exv10w1



 







EXHIBIT 10.1




FORBEARANCE AGREEMENT




     THIS FORBEARANCE AGREEMENT, dated as of March 28, 2006 (this “Agreement”), is entered
into among TRM Inventory Funding Trust (the “Borrower”), TRM ATM Corporation, in its
individual capacity (“TRM ATM”) and as Servicer (the “Servicer”), Autobahn Funding
Company LLC, as Lender (the “Lender), and DZ Bank AG, Deutsche Zentral-Genossenschaftsbank
Frankfurt am Main, as Administrative Agent (the “Administrative Agent”) and as Liquidity
Agent (the “Liquidity Agent”), and U.S. Bank National Association, as Collateral Agent (the
“Collateral Agent”). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Loan Agreement (as defined below).



RECITALS




     WHEREAS, the Borrower, TRM ATM, the Servicer, the Lender, the Administrative Agent, the
Liquidity Agent and the Collateral Agent entered into that certain Loan and Servicing Agreement
dated as of March 17, 2000 (as amended, modified, extended, renewed or replaced from time to time,
the “Loan Agreement”).



     WHEREAS, TRM Corporation and TRM (ATM) Limited (the “Credit Agreement Borrowers”),
certain guarantors party thereto, certain Lenders party thereto and Bank of America, N.A., as
administrative agent (the “Credit Agreement Agent”) have entered into a Forebearance
Agreement and Amendment (the “Credit Agreement Forebearance”) relating to certain defaults
and events of default which exist or will exist under the Credit Agreement dated as of November 19,
2004, as amended by the First Amendment and Waiver to Credit Agreement dated as of November 14,
2005 (as so amended and as further amended, modified, extended, renewed or replaced from time to
time, the “Credit Agreement”) arising from the Credit Agreement Borrowers’ failure to
comply with the financial covenants set forth in Section 8.11(b) and Section 8.11(c) of the Credit
Agreement as of the fiscal quarter ended December 31, 2005 (together with the related failure to
give notice thereof, if any, in the manner required by Section 7.03(a) of the Credit Agreement, the
“Existing Defaults”).



     WHEREAS, pursuant to the Credit Agreement Forebearance, the Credit Agreement Borrowers have
also indicated that (i) they expect to be unable to comply with the financial covenants set forth
in Section 8.11(b) and Section 8.11(c) of the Credit Agreement as of the fiscal quarter ending
March 31, 2006 and (ii) that the audited financial statements for the fiscal year ended December
31, 2005 to be delivered pursuant to Section 7.01(a) of the Credit Agreement may contain a “going
concern” or similar qualification (the “Anticipated Defaults” and, together with the
Existing Defaults, the “Acknowledged Events of Default”).



     WHEREAS, pursuant to Section 9.01(d) of the Loan Agreement, the Existing Defaults under the
Credit Agreement constitute an Event of Default under the Loan Agreement (the “Acknowledged
Loan Agreement Event of Default”).



     WHEREAS, the Borrower, TRM ATM and the Servicer (collectively, the “Loan Parties”)
have requested that the Administrative Agent, the Liquidity Agent and the Lender (i) forbear from
exercising certain rights and remedies arising from the Acknowledged Loan Agreement



 









 




Event of Default through and until June 15, 2006, and (ii) continue to make Borrowings
available to the Borrower until such date.




     WHEREAS, the Administrative Agent, the Liquidity Agent and the Lender have agreed to do so,
but only pursuant to the terms set forth herein.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:



AGREEMENT




     1.     Estoppel, Acknowledgement and Reaffirmation. As of March 28, 2006, the aggregate
outstanding principal amount of all Loans was $79,000,000, which amount constitutes a valid and
subsisting obligation of the Borrower to the Lender that is not subject to any credits, offsets,
defenses, claims, counterclaims or adjustments of any kind. The Loan Parties hereby acknowledge
their obligations under the respective Transaction Documents to which they are party and reaffirm
that each of the liens and security interests created and granted in or pursuant to the Transaction
Documents is valid and subsisting and that this Agreement shall in no manner impair or otherwise
adversely effect such liens and security interests.



