Exhibit 10.1

BUSINESS LOAN AGREEMENT

 

This Agreement dated as of May 15, 2003, is between Bank of America, N.A. (the
“Bank”) and TRM Corporation (the “Borrower”).

 

1.                                       FACILITY NO. 1:  LINE OF CREDIT AMOUNT
AND TERMS

 

1.1                                 Line of Credit Amount.

 

(a)                                  During the availability period described
below, the Bank will provide a line of credit to the Borrower.  The amount of
the line of credit (the “Facility No. 1 Commitment”) is Four Million Dollars
($4,000,000.00).

 

(b)                                 This is a revolving line of credit.  During
the availability period, the Borrower may repay principal amounts and reborrow
them.

 

(C)                                  THE BORROWER AGREES NOT TO PERMIT THE
PRINCIPAL BALANCE OUTSTANDING TO EXCEED THE FACILITY NO. 1 COMMITMENT.  IF THE
BORROWER EXCEEDS THIS LIMIT, THE BORROWER WILL IMMEDIATELY PAY THE EXCESS TO THE
BANK UPON THE BANK’S DEMAND.

 

1.2                                 Availability Period.  The line of credit is
available between the date of this Agreement and April 30, 2004, or such earlier
date as the availability may terminate as provided in this Agreement (the
“Facility No. 1 Expiration Date”).

 

1.3                                 Repayment Terms.

 

(a)                                  The Borrower will pay interest on May 31,
2003 and then on the last day of each month  thereafter until payment in full of
any principal outstanding under this line of credit.

 

(b)                                 The Borrower will repay in full all
principal and any unpaid interest or other charges outstanding under this line
of credit no later than the Facility No. 1 Expiration Date.

 

1.4                                 Interest Rate.

 

(a)                                  The interest rate is a rate per year equal
to the Bank’s Prime Rate.

 

(b)                                 The Prime Rate is the rate of interest
publicly announced from time to time by the Bank as its Prime Rate.  The Prime
Rate is set by the Bank based on various factors, including the Bank’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans.  The Bank may price loans to its
customers at, above, or below the Prime Rate.  Any change in the Prime Rate
shall take effect at the opening of business on the day specified in the public
announcement of a change in the Bank’s Prime Rate.

 

1.5                                 Letters of Credit.

 

(a)                                  During the availability period, at the
request of the Borrower, the Bank will issue:

 

(i)                                     Commercial letters of credit with a
maximum maturity not to extend more than 365 days beyond the Facility No. 1
Expiration Date.

 

(ii)                                  Standby letters of credit with a maximum
maturity not to extend more than 365 days beyond the Facility No. 1 Expiration
Date.

 

(b)                                 The amount of the letters of credit
outstanding at any one time (including the drawn and unreimbursed amounts of the
letters of credit) may not exceed Three Million Dollars ($3,000,000.00).

 

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(c)                                  In calculating the principal amount
outstanding under the Facility No. 1 Commitment, the calculation shall include
the amount of any letters of credit outstanding, including amounts drawn on any
letters of credit and not yet reimbursed.

 

(d)                                 The Borrower agrees:

 

(i)                                     Any sum drawn under a letter of credit
may, at the option of the Bank, be added to the principal amount outstanding
under this Agreement.  The amount will bear interest and be due as described
elsewhere in this Agreement.

 

(ii)                                  If there is a default under this
Agreement, to immediately prepay and make the Bank whole for any outstanding
letters of credit.

 

(iii)                               The issuance of any letter of credit and any
amendment to a letter of credit is subject to the Bank’s written approval and
must be in form and content satisfactory to the Bank and in favor of a
beneficiary acceptable to the Bank.

 

(iv)                              To sign the Bank’s form Application and
Agreement for Commercial Letter of Credit or Application and Agreement for
Standby Letter of Credit, as applicable.

 

(v)                                 To pay any issuance and/or other fees that
the Bank notifies the Borrower will be charged for issuing and processing
letters of credit for the Borrower.

 

(vi)                              To allow the Bank to automatically charge its
checking account for applicable fees, discounts, and other charges.

 

(vii)                           Borrower agrees to pay the Bank a non-refundable
fee equal to the Applicable Margin for LIBOR/IBOR Rate described in Section 2.9
less 50 basis points per annum applied to the outstanding undrawn amount of each
standby letter of credit.  Such fee shall be calculated and payable on the date
each letter of credit is issued, and on the anniversary date of the letter of
credit, if any, calculated on the basis of the face amount outstanding on the
day the fee is calculated, and utilizing the Applicable Margin in effect on such
date.

 

2.                                       FACILITY NO. 2:  TERM LOAN AMOUNT AND
TERMS

 

2.1                                 Loan Amount.  The Bank agrees to provide a
term loan to the Borrower in the amount of Fifteen Million Dollars
($15,000,000.00) (the “Facility No. 2 Commitment”).

 

2.2                                 Availability Period.  The loan is available
in one disbursement from the Bank as soon as reasonably practical after the
execution of this Agreement and satisfaction of the Conditions described in
Section 6.

 

2.3                                 Repayment Terms.

 

(a)                                  The Borrower will pay all accrued but
unpaid interest on May 31, 2003 and then on the last day of each month
thereafter and upon payment in full of the principal of the loan.

 

(b)                                 The Borrower will repay principal in 10
successive quarterly installments of Seven Hundred Fifty Thousand Dollars
($750,000.00) starting September 30, 2003.  On March 31, 2006, the Borrower will
repay the remaining principal balance plus any interest then due.

 

(c)                                  The Borrower may prepay the loan in full or
in part at any time in an amount not less than One Hundred Thousand Dollars
($100,000.00).  The prepayment will be applied to the most remote payment of
principal due under this Agreement.  A prepayment may result in a prepayment fee
under Section 2.7 or Section 2.8.

 

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2.4                                 Interest Rate.

 

(a)                                  The interest rate is a rate per year equal
to the Bank’s Prime Rate, plus the Applicable Margin as defined below.

 

2.5                                 Optional Interest Rates.  Instead of the
interest rate based on the rate stated in the paragraph entitled “Interest Rate”
above, the Borrower may elect the optional interest rates listed below for this
Facility No. 2 during interest periods agreed to by the Bank and the Borrower. 
The optional interest rates shall be subject to the terms and conditions
described later in this Agreement.  Any principal amount bearing interest at an
optional rate under this Agreement is referred to as a “Portion.”  The following
optional interest rates are available:

 

(a)                                  The LIBOR Rate plus the Applicable Margin
as defined below.

 

(b)                                 The IBOR Rate plus the Applicable Margin as
defined below.

 

2.6                                 Optional Rates.  Each optional interest rate
is a rate per year.  Interest will be paid on the last day of each month during
the interest period.  At the end of any interest period, the interest rate will
revert to the Bank’s Prime Rate plus the Applicable Margin as defined below,
unless the Borrower has designated another optional interest rate for the
Portion.  No Portion will be converted to a different interest rate during the
applicable interest period.  Upon the occurrence of an event of default under
this Agreement, the Bank may terminate the availability of optional interest
rates for interest periods commencing after the default occurs.

 

2.7                                 LIBOR Rate.  The election of LIBOR Rates
shall be subject to the following terms and requirements:

 

(a)                                  The interest period during which the LIBOR
Rate will be in effect will be one, two, or three months.  The first day of the
interest period must be a day other than a Saturday or a Sunday on which the
Bank is open for business in New York and London and dealing in offshore dollars
(a “LIBOR Banking Day”).  The last day of the interest period and the actual
number of days during the interest period will be determined by the Bank using
the practices of the London inter-bank market.

 

(b)                                 Each LIBOR Rate Portion will be for an
amount not less than One Million Dollars ($1,000,000.00).

 

(c)                                  The “LIBOR Rate” means the interest rate
determined by the following formula, rounded upward to the nearest 1/100 of one
percent.  (All amounts in the calculation will be determined by the Bank as of
the first day of the interest period.)

