of this Agreement. In addition, Employee shall be entitled (iv) for a
period of time through the end of the term of this Agreement or until Employee’s death, whichever
first occurs, to reimbursement by Employer of (a) the cost of any continued coverage under
Employer’s group medical insurance plan for the benefit of Employee, Employee’s spouse and
dependents, if any, should they elect continued coverage under COBRA, provided they were covered
under the plan immediately prior to Employee’s termination, and (b) the cost of continued coverage
under Employer’s life and long-term disability plans for the benefit of Employee, should Employee
elect to obtain an individual conversion policy, subject to the terms, conditions, and limitations
contained in such policy. Coverage under another group plan (e.g., through a new employer) shall
result in the immediate cessation of the reimbursement and continuation of the applicable Employer
benefit plans. If and to the extent required to prevent a violation of Section 409A of the Code,
Employee will pay the entire cost of such coverage for the first six months after the Date of
Termination and Employer will reimburse Employee for Employer’s share of such costs on the
six-month anniversary of Employee’s “separation from service” as defined in Section 409A of the
Code. All payments under this Section 5.2.1 shall be subject to Section 5.2.8, Section 5.2.10.,
Section 6, and to the additional benefit described in Section 5.2.9, if allowed by law and by this
Agreement.

               5.2.2 Death. In the event of Employee’s Death, such person or persons as Employee shall have
designated in writing or, in the absence of such a designation, Employee’s estate, shall be
entitled to receive (i) the immediate vesting, to the extent not otherwise vested, of all equity
incentive awards previously granted to Employee by the Public Company, and (ii) Employee’s target
cash incentive compensation award for the period in which Death occurs, prorated to date of Death
and payable in a lump sum promptly following such termination. Employer shall also, within
forty-five (45) days following Employee’s Death, pay to Employee’s designee or to Employee’s estate
(iii) an amount equal to two times Employee’s last annual base salary, and (iv) for a period of
twelve (12) months following the date of Employee’s Death, reimburse such persons for the cost of
any continued coverage under

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Employer’s group medical insurance plan for the benefit of Employee’s spouse and dependents,
if any, should they elect continued coverage under COBRA, provided they were covered under the plan
immediately prior to Employee’s Death. Coverage under another group plan (e.g., through a new
employer) shall result in the immediate cessation of the reimbursement and continuation of the
applicable Employer benefit plans. If and to the extent required to prevent a violation of Section
409A of the Code, Employee will pay the entire cost of such coverage for the first six months after
the Date of Termination and Employer will reimburse Employee for Employer’s share of such costs on
the six-month anniversary of Employee’s “separation from service” as defined in Section 409A of the
Code. All payments under this Section 5.2.2 shall be subject to Section 5.2.10 and to the
additional benefit described in Section 5.2.9, if allowed by law and by this Agreement.

               5.2.3 Cause. In the event of Employee’s termination for Cause, Employee shall not be entitled
to any additional compensation or benefits, except as provided in Section 5.2.

               5.2.4 Poor Performance. In the event of Employee’s termination for Poor Performance, the
benefits payable to Employee shall depend upon Employee’s position and years of continuous service
to Employer or its affiliates. If Employee had five (5) or fewer years of continuous service as of
the Termination Date, Employee shall be entitled to payment of an amount equal to the lesser of (a)
the product obtained by multiplying Employee’s then-current base salary by 0.5, or (b) the product
obtained by multiplying one-twelfth (1/12) of Employee’s then-current base salary, reduced by 50%,
by the number of whole months remaining from the Termination Date until the end of the term of this
Agreement. Such amount shall be paid in approximately equal monthly or bi-weekly installments
through the end of the calendar year in which the termination occurs.

               If Employee had more than five (5) years of continuous service as of the Termination Date, or
if Employee is a person required to file reports pursuant to Section 16(a) of the Securities
Exchange Act of 1934, as amended, due to Employee’s status as a director, officer or principal
stockholder of Employer or of any of its affiliates (a “Section 16 Reporting Person”), Employee
shall be entitled to payment of an amount equal to the lesser of (a) Employee’s then-current base
salary, or (b) the product obtained by multiplying one-twelfth (1/12) of Employee’s then-current
base salary by the number of whole months remaining from the Termination Date until the end of the
term of this Agreement. Such amount shall be paid in approximately equal monthly or bi-weekly
installments through the end of the calendar year in which the termination occurs.

               Regardless of Employee’s position or years of service, Employee shall also be entitled to
Employee’s target cash incentive compensation award for the period in which such termination
occurs, prorated to the Termination Date and payable in a lump sum promptly following such
termination. All payments under this Section 5.2.4 shall be subject to Section 5.2.8, Section
5.2.10., Section 6, and to the additional benefit described in Section 5.2.9, if allowed by law and
by this Agreement.

               5.2.5 Without Cause. In the event Employee’s employment is terminated by Employer Without
Cause, Employee shall be entitled to (i) the immediate vesting,

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to the extent not otherwise vested, of all equity incentive awards previously granted to
Employee by the Public Company, but only to the extent that any such awards would, by their normal
terms, vest within one (1) year of the Termination Date, and (ii) Employee’s target cash incentive
compensation award for the period in which such termination occurs, prorated to the Termination
Date and payable in a lump sum promptly following such termination. Employee shall also be
entitled to (iii) payment of an amount equal to the lesser of (a) the product obtained by
multiplying Employee’s then-current base salary by 1.5, or (b) the product obtained by multiplying
one-twelfth (1/12) of Employee’s then-current base salary, increased by 100%, by the number of
whole months remaining from the Termination Date until the end of the term of this Agreement. Such
amount shall be paid in approximately equal monthly or bi-weekly installments through the end of
the calendar year in which the termination occurs. In addition, Employee shall be entitled (iv)
for a period of twelve (12) months following the Termination Date, to reimbursement by Employer of
(a) the cost of any continued coverage under Employer’s group medical insurance plan for the
benefit of Employee, Employee’s spouse and dependents, if any, should they elect continued coverage
under COBRA, provided they were covered under the plan immediately prior to Employee’s termination,
and (b) the cost of continued coverage under Employer’s life and long-term disability plans for the
benefit of Employee, should Employee elect to obtain an individual conversion policy, subject to
the terms, conditions, and limitations contained in such policy. Coverage under another group plan
(e.g., through a new employer) shall result in the immediate cessation of such reimbursement and
continuation of the applicable Employer benefit plans. If and to the extent required to prevent a
violation of Section 409A of the Code, Employee will pay the entire cost of such coverage for the
first six months after the Date of Termination and Employer will reimburse Employee for Employer’s
share of such costs on the six-month anniversary of Employee’s “separation from service” as defined
in Section 409A of the Code. All payments under this Section 5.2.5 shall be subject to Section
5.2.8, Section 5.2.10., Section 6, and to the additional benefit described in Section 5.2.9, if
allowed by law and by this Agreement.

               5.2.6 Resignation. In the event of Employee’s Resignation, Employee shall not be entitled to
payment of any additional compensation or benefits, except as provided in Section 5.2.

               5.2.7 Change in Control.

               5.2.7.1 Determination of Change in Control. For purposes of this Agreement, “Change in
Control” shall have the meaning set forth in the IndyMac Bancorp, Inc. 2002 Incentive Plan, as
Amended and Restated, or if a subsequent incentive plan is adopted by the Board of Directors of the
Public Company and approved by the shareholders thereof, then the definition of “Change in Control”
in such subsequent plan, if applicable, shall be used for purposes of this Agreement.

               5.2.7.2 Effect of Change of Control. If a Change in Control should occur during the term of
this Agreement, and should Employee’s employment be terminated within two (2) years following the
Change in Control (i) by reason of Employee’s Disability or Death, or (ii) either by Employer or
its successor Without Cause, then, in lieu of any other benefits described elsewhere in this
Agreement:

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               (i) Employer shall pay Employee in a single severance payment as soon as practicable after
the Termination Date, but in no event later than thirty (30) days thereafter, an amount in cash
equal to two (2) times the sum of (a) Employee’s then-current base salary and (b) the higher of
Employee’s target annual cash incentive compensation award as in effect on the Termination Date or
Employee’s target annual cash incentive compensation award at the time of the Change in Control,

               (ii) Employer shall pay Employee an amount equal to Employee’s annual cash incentive
compensation award for the period in which such termination occurs, prorated to the Termination
Date and payable in a lump sum promptly following such termination.

               (iii) Any unvested stock options and other equity grants shall become immediately and fully
vested, and any vested options (or other incentive awards that may be exercised) shall remain
exercisable until (a) the later of the fifteenth (15th) day of the third month following
the date the award otherwise would have expired if the exercise period had not been extended
pursuant to this provision, or December 31 of the calendar year in which the award otherwise would
have expired if the exercise period had not been extended pursuant to this provision, or (b) if
earlier, their full-term expiration,

               (iv) For a period of twelve (12) months following the Termination Date, Employer shall
reimburse Employee for (a) the cost of any continued coverage under Employer’s group medical
insurance plan for the benefit of Employee, Employee’s spouse and dependents, if any, should they
elect continued coverage under COBRA, provided they were covered under the plan immediately prior
to Employee’s termination, and (b) the cost of continued coverage under Employer’s life and
long-term disability plans for the benefit of Employee, should Employee elect to obtain an
individual conversion policy, subject to the terms, conditions, and limitations contained in such
policy; provided that, if and to the extent required to prevent a violation of Section 409A of the
Code, Employee will pay the entire cost of such coverage for the first six months after the Date of
Termination and Employer will reimburse Employee for Employer’s share of such costs on the
six-month anniversary of Employee’s “separation from service” as defined in Section 409A of the
Code, and

               (v) Employee shall be entitled to his any Accrued Benefits and any Vested Benefits.