     2.     Forbearance. Subject to the terms and conditions set forth herein, the
Administrative Agent, the Liquidity Agent and the Lender agree that they shall, during the
Forbearance Period (as defined below), forbear from exercising any and all rights or remedies
available to them as a result of the Acknowledged Loan Agreement Event of Default, but only to the
extent such rights or remedies arise exclusively as a result of the Acknowledged Loan Agreement
Event of Default; provided, however, that the Administrative Agent, the Liquidity
Agent and the Lender shall be free to exercise any or all of their rights and remedies arising on
account of the Acknowledged Loan Agreement Event of Default at any time upon or after the
occurrence of a Forbearance Termination Event (as defined below).



     3.     Forbearance Termination Events. Nothing set forth herein or contemplated hereby is
intended to constitute an agreement by the Administrative Agent, the Liquidity Agent or the Lender
to forbear from exercising any of the rights available to them under the Loan Agreement, the other
Transaction Documents, or applicable law (all of which rights and remedies are hereby expressly
reserved by the Administrative Agent, the Liquidity Agent and the Lender) upon or after the
occurrence of a Forbearance Termination Event. As used herein, a “Forbearance Termination
Event” shall mean the earliest to occur of: (a) any Unmatured Event of Default or Event of
Default under any of the Transaction Documents other than the Acknowledged Loan Agreement Event of
Default; (b) a breach by any Loan Party of any term or condition of this Agreement (other than the
reporting covenants specified in Section 4(a) or (b) below); (c) a “Forebearance Termination Event”
shall occur under (and as defined in) the Credit Agreement Forebearance and (d) June 15, 2006. The
period from the date hereof to (but excluding) the date that a Forbearance Termination Event occurs
shall be referred to as the “Forbearance Period”.



2









 





     4.     Additional Forbearance Period Reporting Covenants.




     (a)     On or before April 15, 2006, May 15, 2006 and June 1, 2006 (and in any event
concurrently with delivery thereof to the Credit Agreement Agent), the Loan Parties shall
deliver to the Administrative Agent, the Liquidity Agent and the Lender a written summary of
the status of their efforts, and those of their advisors (including without limitation Allen
& Company), to (i) consummate a sale of the Credit Agreement Borrowers or any of their
respective divisions, and (ii) refinance the Obligations (as defined in the Credit
Agreement).




     (b)     The Loan Parties shall (i) deliver to the Administrative Agent, the Liquidity Agent
and the Lender, on or before May 3, 2006 (and in any event concurrently with delivery
thereof to the Credit Agreement Agent), a draft of TRM Corporation’s proposed quarterly
report on Form 10Q for the quarter ended March 31, 2006 and (ii) cause the actual such
report to be filed as and when due.




     (c)     Notwithstanding Section 3.04(d) of the Loan Agreement, the Borrower shall provide
the Administrative Agent with written confirmation from the Letter of Credit Bank of the
extension of the Letter of Credit Expiry Date for an additional period of at least 30 days
at least 30 days prior to each Letter of Credit Expiry Date occurring after the date hereof.



     5.     Forbearance Fee; Expenses. In consideration of the willingness of the
Administrative Agent, the Liquidity Agent and the Lender to enter into this Agreement, the Loan
Parties shall be obligated to pay a forbearance fee (the “Forbearance Fee”) to the
Administrative Agent on or prior to 5:00 p.m. (New York time) on March 28, 2006 in an amount equal
to $75,000. The Loan Parties jointly and severally covenant and agree to pay all expenses incurred
by the Administrative Agent, the Liquidity Agent and the Lender in connection with investigating
any of the Acknowledged Events of Default or otherwise conducting audits or other due diligence
activities in connection with the Loan Agreement during the Forbearance Period.



