<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ________
Commission file number 0-19657
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TRM CORPORATION
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(Exact name of registrant as specified in its charter)
OREGON 93-0809419
- --------------------------------- ----------------------------
(State or other jurisdiction (I.R.S.
of incorporation or organization) Employer Identification No.)
5208 N.E. 122ND AVENUE
PORTLAND, OREGON 97230
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(Address of principal executive offices) (Zip Code)
(503) 257-8766
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(Registrant's telephone number, including area code)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
---- ----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date:
CLASS OUTSTANDING AT MARCH 31, 2000
----- -----------------------------
Common Stock 7,079,440
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 16,775 $ 472
Accounts receivable, net 7,362 7,938
Income tax receivable 378 688
Inventories 3,771 4,298
Prepaid expenses and other 2,188 4,148
Deferred income taxes 1,243 1,243
------------ ------------
Total current assets 31,717 18,787
Equipment and vehicles, less accumulated depreciation 62,648 66,813
Other assets 1,541 2,299
------------ ------------
$ 95,906 $ 87,899
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 2,880 7,693
Accrued expenses 3,539 4,275
------------ ------------
Total current liabilities 6,419 11,968
Long-term debt 23,192 11,152
Deferred income taxes 5,016 5,003
------------ ------------
Total liabilities 34,627 28,123
------------ ------------
Shareholders' equity:
Preferred stock, no par value. Authorized
5,000 shares; 1,778 shares issued
and outstanding 19,798 19,798
Common stock, no par value. 50,000 authorized
7,071 and 7,079 shares issued and
outstanding, respectively 19,095 19,130
Accumulated other comprehensive income (427) (780)
Retained earnings 22,813 21,628
------------ ------------
Total shareholders' equity 61,279 59,776
------------ ------------
$ 95,906 $ 87,899
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
TRM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1999 2000
-------- --------
<S> <C> <C>
Sales $ 16,948 $ 18,081
Less discounts 3,089 3,169
-------- --------
Net sales 13,859 14,912
Cost of sales 7,109 8,933
-------- --------
Gross profit 6,750 5,979
Selling, general and administrative expense 5,425 6,838
-------- --------
Operating income (loss) 1,325 (859)
Other (income) expense:
Interest 30 474
Other, net (150) 21
-------- --------
Income (loss) before income taxes 1,445 (1,354)
Provision (benefit) for income taxes 564 (543)
-------- --------
Net income (loss) $ 881 $ (811)
======== ========
Earnings per share computation:
Net income (loss) $ 881 $ (811)
Preferred stock dividends (370) (374)
-------- --------
Net income (loss) available to common
shareholders $ 511 $ (1,185)
======== ========
Basic net income (loss) per share:
Shares outstanding 7,101 7,076
-------- --------
Net income (loss) per share $ .07 $ (.17)
======== ========
Diluted net income (loss) per share:
Shares outstanding 7,351 7,076
======== ========
Net income (loss) per share $ .07 $ (.17)
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
TRM CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive Preferred Stock Common Stock Comprehen- Retained
Income Shares Amounts Shares Amounts sive Income Earnings Total
------------- --------- ----------- ---------- ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES, DECEMBER 31, 1999 1,778 $ 19,798 7,071 $ 19,095 $ (427) $ 22,813 $ 61,279
Comprehensive income
Net loss $ (811) -- -- -- -- -- (811) (811)
Other Comprehensive
income (loss), net of tax
Foreign currency
translation adjustment (353) -- -- -- -- (353) -- (353)
-------------
Comprehensive income $(1,164)
=============
Issuance of stock to employees -- -- 8 35 -- -- 35
Preferred stock dividends -- -- -- -- -- (374) (374)
--------- ----------- ---------- ------------ ------------- ------------ -----------
BALANCES, MARCH 31, 2000 1,778 $ 19,798 7,079 $ 19,130 $ (780) $ 21,628 $ 59,776
========= =========== ========== ============ ============= ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
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TRM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1999 2000
-------- --------
<S> <C> <C>
Operating activities:
Net income (loss) $ 881 $ (811)
Adjustments to reconcile net
income (loss) to net cash provided
(used in) by operating activities:
Depreciation and amortization 1,806 2,660
Gain on disposal of equipment
and vehicles (4) (24)
Changes in items affecting operations:
Accounts receivable 214 (576)
Inventories 574 (527)
Income tax receivable 146 (310)
Prepaid expenses and other (399) (1,960)
Accounts payable (5,306) 4,813
Accrued expenses 388 736
Deferred income tax (59) (13)
-------- --------
Cash provided by (used in)
operating activities (1,759) 3,988
-------- --------
Cash flows from investing activities:
Proceeds from sale of equipment 96 93
Capital expenditures (2,816) (6,671)
Other (700) (806)
-------- --------
Cash used in investing
activities (3,420) (7,384)
-------- --------
Cash flows from financing activities:
Net borrowings on notes payable -- (12,040)
Net proceeds from issuance of common stock 65 35
Dividends on preferred stock (370) (374)
-------- --------
Cash used in financing
activities (305) (12,379)
-------- --------
Effect of exchange rate changes 122 (528)
-------- --------
Net increase (decrease) in cash and
cash equivalents (5,362) (16,303)
Cash and cash equivalents at beginning
of period 14,285 16,775
-------- --------
Cash and cash equivalents at end of period $ 8,923 $ 472
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
TRM CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Interim Financial Data:
The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission and reflect all adjustments, consisting
only of normal recurring adjustments, which, in the opinion of management,
are necessary for a fair statement of the results of the interim periods.