               Notwithstanding anything contained herein, if a Change in Control occurs and Employee’s
employment with Employer is terminated prior to a Change in Control other than for Cause or Poor
Performance, and if such termination of employment or event was at the request, suggestion or
initiative of a third party who has taken steps reasonably calculated to effect a Change in
Control, then Employee upon occurrence of the Change in Control shall be entitled to receive the
payments and benefits set forth in this Section 5.2.7, in lieu of payments and benefits described
elsewhere in this Agreement. All payments under this Section 5.2.7 shall be subject to Section
5.2.8, Section 5.2.10., Section 6, and to the additional benefit described in Section 5.2.9, if
allowed by law and by this Agreement.

               5.2.8 Other Employment. Employer’s obligation to pay continuation benefits to Employee in the
event of Employee’s termination for Disability or by Employer

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Without Cause or for Poor Performance, other than pursuant to Section 5.2.7, shall immediately
cease in the event that Employee obtains employment for compensation (whether as an employee,
independent contractor, consultant or otherwise) with any person or entity.

               5.2.9 Excise Tax. In the event it should be determined that any payment or distribution by
Employer as the result of Employee’s termination of employment in connection with a change in
control of Employer (a “Payment”) would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code or any interest or penalties are incurred by Employee with respect to such
excise tax (such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then Employee shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment by Employee of all
taxes (including any interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. In order to be eligible for this benefit,
Employee must have had more than ten (10) years of continuous service to Employer or its affiliates
as of the Termination Date or must immediately prior to the transaction giving rise to the change
in control be a Section 16 Reporting Person. If the law prohibits any form of the foregoing
benefit, then Employer and Employee understand and agree that this Section 5.2.9 is of no effect.

               5.2.10 Release of Claims. Employer’s obligation to pay any salary continuation, benefits
continuation or other amounts, awards, or benefits which otherwise were not vested as of the date
of Employee’s termination is expressly conditional upon the effective date of a general release,
executed by Employee, of all claims or causes of action, whether known or unknown, that Employee
may have or hold against Employer including, but not limited to, any claims for breach of contract,
for employment discrimination or harassment, for wrongful termination or for other tortious conduct
in connection with Employee’s employment or its termination. Such release agreement shall be
prepared by Employer, shall be similar to the release(s) required to be signed by Peer Employees in
connection with their termination of employment, shall include an express waiver by Employee of
California Civil Code section 1542, and shall be promptly provided to Employee following
termination of employment. Employee shall be required to execute and return such release agreement
to Employer within fourteen (14) days following receipt of such agreement from Employer.

6. Restrictive Covenants.

          6.1 No Solicitation. During employment and for a period of eighteen (18) months after
termination of employment, Employee shall not, directly or indirectly:

               6.1.1 Solicit, or cause to be solicited, any customers of Employer or Employer’s affiliates
for purposes of selling any products or services competitive with those of Employer or its
affiliates and with whom Employee had Material Contact in the twelve (12) months preceding
termination of employment. For purposes of this Agreement, Employee had “Material Contact” with a
customer if (a) Employee had business dealings with the customer on Employer’s behalf, or (b)
Employee was responsible for supervising or coordinating the dealings between the customer and
Employer;

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       6.1.2 Solicit for employment, offer, or cause to be offered employment, either on a full time,
part-time or consulting basis, to any person who was employed by Employer or its affiliates on the
date Employee’s employment terminated and with whom Employee had regular contact with during the
course of his employment by Employer, unless Employee shall have received the prior written consent
of Employer.

         
 6.2 Basis for Non-Solicitation Agreement. Employee understands and agrees that the
non-solicitation agreement contained in Section 6.1 is necessary to Employer because Employee has
access to, and in order to protect the confidentiality of, Employer’s “Confidential Information”
(as that term is defined in Section 6.3 below) from intentional and/or inadvertent disclosure or
use upon or after the termination of Employee’s employment with Employer. As consideration,
Employer expressly agrees to provide Employee with confidential information during Employee’s
employment with Employer.

          6.3
Confidentiality.

               6.3.1 Trade Secrets. “Trade Secrets” refers to information, without regard to form, that is
not generally known about Employer’s business, that Employer has made reasonable efforts to
maintain as secret or confidential, and from which Employer derives economic value because it is
not generally known to others who can obtain economic value from its use or disclosure. Trade
Secrets include, but are not limited to, concepts, ideas, customer lists, business lists, business
and strategic plans, financial data, accounting procedures, secondary marketing and hedging models,
trade secrets, and computer programs and plans. This definition shall not limit any definition of
“trade secrets” or any equivalent term under applicable state, local, or federal law.

               6.3.2 Confidential Information. “Confidential Information” refers to business information or
data of Employer that, although not a Trade Secret, is not generally known to the public and that
Employer desires and makes reasonable efforts to keep confidential. Confidential Information
includes, but is not limited to, concepts, ideas, customer lists, business lists, business and
strategic plans, financial data, accounting procedures, secondary marketing and hedging models,
trade secrets, computer programs and plans, information related to officers, directors, employees
and agents, operations materials and memoranda, personnel records and information, pricing and
financial information related to the Employer and suppliers, and any information marked
“Confidential” by Employer, and other proprietary information that does not rise to the level of a
Trade Secret. Confidential Information does not include data or information that (i) Employer has
voluntarily disclosed to the public, (ii) third parties have independently developed and disclosed
to the public, (iii) otherwise enters the public domain through lawful means, or (iv) is lawfully
and rightfully disclosed to Employee following the date of this Agreement by another party without
an obligation to keep the information confidential. This definition shall not limit any definition
of “confidential information” or any equivalent term under any applicable state, local or federal
law.

               6.3.3 Non-Disclosure. Employee hereby acknowledges and agrees that Employer and its
affiliates have developed and own valuable information described above as Trade Secrets and
Confidential Information. Employee acknowledges and agrees that all such Trade Secrets and
Confidential Information are valuable assets of Employer, and if developed by

- 9 -

 

Employee, are developed by Employee in the course of Employee’s employment with Employer, and
are the sole property of Employer. Employee agrees that Employee will not divulge or otherwise
disclose to any third party, directly or indirectly, any Confidential Information or Trade Secrets,
except to the extent such use or disclosure is (i) required by applicable law or in response to a
lawful inquiry from a governmental or regulatory authority, (ii) lawfully obtainable from other
sources, or (iii) authorized by Employer. Employee acknowledges that this restriction on
disclosure of Confidential Information is limited to the period during Employee’s employment and
for eighteen (18) months thereafter. The parties acknowledge and agree that this Agreement is not
intended to, and does not, alter either Employer’s rights or Employee’s obligations under any state
or federal statutory or common law regarding trade secrets or unfair trade practices.

          6.4 Conditional Payment. Employee’s right to receive payments of salary continuation,
benefits continuation or other non-vested compensation described in Section 5.2 is conditioned upon
Employee’s full compliance with Section 6. If Employee fails to comply with the obligations set
forth in Section 6 as reasonably determined by the Chief Executive Officer, the Board of Directors
of Employer, or a committee of the Board, within eighteen (18) months after Employee’s termination,
then Employee shall not be entitled to any further salary continuation, benefits continuation or
other non-vested compensation from Employer.

     7. Reimbursement of Business Expenses. During the term of this Agreement, Employee shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by Employee in
accordance with the policies, practices and procedures of Employer to the extent applicable
generally to Peer Employees.

     8. Miscellaneous.

          8.1 Notice of Termination and Termination Date. Any termination of this Agreement by Employer
or by Employee (including any Resignation) shall be communicated by a written Notice of Termination
to the other party, stating the specific termination provision in this Agreement relied upon, if
any, and setting forth in reasonable detail the facts and circumstances, if applicable, claimed to
provide a basis for termination. The failure by Employer to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Cause shall not waive any right of
Employer hereunder or preclude Employer from asserting such fact or circumstance in enforcing
Employer’s rights under this Agreement. The effective date of termination (“Termination Date”)
shall be (i) the date specified in the Notice of Termination, or (ii) in the event of Employee’s
Death, the date of Death, or (iii) in the event of a Change in Control, either the date specified
in the Notice of Termination or the last day of the term of this Agreement should same not be
renewed on substantially comparable terms within two (2) years following the Change in Control.