     6.     Effectiveness; Conditions Precedent. This Agreement shall be effective as of March
28, 2006 when the following conditions shall have been satisfied in form and substance satisfactory
to the Administrative Agent:




     (a)     The Administrative Agent shall have received copies of this Agreement duly executed
by the Borrower, TRM ATM, the Servicer, the Lender and the Administrative Agent.




     (b)     Payment by the Borrower of all fees due and payable in connection with the
Agreement (including without limitation the Forbearance Fee) and all reasonable expenses
(including reasonable attorney fees) owed by the Borrower to the Administrative Agent as of
the date hereof.



3









 





     7.     Representations of Loan Parties. Each of the Loan Parties represents and warrants
as follows:




     (a)     It has taken all necessary action to authorize the execution, delivery and
performance of this Agreement.




     (b)     This Agreement has been duly executed and delivered by such Person and constitutes
such Person’s legal, valid and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights
generally and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).




     (c)     No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is required in
connection with the execution, delivery or performance by such Person of this Agreement.




     (d)     The execution and delivery of this Agreement does not (i) violate, contravene or
conflict with any provision of its organization documents or (ii) materially violate,
contravene or conflict with any laws applicable to it or any of its Subsidiaries.




     (e)     After giving effect to this Agreement, (i) the representations and warranties of
the Loan Parties set forth in the Transaction Documents (except that the representation as
to no existence of an Event of Default is hereby made subject to the Acknowledged Loan
Agreement Event of Default) and (ii) no event has occurred and is continuing which
constitutes an Unmatured Event of Default or an Event of Default (other than the
Acknowledged Loan Agreement Event of Default).



     8.     Release. As a material part of the consideration for Administrative Agent, the
Liquidity Agent and the Lender entering into this Agreement, the Loan Parties agree as follows (the
“Release Provision”):




     (a)     Release and Discharge. Each Loan Party hereby releases and forever
discharges the Administrative Agent, the Liquidity Agent and the Lender and their respective
predecessors, successors, assigns, officers, managers, directors, shareholders, employees,
agents, attorneys, representatives, parent corporations, subsidiaries, and affiliates (the
“Lender Parties”) jointly and severally from any and all claims, counterclaims,
demands, damages, debts, agreements, covenants, suits, contracts, obligations, liabilities,
accounts, offsets, rights, actions and causes of action of any nature whatsoever, including,
without limitation, all claims, demands, and causes of action for contribution and
indemnity, whether arising at law or in equity, whether presently possessed or possessed in
the future, whether known or unknown, whether liability be direct or indirect, liquidated or
unliquidated, whether presently accrued or to accrue hereafter, whether absolute or
contingent, foreseen or unforeseen, and whether or not heretofore asserted, which such Loan
Party may have or claim to have against any Lender Party in any way related to the
Transaction Documents.



4









 






     (b)     Covenant Not to Sue. Each Loan Party agrees not to sue any Lender Party or
in any way assist any other person or entity in suing any Lender Party with respect to any
claim released herein. The Release Provision may be pleaded as a full and complete defense
to, and may be used as the basis for an injunction against, any action, suit, or other
proceeding which may be instituted, prosecuted, or attempted in breach of the release
contained herein.




      (c)     Representations and Warranties. Each Loan Party hereby acknowledges,
represents and warrants to each Lender Party that:




     (i)     such Loan Party has read and understands the effect of the Release
Provision. Such Loan Party has had the assistance of independent counsel of its own
choice, or has had the opportunity to retain such independent counsel, in reviewing,
discussing, and considering all the terms of the Release Provision; and if counsel
was retained, counsel for such Loan Party has read and considered the Release
Provision and advised such Loan Party to execute the same. Before execution of this
Agreement, such Loan Party has had adequate opportunity to make whatever
investigation or inquiry it may deem necessary or desirable in connection with the
subject matter of the Release Provision.




     (ii)     such Loan Party is not acting in reliance on any representation,
understanding, or agreement not expressly set forth herein. Such Loan Party
acknowledges that no Lender Party has made any representation with respect to the
Release Provision except as expressly set forth herein.