These condensed interim financial data should be read in conjunction with
the Company's latest annual report to shareholders.
2. Net Income Per Share:
Basic and diluted net income per share are based on the weighted average
number of common shares outstanding during each year, with diluted
including the effect of potentially dilutive securities. For the three
months ended March 31, 1999 and 2000, the weighted average number of common
shares for basic net income per share computations were 7,101,000 and
7,076,000, respectively. For diluted net income per share, 250,000 shares
were added to weighted average shares outstanding for the three months
ended March 31, 1999, representing potential dilution for stock options
outstanding, calculated using the treasury stock method. In calculating
basic net income per share, dividends for preferred stock are deducted to
arrive at income available for common stockholders. For diluted net income
per share, the calculation assumes the conversion of common stock
equivalents including the conversion of preferred stock to common unless
such conversion is anti-dilutive. For the three months ended March 31,
2000, no shares were added to the weighted average shares outstanding
because the addition of shares would be anti-dilutive.
3. Inventories (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
------ ------
<S> <C> <C>
Paper $ 696 $ 714
Toner and developer 550 671
Parts 2,525 2,913
------ -------
$3,771 $4,298
====== =======
</TABLE>
4. Segment Reporting (in thousands):
In fiscal 1998, the Company adopted SFAS No. 131 - "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS 131"). This
statement establishes new standards for the manner in which companies
report operating segment information, as well as disclosures about products
and services and major customers. Prior to 1999, the Company had only one
business segment.
The Company has two reportable segments: CopyCenters and ATM.
CopyCenters owns and maintains self-service photocopiers in retail
establishments. ATM owns and operates ATM machines in retail
establishments.
6
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The Company evaluates each segment's performance based on income or loss
before interest and income taxes, excluding non-recurring charges.
Information regarding the operations in these reportable segments is as
follows:
<TABLE>
<CAPTION>
Three months ended:
---------------------
March 31, March 31,
1999 2000
-------- --------
<S> <C> <C>
Sales:
CopyCenters $ 16,948 $ 16,956
ATM -- 1,125
-------- --------
$ 16,948 $ 18,081
======== ========
Depreciation and amortization:
CopyCenters $ 1,806 $ 2,515
ATM -- 145
-------- --------
$ 1,806 $ 2,660
======== ========
Income (Loss) Before interest and taxes:
CopyCenters $ 1,475 $ 129
ATM -- (1,009)
-------- --------
$ 1,475 $ (880)
======== ========
Capital Expenditures:
CopyCenters $ 2,816 $ 2,437
ATM -- $ 4,234
-------- --------
$ 2,816 $ 6,671
======== ========
</TABLE>
<TABLE>
<CAPTION>
---------------------
March 31, March 31,
1999 2000
-------- --------
<S> <C> <C>
Assets:
CopyCenters $ 71,311 $ 74,891
ATM 2,733 13,008
-------- --------
$ 74,044 $ 87,899
======== ========
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
During the quarter ending March 31, 2000, the Company aggressively
expanded its new ATM services business while its core CopyCenters services
business generated sound cash flow. The Company's financial position remains
sound, offering it flexibility to meet its aggressive growth strategy.
As of March 31, 2000 the Company had a total of 689 ATM operating units
installed, with 561 and 128 deployed in the United States and United Kingdom
respectively, as compared to 18 at March 31, 1999, an increase of 671 units.
The ATM business contributed $1.1 million to quarterly gross revenues. The
Company believes that revenues generated from services delivered through its
ATM network will become an increasingly higher percentage of its overall
revenue in the future as it expands the product offerings through its ATM
network, and pursues new geographic opportunities.