          8.2 Successorship. This Agreement shall inure to the benefit of and shall be binding upon
Employer, its successors and assigns. This Agreement may not be assigned without the prior written
consent of the parties, other than in connection with a merger or sale of Employer or the sale of
substantially all the assets of Employer, or similar transaction. Notwithstanding the foregoing,
Employer may, without Employee’s consent, assign, whether by assignment agreement, merger,
operation of law or otherwise, this Agreement to the Public

- 10 -

 

Company or to any successor or affiliate of Employer or the Public Company, subject to such
assignee’s express assumption of all obligations of Employer hereunder. The failure of any
successor to or assignee of the Employer’s business and/or assets in such transaction to expressly
assume all obligations of Employer hereunder shall be deemed a termination by the Company Without
Cause.

          8.3 Notices. Any notices provided for in this Agreement shall be sent to Employer at its
corporate headquarters, Attention: General Counsel, with a copy to the Human Resources department
at the same address, or to such other address as Employer may from time to time in writing
designate, and to Employee at such address as Employee may from time to time in writing designate
(or Employee’s business address of record in the absence of such designation). All notices shall
be deemed to have been given two (2) business days after they have been deposited as certified
mail, return receipt requested, postage paid and properly addressed to the designated address of
the party to receive the notices.

          8.4 Entire Agreement. This instrument contains the entire agreement of the parties relating
to the subject matter hereof, and it replaces and supersedes any prior agreements between the
parties relating to said subject matter; provided, however, that all provisions of Employer’s
Employee Handbook and any other written personnel policies of Employer shall be incorporated herein
by this reference, and Employee hereby expressly acknowledges that all provisions of the Employee
Handbook and other written policies are applicable to Employee’s employment relationship with
Employer, except to the extent that any such provisions directly conflict with any term contained
in this Agreement; PROVIDED, FURTHER, THAT OFFICER HEREBY EXPRESSLY ACKNOWLEDGES THAT OFFICER
HAS EXECUTED EMPLOYER’S STANDARD MUTUAL AGREEMENT TO ARBITRATE CLAIMS CONCURRENTLY HEREWITH, WHICH
REQUIRES THAT ANY DISPUTE UNDER THIS AGREEMENT WILL BE ARBITRATED. No modifications or
amendments of this Agreement shall be valid unless made in writing and signed by the parties
hereto.

          8.5 Waiver. The waiver of the breach of any term or of any condition of this Agreement shall
not be deemed to constitute the waiver of any other breach of the same or any other term or
condition.

          8.6 California Law. This Agreement shall be construed and interpreted in accordance with the
laws of California, without reference to its conflict of laws principles.

          8.7 Injunctive Relief. Employer and Employee acknowledge that the services Employee is
obligated to render under the provisions of this Agreement are of a special, unique, unusual,
extraordinary and intellectual character, which gives this Agreement peculiar value to Employer.
The loss of these services cannot be reasonably or adequately compensated in damages in an action
at law and it would be difficult (if not impossible) to replace these services. By reason thereof,
if either party violates any of the material provisions of this Agreement, the parties shall, in
addition to any other rights and remedies available under this Agreement, or under applicable law
or the Mutual Agreement to Arbitrate Claims, be entitled to seek injunctive relief, as permitted by
law, from an Arbitrator pursuant to Employer’s Arbitration Agreement, restraining the other from
committing or continuing any violation of this Agreement. The provisions hereof shall survive the
expiration, suspension or termination, for any reason, of

- 11 -

 

this Agreement and shall be in addition to, and not in lieu of, any other rights and remedies
available to Employer at law or in equity.

          8.8 Claims Procedures. If Employee believes that he or she is entitled to a payment or
benefit hereunder which has not been received or which is different than that which is required by
this Agreement, Employee may file a claim in writing with the administrator pursuant to Employer’s
claims procedures applicable to Employee with respect to this Agreement. Employer shall provide to
Employee a copy of such claims procedures separately. Utilization of the claims procedures is a
condition of payment of benefits under the Agreement.

          8.9 Severability. If any provision of this Agreement is held invalid or unenforceable, the
remainder of this Agreement shall nevertheless remain in full force and effect, and if any
provision is held invalid or unenforceable with respect to particular circumstances, it shall
nevertheless remain in full force and effect in all other circumstances.

          8.10 Regulatory Intervention. Notwithstanding anything in this Agreement to the contrary,
this Agreement is subject to the following terms and conditions:

               8.10.1 If Employee is suspended and/or temporarily prohibited from participating in the
conduct of Employer’s affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1818 (e)(3) and (g)(1)), Employer’s obligations hereunder shall be
suspended as of the date of service unless stayed by appropriate proceedings. If the charges in
the notice are dismissed, Employer shall (i) pay Employee all or part of the compensation withheld
while Employer’s contract obligations were suspended, and (ii) reinstate any of Employer’s
obligations which were suspended.

               8.10.2 If Employee is removed and/or permanently prohibited from participating in the conduct
of Employer’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818 (e)(4) and (g)(1)), all obligations of Employer under this Agreement
shall terminate as of the effective date of the order, but Employee’s vested rights shall not be
affected.

               8.10.3 If Employer is in default (as defined in Section 3(x)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1813 (x)(1)), all obligations under this Agreement shall terminate as of
the date of default, but Employee’s vested rights shall not be affected.

               8.10.4 All obligations under this Agreement shall be terminated, except to the extent
determined that continuation of the contract is necessary for the continued operation of Employer,
(i) by the Office of Thrift Supervision (“OTS”) at the time the Federal Deposit Insurance
Corporation (“FDIC”) enters into an agreement to provide assistance to or on behalf of Employer
under the authority contained in Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1823
(c)); or (ii) by the OTS at the time the OTS approves a supervisory merger to resolve problems
related to operation of Employer or when Employer is determined by the OTS to be in an unsafe or
unsound condition. Any rights of Employee that shall have vested under this Agreement shall not be
affected by such action.

- 12 -

 

               8.10.5 With regard to the provisions of this Section 8.10:

               (i) Employer agrees to use its best efforts to oppose any such notice of charges as to which
there are reasonable defenses;

               (ii) In the event the notice of charges is dismissed or otherwise resolved in a manner that
will permit Employer to resume its obligations to pay compensation hereunder, Employer will
promptly make such payment hereunder; and

               (iii) During the period of suspension, the vested rights of the contracting parties shall not
be affected except to the extent precluded by such notice.

               8.10.6 Any termination related payments made to Employee by Employer pursuant to this
Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.

          8.11 Counsel. Employer encourages Employee to review this Agreement with his or her personal
legal counsel and to take such other steps as may be necessary to fully understand the terms and
conditions hereof. Each party and his, her, or its counsel, if any, have reviewed this Agreement
and have been provided the opportunity to discuss this Agreement with the other party prior to its
execution.

	 	 	 	 	 	 	 	 
	EMPLOYER:	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	 	 	Dated:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Michael Perry	 	 	 	 
	 

	 	Chief Executive Officer	 	 	 	 
	 

	 	IndyMac Bank, F.S.B.	 	 	 	 
	 
	 	 	 	 	 	 
	EMPLOYEE:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Dated:	 	 
	 	 	 	 	 
	Name: Ruthann Melbourne	 	 	 	 

- 13 -

 

APPENDIX A

BASE SALARY

Employee Name: Ruthann Melbourne

Current Annual Rate: $275,000

 

 

APPENDIX B

CASH INCENTIVE COMPENSATION

Employee Name: Ruthann Melbourne

Initial Performance Criteria:

	 	1.	 	Management of Top 7 Risk Policies and Board Governance documentation – 25%
	 
	 	2.	 	Monitor and resolve company “high risk” issues – 25%
	 
	 	3.	 	CAMELS self assessment rating – 25%
	 
	 	4.	 	Establish ERM framework, organized structure and team – 25%exv10w1

 

Exhibit 10.1

CASH SYSTEMS INC.

COMMON STOCK PURCHASE AGREEMENT

     THIS COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
November 17, 2005 by and between The Viejas Band of Kumeyaay Indians, a federally recognized Indian
tribe, (“Viejas”) and CASH SYSTEMS INC., a Delaware corporation (the “Company”).

1. AGREEMENT TO PURCHASE AND SELL STOCK.

     1.1 Authorization. As of the Closing (as defined below) the Company will have
authorized the issuance, pursuant to the terms and conditions of this Agreement, of up to 710,000
unregistered and restricted shares of the Company’s Common Stock, $0.001 par value (the “Common
Stock”).

     1.2 Agreement to Purchase and Sell. The Company agrees to sell to Viejas at the
Closing, and Viejas agrees to purchase from the Company at the Closing, the 710,000 shares of
Common Stock of the Company for the aggregate price of $4,470,160, or a per share price of $6.296.
The shares of Common Stock purchased and sold pursuant to this Agreement will be collectively
hereinafter referred to as the “Purchased Shares.”