 

LIBOR Rate =

 

London Inter-Bank Offered Rate

 

 

 

 

(1.00 - Reserve Percentage)

 

Where,

 

(i)                                     “London Inter-Bank Offered Rate” means
the interest rate at which the Bank’s London Banking Center, London, Great
Britain, would offer U.S. dollar deposits for the applicable interest period to
other major banks in the London inter-bank market at approximately 11:00 a.m.
London time two (2) London Banking Days before the commencement of the interest
period.  A “London Banking Day” is a day on which the Bank’s London Banking
Center is open for business and dealing in offshore dollars.

 

(ii)                                  “Reserve Percentage” means the total of
the maximum reserve percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency Liabilities, as
defined in Federal Reserve Board Regulation D, rounded upward to the nearest
1/100 of one percent.  The percentage will be expressed as a decimal, and will
include, but not be limited to, marginal, emergency, supplemental, special, and
other reserve percentages.

 

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(d)                                 The Borrower shall irrevocably request a
LIBOR Rate Portion no later than 12:00 noon Portland time on the LIBOR Banking
Day preceding the day on which the London Inter-Bank Offered Rate will be set,
as specified above.  For example, if there are no intervening holidays or
weekend days in any of the relevant locations, the request must be made at least
three days before the LIBOR Rate takes effect.

 

(e)                                  The Bank will have no obligation to accept
an election for a LIBOR Rate Portion if any of the following described events
has occurred and is continuing:

 

(i)                                     Dollar deposits in the principal amount,
and for periods equal to the interest period, of a LIBOR Rate Portion are not
available in the London inter-bank market; or

 

(ii)                                  the LIBOR Rate does not accurately reflect
the cost of a LIBOR Rate Portion.

 

(f)                                    Each prepayment of a LIBOR Rate Portion,
whether voluntary, by reason of acceleration or otherwise, will be accompanied
by the amount of accrued interest on the amount prepaid and a prepayment fee as
described below.  A “prepayment” is a payment of an amount on a date earlier
than the scheduled payment date for such amount as required by this Agreement.

 

(g)                                 The prepayment fee shall be in an amount
sufficient to compensate the Bank for any loss, cost or expense incurred by it
as a result of the prepayment, including any loss of anticipated profits and any
loss or expense arising from the liquidation or reemployment of funds obtained
by it to maintain such Portion or from fees payable to terminate the deposits
from which such funds were obtained.  The Borrower shall also pay any customary
administrative fees charged by the Bank in connection with the foregoing.  For
purposes of this paragraph, the Bank shall be deemed to have funded each Portion
by a matching deposit or other borrowing in the applicable interbank market,
whether or not such Portion was in fact so funded.

 

2.8                                 IBOR Rate.  The election of IBOR Rates shall
be subject to the following terms and requirements:

 

(a)                                  The interest period during which the IBOR
Rate will be in effect will be no shorter than 7 days and no longer than 90
days.  The last day of the interest period will be determined by the Bank using
the practices of the offshore dollar inter-bank market.

 

(b)                                 Each IBOR Rate Portion will be for an amount
not less than One Million Dollars ($1,000,000.00).

 

(c)                                  The “IBOR Rate” means the interest rate
determined by the following formula, rounded upward to the nearest 1/100 of one
percent.  (All amounts in the calculation will be determined by the Bank as of
the first day of the interest period.)

 

IBOR Rate =

 

IBOR Base Rate

 

 

 

 

(1.00 - Reserve Percentage)

 

Where,

 

(i)                                     “IBOR Base Rate” means the interest rate
at which the Bank’s Grand Cayman Banking Center, Grand Cayman, British West
Indies, would offer U.S. dollar deposits for the applicable interest period to
other major banks in the offshore dollar inter-bank market.

 

(ii)                                  “Reserve Percentage” means the total of
the maximum reserve percentages for determining the reserves to be maintained by
member banks of the Federal Reserve System for Eurocurrency Liabilities, as
defined in Federal Reserve Board Regulation D, rounded upward to the nearest
1/100 of one percent.  The percentage will be expressed as a decimal, and will
include, but not be limited to, marginal, emergency, supplemental, special, and
other reserve percentages.

 

(d)                                 The Bank will have no obligation to accept
an election for an IBOR Rate Portion if any of the following described events
has occurred and is continuing:

 

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(i)                                     Dollar deposits in the principal amount,
and for periods equal to the interest period, of an IBOR Rate Portion are not
available in the offshore dollar inter-bank market; or

 

(ii)                                  the IBOR Rate does not accurately reflect
the cost of an IBOR Rate Portion.

 

(e)                                  Each prepayment of an IBOR Rate Portion,
whether voluntary, by reason of acceleration or otherwise, will be accompanied
by the amount of accrued interest on the amount prepaid, and a prepayment fee as
described below.  A “prepayment” is a payment of an amount on a date earlier
than the scheduled payment date for such amount as required by this Agreement.

 

(f)                                    The prepayment fee shall be in an amount
sufficient to compensate the Bank for any loss, cost or expense incurred by it
as a result of the prepayment, including any loss of anticipated profits and any
loss or expense arising from the liquidation or reemployment of funds obtained
by it to maintain such Portion or from fees payable to terminate the deposits
from which such funds were obtained.  The Borrower shall also pay any customary
administrative fees charged by the Bank in connection with the foregoing.  For
purposes of this paragraph, the Bank shall be deemed to have funded each Portion
by a matching deposit or other borrowing in the applicable interbank market,
whether or not such Portion was in fact so funded.

 

2.9                                 Applicable Margin.  The Applicable Margin
shall be the following amounts per annum, based upon the Leverage Ratio (as
defined in the “Covenants” section of this Agreement) on a rolling four quarter
basis, as set forth in the most recent compliance certificate received by the
Bank as required in the Covenants section:

 

 

 

 

 

Applicable Margin
(in basis points per annum)

 

Pricing
Level

 

Leverage Ratio

 

Offshore
Applicable Margin

 

Prime Rate
Applicable Margin

 

1

 

>2.00x

 

325 bps

 

50 bps

 

2

 

>1.50x but <2.00x

 

295 bps

 

25 bps

 

3

 

>1.00x but <1.50x

 

265 bps

 

0 bps

 

4

 

<1.00x

 

235 bps

 

0 bps

 

 

The Applicable Margin shall be in effect from the date the most recent
compliance certificate is received by the Bank until the date the next
compliance certificate is received; provided, however, that if the Borrower
fails to timely deliver the next compliance certificate, the Applicable Margin
from the date such compliance certificate was due until the date such compliance
certificate is received by the Bank shall be the highest pricing level set forth
above.

 

Notwithstanding the foregoing, until the Bank receives the compliance
certificate as of June 30, 2003, the Applicable Margin shall be as indicated for
pricing level 1.  Thereafter, until the Bank receives the compliance certificate
as of September 30, 2003, the Applicable Margin shall be as specified for the
Leverage Ratio actually achieved or for pricing level 3, whichever results in
the greatest Applicable Margin.  Thereafter, the Applicable Margin shall reflect
the Leverage Ratio actually achieved.

 

3.                                       FEES AND EXPENSES

 

3.1                                 Fees.

 

(a)                                  Loan Fee.

 

(i)                                     The Borrower agrees to pay a loan fee on
Facility No. 1 in the amount of Ten Thousand Dollars ($10,000.00).  This fee is
due on the date of this Agreement.

 

(ii)                                  The Borrower agrees to pay a loan fee on
Facility No. 2 in the amount of Fifty Six Thousand Two-Hundred Fifty Dollars
($56,250.00).  This fee is due on the date of this Agreement.

 

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(b)                                 Waiver Fee.  If the Bank, at its discretion,
agrees to waive or amend any terms of this Agreement, the Borrower will, at the
Bank’s option, pay the Bank a fee for each waiver or amendment in an amount
advised by the Bank at the time the Borrower requests the waiver or amendment. 
Nothing in this paragraph shall imply that the Bank is obligated to agree to any
waiver or amendment requested by the Borrower.  The Bank may impose additional
requirements as a condition to any waiver or amendment.