     (iii)     such Loan Party has executed this Agreement and the Release Provision
thereof as its free and voluntary act, without any duress, coercion, or undue
influence exerted by or on behalf of any person.




     (iv)     such Loan Party is the sole owner of the claims released by the Release
Provision, and such Loan Party has not heretofore conveyed or assigned any interest
in any such claims to any other Person.




     (d)     Consideration. Such Loan Party understands that the Release Provision was
a material consideration in the agreement of the Administrative Agent, the Liquidity Agent
and the Lender to enter into this Agreement.




     (e)     Broadly Construed. It is the express intent of such Loan Party that the
release and discharge set forth in the Release Provision be construed as broadly as possible
in favor of the Administrative Agent, the Liquidity Agent and the Lender so as to foreclose
forever the assertion by such Loan Party of any claims released hereby against the
Administrative Agent, the Liquidity Agent and the Lender.



     9.     Reference to and Effect on Transaction Agreement. Except as specifically modified
herein, the Transaction Documents shall remain in full force and effect. The execution, delivery
and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of
the Lender, the Collateral Agent, the Liquidity Agent or the Administrative Agent under any of the
Transaction Documents, or constitute a waiver or amendment of any provision



5









 




of any of the Transaction Documents, except as expressly set forth herein. Any default or
event of default under this Agreement shall constitute an Event of Default under the Loan Agreement
and this Agreement shall constitute a Transaction Document.




     10.     Further Assurances. The Administrative Agent, the Lender, TRM ATM, the Servicer
and the Borrower each agrees to execute and deliver, or to cause to be executed and delivered, all
such instruments as may reasonably be requested to effectuate the intent and purposes, and to carry
out the terms, of this Agreement.



     11.     GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.



     12.     Miscellaneous.




     (a) This Agreement shall be binding on and shall inure to the benefit of the Borrower,
TRM ATM, the Servicer, the Administrative Agent, the Liquidity Agent, the Collateral Agent,
the Lender and their respective successors and permitted assigns. The terms and provisions
of this Agreement are for the purpose of defining the relative rights and obligations of the
Borrower, TRM ATM, the Servicer, the Administrative Agent, the Liquidity Agent, the
Collateral Agent and the Lender with respect to the transactions contemplated hereby and
there shall be no third party beneficiaries of any of the terms and provisions of this
Agreement.




     (b) Section headings in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose.




     (c) Wherever possible, each provision of this Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.




     (d) Except as otherwise provided in this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in the Transaction
Documents, the provision contained in this Agreement shall govern and control.




     (e) This Agreement may be executed in any number of separate counterparts, each of
which shall collectively and separately constitute one agreement. Delivery of an executed
counterpart of this Agreement by facsimile shall be effective as an original and shall
constitute a representation that an original shall be delivered to the Administrative Agent.



     13.     Entirety. This Agreement and the other Transaction Documents embody the entire
agreement between the parties and supersede all prior agreements and understandings, if any,
relating to the subject matter hereof. This Agreement and the other Transaction Documents



6









 




represent the final agreement between the parties and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties.




[remainder of page intentionally left blank]




7









 





     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.



	 	 	 	 	 
	 	TRM INVENTORY FUNDING TRUST

 	 
	 	By:  	Wilmington Trust Company, not in its
 	 
	 	 	individual capacity, but solely as Owner 	 
	 	 	Trustee 	 
	 	 	 
	 	By:  	                                              /s/ Denise M. Geran
 	 
	 	 	Name:  	Denise M. Geran 	 
	 	 	Title:  	Vice President 	 
	 
	 	TRM ATM CORPORATION

 	 
	 	By:  	/s/ Daniel E. O’Brien
 	 
	 	 	Name:  	Daniel E. O’Brien	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	AUTOBAHN FUNDING COMPANY LLC