In the CopyCenters business, the service areas the Company operates in
include 47 in the United States, 5 in Canada, 15 in the United Kingdom and 3 in
France. As of March 31, 2000, the Company had 36,042 TRM Copy Centers compared
to 31,354 at March 31, 1999, an increase of 4,688 centers (15.0%). In the first
quarter of 2000, the CopyCenters business generated $2.6 million in earnings
before interest, taxes and depreciation, compared to $3.2 million in the
prior year.
Also, in the first quarter of 2000 the Company formed a subsidiary to
deliver a unique distribution channel to access the Internet using its
existing ATMs initially and eventually rolling out the software capability
worldwide to other ATMs. The new subsidiary, iATMglobal.net, is headquartered
in San Francisco, CA. iATMglobal.net will continue TRM's previous work on the
development of a Remote Access Application Protocol (RAAP) which will provide
the infrastructure for e-tailers to use the ATM as an additional way to sell
goods and services. The new software is intended to transform existing ATMs
into Internet ATMs (iATMs), which would allow controlled access to the
Internet and related functions for the end user. In conjunction with
strategic e-commerce partners, iATMs are expected to be able to deliver a
wide range of services, including event and travel ticketing, Internet
banking services, affinity vouchers, and other goods and services. It is
expected that anything the Internet delivers to consumers can be available
using the iATM network.
The Company's balance sheet maintains a low debt to equity ratio. This
financial position offers TRM Corporation the flexibility to finance its
strategic expansion plans related to its ATM business. In the first quarter
of 2000, the Company replaced its existing bank line of credit. The Company
signed a new Loan Agreement with Bank of America N.A. to provide a line of
credit commitment equal to $30 million through June 30, 2001, reducing to $25
million through June 30, 2002. Also in the first quarter of 2000, the Company
(through a special purpose finance entity) established a $30.0 million Loan
Facility with a commercial paper conduit to provide vault cash for its ATM
network. The financing was completed off the Company's balance sheet on a
non-recourse basis. The Company initially funded $23.6 million under the
facility to supply its ATMs with cash. See "Liquidity and Capital Resources."
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected
statement of operations data, expressed as a percentage of sales, and the
percentage change in dollar amounts of each item on the Consolidated Statements
of Operations (see page 3 of this Form 10-Q).
8
<PAGE>
<TABLE>
<CAPTION>
Percentage Change As a Percentage of Sales
Increase (Decrease) 1999 2000
----- -----
<S> <C> <C> <C>
Sales 6.7% 100.0% 100.0%
Sales discounts 2.6 18.2 17.5
Cost of sales 25.7 42.0 49.4
Selling, general and administrative 26.1 32.0 37.8
------- ----- -----
Operating income (loss) (164.7) 7.8 (4.7)
Interest expense, net 1,480.0 0.2 2.6
Other expense (income) net (114.5) (0.9) 0.2
------- ----- -----
Income (loss) before income taxes (193.7) 8.5 (7.5)
Provision (benefit) for income taxes (196.3) 3.3 (3.0)
------- --- ------
Net income (loss) (192.1)% 5.2% (4.5)%
======= ===== ======
</TABLE>
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
For the quarter ended March 31, 2000, consolidated sales increased by $1.1
million (6.7%) to $18.1 million from $16.9 million for 1999. The $1.1 million
increase in gross revenue is primarily attributed to the Company's ATM
business, while the CopyCenters business revenues were flat in the first
quarter of 2000 as compared to the first quarter of 1999.
Although CopyCenters sales were flat for the quarter ended March 31,
2000 as compared to the same period in 1999, there was an increase in billed
units of 10.4%, most of which were added to the installed base in the fourth
quarter of 1999 and the first quarter of 2000. Revenues per billed unit were
down 10.7% in the first quarter 2000 compared to the 1999, resulting in no
change in revenue on the higher installed base.
Revenues from the Company's new ATM business were $1.1 million during the
first quarter of 2000 with no revenues in 1999. The Company is expecting a
significant increase in ATM revenues in 2000 over 1999's revenue because of the
aggressive growth plans it has for the newly established ATM services business.
Sales discounts are the portion of revenue retained by retail customers.
Sales discounts generally vary at individual retail businesses depending on
volume - the higher the volume, the greater the discount. The increase in
sales discounts for the quarter ended March 31, 2000 compared to the prior
year was $80,000 (2.6%), which is attributed to the Company's ATM business.