 

(c)                                  Late Fee.  To the extent permitted by law,
the Borrower agrees to pay a late fee in an amount not to exceed four percent
(4%) of any payment that is more than fifteen (15) days late.  The imposition
and payment of a late fee shall not constitute a waiver of the Bank’s rights
with respect to the default.

 

(d)                                 Unused Commitment Fee.  The Borrower agrees
to pay a fee on any difference between the Facility No. 1 Commitment and the
amount of credit it actually uses, determined by the average of the daily amount
of credit outstanding during the specified period.  The fee will be calculated
at 0.35% per year.  The calculation of credit outstanding shall include the
undrawn amount of letters of credit.  This fee shall be paid quarterly in
arrears.

 

3.2                                 Expenses.  The Borrower agrees to
immediately repay the Bank for expenses that include, but are not limited to,
filing, recording and search fees, appraisal fees, title report fees, and
documentation fees.

 

3.3                                 Reimbursement Costs.

 

(a)                                  The Borrower agrees to reimburse the Bank
for any expenses it incurs in the preparation of this Agreement and any
agreement or instrument required by this Agreement.  Expenses include, but are
not limited to, reasonable attorneys’ fees, including any allocated costs of the
Bank’s in-house counsel to the extent permitted by applicable law.

 

(b)                                 The Borrower agrees to reimburse the Bank
for the cost of periodic field examinations of the Borrower’s books, records and
collateral, and appraisals of the collateral, at such intervals as the Bank may
reasonably require, not to exceed one per year while loan is not in default. 
The actions described in this paragraph may be performed by employees of the
Bank or by independent appraisers.

 

4.                                       COLLATERAL

 

4.1                                 Personal Property.  The Borrower’s
obligations to the Bank under this Agreement will be secured by personal
property the Borrower now owns or will own in the future as listed below.  The
collateral is further defined in security agreement(s) executed by the
Borrower.  In addition, all personal property collateral securing this Agreement
shall also secure all other present and future obligations of the Borrower (or,
if there is more than one Borrower, any one of them) to the Bank (excluding any
consumer credit covered by the federal Truth in Lending law, unless the Borrower
has otherwise agreed in writing or received written notice thereof).  All
personal property collateral securing any other present or future obligations of
the Borrower (or, if there is more than one Borrower, any one of them) to the
Bank shall also secure this Agreement.

 

(a)                                  Machinery and Equipment.

 

(b)                                 Inventory.

 

(c)                                  Receivables.

 

(d)                                 Stock and other securities as follows:  100%
of the shares of stock or other equity interests in TRM Copy Centers (USA)
Corporation, 100% of the shares of stock or other equity interests in TRM ATM
Corporation, and 65% of the shares or other equity interests of TRM (ATM) Ltd.

 

Regulation U of the Board of Governors of the Federal Reserve System places
certain restrictions on loans secured by margin stock (as defined in the
Regulation).  The Bank and the Borrower

 

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shall comply with Regulation U.  If any of the collateral is margin stock, the
Borrower shall provide to the Bank a Form U-1 Purpose Statement.

 

(e)                                  Patents, trademarks and other general
intangibles.

 

4.2                                 Lent Collateral.  The Borrower’s obligation
to the Bank under this agreement will be secured by personal property now owned
or owned in the future by TRM Copy Centers (USA) Corporation and TRM ATM
Corporation as listed below.  The collateral is further defined in security
agreements executed by such corporations.

 

(a)                                  Machinery and Equipment.

 

(b)                                 Inventory.

 

(c)                                  Receivables.

 

(d)                                 Patents, trademarks and other general
intangibles.

 

(e)                                  Applicable to TRM Copy Centers (USA)
Corporation only, 65% of the shares of stock or other equity interests in TRM
Copy Centres (Canada) Ltd. and TRM Copy Centres (U.K.) Ltd. The foregoing are
called “Material Foreign Subsidiaries.”

 

4.3                                 Subsidiary Guaranties.  The Borrower’s
obligations to the Bank under this Agreement will be guaranteed by TRM Copy
Centers (USA) Corporation and TRM ATM Corporation.

The foregoing are called “Guarantors.”

 

5.                                       DISBURSEMENTS, PAYMENTS AND COSTS

 

5.1                                 Disbursements and Payments.

 

(a)                                  Each payment by the Borrower will be made
in immediately available funds by direct debit to a deposit account as specified
below or by mail to the address shown on the Borrower’s statement or at one of
the Bank’s banking centers in the United States.

 

(b)                                 Each disbursement by the Bank and each
payment by the Borrower will be evidenced by records kept by the Bank.  In
addition, the Bank may, at its discretion, require the Borrower to sign one or
more promissory notes.

 

5.2                                 Telephone and Telefax Authorization.

 

The Bank may honor telephone or telefax instructions for advances or repayments
or for the designation of optional interest rates and telefax requests for the
issuance of letters of credit given, or purported to be given, by any one of the
individuals authorized to sign loan agreements on behalf of the Borrower, or any
other individual designated by any one of such authorized signers.

 

(a)                                  Advances will be deposited in and
repayments will be withdrawn from account number 28011-01047 owned by Borrower,
or such other of the Borrower’s accounts with the Bank as designated in writing
by the Borrower.

 

(b)                                 The Borrower will indemnify and hold the
Bank harmless from all liability, loss, and costs in connection with any act
resulting from telephone or telefax instructions the Bank reasonably believes
are made by any individual authorized by the Borrower to give such
instructions.  This paragraph will survive this Agreement’s termination, and
will benefit the Bank and its officers, employees, and agents.

 

5.3                                 Direct Debit (Pre-Billing).

 

(a)                                  The Borrower agrees that the Bank will
debit deposit account number 28011-01047 owned by Borrower, or such other of the
Borrower’s accounts with the Bank as designated in writing by the

 

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Borrower (the “Designated Account”) on the date each payment of principal and
interest and any fees from the Borrower becomes due (the “Due Date”).

 

(b)                                 Prior to each Due Date, the Bank will mail
to the Borrower a statement of the amounts that will be due on that Due Date
(the “Billed Amount”).  The bill will be mailed a specified number of calendar
days prior to the Due Date, which number of days will be mutually agreed from
time to time by the Bank and the Borrower.  The calculations in the bill will be
made on the assumption that no new extensions of credit or payments will be made
between the date of the billing statement and the Due Date, and that there will
be no changes in the applicable interest rate.

 

(c)                                  The Bank will debit the Designated Account
for the Billed Amount, regardless of the actual amount due on that date (the
“Accrued Amount”).  If the Billed Amount debited to the Designated Account
differs from the Accrued Amount, the discrepancy will be treated as follows:

 

(i)                                     If the Billed Amount is less than the
Accrued Amount, the Billed Amount for the following Due Date will be increased
by the amount of the discrepancy.  The Borrower will not be in default by reason
of any such discrepancy.

 

(ii)                                  If the Billed Amount is more than the
Accrued Amount, the Billed Amount for the following Due Date will be decreased
by the amount of the discrepancy.

 

Regardless of any such discrepancy, interest will continue to accrue based on
the actual amount of principal outstanding without compounding.  The Bank will
not pay the Borrower interest on any overpayment.

 

(d)                                 The Borrower will maintain sufficient funds
in the Designated Account to cover each debit.  If there are insufficient funds
in the Designated Account on the date the Bank enters any debit authorized by
this Agreement, the Bank may reverse the debit.

 

5.4                                 Banking Days.  Unless otherwise provided in
this Agreement, a banking day is a day other than a Saturday, Sunday or other
day on which commercial banks are authorized to close, or are in fact closed, in
the state where the Bank’s lending office is located, and, if such day relates
to amounts bearing interest at an offshore rate (if any), means any such day on
which dealings in dollar deposits are conducted among banks in the offshore
dollar interbank market.  All payments and disbursements which would be due on a
day which is not a banking day will be due on the next banking day.  All
payments received on a day which is not a banking day will be applied to the
credit on the next banking day.