2. CLOSING. The purchase and sale of the Purchased Shares will take place at the offices
of DLA Piper Rudnick Gray Cary US LLP at 4:00 p.m., Pacific Daylight Time, within three (3) days
following the satisfaction and/or waiver of all conditions to close set forth in Sections 6 and 7
hereof (other than conditions which can be satisfied only by the delivery of certificates, opinions
or other documents at the Closing), unless another date or place is agreed in writing by each of
the parties hereto. At the Closing, the Company will deliver to Viejas a certificate representing
the number of Purchased Shares that Viejas has agreed to purchase hereunder against delivery to the
Company by Viejas of the full purchase price of such Purchased Shares, paid by (i) a check payable
to the Company’s order, or (ii) wire transfer of funds to the Company.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and
warrants to Viejas that, except as set forth in the Disclosure Schedule (the “Disclosure
Schedule”) separately delivered by the Company to Viejas (which Disclosure Schedule shall be
deemed to be representations and warranties to Viejas by the Company under this Section and to
qualify each of the representations and warranties set forth herein), the statements in the
following paragraphs of this Section 3 are all true and correct:

     3.1 Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware, and has
all requisite corporate power and authority to conduct its business as currently conducted. The
Company is qualified to do business as a foreign corporation in each jurisdiction where failure to
be so qualified could reasonably be expected to have a material adverse effect on

 

 

the business, assets, financial condition or results of operations or assets of the Company
(the “Business”) (such effect referred to as a “Material Adverse Effect”).

     3.2 Capitalization. Immediately before the Closing the capitalization of the Company
will consist of the following:

          (a) The authorized capital stock of the Company consists of 50,000,000 shares of common stock,
$0.001 par value per share. As of October 25, 2005, 16,876,738 shares of the Common Stock were
issued and outstanding. As of September 30, 2005, the Company had authorized or reserved 3,500,000
shares of the Common Stock for issuance pursuant to the Company’s option plans, and the Company had
granted options to purchase 2,282,750 shares of the Common Stock under the Company’s option plans.
All of the issued and outstanding shares of the Common Stock are, and all shares reserved for
issuance pursuant to the Company’s option plans will be, upon issuance in accordance with the terms
specified in such plans, respectively, and the agreements pursuant to which they are issuable, duly
authorized, validly issued, fully paid and non-assessable and have not been issued in violation of
any preemptive or similar rights. Except pursuant to the Company’s option plans and this
Agreement, there are no outstanding subscriptions, options, warrants, calls, preemptive rights or
other contracts, commitments, understandings or arrangements, including any right of conversion or
exchange under any outstanding security, instrument or agreement (together, “Options”),
obligating the Company to issue or sell any capital shares of the Company or to grant, extend or
enter into any Option with respect thereto.

          (b) There are no agreements to which the Company is a party and by which it is bound, with
respect to the voting (including voting trusts or proxies) or sale or transfer of any securities of
the Company.

          (c) There are no outstanding commitments, understandings, arrangements or contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares of the Company’s
capital stock.

     3.3 Subsidiaries. Except for the subsidiaries of the Company listed on the Disclosure
Schedule, each of which is not a “significant subsidiary” as defined in Rule 1-02 of Regulation
S-X, the Company does not presently own or control, directly or indirectly, any interest in any
other corporation, partnership, trust, joint venture, association, or other entity.

     3.4 Due Authorization; No Violation. All corporate action on the part of the Company
and its officers, directors and stockholders necessary for the authorization, execution and
delivery of, and the performance of all obligations of the Company under, this Agreement, and the
authorization, issuance, reservation for issuance and delivery of all of the Purchased Shares being
sold under this Agreement, has been taken or will be taken prior to the Closing, and this Agreement
constitutes a valid and legally binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or affecting the
enforcement of creditors’ rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies. Neither the execution, delivery or performance by the Company
of this Agreement nor the consummation by the Company of the transactions

2

 

contemplated hereby will (i) conflict with or result in a breach of any provision of the
Company’s Certificate of Incorporation, as amended, or the Company’s Bylaws, as amended (ii)
conflict with, result in a violation or breach of, or cause a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or provisions of any
agreement, instrument or obligation to which the Company is a party, which default could reasonably
be expected to have a Material Adverse Effect or (iii) violate any law, statute, rule or regulation
or judgment, order, writ, injunction or decree of any governmental authority, in each case
applicable to the Company or its properties or assets and which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

     3.5 Valid Issuance of Stock. The Purchased Shares, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration provided for herein, will be duly
and validly issued, fully paid and nonassessable and are not subject to preemptive or other similar
rights of any stockholder of the Company.

     3.6 Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement, the offer, sale and issuance of the Purchased Shares, or
the consummation of the transactions contemplated by this Agreement, except for qualifications or
filings under the Securities Act of 1933, as amended (the “Act”) and the applicable rules
and regulations (the “Rules and Regulations”) of the Securities and Exchange Commission
(the “Commission”) under the Act, and all other applicable securities laws as may be
required in connection with the transactions contemplated by this Agreement. All such
qualifications will be effective on the Closing, and all such filings be made within the time
prescribed by law.

     3.7 Litigation. There is no action, suit, proceeding, claim, arbitration or
investigation (“Action”) pending (or, to the Company’s knowledge, currently threatened)
against the Company, its activities, properties or assets, which (i) might prevent the consummation
of the transactions contemplated hereby or (ii) if adversely resolved against the Company could
reasonably be expected to have a Material Adverse Effect.

     3.8 American Stock Exchange Listing. The Common Stock is registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
is listed on the American Stock Exchange (“AMEX”). The Company has not received any
notification that the Commission or AMEX is contemplating the termination of such registration or
listing. Before any registration statement in connection with the Purchased Shares is declared
effective by the Commission, the Purchased Shares will, if required by the listing rules of AMEX,
have been approved for listing on AMEX, subject to notice of issuance.

     3.9 SEC Filings and Financial Statements.

          (a) The Company’s SEC forms, reports and documents required to be filed (“collectively, the
“Company SEC Reports”) since December 31, 2002 (i) at the time filed, complied in all
material respects with the applicable requirements of the Securities Act and the Exchange Act, as
the case may be, and (ii) did not at the time they were filed (or if amended or

3

 

           superseded by a filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact required to be
stated in such Company SEC Reports or necessary in order to make the statements in such Company SEC
Reports, in the light of the circumstances under which they were made, not misleading. None of the
Company’s subsidiaries are required to file any forms, reports or other documents with the SEC.

          (b) Each of the consolidated financial statements (including, in each case, any related notes)
contained in the Company SEC Reports, complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect thereto, was prepared in
accordance with United States GAAP applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes to such financial statements or, in the case of unaudited
statements, as permitted by Form 10-Q promulgated by the SEC) and presented fairly, in all material
respects, the consolidated financial position of the Company as of and at the respective dates and
the consolidated results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount.

     3.10 Absence of Certain Changes or Events. Since June 30, 2005, the Company has not
experienced a Material Adverse Effect, and the Company has conducted its business in the ordinary
course and in a manner consistent with past practices. Since June 30, 2005, the Company has not
agreed to take any action outside the ordinary course of business or that would (if the action were
taken immediately) constitute a breach of any of the covenants, representations or warranties of
the Company contained in this Agreement.

     3.11 Disclosure. The representations and warranties made by the Company in this
Agreement (including the Disclosure Schedule) and the Filings when read together do not contain any
untrue statement of a material fact and do not omit to state a material fact necessary to make the
statements herein as a whole not misleading.

     3.12 Governmental Permits, Etc. The Company possesses all licenses, franchises,
governmental approvals, permits or other governmental authorizations (collectively,
“Authorizations”) relating to the operation of the Business, except for those
Authorizations the failure of which to possess would not, separately or in the aggregate, have a
Material Adverse Effect. To the Company’s knowledge, the Company is in compliance with the terms
of all Authorizations and all laws, ordinances, regulations and decrees which to the Company’s
knowledge are applicable to the Business, except for such non-compliance which does not, separately
or in the aggregate, have a Material Adverse Effect.

     3.13 Insurance. The Company is covered by insurance with companies the Company
believes to be responsible and in such amounts and covering such risks as it believes to be
adequate for the conduct of its Business and the value of its properties and which, it believes, is
customary for companies engaged in similar businesses in similar industries. The Company has no
knowledge that any such carrier has grounds or intends to cancel or fail to renew such policies.

4

 

     3.14 Intellectual Property. To the Company’s knowledge after reasonable investigation,
the Company owns or possesses the patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other rights or interests in items of
intellectual property as are necessary for the operation of the Business operated by it (the
“Patent and Proprietary Rights”), except where the failure to own or possess such rights
would not have a Material Adverse Effect; the Company has not received notice of any asserted
rights with respect to any of the Patent and Proprietary Rights which, if determined unfavorably
with respect to the interests of the Company would have a Material Adverse Effect; and the Company
has not received notice and is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any of the Patent or Proprietary Rights, which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding), individually or in the
aggregate, would result in a Material Adverse Effect.

     3.15 Employees. The Company is not aware that any officer or key employee, or that
any group of key employees, intends to terminate their employment with the Company, nor does the
Company have any present intention to terminate the employment of any officer, key employee or
group of key employees.

4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF VIEJAS. Viejas hereby represents
and warrants to, and agrees with, the Company, that:

     4.1 Authorization. All governmental action on the part of Viejas and its tribal
general council, tribal council, officers and directors necessary for the authorization, execution
and delivery of, and the performance of all obligations of Viejas under, this Agreement has been
taken or will be taken prior to the Closing, and this Agreement constitutes a valid and legally
binding obligation of Viejas, enforceable against Viejas in accordance with its terms, except as
enforceability may be limited by Section 8.3.