 	 
	 	By:  	DZ Bank AG, Deutsche Zentral-
 	 
	 	 	Genossenschaftsbank Frankfurt am Main, 	 
	 	 	as its attorney-in-fact 	 
	 	 	 
	 	By:  	                                              /s/ Patrick Preece
 	 
	 	 	Name:  	Patrick Preece 	 
	 	 	Title:  	First Vice President 	 
	 	 	 
	 	By:  	                                              /s/ Rodney Hutter
 	 
	 	 	Name:  	Rodney Hutter 	 
	 	 	Title:  	Vice President 	 
	 
	 	DZ BANK AG, DEUTSCHE ZENTRAL-

GENOSSENSCHAFTSBANK

FRANKFURT AM MAIN, as Administrative

Agent and Liquidity Agent

 	 
	 	By:  	/s/ Patrick Preece
 	 
	 	 	Name:  	Patrick Preece 	 
	 	 	Title:  	First Vice President 	 
	 	 	 
	 	By:  	                                              /s/ Rodney Hutter
 	 
	 	 	Name:  	Rodney Hutter 	 
	 	 	Title:  	Vice President 	 
	 




8









 





	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Toby Robillard
 	 
	 	 	Name:  	Toby Robillard 	 
	 	 	Title:  	Assistant Vice President 	 
	 




9









 








March 27, 2006





Wilmington Trust Company,

not in its individual capacity

but solely as Owner Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: Corporate Trust Administration



Re: Forebearance Agreement




     We refer (i) to the Deposit Trust Agreement, dated as of March 14, 2000 (the “Trust
Agreement”), among TRM ATM Corporation, as Administrator, GSS Holdings, Inc., as Depositor, and
Wilmington Trust Company, not in its individual capacity but solely as owner trustee (the “Owner
Trustee”) and (ii) the Administration Agreement, dated as of March 17, 2000 (the “Administration
Agreement”) between TRM Inventory Funding Trust and TRM ATM Corporation, as Administrator (the
“Administrator”). Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in or by reference in the Trust Agreement.



     The undersigned, being the Administrator of the Trust pursuant to the Administration
Agreement, hereby requests and directs you, as Owner Trustee, to execute and deliver the
Forebearance Agreement relating to the Loan and Servicing Agreement in such form as may be tendered
to the Owner Trustee by Mayer, Brown, Rowe & Maw LLP. By acknowledging below, the
Certificateholders acknowledge, agree and consent to your execution of such documents, and join in
giving the instruction and direction set forth in the preceding sentence.



     In order to induce you to take the foregoing action, we hereby agree to indemnify Wilmington
Trust Company, its directors, officers, employees, and agents (individually, an “Indemnitee”) for,
and agree to hold each Indemnitee harmless against, any liability, loss or expense (including,
without limitation legal and other professional fees and expenses) incurred by an Indemnitee in
connection with or arising out of the taking by Wilmington Trust Company, as Owner Trustee, of the
foregoing requested action, all in accordance with Section 6.9 of the Trust Agreement.



1









 





     This letter of instruction may be executed in any number of counterparts, each of which when
executed and delivered shall be an original, but all of which together shall constitute but one and
the same instrument.



	 	 	 	 	 
	 	Very truly yours,




TRM ATM CORPORATION, as Administrator

 	 
	 	By:  	/s/ Daniel E. O’Brien
 	 
	 	 	Name:  	Daniel E. O’Brien 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



Acknowledged, Agreed and Consent to:




AUTOBAHN FUNDING COMPANY LLC





			
	By:	 	DZ Bank AG, Deutsche Zentral-

Genossenschaftsbank Frankfurt am Main,

As its attorney-in-fact





	 	 	 	 
	 	 	 
	By:  	/s/ Patrick Preece
 	 
	 	Name:  	Patrick Preece 	 
	 	Title:  	First Vice President 	 
	 
	GSS HOLDINGS, INC.

 	 
	By:  	/s/ Bernard J. Angelo
 	 
	 	Name:  	Bernard J. Angelo 	 
	 	Title:  	Vice President