 

5.5                                 Interest Calculation.  Except as otherwise
stated in this Agreement, all interest and fees, if any, will be computed on the
basis of a 360-day year and the actual number of days elapsed.  This results in
more interest or a higher fee than if a 365-day year is used.  Installments of
principal which are not paid when due under this Agreement shall continue to
bear interest until paid.

 

5.6                                 Default Rate.  Upon the occurrence of any
default under this Agreement, all amounts outstanding under this Agreement,
including any interest, fees, or costs which are not paid when due, will at the
option of the Bank bear interest at a rate which is 4.0 percentage point(s)
higher than the rate of interest otherwise provided under this Agreement.  This
may result in compounding of interest.  This will not constitute a waiver of any
default.

 

6.                                       CONDITIONS

 

The Bank must receive the following items, in form and content acceptable to the
Bank, before it is required to extend any credit to the Borrower under this
Agreement:

 

6.1                                 Conditions to First Extension of Credit. 
Before the first extension of credit:

 

(a)                                  Authorizations.  If any Borrower or any
guarantor is anything other than a natural person, evidence that the execution,
delivery and performance by such Borrower and/or such guarantor of this
Agreement and any instrument or agreement required under this Agreement have
been duly authorized.

 

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(b)                                 Governing Documents.  A copy of the
Borrower’s organizational documents.

 

(c)                                  Guaranties.  Guaranties signed by TRM Copy
Centers (USA) Corporation and TRM ATM Corporation.

 

(d)                                 Security Agreements.  (i) Original security
agreements signed by Borrower, TRM ATM Corporation and by TRM Copy Centers (USA)
Corporation, (ii) original pledge agreements signed by Borrower and TRM Copy
Centers (USA) Corporation covering all of the equity securities of the
Guarantors, (iii) original pledge agreements signed by TRM Copy Centers (USA)
Corporation covering sixty-five percent (65%) of the equity securities of the
Material Foreign Subsidiaries, and (iv) such assignments, financing statements,
fixture filings and delivery of pledged securities indorsed in blank, which the
Bank requires in connection with such security agreements and pledge agreement,
all in form and substance satisfactory to Bank.

 

(e)                                  Perfection and Evidence of Priority.
Financing statements and fixture filings (and any collateral in which the Bank
requires a possessory security interest), together with evidence that the
security interests and liens in favor of the Bank are valid, enforceable, and
prior to all others’ rights and interests, except those the Bank consents to in
writing.

 

(f)                                    Payment of Fees.  Payment of all accrued
and unpaid expenses incurred by the Bank as required by the paragraph entitled
“Reimbursement Costs.”

 

(g)                                 Insurance.  Evidence of insurance coverage,
as required in the “Covenants” section of this Agreement.

 

(h)                                 Legal Opinion.  Written opinions from the
Borrower’s legal counsel, covering such matters as the Bank may require.  The
legal counsel and the terms of the opinion must be acceptable to the Bank.

 

(i)                                     Good Standing.  Certificates of good
standing or existence for the Borrower and each Guarantor from its state or
country of formation.

 

(j)                                     Other Items.  Any other items that the
Bank reasonably requires.

 

7.                                       REPRESENTATIONS AND WARRANTIES

 

When the Borrower signs this Agreement, and until the Bank is repaid in full,
the Borrower makes the following representations and warranties.  Each request
for an extension of credit constitutes a renewal of these representations and
warranties as of the date of the request:

 

7.1                                 Formation.  If any Borrower is anything
other than a natural person, it is duly formed and existing under the laws of
the state where organized.

 

7.2                                 Authorization.  This Agreement, and any
instrument or agreement required hereunder, are within the Borrower’s powers,
have been duly authorized, and do not conflict with any of its organizational
papers.

 

7.3                                 Enforceable Agreement.  This Agreement is a
legal, valid and binding agreement of the Borrower, enforceable against the
Borrower in accordance with its terms, and any instrument or agreement required
hereunder, when executed and delivered, will be similarly legal, valid, binding
and enforceable.

 

7.4                                 Good Standing.  In each state in which the
Borrower does business, it is properly licensed, in good standing, and, where
required, in compliance with fictitious name statutes, except where failure to
do any of the foregoing is not reasonably likely to result in a material adverse
impact to the Borrower or the collateral.

 

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7.5                                 No Conflicts.  This Agreement does not
conflict with any law, agreement, or obligation by which the Borrower is bound,
except where such conflict would not result in a material adverse impact to the
Borrower or the collateral.

 

7.6                                 Financial Information.  All financial and
other information that has been or will be supplied to the Bank is sufficiently
complete to fairly present in all material respects the Borrower’s (and any
guarantor’s) financial condition, including all material contingent
liabilities.  Since the date of the most recent financial statement provided to
the Bank, there has been no material adverse change in the business condition
(financial or otherwise), operations, properties or prospects of the Borrower
(or any guarantor).  If any Borrower is comprised of the trustees of a trust,
the foregoing representations shall also pertain to the trustor(s) of the trust.

 

7.7                                 Lawsuits.  There is no lawsuit, tax claim or
other dispute pending or, to Borrower’s knowledge, threatened against the
Borrower which, if lost, would impair the Borrower’s financial condition or
ability to repay the loan, except as have been disclosed in writing to the Bank.

 

7.8                                 Collateral.  All collateral required in this
Agreement is owned by the grantor of the security interest free of any title
defects or any liens or interests of others, except those disclosed on
Schedule 7.8 attached.

 

7.9                                 Permits, Franchises.  The Borrower possesses
all permits, memberships, franchises, contracts and licenses required and all
trademark rights, trade name rights, patent rights and fictitious name rights
necessary to enable it to conduct the business in which it is now engaged,
except where such failure would not result in a material adverse impact to the
Borrower or the collateral.

 

7.10                           Other Obligations.  The Borrower is not in
default on any material obligation for borrowed money, any material purchase
money obligation or any other material lease, commitment, contract, instrument
or obligation, except as have been disclosed in writing to the Bank.

 

7.11                           Tax Matters.  The Borrower has no knowledge of
any pending material assessments or material adjustments of its income tax for
any year and all taxes due have been paid, except as have been disclosed in
writing to the Bank.

 

7.12                           No Event of Default.  There is no event which is,
or with notice or lapse of time or both would be, a default under this
Agreement.

 

7.13                           Insurance.  The Borrower has obtained, and
maintained in effect, the insurance coverage required in the “Covenants” section
of this Agreement.

 

7.14                           Location of Borrower.  Borrower’s place of
business (or, if any Borrower has more than one place of business, its chief
executive office) is located at the address listed under the Borrower’s
signature on this Agreement. Borrower and each Guarantor is an Oregon
corporation.

 

7.15                           Tax Shelter Regulations.  Borrower does not
intend to treat the loans and/or letters of credit as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4).  In
the event Borrower determines to take any action inconsistent with such
intention, it will promptly notify Bank.  If Borrower so notifies the Bank,
Borrower acknowledges that the Bank may treat the loans and/or letters of credit
as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and the Bank will maintain the lists and other records
required by such Treasury Regulation.

 

8.                                       COVENANTS

 

The Borrower agrees, so long as credit is available under this Agreement and
until the Bank is repaid in full:

 

8.1                                 Use of Proceeds.

 

(a)                                  To use the proceeds of Facility No. 1 as
described in Section 10.11 and for general business purposes.

 

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(b)                                 To use the proceeds of Facility No. 2 as
described in Section 10.11 and for general business purposes.

 

8.2                                 Financial Information.  To provide the
following financial information and statements in form and scope reasonably
acceptable to the Bank, and such additional information as requested by the Bank
from time to time:

 

(a)                                  Within 120 days of the fiscal year end, the
annual financial statements of Borrower, certified and dated by an authorized
financial officer.  These financial statements must be audited (with an opinion
satisfactory to the Bank) by a Certified Public Accountant acceptable to the
Bank.  The statements shall be prepared on a consolidated basis.

 

(b)                                 Copies of the Form 10-K Annual Report for
Borrower within 120 days of Borrower’s fiscal year end.