     4.2 Purchase for Own Account. The Purchased Shares to be purchased by Viejas
hereunder will be acquired for investment for Viejas’ own account, not as a nominee or agent, and
not with a view to the public resale or distribution thereof within the meaning of the Act, and
Viejas has no present intention of selling, granting any participation in, or otherwise
distributing the same. Viejas also represents that Viejas has not been formed for the specific
purpose of acquiring the Purchased Shares.

     4.3 Disclosure of Information. Viejas has received or has had full access to all the
information it considers necessary or appropriate to make an informed investment decision with
respect to the Purchased Shares to be purchased by Viejas under this Agreement. Viejas further has
had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Purchased Shares and to obtain additional information (to the
extent the Company possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify any information furnished to Viejas or to which Viejas had access.
The foregoing, however, does not in any way limit or modify the representations and warranties made
by the Company in Section 3 or the Disclosure Schedules.

5

 

     4.4 Investment Experience. Viejas understands that the purchase of the Purchased
Shares involves substantial risk. Viejas: (i) has experience as an investor in securities of
companies in the development stage and acknowledges that Viejas is able to bear the economic risk
of Viejas’ investment in the Purchased Shares and has such knowledge and experience in financial or
business matters that Viejas is capable of evaluating the merits and risks of this investment in
the Purchased Shares and protecting its own interests in connection with this investment or (ii)
has a preexisting personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables Viejas to be aware of the
character, business acumen and financial circumstances of such persons.

     4.5 Accredited Investor Status. Viejas is an “accredited investor” within the meaning
of Regulation D promulgated under the Act.

     4.6 Restricted Securities. Viejas understands that the Purchased Shares are
characterized as “restricted securities” under the Act inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under the Act and the Rules and
Regulations such securities may be resold without registration under the Act only in certain
limited circumstances. In this connection, Viejas represents that Viejas is familiar with Rule 144
of the Commission and understands the resale limitations imposed thereby and by the Act. Viejas
understands that the Company is under no obligation to register any of the Purchased Shares other
than pursuant to the Registration Rights Agreement.

     4.7 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, Viejas further agrees not to make any disposition of all or any
portion of the Purchased Shares unless and until:

          (a) there is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with such registration statement; or

          (b) (i) Viejas shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the proposed disposition,
and (ii) Viejas shall have furnished the Company, at the expense of Viejas or its transferee, with
an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not
require registration of such securities under the Act.

          Notwithstanding the provisions of paragraphs (a) and (b) above, no such registration statement
or opinion of counsel shall be required: (i) for any routine transfer of any Purchased Shares in
compliance with Rule 144 or Rule 144A (except that an opinion of counsel may be required for other
than routine Rule 144 transactions), or (ii) for any transfer of Purchased Shares by an investor
that is a partnership or a corporation to (A) a partner of such partnership or stockholder of such
corporation, or (B) the estate of any such partner or stockholder; provided, that in each of the
foregoing cases the transferee agrees in writing to be subject to the terms of this Section 4
(other than Section 4.5) to the same extent as if the transferee were an original investor
hereunder.

6

 

     4.8 Legends. It is understood that the certificates evidencing the Purchased Shares
will bear the legends set forth below:

          (a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.

          (b) THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF, AND MAY HAVE
CERTAIN REGISTRATION RIGHTS PURSUANT TO, THE PROVISIONS OF A PURCHASE AGREEMENT BETWEEN THE COMPANY
AND THE HOLDER, WHICH MAY RESTRICT THE TRANSFER OF SUCH SHARES IN CERTAIN CIRCUMSTANCES. A COPY OF
SUCH AGREEMENT MAY BE OBTAINED, WITHOUT CHARGE, AT THE COMPANY’S PRINCIPAL OFFICE.

          (c) After consultation with counsel for Viejas (or counsel to a transferee of Viejas), any
legend that counsel to the Company reasonably deems appropriate under the laws of the State of
Delaware.

     The legends set forth in (a) and (b) above shall, upon the request of Viejas or transferee of
Viejas, be promptly removed by the Company from any certificate evidencing Purchased Shares upon
delivery to the Company of an opinion of counsel to the Company, that the legended security can be
freely transferred in a public sale without a registration statement being in effect under the Act
and in compliance with exemption requirements under applicable state securities laws and that such
transfer will not jeopardize the exemption or exemptions from registration pursuant to which the
Company issued the Purchased Shares; provided, however, that no such opinion shall be required in
connection with routine sales of Purchased Shares pursuant to a registration statement. In
connection with any such opinion, Viejas (of transferee of Viejas) shall provide such
certifications as may be reasonably be deemed necessary for the delivery of such opinion.

     4.9 Restrictions on Further Investment. Viejas will not without prior approval of the
Company’s Board of Directors purchase additional shares of the Company if such purchases would
bring the total shares of the Company owned by Viejas to five percent (5%) of the total outstanding
shares of Purchaser.

5. INTERIM OPERATIONS OF THE COMPANY. The Company shall use its commercially reasonable
efforts to procure that, and the Company covenants and agrees that, after the date hereof and prior
to the Closing Date, except (i) as expressly provided in this

7

 

Agreement, (ii) as set forth in the Disclosure Schedule or (iii) as may be agreed in writing by
Viejas:

     (a) the Company shall conduct its business in the same manner as heretofore conducted and only
in the ordinary course, and each of the Company and its subsidiaries shall use its best efforts to
preserve the business organization of the Company intact, keep available the services of the
current officers and employees of the Company and maintain the existing relations with franchisees,
customers, suppliers, creditors, business partners and others having business dealings with the
Company;

     (b) the Company shall not amend or otherwise change its certificate of incorporation or
bylaws;

     (c) the Company shall not issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance (including in each case by way of share
split, combination or reclassification) of any shares of its capital stock, or any options,
warrants, convertible securities or other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including any phantom interest), of the Company, except
pursuant to the terms of the options and the warrants outstanding on the date of this Agreement;

     (d) the Company shall not incur any indebtedness outside the ordinary course of business or
issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, or make any loans or advances;

     (e) the Company shall file, on a timely basis, with appropriate taxing authorities all Tax
Returns required to be filed prior to the Closing Date.

     (f) the Company shall not take, or agree to or commit to take, any action that would or is
reasonably likely to result in any of the conditions to the Closing set forth in Sections 6 or 7
not being satisfied, or would make any representation or warranty of the Company contained herein
inaccurate in any respect at, or as of any time prior to, the Closing Date, or that would
materially impair the ability of the Company or Viejas to consummate the Closing in accordance with
the terms hereof or materially delay such consummation; and

     (g) Purchaser shall not enter into any agreement, contract, commitment or arrangement to do
any of the foregoing, or authorize, recommend, propose or announce an intention to do, any of the
foregoing.

6. CONDITIONS TO VIEJAS’ OBLIGATIONS AT CLOSING.

     6.1 Closing. The obligations of Viejas under Section 2 of this Agreement to purchase
the Purchased Shares at the Closing are subject to the fulfillment or waiver, on or before the
Closing, of each of the following conditions, and the Company shall use all reasonable efforts to
cause such conditions to be satisfied on or before the Closing:

8

 

          (a) Representations and Warranties True. Each of the representations and warranties
of the Company contained in Section 3 shall be true and correct on and as of the Closing with the
same effect as though such representations and warranties had been made on and as of the Closing.

          (b) Performance. The Company shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and shall have obtained all approvals, consents and
qualifications necessary to complete the purchase and sale described herein.

          (c) Compliance Certificate. The Company shall have delivered to Viejas at the Closing
a certificate signed on its behalf by its President, Chief Executive Officer, Chief Financial
Officer or Secretary certifying that the conditions specified in Sections 5.1.1 and 5.1.2 have been
fulfilled.

          (d) Registration; Securities Exemptions. The offer and sale of the Purchased Shares
to Viejas pursuant to this Agreement shall be exempt from the registration requirements under the
Act, as amended, and the rules thereunder and the registration and/or qualification requirements of
all other applicable state securities laws (the “Law”).

          (e) No Material Change. There shall have been no material adverse change in the
Business from the date of this Agreement.

          (f) Registration Rights Agreement. The Company shall have executed and delivered to
Viejas a Registration Rights Agreement, substantially in the form of Exhibit A attached
hereto, in connection with the Purchased Shares.

          (g) Asset Purchase Agreement. That certain Asset Purchase Agreement dated as of
November 17, 2005 by and among the Company and Borrego Springs Bank, N.A., a national banking
association, relating to the sale of the assets of a business, shall have been executed and remain
in effect. The transactions contemplated thereby shall be consummated promptly after the Closing
hereunder.

7. CONDITIONS TO THE COMPANY’S OBLIGATIONS AT CLOSING.

     7.1 Closing. The obligations of the Company under this Agreement to sell the
Purchased Shares to Viejas at the Closing are subject to the fulfillment or waiver on or before the
Closing of each of the following conditions by Viejas, and Viejas shall use all reasonable efforts
to cause such conditions to be satisfied on or before the Closing:

          (a) Representations and Warranties. The representations and warranties of Viejas
contained in Section 4 shall be true and correct on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the Closing.