 

(c)                                  Within 30 days of the period’s end, monthly
financial statements of Borrower, certified and dated by an authorized financial
officer.  The statements shall be prepared on a consolidated basis and will also
include consolidating and/or divisional financial statements.

 

(d)                                 Copies of the Form 10-Q Quarterly Report for
Borrower within 45 days of quarter end.

 

(e)                                  Financial projections for the subsequent
two fiscal years, specifying the assumptions used in creating the projections. 
The projections shall be provided to the Bank no less often than 60 days after
the end of each fiscal year.

 

(f)                                    Within the period(s) provided in (a) and
(d) above, a compliance certificate of the Borrower signed by an authorized
financial officer of the Borrower setting forth (i) the information and
computations (in sufficient detail) to establish that the Borrower is in
compliance with all financial covenants at the end of the period covered by the
financial statements then being furnished and (ii) whether there existed as of
the date of such financial statements and whether there exists as of the date of
the certificate, any default under this Agreement and, if any such default
exists, specifying the nature thereof and the action the Borrower is taking and
proposes to take with respect thereto.

 

(g)                                 If Borrower notifies the Bank of any
intention to treat loans and/or letters of credit as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4), a
duly completed copy of IRS Form 8886 or any successor form.

 

8.3                                 Minimum Tangible Net Worth.  To maintain on
a consolidated basis Tangible Net Worth equal to at least the sum of the
following:

 

(a)                                  Forty Million Dollars ($40,000,000.00);
plus

 

(b)                                 the sum of 50% of net income after income
taxes (without subtracting losses) earned in each quarterly accounting period
commencing after March 31, 2003; plus

 

(c)                                  75% of net proceeds from any equity
securities issued after the date of this Agreement; plus

 

(d)                                 any increase in stockholders’ equity
resulting from the conversion of debt securities to equity securities after the
date of this Agreement.

 

“Tangible Net Worth” means the value of total assets (including leaseholds and
leasehold improvements and reserves against assets but excluding goodwill,
patents, trademarks, trade names, organization expense, unamortized debt
discount and expense, capitalized or deferred research and development costs,
deferred marketing expenses, and other like intangibles, and monies due from
affiliates, officers, directors, employees, shareholders, members or managers)
less total liabilities, including but not limited to accrued and deferred income
taxes.

 

Compliance with this covenant will be determined at the end of each quarter.

 

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8.4                                 Minimum Fixed Charge Coverage Ratio.  To
maintain on a consolidated basis a Fixed Charge Coverage Ratio of at least
1.50:1.00.

 

“Fixed Charge Coverage Ratio” means the ratio of (a) the sum of EBITDA, less
taxes, dividends, and unfunded capital expenditures to (b) the sum of current
portion of long-term debt, plus interest expense. In computing EBITDA for the
purpose of this and the following covenant, commercial paper/cash securitization
expense will be treated as an operating expense and not treated as interest. 
The following one-time additions to EBITDA relating to non-cash charges taken in
the fourth quarter of 2002 shall be made in calculating EBITDA for any period in
which such additions are applicable:

 

(a)                                  Mita inventory adjustment, $1,930,258;

 

(b)                                 Redundancy accrual, $686,211;

 

(c)                                  Litigation settlement reserve, $1,788,000;

 

(d)                                 Vehicle lease provision, $400,000.

 

This ratio will be calculated at the end of each fiscal quarter, using the
results of that quarter and the 3 immediately preceding fiscal quarters.

 

8.5                                 Maximum Leverage Ratio.  To maintain on a
consolidated basis a Leverage Ratio of less than 2.25:1.0 from the date of this
Agreement through September 30, 2003 and less than 2.00:1.0 thereafter.

 

“Leverage Ratio” means the ratio of Funded Debt to EBITDA.

 

“Funded Debt” means all outstanding indebtedness for borrowed money and other
interest-bearing indebtedness, including current and long term indebtedness.

 

This ratio will be calculated at the end of each fiscal quarter, using the
results of that quarter and the 3 immediately preceding fiscal quarters.

 

8.6                                 Accounts Payable Days.  To maintain at the
end of each quarter, on a consolidated basis, Accounts Payable Days at or below
50 days.  “Accounts Payable Days” is the number calculated by dividing trade
accounts payable outstanding at the end of any quarter by the cost of goods sold
for the 12 month period ended at the end of such quarter multiplied by 365. 
Depreciation shall not be included in cost of goods sold for purposes of this
calculation.

 

8.7                                 Out of Facility No. 1 Period.  To reduce the
amount of advances outstanding under Facility No. 1 to 0 for a period of at
least 30 consecutive days in each Line-Year. “Line-Year” means the period
between the date of this Agreement and the date one year thereafter and each
subsequent one-year period (if any).  For purposes of this Section, “Advances”
does not include undrawn amount of outstanding letters of credit.

 

8.8                                 Other Debts.  Not to have outstanding or
incur any direct or contingent liabilities or lease obligations (other than
those to the Bank), or become liable for the liabilities of others (or to permit
any subsidiary of Borrower  to do so) without the Bank’s written consent.  This
does not prohibit:

 

(a)                                  Acquiring goods, supplies, or merchandise
on normal trade credit.

 

(b)                                 Endorsing negotiable instruments received in
the usual course of business.

 

(c)                                  Obtaining surety bonds in the usual course
of business.

 

(d)                                 Liabilities, lines of credit and leases in
existence on the date of this Agreement disclosed in writing to the Bank.

 

(e)                                  Liabilities for the purchase or lease of
equipment if such purchase or lease is not restricted by the restriction on
capital expenditures set forth below.

 

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(f)                                    Unsecured liabilities not exceeding
$2,500,000 in any fiscal year.

 

8.9                                 Other Liens.  Not to create, assume, allow
or permit any security interest or lien (including judicial liens) on property
it now or later owns, or permit any subsidiary of Borrower to do so except:

 

(a)                                  Liens and security interests in favor of
the Bank.

 

(b)                                 Liens for taxes not yet due.

 

(c)                                  Liens outstanding on the date of this
Agreement disclosed in writing to the Bank.

 

(d)                                 Carrier’s, warehousemen’s, mechanics’,
materialmen’s or other like liens arising in the ordinary course of business,
which are not overdue for a period of more than 60 days, or which are being
contested in good faith and by appropriate proceedings, if adequate reserves
with respect thereto are maintained on the books of the applicable person.

 

(e)                                  Attachment, judgment or similar liens
arising in connection with litigation or other legal proceedings (and not
otherwise an Event of Default hereunder) in the ordinary course of business that
are currently being contested in good faith by appropriate proceedings, and for
which adequate reserves have been set aside.

 

(f)                                    Purchase money liens or security interest
in connection with the purchase or lease of equipment not restricted by the
restriction on capital expenditures set forth below.

 

8.10                           Maintenance of Assets.

 

(a)                                  Not to sell, assign, lease, transfer or
otherwise dispose of any part of the Borrower’s business or the Borrower’s
assets except in the ordinary course of the Borrower’s business, as in a sale of
copiers that are obsolete and have been fully depreciated, nor permit any of its
subsidiaries to do so.

 

(b)                                 Not to sell, assign, lease, transfer or
otherwise dispose of any assets for less than fair market value, or enter into
any agreement to do so nor permit any of its subsidiaries to do so.

 

(c)                                  Not to enter into any sale and leaseback
agreement covering any of its fixed assets nor permit any of its subsidiaries to
do so, unless proceeds from such transaction are used to reduce the outstanding
balance of Facility No. 2.

 

(d)                                 To maintain and preserve all rights,
privileges, and franchises the Borrower now has and cause its subsidiaries to do
so.

 

(e)                                  To make any repairs, renewals, or
replacements to keep the Borrower’s properties in good working condition and
cause its subsidiaries to do so.

 

8.11                           Investments.  Not to have any existing, or make
any new,  investments in any individual or entity, or make any capital
contributions or other transfers of assets to any individual or entity, or
permit any of its subsidiaries to do so, without the Bank’s permission, which
permission shall not be unreasonably withheld, except for:

 

(a)                                  Existing investments disclosed to the Bank
in writing.