          (b) Payment of Purchase Price. Viejas shall have delivered to the Company the
purchase price for the Purchased Shares, in accordance with the provisions of Section 2.

9

 

          (c) Registration; Securities Exemptions. The offer and sale of the Purchased Shares
to Viejas pursuant to this Agreement shall be exempt from the registration requirements under the
Act and shall be exempt from the qualification requirements of the Law and the registration and/or
qualification requirements of all other applicable state securities laws.

8. MISCELLANEOUS.

     8.1 Survival of Warranties. The representations, warranties and covenants of the
Company and Viejas contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing and shall in no way be affected by any investigation of
the subject matter thereof made by or on behalf of Viejas, their counsel or the Company, as the
case may be.

     8.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the parties.

     8.3 Governing Law; Limited Waiver of Sovereign Immunity and Dispute Resolution. This
Agreement shall be governed by and construed under the internal laws of the State of Delaware
except as provided in this Section 8.3:

          (a) Grant of Limited Waiver. Viejas is a federally recognized Indian Tribe that
retains full sovereign immunity from unconsented suit. Subject to and limited by the provisions
herein, Viejas hereby expressly grants to Company a limited waiver of tribal sovereign immunity for
the specific purpose of enforcing payment by Viejas of the consideration referenced in Section 2 of
this Agreement, or for enforcement of the Representations, Warranties and Certain Agreements of
Viejas as stated in Section 4 of this Agreement, and for no other purpose whatsoever.

          (b) Dispute Resolution. The parties agree that any dispute between them arising under
the sections of this Agreement referenced in paragraph (a) above shall be resolved by a two-step
dispute resolution process under the rules of J.A.M.S. of San Diego, California. (See:
www.jams-endispute.com). The dispute shall first be submitted to mediation before a neutral
panelist, followed if necessary by final and binding arbitration by the same, or if requested by
either party, another J.A.M.S. panelist. By entering into this Agreement, both parties are giving
up the right to have any such dispute decided before a court of law or a jury. The parties
specifically select the United States District Court for the Southern District of California, and
applicable Courts of Appeal (the “Federal Courts”), as the exclusive forum for the
enforcement of any arbitration award, and Viejas hereby waives its immunity as a sovereign
government limited to and only to the extent necessary for the mediation and arbitration before
J.A.M.S. and enforcement of the award, if any, in the Federal Courts. This waiver shall include
the power to render awards, orders, decisions or judgments, and to enforce any and all such awards,
orders, decisions or judgments by writ of execution or otherwise. Each party further agrees that
Viejas has waived its claims of immunity as herein limited, and that both parties have agreed to
the jurisdiction of the tribunals in the order designated above to determine the question of
whether, by this paragraph, such tribunal has the appropriate jurisdiction and whether each party
has waived its immunity or otherwise consented to resolution of the dispute by such tribunal. In
the event that J.A.M.S. is no longer offering mediation and/or arbitration services, the

10

 

parties agree to the substitution of the American Arbitration Association (AAA) and the
application of AAA’s Commercial Arbitration Rules.

          (c) No Third-Party Beneficiary. This limited waiver of sovereign immunity shall
extend only to Company, and shall not be construed to the benefit of any third party, nor shall the
waiver confer on any third party the right to infringe or invade, in any manner whatsoever, the
sovereignty or immunity of Viejas or its enterprises. Viejas hereby reserves all powers of
self-government and sovereign immunity against any and all claims and actions except those
expressly and specifically provided in this Section 8.3.

          (d) Enforcement. Except as expressly provided herein, Viejas consents only to the
jurisdiction of the United States District Court, Southern District of California, including the
federal courts of appeal with jurisdiction over such court. In the event the above-described court
determines that it lacks jurisdiction to hear the case, Viejas and the Company agree to submit the
dispute to the Chancery Court of the State of Delaware.

          (e) Expenses of Judicial Enforcement. In the event of any mediation, arbitration or
legal proceedings between the parties, the prevailing party shall recover from the non-prevailing
party all of its costs, expenses, and attorney’s fees incurred in connection with any such
proceedings. The parties expressly agree that this provision shall survive the termination or
expiration of this Agreement.

          (f) Retention of Sovereign Immunity. By the waiver contained in this Section 8.3,
Viejas, as a federally recognized Indian Tribe, does not waive, limit or modify its sovereign
immunity from unconsented suit or proceedings in arbitration and/or litigation, except as provided
in this Section 8.3.

     8.4 Counterparts. This Agreement may be executed in two or more counterparts and by
facsimile, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     8.5 Headings. The headings and captions used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement. All
references in this Agreement to sections, paragraphs, exhibits and schedules shall, unless
otherwise provided, refer to sections and paragraphs hereof and exhibits and schedules attached
hereto, all of which exhibits and schedules are incorporated herein by this reference.

     8.6 Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given when mailed, delivered personally, telecopied (which is confirmed) or sent by
an overnight courier service, such as Federal Express, to the parties at the following addresses
(or at such other address for a party as shall be specified by such party by like notice):

11

 

If to the Company, to:

Cash Systems Inc.

7350 Dean Martin Drive, Suite 309

Las Vegas, NV 89139

Attention: Michael D. Rumbolz — Chief Executive Officer

Telephone: 702-987-7169

Telecopy: 702-987-7168

With a copy to:

Cash Systems Inc.

7350 Dean Martin Drive, Suite 309

Las Vegas, NV 89139

Attention: Zev E. Kaplan — General Counsel

Telephone: 702-987-7169

Telecopy: 702-987-7168

and

If to Viejas, to:

The Viejas Band of Kumeyaay Indians

5000 Willows Road

Alpine, CA 91901

Attention: Mr. Frank Riolo — Chief Executive Officer

Copy to: Ms. Diane Vitols — General Counsel

Telephone: 619-659-2502

With a copy to:

DLA Piper Rudnick Gray Cary US LLP

4365 Executive Drive, Suite 1100

San Diego, CA 92121

Attention: Jeffrey T. Baglio

Telephone: 858-677-1400

Telecopy: 858-677-1401

     8.7 No Finder’s Fees. Each party represents that it neither is nor will be obligated
for any finder’s or broker’s fee or commission in connection with this transaction. Viejas agrees
to indemnify and to hold harmless the Company from any liability for any commission or compensation
in the nature of a finder’s or broker’s fee (and any asserted liability) for which Viejas or any of
its officers, partners, employees, or representatives is responsible. The Company agrees to
indemnify and to hold harmless Viejas from any liability for any commission or compensation in the
nature of a finder’s or broker’s fee (and any asserted liability) for which the Company or any of
its officers, employees or representatives is responsible.

12

 

     8.8 Costs, Expenses. Each party’s costs in connection with the preparation, execution
delivery and performance of this Agreement (including without limitation legal fees) shall be borne
by that party.

     8.9 Amendments and Waivers. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written consent of the Company
and Viejas.

     8.10 Severability. If one or more provisions of this Agreement are held to be
invalid, illegal or unenforceable under applicable law, such provision(s) shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were
so excluded and shall be enforceable in accordance with its terms.

     8.11 Entire Agreement. This Agreement, together with any exhibits or schedules
hereto, constitutes the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements,
understandings duties or obligations between the parties with respect to the subject matter hereof.

     8.12 Further Assurances. From and after the date of this Agreement, upon the request
of Viejas or the Company, the Company and Viejas shall execute and deliver such instruments,
documents or other writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.

[Remainder of this page intentionally left blank]

13

 

     IN WITNESS WHEREOF, the parties hereto have executed this Common Stock Purchase Agreement as
of the date first above written.

	 	 	 	 	 	 	 
	 	 	CASH SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
Michael Rumbolz

	 	 
	 	 	Name: Michael Rumbolz	 	 
	 	 	Title: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	THE VIEJAS BAND OF KUMEYAAY	 	 
	 	 	INDIANS, A FEDERALLY RECOGNIZED	 	 
	 	 	INDIAN TRIBE	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/
Anthony R. Pico

	 	 
	 

	 	Name: Anthony R. Pico	 
	 

	 	Title: Tribal Chairman	 

[COUNTERPART SIGNATURE PAGE

COMMON STOCK PURCHASE AGREEMENT]

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Exhibit A

Registration Rights Agreement

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (the “Agreement”) is made and entered as of this 17th day
of November, 2005 by and among Cash Systems, Inc., a Delaware corporation (the “Issuer”) and The
Viejas Band of Kumeyaay Indians, a federally recognized Indian tribe, or its assigns (“Holder”).

     WHEREAS, Issuer and Holder have entered into that certain Common Stock Purchase Agreement,
dated as of November 17, 2005 (the “Purchase Agreement”) pursuant to which Holder purchased 710,000
shares of common stock of Issuer (“Issuer Common Stock”);

     WHEREAS, as a condition of entering into the Purchase Agreement, Holder has required the
registration rights set forth below.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained in
this Agreement and for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:

     1. Certain Definitions.

     As used in this Agreement, the following terms shall have the following meanings:

     “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

     “Prospectus” shall mean the prospectus included in any Registration Statement, as amended or
supplemented by any prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all material
incorporated by reference in such prospectus.