 

(b)                                 Investments in the Borrower’s current
subsidiaries.

 

(c)                                  Investments in any of the following:

 

(i)                                     certificates of deposit;

 

(ii)                                  U.S. treasury bills and other obligations
of the federal government;

 

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8.12                           Loans.  Not to make any loans, advances or other
extensions of credit to any individual or entity, or permit any of its
subsidiaries to do so except for:

 

(a)                                  Existing extensions of credit disclosed to
the Bank in writing.

 

(b)                                 Extensions of credit to the Borrower’s
current subsidiaries.

 

(c)                                  Extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or lease of goods
or services in the ordinary course of business to non-affiliated entities.

 

8.13                           Dividends-Stock Repurchases.  Not to declare or
pay any dividends on any of its capital stock except dividends payable in
capital stock of Borrower, and not to purchase or redeem any of its capital
stock in excess of $1,500,000 in any fiscal year.

 

8.14                           Additional Negative Covenants.  Not to, without
the Bank’s written consent, do any of the following things or permit any of
Borrower’s subsidiaries to do such things:

 

(a)                                  engage in any material business activities
substantially different from the Borrower’s, Guarantor’s or Material Foreign
Subsidiary’s present business.

 

(b)                                 liquidate or dissolve the Borrower’s,
Guarantor’s or Material Foreign Subsidiary’s business, except that a Guarantor
or Material Foreign Subsidiary may liquidate if its assets are transferred to
Borrower or another Guarantor or Material Foreign Subsidiary.

 

(c)                                  enter into any consolidation, merger, or
other combination, or become a partner in a partnership, a member of a joint
venture, or a member of a limited liability company without written consent of
Bank.

 

(d)                                 sell, assign, lease, transfer or otherwise
dispose of any material part of the Borrower’s or any Guarantor’s or Material
Foreign Subsidiary’s business or the Borrower’s or any Guarantor’s or Material
Foreign Subsidiary’s assets except in the ordinary course of the Borrower’s or
Guarantor’s or Material Foreign Subsidiary’s business, and except that Borrower,
Guarantors and Material Foreign Subsidiaries may dispose of their presently
owned Savin liquid toner copy machines.

 

(e)                                  acquire or purchase a business or its
assets.

 

(f)                                    voluntarily suspend its business for more
than 7 days in any 30-day period.

 

(g)                                 pledge or mortgage of assets of Borrower or
any Guarantor or Material Foreign Subsidiary, except as permitted above.

 

(h)                                 except for loans or capital contributions
specifically permitted herein, transfer money or assets to TRM ATM Corporation
or any other affiliate whose business is utilizing ATM machines.

 

(i)                                     to expend or become obligated to expend
for capital expenditures more than the sum of $2,500,000 in fiscal year 2003 or
more than $5,000,000 in any fiscal year thereafter.

 

8.15                           Notices to Bank.  To promptly notify the Bank in
writing of:

 

(a)                                  Any lawsuit over One Million Dollars
($1,000,000.00) against the Borrower (or any guarantor or, if any Borrower is
comprised of the trustees of a trust, any trustor).

 

(b)                                 Any substantial dispute between any
governmental authority and the Borrower (or any guarantor or, if any Borrower is
comprised of the trustees of a trust, any trustor).

 

(c)                                  Any event of default under this Agreement,
or any event which, with notice or lapse of time or both, would constitute an
event of default.

 

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(d)                                 Any material adverse change in the
Borrower’s (or any guarantor’s, or, if any Borrower is comprised of the trustees
of a trust, any trustor’s) business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the credit.

 

(e)                                  Any change in the Borrower’s name, legal
structure, place of business, or chief executive office if the Borrower has more
than one place of business.

 

(f)                                    Any actual material contingent
liabilities of any Borrower (or any guarantor or, if any Borrower is comprised
of the trustees of a trust, any trustor), and any such material contingent
liabilities which are reasonably foreseeable.

 

8.16                           Insurance.

 

(a)                                  General Business Insurance.  To maintain
insurance as is usual for the business it is in.

 

(b)                                 Insurance Covering Collateral.  To maintain
all risk property damage insurance policies covering the tangible property
comprising the collateral.  Each insurance policy must be in an amount
reasonably acceptable to the Bank.  The insurance must be issued by an insurance
company reasonably acceptable to the Bank and must include a lender’s loss
payable endorsement in favor of the Bank in a form reasonably acceptable to the
Bank.

 

(c)                                  Business Interruption Insurance.  To
maintain a business interruption insurance policy in an amount, and with an
insurer acceptable to the Bank, and with the Bank named as an additional loss
payee.

 

(d)                                 Flood Insurance.  If any improved real
property collateral is located in a designated flood hazard area, or becomes
located in a designated flood hazard area after the date of this Agreement as a
result of any re-mapping of flood insurance maps by the Federal Emergency
Management Agency, the Borrower will be required to maintain flood insurance on
the real property and on any tangible personal property collateral located on
the real property.

 

(e)                                  Evidence of Insurance.  Upon the request of
the Bank, to deliver to the Bank a copy of each insurance policy, or, if
permitted by the Bank, a certificate of insurance listing all insurance in
force.

 

8.17                           Compliance with Laws.  To comply in all material
respects with the laws (including any fictitious name statute), regulations, and
orders of any government body with authority over the Borrower’s business.

 

8.18                           ERISA Plans.  Promptly during each year, to pay
and cause any subsidiaries to pay contributions adequate to meet at least the
minimum funding standards under ERISA with respect to each and every Plan; file
each annual report required to be filed pursuant to ERISA in connection with
each Plan for each year; and notify the Bank within ten (10) days of the
occurrence of any Reportable Event that might constitute grounds for termination
of any capital Plan by the Pension Benefit Guaranty Corporation or for the
appointment by the appropriate United States District Court of a trustee to
administer any Plan.  “ERISA” means the Employee Retirement Income Security Act
of 1974, as amended from time to time.  Capitalized terms in this paragraph
shall have the meanings defined within ERISA.

 

8.19                           Books and Records.  To maintain adequate books
and records.

 

8.20                           Audits.  To allow the Bank and its agents to
inspect the Borrower’s properties and examine, audit, and make copies of books
and records at any reasonable time.  If any of the Borrower’s properties, books
or records are in the possession of a third party, the Borrower authorizes that
third party to permit the Bank or its agents to have access to perform
inspections or audits and to respond to the Bank’s requests for information
concerning such properties, books and records.

 

8.21                           Perfection of Liens.  To help the Bank perfect
and protect its security interests and liens, and reimburse it for related costs
it incurs to protect its security interests and liens.

 

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8.22                           Cooperation.  To take any action reasonably
requested by the Bank to carry out the intent of this Agreement.

 

9.                                       DEFAULT AND REMEDIES

 

If any of the following events of default occurs, the Bank may do one or more of
the following: declare the Borrower in default, stop making any additional
credit available to the Borrower, and require the Borrower to repay its entire
debt immediately and without prior notice.  In addition, if any event of default
occurs, the Bank shall have all rights, powers and remedies available under any
instruments and agreements required by or executed in connection with this
Agreement, as well as all rights and remedies available at law or in equity.  If
an event of default occurs under the paragraph entitled  “Bankruptcy,” below,
with respect to any Borrower, then the entire debt outstanding under this
Agreement will automatically be due immediately.

 

9.1                                 Failure to Pay.  The Borrower fails to make
a payment under this Agreement when due other than an interest payment or a
payment of fees or expenses.

 

9.2                                 Failure to Pay Interest.  The Borrower fails
to make an interest payment or a payment of fees or expenses under this
Agreement within three calendar days of the date when due.

 

9.3                                 Other Bank Agreements.  The Borrower (or any
Obligor) or any of the Borrower’s subsidiaries fails to meet the conditions of,
or fails to perform any obligation under any other agreement the Borrower (or
any Obligor) or any of the Borrower’s subsidiaries has with the Bank or any
affiliate of the Bank.  If in the Bank’s opinion the breach is capable of being
remedied, the breach will not be considered an Event of Default under this
Agreement for a period of 30 days; provided however, the Bank will not be
obligated to extend any additional credit to the Borrower during such 30-day
period.  For purposes of this Agreement, “Obligor” shall mean any Guarantor, any
party pledging collateral to the Bank.

 

9.4                                 Cross-default.  Any default occurs under any
agreement in connection with any credit greater than One Million Dollars
($1,000,000.00) that the Borrower (or any Obligor) or any of the Borrower’s
subsidiaries has obtained from anyone other than Bank else or which the Borrower
(or any Obligor) or any of the Borrower’s subsidiaries has guaranteed, if the
default is not cured within 30 days; provided however, the Bank will not be
obligated to extend any additional credit to the Borrower during such 30-day
period.

 

9.5                                 False Information.  The Borrower or any
Obligor has given the Bank false or misleading information or representations.

 

9.6                                 Bankruptcy.  The Borrower, any Obligor, or
any general partner of the Borrower or of any Obligor files a bankruptcy
petition, a bankruptcy petition is filed against any of the foregoing parties,
or the Borrower, any Obligor, or any general partner of the Borrower or of any
Obligor makes a general assignment for the benefit of creditors.

 

9.7                                 Receivers.  A receiver or similar official
is appointed for a substantial portion of the Borrower’s or any Obligor’s
business, or the business is terminated, or, if any Obligor is anything other
than a natural person, such Obligor is liquidated or dissolved.

 

9.8                                 Lien Priority.  The Bank fails to have an
enforceable first lien (except for any prior liens to which the Bank has
consented in writing) on or security interest in any property given as security
for this Agreement (or any guaranty).

 

9.9                                 Judgments.  Any judgments or arbitration
awards are entered against the Borrower or any Obligor, or the Borrower or any
Obligor enters into any settlement agreements with respect to any litigation or
arbitration, in an aggregate amount of One Million Dollars ($1,000,000.00) or
more in excess of any insurance coverage, and such award or settlement is not
satisfied within 30 days after such settlement or the entry of such judgment or
award; provided, however, the Bank will not be obligated to extend any
additional credit to the Borrower during such 30-day period.

 

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9.10                           Material Adverse Change.  A material adverse
change occurs, or is reasonably likely to occur, in the Borrower’s (or any
Obligor’s) business condition (financial or otherwise), operations, properties
or prospects, or ability to repay the credit of the Borrower and its
subsidiaries as a whole.

 

9.11                           Government Action.  Any government authority
takes action that the Bank believes materially adversely affects the Borrower’s
or any Obligor’s financial condition or ability to repay.

 

9.12                           Default under Related Documents, Revocation of
Guaranty.  Any default occurs under any guaranty, subordination agreement,
security agreement, deed of trust, mortgage, or other document required by or
delivered in connection with this Agreement or any such document is no longer in
effect, or any Guarantor revokes or disavows its Guaranty or purports to do so.

 

9.13                           ERISA Plans.  Any one or more of the following
events occurs with respect to a Plan of the Borrower subject to Title IV of
ERISA, provided such event or events could reasonably be expected, in the
judgment of the Bank, to subject the Borrower to any tax, penalty or liability
(or any combination of the foregoing)  which, in the aggregate, could have a
material adverse effect on the financial condition of the Borrower:

 

(a)                                  A reportable event shall occur under
Section 4043(c) of ERISA with respect to a Plan.

 

(b)                                 Any Plan termination (or commencement of
proceedings to terminate a Plan) or the full or partial withdrawal from a Plan
by the Borrower or any ERISA Affiliate.

 

9.14                           Other Breach Under Agreement.  The Borrower fails
to meet the conditions of, or fails to perform any obligation under, any term of
this Agreement not specifically referred to in this Article.  This includes any
failure or anticipated failure by the Borrower to comply with any financial
covenants set forth in this Agreement, whether such failure is evidenced by
financial statements delivered to the Bank or is otherwise known to the Borrower
or the Bank.  If in the Bank’s opinion the breach is capable of being remedied,
the breach will not be considered an Event of Default under this Agreement for a
period of 30 days; provided however, the Bank will not be obligated to extend
any additional credit to the Borrower during such 30-day period.

 

9.15                           Loss of Access to Cash.  For a period of more
than two consecutive days the Borrower does not have access to cash to service
its ATM machines at the present level, regardless of what causes such loss of
access to cash.

 

10.                                 ENFORCING THIS AGREEMENT; MISCELLANEOUS

 

10.1                           GAAP.  Except as otherwise stated in this
Agreement, all financial information provided to the Bank and all financial
covenants will be made under generally accepted accounting principles,
consistently applied.

 

10.2                           Oregon Law.  This Agreement is governed by Oregon
law.

 

10.3                           Successors and Assigns.  This Agreement is
binding on the Borrower’s and the Bank’s successors and assignees.  The Borrower
agrees that it may not assign this Agreement without the Bank’s prior consent. 
The Bank may sell participations in or assign this loan, and may exchange
financial information about the Borrower with actual or potential participants
or assignees.  If a participation is sold or the loan is assigned, the purchaser
will have the right of set-off against the Borrower.

 

10.4                           Arbitration and Waiver of Jury Trial.

 

(a)                                  This paragraph concerns the resolution of
any controversies or claims between the parties, whether arising in contract,
tort or by statute, including but not limited to controversies or claims that
arise out of or relate to: (i) this agreement (including any renewals,
extensions or modifications); or (ii) any document related to this agreement
(collectively a “Claim”).  For the purposes of this arbitration provision only,
the term “parties” shall include any parent corporation, subsidiary or affiliate
of the Bank involved in the servicing, management or administration of any
obligation described or evidenced by this agreement.

 

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(b)                                 At the request of any party to this
agreement, any Claim shall be resolved by binding arbitration in accordance with
the Federal Arbitration Act (Title 9, U. S. Code) (the “Act”).  The Act will
apply even though this agreement provides that it is governed by the law of a
specified state.

 

(c)                                  Arbitration proceedings will be determined
in accordance with the Act, the applicable rules and procedures for the
arbitration of disputes of JAMS or any successor thereof (“JAMS”), and the terms
of this paragraph.  In the event of any inconsistency, the terms of this
paragraph shall control.

 

(d)                                 The arbitration shall be administered by
JAMS and conducted, unless otherwise required by law, in any U. S. state where
real or tangible personal property collateral for this credit is located or if
there is no such collateral, in the state specified in the governing law section
of this agreement.  All Claims shall be determined by one arbitrator; however,
if Claims exceed Five Million Dollars ($5,000,000), upon the request of any
party, the Claims shall be decided by three arbitrators.  All arbitration
hearings shall commence within ninety (90) days of the demand for arbitration
and close within ninety (90) days of commencement and the award of the
arbitrator(s) shall be issued within thirty (30) days of the close of the
hearing.  However, the arbitrator(s), upon a showing of good cause, may extend
the commencement of the hearing for up to an additional sixty (60) days.  The
arbitrator(s) shall provide a concise written statement of reasons for the
award.  The arbitration award may be submitted to any court having jurisdiction
to be confirmed and enforced.

 

(e)                                  The arbitrator(s) will have the authority
to decide whether any Claim is barred by the statute of limitations and, if so,
to dismiss the arbitration on that basis. For purposes of the application of the
statute of limitations, the service on JAMS under applicable JAMS rules of a
notice of Claim is the equivalent of the filing of a lawsuit.  Any dispute
concerning this arbitration provision or whether a Claim is arbitrable shall be
determined by the arbitrator(s).  The arbitrator(s) shall have the power to
award legal fees pursuant to the terms of this agreement.

 

(f)                                    This paragraph does not limit the right
of any party to: (i) exercise self-help remedies, such as but not limited to,
setoff; (ii) initiate judicial or non-judicial foreclosure against any real or
personal property collateral; (iii) exercise any judicial or power of sale
rights, or (iv) act in a court of law to obtain an interim remedy, such as but
not limited to, injunctive relief, writ of possession or appointment of a
receiver, or additional or supplementary remedies.