     “Register,” “registered” and “registration” refer to a registration made by preparing and
filing a registration statement or similar documents in compliance with the 1933 Act, and the
declaration or ordering of effectiveness of such registration statement or document.

 

 

     “Registration Expenses” shall mean all reasonable expenses incurred by Issuer in complying
with Section 2 hereof, including all registration and filing fees, listing fees for the Issuer
Common Stock, printing expenses, fees and disbursements of counsel for Issuer, and blue sky fees
and expenses in all states.

     “Registrable Securities” shall mean the Issuer Common Stock issued pursuant to the Purchase
Agreement; provided, however, that a Holder’s Registrable Securities shall cease to be Registrable
Securities when all shares held by Holder may be sold in a three-month period pursuant to Rule 144
without regard to volume limitations.

     “Registration Statement” shall mean any registration statement filed under the 1933 Act that
covers the resale of any of the Registrable Securities pursuant to the provisions of this
Agreement, amendments and supplements to such registration statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such registration statement.

     “Rule 144” shall mean Rule 144 under the 1933 Act, as such rule may be amended from time to
time, or any similar rule or regulation adopted by the SEC (excluding Rule 144A).

     “SEC” means the U.S. Securities and Exchange Commission.

     2. Shelf Registration.

          (a) Registration Statement. Not later than thirty (30) days after the Closing (as
defined in the Purchase Agreement), Issuer shall prepare and file with the SEC one Registration
Statement pursuant to Rule 415 under the 1933 Act covering the Registrable Securities (the
“Shelf Registration”). The Shelf Registration shall be on Form S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by Holder from time to time.

          (b) Effectiveness. Issuer shall use its best efforts to cause the Shelf Registration
to become effective not later than ninety (90) days after the Closing. Subject to the requirements
of the 1933 Act, including without limitation, requirements relating to updating through
post-effective amendments or otherwise, Issuer shall use its commercially reasonable efforts to
keep the Shelf Registration continuously effective until the earlier of (i) such time as all of the
Registrable Securities have been sold or otherwise disposed of by the Holder and (ii) the second
anniversary of the Closing. Issuer shall take such actions under the laws of various states as may
be required to cause the resale of the Registrable Securities pursuant to the Shelf Registration to
be lawful.

          (c) Suspension Period. Following the effectiveness of a Registration Statement filed
pursuant to this Section 2, Issuer may, at any time, suspend the effectiveness of such Registration
Statement for up to 30 days, as appropriate (a “Suspension Period”) if Issuer determines in
good faith that it would be detrimental to Issuer and its stockholders to use a Prospectus under
the Registration Statement because

2

 

of a development or potential development involving Issuer which Issuer would be obligated to
disclose in the Prospectus, but which disclosure would be premature at such time or in Issuer’s
reasonably judgment have a material adverse effect upon Issuer or its stockholders, and prior to
suspending such use, Issuer provides Holder notice of the intended suspension and a description in
reasonable detail of the basis therefor. Issuer may not use more than two Suspension Periods in
any 6-month period and at least 30 days must separate each Suspension Period. Issuer shall use its
commercially reasonable efforts to limit the duration and number of any Suspension Periods. Holder
agrees that, upon receipt of any notice from Issuer of a Suspension Period, Holder shall forthwith
discontinue disposition of shares covered by such Registration Statement or Prospectus until Holder
(i) is advised in writing by Issuer that the use of the applicable Prospectus may be resumed, (ii)
has received copies of a supplemental or amended Prospectus, if applicable, and (iii) has received
copies of any additional or supplemental filings which are incorporated or deemed to be
incorporated by reference in such Prospectus.

     3. Expenses of Registration. All Registration Expenses shall be borne by Issuer;
provided, however, that the term Registration Expenses shall not include, and in no event will the
Issuer be obligated to pay, stock transfer taxes or underwriters’ or brokers’ discounts or
commissions relating to Registrable Securities and all fees and disbursements of any counsel of any
holder of Registrable Securities.

     4. Issuer Obligations. Issuer shall:

          (a) prepare and file with the SEC such amendments and supplements to any Registration
Statement and associated Prospectus as may be necessary to keep such Registration Statement
effective;

          (b) furnish to Holder such number of copies of a Prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such other documents as Holder may
reasonably request in order to facilitate the disposition of the Registrable Securities owned by
Holder;

          (c) use its best efforts to prevent the issuance of any stop order or other suspension of
effectiveness and, if such order is issued, obtain the withdrawal of any such order at the earliest
possible moment;

          (d) prior to any public offering of Registrable Securities, register or qualify such
Registrable Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as Holder may reasonably request and do any and all other reasonable acts or things
necessary or advisable to enable the distribution in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided, however, that Issuer shall not be
required in connection therewith or as a condition thereto to (i) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this Section, (ii) subject
itself to general taxation in any such jurisdiction, (iii) file a general consent to service of
process in any such jurisdiction, (iv) provide any undertakings that cause Issuer undue expense or
burden, or (v) make any change in its charter or bylaws;

3

 

          (e) cause all Registrable Securities covered by the Registration Statement to be listed on the
securities exchange, interdealer quotation system or other market on which similar securities
issued by Issuer are then listed; and

          (f) as promptly as practicable, notify Holder, at any time when a Prospectus relating to the
Registrable Securities is required to be delivered under the 1933 Act, upon discovery that, or as
promptly as practicable after becoming aware of any event as a result of which, the Prospectus
included in such Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances then existing, and
promptly prepare and furnish to Holder a reasonable number of copies of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchaser
of such Registrable Securities, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then existing.

     5. Obligations of Holder.

          (a) It shall be a condition precedent to the obligations of Issuer to complete the
registration pursuant to this Agreement with respect to the Registrable Securities that Holder
shall furnish in writing to Issuer such information regarding itself, the Registrable Securities
held by Holder and the intended method of disposition of such Registrable Securities held by Holder
as shall be reasonably required to effect the registration of such Registrable Securities, and
shall execute such documents in connection with such registration as Issuer may reasonably request.
At least fifteen (15) business days prior to the first anticipated filing date of the Registration
Statement, Issuer shall notify Holder of the information Issuer requires from Holder if Holder
elects to have any of its Registrable Securities included in the Registration Statement.

          (b) Holder agrees to cooperate with Issuer as reasonably requested by Issuer in connection
with the preparation and filing of the Registration Statement hereunder.

          (c) Holder agrees that, upon receipt of any notice from Issuer suspending the effectiveness of
the Registration Statement or of any event rendering the Registration Statement no longer
effective, Holder will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities held or owned by it until Holder’s
receipt of the copies of the supplemented or amended Prospectus filed with the SEC and declared
effective and, if so directed by Issuer, Holder shall deliver to Issuer (at the expense of Issuer)
or destroy (and deliver to Issuer a certificate of destruction) all copies in Holder’s possession
(except copies for the files of Holder) of the Prospectus covering the Registrable Securities
current at the time of receipt of such notice.

     6. Indemnification.

4

 

          (a) Indemnification by Issuer. Issuer agrees to indemnify and hold harmless, to the
fullest extent permitted by law, Holder, its officers, directors, partners and employees and each
person who controls Holder (within the meaning of the 1933 Act) against all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable attorney’s fees) and
expenses (collectively, “Loss”) caused by (i) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, Prospectus or any preliminary prospectus or any
amendment or supplement thereto or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are based upon any information furnished in writing to Issuer by Holder,
expressly for use therein or results from Holder’s failure to deliver a copy of a Registration
Statement or Prospectus (or any amendment or supplement thereto or any final Prospectus that
corrects an untrue statement or omission of a material fact in a preliminary prospectus) after
Issuer has furnished Holder with a copy thereof, or (ii) any violation by Issuer of any federal,
state or common law, rule or regulation applicable to Issuer in connection with any Registration
Statement, Prospectus or any preliminary prospectus, or any amendment or supplement thereto.

          (b) Indemnification by Holder of Registrable Securities. In connection with any
registration pursuant to the terms of this Agreement, Holder will furnish to Issuer in writing such
information as Issuer reasonably requests concerning Holder or the proposed manner of distribution
for use in connection with any Registration Statement or Prospectus and Holder agrees to indemnify
and hold harmless, to the fullest extent permitted by law, Issuer, its directors, officers,
employees, stockholders, affiliates and each person who controls Issuer (within the meaning of
Section 15 of the 1933 Act) against any Loss resulting from any untrue statement of a material fact
or any omission of a material fact required to be stated in the Registration Statement or
Prospectus or preliminary prospectus or amendment or supplement thereto or necessary to make the
statement therein not misleading, but only to the extent that such untrue statement or omission is
contained in any information furnished in writing by Holder to Issuer specifically for inclusion in
such Registration Statement or Prospectus or amendment or supplement thereto. In no event shall
the liability of Holder be greater in amount than the dollar amount of the proceeds (net of all
expenses paid by Holder and the amount of any damages Holder has otherwise been required to pay by
reason of such untrue statement or omission) received by Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

          (c) Conduct of Indemnification Proceedings. Any person entitled to indemnification
hereunder shall (i) give prompt notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such
claim with counsel reasonably satisfactory to the indemnified party; provided, however,
that any person entitled to indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the fees and expenses of such counsel
shall be at the expense of such person unless (x) the indemnifying party has agreed to pay such
fees or expenses, or (y) the indemnifying party shall have failed to timely assume the defense of
such claim and employ counsel reasonably satisfactory to such person or (z) in the reasonable
judgment

5

 

of any such person, a conflict of interest exists between such person and the indemnifying
party with respect to such claims, in which case, if the person notifies the indemnifying party in
writing that such person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of such claim on
behalf of such person; and provided further, that the failure of any indemnified
party to give notice as provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall materially adversely affect
the indemnifying party in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable
for fees or expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement that does not include as an
unconditional terms thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.