 

(g)                                 The filing of a court action is not intended
to constitute a waiver of the right of any party, including the suing party,
thereafter to require submittal of the Claim to arbitration.

 

(h)                                 BY AGREEING TO BINDING ARBITRATION, THE
PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM.  FURTHERMORE, WITHOUT INTENDING IN ANY WAY TO
LIMIT THIS AGREEMENT TO ARBITRATE, TO THE EXTENT ANY CLAIM IS NOT ARBITRATED,
THE PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF SUCH CLAIM.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR
THE PARTIES ENTERING INTO THIS AGREEMENT.

 

10.5                           Severability; Waivers.  If any part of this
Agreement is not enforceable, the rest of the Agreement may be enforced.  The
Bank retains all rights, even if it makes a loan after default.  If the Bank
waives a default, it may enforce a later default.  Any consent or waiver under
this Agreement must be in writing.

 

10.6                           Attorneys’ Fees.  The Borrower shall reimburse
the Bank for any reasonable costs and attorneys’ fees incurred by the Bank in
connection with the enforcement or preservation of any rights or remedies under
this Agreement and any other documents executed in connection with this
Agreement, and in connection with any amendment, waiver, “workout” or
restructuring under this Agreement.  In the event of a lawsuit or arbitration
proceeding, the prevailing party is entitled to recover costs and reasonable
attorneys’ fees incurred in connection with the lawsuit or arbitration
proceeding, as determined by the court or arbitrator.  In the event that any
case is commenced by or against the Borrower under the Bankruptcy Code (Title
11, United States Code) or any similar or successor statute, the Bank is
entitled to recover costs and reasonable attorneys’ fees incurred by the Bank
related to the preservation, protection,

 

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or enforcement of any rights of the Bank in such a case.  As used in this
paragraph, “attorneys’ fees” includes the allocated costs of the Bank’s in-house
counsel.

 

10.7                           Confidentiality.  Bank shall use any confidential
non-public information concerning Borrower and its subsidiaries that is
furnished to it by or on behalf of Borrower and its subsidiaries in connection
with this Agreement (collectively, “Confidential Information”) solely for the
purpose of evaluating and providing products and services to them, and
administering and enforcing this Agreement and related documents, and it will
hold the Confidential Information in confidence.  Notwithstanding the foregoing,
Bank may disclose Confidential Information to (i) any governmental agency or
regulatory body having or claiming to have authority to regulate or oversee any
aspect of the Bank’s business in connection with the exercise of such authority
or claimed authority; (ii) the extent necessary or appropriate to effect or
preserve Bank’s security or to enforce any right or remedy in connection with
any claims asserted by or against Bank; (iii) representatives whom it determines
need to know such information for the purposes set forth in this Section; and
(iv) any bank or financial institution or other entity to which Bank has
assigned or desires to assign an interest or participation in this Agreement or
the advances, provided that any such recipient of Confidential Information
agrees to keep such Confidential Information confidential as specified herein. 
For purposes hereof, the term “Confidential Information” shall not include
information that is in Bank’s possession prior to its being provided by or on
behalf of Borrower, and shall not include information which is or becomes
publicly available other than through a breach hereof by the Bank, or
information that becomes available to the Bank on a non-confidential basis. 
Notwithstanding anything herein to the contrary, “Confidential Information”
shall not include, and the Bank may disclose to any and all persons, without
limitation of any kind, any information with respect to the “tax treatment” and
“tax structure” (in each case, within the meaning of Treasury Regulation
Section 1.6011-4) of the transactions contemplated hereby and all materials of
any kind (including opinions or other tax analyses) that are provided to the
Bank relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment of tax structure of the transaction as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the loans, letters of credit and transactions contemplated hereby.

 

10.8                           One Agreement.  This Agreement and any related
security or other agreements required by this Agreement, collectively:

 

(a)                                  represent the sum of the understandings and
agreements between the Bank and the Borrower concerning this credit;

 

(b)                                 replace any prior oral or written agreements
between the Bank and the Borrower concerning this credit; and

 

(c)                                  are intended by the Bank and the Borrower
as the final, complete and exclusive statement of the terms agreed to by them.

 

In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.  Any reference in any
related document to a “promissory note” or a “note” executed by the Borrower and
dated as of the date of this Agreement shall be deemed to refer to this
Agreement, as now in effect or as hereafter amended, renewed, or restated.

 

10.9                           Indemnification.  The Borrower will indemnify and
hold the Bank harmless from any loss, liability, damages, judgments, and costs
of any kind relating to or arising directly or indirectly out of (a) this
Agreement or any document required hereunder, (b) any credit extended or
committed by the Bank to the Borrower hereunder, and (c) any litigation or
proceeding related to or arising out of this Agreement, any such document, or
any such credit.  This indemnity includes but is not limited to attorneys’ fees
(including the allocated cost of in-house counsel).  This indemnity extends to
the Bank, its parent, subsidiaries and all of their directors, officers,
employees, agents, successors, attorneys, and assigns.  This indemnity will
survive repayment of the Borrower’s obligations to the Bank.  All sums due to
the Bank hereunder shall be obligations of the Borrower, due and payable
immediately without demand.  The foregoing indemnity shall not, as to any
indemnitee, be available to the extent that such loss, liability, damages,
judgments or costs are determined by court of competent jurisdiction by final
and non-appealable judgment to have resulted from the gross negligence or
willful misconduct of such indemnitee.

 

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10.10                     Notices.  Unless otherwise provided in this Agreement
or in another agreement between the Bank and the Borrower, all notices required
under this Agreement shall be personally delivered or sent by first class mail,
postage prepaid, or by overnight courier, to the addresses on the signature page
of this Agreement, or sent by facsimile to the fax numbers listed on the
signature page, or to such other addresses as the Bank and the Borrower may
specify from time to time in writing.  Notices and other communications shall be
effective (i) if mailed, upon the earlier of receipt or five (5) days after
deposit in the U.S. mail, first class, postage prepaid, (ii) if telecopied, when
transmitted, or (iii) if hand-delivered, by courier or otherwise (including
telegram, lettergram or mailgram), when delivered.

 

10.11                     Existing Agreement.  This Agreement supersedes the
Third Amended and Restated Business Loan Agreement dated as of July 21, 2000, as
amended, and the proceeds of the Facilities described in this Agreement shall be
used to pay off all obligations under such Third Amended and Restated Business
Loan Agreement, except that any letters of credit issued pursuant thereto shall
be deemed issued pursuant to this Agreement and shall be controlled hereby.

 

10.12                     Headings.  Article and paragraph headings are for
reference only and shall not affect the interpretation or meaning of any
provisions of this Agreement.

 

10.13                     Counterparts.  This Agreement may be executed in as
many counterparts as necessary or convenient, and by the different parties on
separate counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
agreement.

 

 

10.14                 Oral Agreements.  UNDER OREGON LAW, MOST AGREEMENTS,
PROMISES AND COMMITMENTS MADE BY THE BANK AFTER OCTOBER 3, 1989, CONCERNING
LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN
WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE ENFORCEABLE.

 

This Agreement is executed as of the date stated at the top of the first page.

 

Bank of America, N.A.

TRM Corporation

 

 

 

 

By

/s/ Eric Eidler

 

By

/s/ Kenneth Lewis Tepper

 

 

 

Typed Name

Eric Eidler

 

Typed Name

Kenneth Lewis Tepper

 

 

 

Title

Senior Vice President

 

Title

President and Chief Executive Officer

 

 

 

Address where notices to
the Bank are to be sent:

Address where notices to
the Borrower are to be sent:

 

 

 

 

Oregon Commercial Banking #04614

5208 N.E. 122nd Avenue

121 S.W. Morrison Street, Suite 1700

Portland, OR 97230

Portland, OR 97204

 

 

 

Facsimile: (503) 275-1391

Telephone: (503) 257-8766

 

Facsimile: (800) 219-7805

 

 

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