          (d) Contribution. If for any reason the indemnification provided for in the preceding
clauses (a) and (b) is unavailable to an indemnified party or insufficient to hold it harmless,
other than as expressly specified therein, then the indemnifying party shall contribute to the
amount paid or payable by the indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of the indemnified
party and the indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act
shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation.
In no event shall the contribution obligation of Holder be greater in amount than the dollar amount
of the proceeds (net of all expenses paid by Holder and the amount of any damages Holder has
otherwise been required to pay be reason of such untrue or alleged untrue statement or omission or
alleged omission) received by it upon the sale of the Registrable Securities giving rise to such
contribution obligation.

     7. Rule 144 Reporting. With a view to making available to Holder the benefits of
certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to
the public, subject in all cases to applicable law and the terms and conditions set forth herein,
Issuer agrees to use its commercially reasonable efforts to:

          (a) make and keep public information available, as those terms are understood and defined in
Rule 144, as long as Registrable Securities are outstanding;

          (b) file with the SEC, in a timely manner, all reports and other documents required of the
Company under the 1933 Act and the 1934 Act;

          (c) so long as Holder owns any Registrable Securities, furnish to Holder forthwith upon
request: a written statement by Issuer as to its compliance with the reporting requirements of Rule
144 and of the 1934 Act; a copy of the most recent annual or quarterly report of Issuer; and such
other reports and documents as Holder may

6

 

reasonably request in availing itself or any rule or regulation of the SEC allowing it to sell
any such securities without registration or pursuant to a registration on Form S-3; and

          (d) take all such action (including without limitation the furnishing of the information
described in Rule 144(d)(4)) as may be necessary or helpful to facilitate a sale of Registrable
Securities by Holder.

     8. Miscellaneous.

          (a) Amendments and Waivers. This Agreement may be amended only by a writing signed by
the Company and Holder. Issuer may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if Issuer shall have obtained the written consent to
such amendment, action or omission to act, of Holder.

          (b) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by overnight courier or
facsimile to the parties at the following addresses and numbers or at such other addresses and
numbers as shall be specified by the parties by like notice:

(i) if to Issuer:

Cash Systems Inc.

7350 Dean Martin Drive, Suite 309

Las Vegas, NV 89139

Attention: Michael D. Rumbolz — Chief Executive Officer

Telephone: 702-987-7169

Telecopy: 702-987-7168

with a copy, which shall not constitute notice, to:

Cash Systems Inc.

7350 Dean Martin Drive, Suite 309

Las Vegas, NV 89139

Attention: Zev E. Kaplan — General Counsel

Telephone: 702-987-7169

Telecopy: 702-987-7168

(ii) if to Holder:

The Viejas Band of Kumeyaay Indians

5000 Willows Road

Alpine, CA 91901

Attention: Mr. Frank Riolo — Chief Executive Officer

Copy to: Ms. Diane Vitols — General Counsel

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Telephone: 619-659-2502

with a copy, which shall not constitute notice, to:

DLA Piper Rudnick Gray Cary US LLP

4365 Executive Drive, Suite 1100

San Diego, CA 92121

Attention: Jeffrey T. Baglio

Telephone: 858-677-1400

Telecopy: 858-677-1401

          (c) Notice so given shall (in the case of notice so given by mail) be deemed to be given when
received and (in the case of notice so given by facsimile or personal delivery) on the date of
actual transmission or (as the case may be) personal delivery.

          (d) Assignments and Transfers by Holder. This Agreement and all the rights and
obligations of Holder hereunder may not be assigned or transferred to any transferee or assignee
except as set forth herein. Holder may make such assignment or transfer only to a transferee or
assignee of Registrable Securities that is an affiliate (as such term is defined in Rule 405 of the
1933 Act); provided, that (i) such transfer or assignment is made expressly subject to the
applicable provisions of this Agreement and the transferee or assignee agrees in writing to be
bound by the applicable terms and conditions hereof, and (ii) Issuer is provided with written
notice of such assignment. Any such transferee or assignee shall thereafter be considered “Holder”
for purposes of this Agreement.

          (e) Benefits of the Agreement. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.

          (f) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

          (g) Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.

          (h) Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms to the fullest extent permitted by law.

8

 

          (i) Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be required to carry
out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein
contained.

          (j) Entire Agreement. This Agreement, together with the agreements and documents
referred to in the Purchase Agreement, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement and understanding
of the parties hereto in respect of the subject matter contained herein. This Agreement, together
with the agreements and documents referred to in the Purchase Agreement, supersedes all prior
agreements and understandings between the parties with respect to such subject matter.

          (k) Applicable Law; Limited Waiver of Sovereign Immunity; Dispute Resolution. This
Agreement shall be governed by and construed under the laws of the State of California except as
provided in this Section 8 (k).

               (i) Grant of Limited Waiver. The Viejas Band of Kumeyaay Indians, as Holder, is a
federally recognized Indian Tribe that retains full sovereign immunity from unconsented suit.
Subject to and limited by the provisions herein, Holder hereby expressly grants to Issuer a limited
waiver of tribal sovereign immunity for the specific purpose of enforcing the Obligations of Holder
referenced in Section 5 of this Agreement, and for enforcement of the Indemnification obligations
referenced in Section 6 of this Agreement, and for no other purpose whatsoever.

               (ii) Dispute Resolution. The parties agree that any dispute between them arising
under the Sections of this Agreement referenced in paragraph 1 above shall be resolved by a
two-step dispute resolution process under the rules of J.A.M.S. of San Diego, California. (See:
www.jams-endispute.com). The dispute shall first be submitted to mediation before a neutral
panelist, followed if necessary by final and binding arbitration by the same, or if requested by
either party, another J.A.M.S. panelist. By entering into this Agreement, both parties are giving
up the right to have any such dispute decided before a court of law or a jury. The parties
specifically select the United States District Court for the Southern District of California, and
applicable Courts of Appeal (“the Federal Courts”), as the exclusive forum for the enforcement of
any arbitration award, and Holder hereby waives its immunity as a sovereign government limited to
and only to the extent necessary for the mediation and arbitration before J.A.M.S. and enforcement
of the award, if any, in the Federal Courts. This waiver shall include the power to render awards,
orders, decisions or judgments, and to enforce any and all such awards, orders, decisions or
judgments by writ of execution or otherwise. Each party further agrees that Holder has waived its
claims of immunity as herein limited, and that both parties have agreed to the jurisdiction of the
tribunals in the order designated above to determine the question of whether, by this paragraph,
such tribunal has the appropriate jurisdiction and whether each party has waived its immunity or
otherwise consented to resolution of the dispute by such tribunal. In the event that J.A.M.S. is no
longer offering mediation and/or arbitration services, the parties agree to

9

 

the substitution of the American Arbitration Association (AAA) and the application of AAA’s
Commercial Arbitration Rules.

               (iii) No Third-Party Beneficiary. This limited waiver of sovereign immunity shall
extend only to Issuer, and shall not be construed to the benefit of any third party, nor shall the
waiver confer on any third party the right to infringe or invade, in any manner whatsoever, the
sovereignty or immunity of the Viejas Band of Kumeyaay Indians or its enterprises. Holder hereby
reserves all powers of self-government and sovereign immunity against any and all claims and
actions except those expressly and specifically provided in this Section 8 (k).

               (iv) Enforcement. Except as expressly provided herein, Holder consents only to the
jurisdiction of the United States District Court, Southern District of California, including the
federal courts of appeal with jurisdiction over such court. In the event the above-described court
determines that it lacks jurisdiction to hear the case, Holder and Issuer agree to submit the
dispute to the Superior Court of the State of California.

               (v) Expenses of Judicial Enforcement. In the event of any mediation, arbitration or
legal proceedings between the parties, the prevailing party shall recover from the non-prevailing
party all of its costs, expenses, and attorney’s fees incurred in connection with any such
proceedings. The parties expressly agree that this provision shall survive the termination or
expiration of this Agreement.

               (vi) Retention of Sovereign Immunity. By this waiver, Holder, as a federally
recognized Indian Tribe, does not waive, limit or modify its sovereign immunity from unconsented
suit or proceedings in arbitration and/or litigation, except as provided in this Section 8 (k).

[remainder of page intentionally left blank —signature page follows]

10

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.

	 	 	 	 	 	 	 
	Issuer:	 	CASH SYSTEMS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name: Michael Rumbolz
	 	 
	 

	 	 	 	Title: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	Holder:	 	THE VIEJAS BAND OF KUMEYAAY INDIANS	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

11

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