Costs of sales on a consolidated basis increased $1.8 million (27.7%)
for the quarter ended March 31, 2000 compared to 1999. $838,000 of the
increase is due to the new ATM Business. Costs of paper, toner, parts, field
labor and other costs increased by $478,000, which can be explained by a
contract price increase in the price of paper and an increase in the
installed base. The remaining increase of $522,000 is due to copier machine
depreciation, which relates to the additional NextGen(TM) photocopiers in the
Company's installed base.
Selling, general and administrative expenses increased $1.4 million (26.1%)
during the quarter ended March 31, 2000 compared to 1999. $1.2 million of the
increase is due to the addition of the Company's ATM business.
During the quarter ended March 31, 2000, interest expense increased to
$474,000 from $30,000 in 1999. The increase was due to an increase in borrowings
on the Company's revolving line of credit during 2000 primarily as the result of
increased borrowings to finance the carrying of
9
<PAGE>
cash balances in ATM machines operated by the Company in its newly formed ATM
business. Borrowings to finance the cash needs of the ATM network are not
expected to be necessary for the remainder of the year as a result of the
establishment of a commercial paper facility. See the section on "Liquidity
and Capital Resources" in this Form 10-Q.
Other income decreased $171,000 during the quarter ended March 31, 2000
compared to 1999. The decrease was primarily due to interest income generated
from short-term investments in the first quarter of 1999, which were not
outstanding in 2000.
The Company's effective tax rate for the quarter ended March 31, 2000 was
40.0 percent, resulting in an income tax benefit of $543,000, compared to an
effective rate of 39.0 percent and an income tax provision of $564,000 in 1999.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter of 2000, TRM generated $4.0 million in cashflows
from operations and decreased its net working capital from $25.3 million at
December 31, 1999 to $6.8 million at March 31, 2000 (including cash and cash
equivalents of $472,000). The Company also has a $30.0 million bank line of
credit, with $11.2 million in borrowings outstanding at March 31, 2000.
During the first quarter of 2000, the Company funded capital expenditures
of $6.7 million primarily from bank borrowings on its line of credit. Capital
expenditures were primarily for NCR ATM machines, and computer systems
implementation costs.
The Company also obtained a new source for vault cash inventory in its ATM
network during the first quarter of 2000. As of December 31, 1999, the Company
had a cash balance related to the ATM vault cash inventory of $16.1 million. The
Company used its line of credit to finance this increase in cash. In March of
2000, the Company established a $30.0 million financing facility to access a
commercial paper conduit to provide vault cash for its ATM network. This
facility can be increased to $75 million, and the agreement resulted in the
removal of the cash and underlying bank borrowings from the Company's balance
sheet. The financing was completed off the Company's balance sheet on a
non-recourse basis. As such, the ATM vault cash inventory and related debt
financing was removed from the balance sheet as of March 31, 2000.
The Company currently anticipates capital expenditures of approximately
$35 million during calendar 2000. Approximately $30 million will be used to
acquire ATM machines and the remainder will be used to acquire computer
related systems and other capital items. The Company expects to finance these
capital expenditures with cash generated from operations and bank borrowings.
The Company entered into a new bank line of credit arrangement which will
allow it greater flexibility in its use of proceeds. The line of credit also
will not encumber the Company's ATM assets, allowing it to refinance its
existing ATM assets and finance future ATM asset purchases, subject to limits
based on the Company's ratio of funded debt to EBITDA. The Company expects
that these sources will provide adequate cash to fund its expansion through
at least December 31, 2000.
DISCLOSURE REGARDING EURO CONVERSION
On January 1, 1999, eleven member countries of the European Community began
a process to convert their existing sovereign currencies to a single common
denomination, the Euro. The process of conversion is gradual over the next three
years, culminating in the eventual removal from circulation of all existing
domestic currency for the participating countries. The Company presently
operates in the United Kingdom and France and transacts business in the local
currency of those countries. France will be subject to the Euro Conversion, and
the United Kingdom may become
10
<PAGE>
subject to the conversion. The Company believes that it will be able to
accommodate the conversion to the Euro without a material impact on its
financial statements.
FORWARD-LOOKING STATEMENTS
Information in "Management's Discussion and Analysis," in this Form 10-Q
about the Company's goals, plans and expectations regarding expansion, capital
expenditures, effectively using a third-party network of service providers,
expanding the ATM business, offering and providing e-commerce goods and services
through SmartATMs, constitutes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The following factors that could cause the actual results
to differ materially from the forward-looking statements: business conditions in
the market areas in which the Company operates, competitive factors, customer
demand for the Company's services, the Company's ability to execute its plans
successfully and the volatility of paper costs. Any forward-looking statements
should be considered in light of these factors as well as risk factors and
business conditions discussed in the Company's SEC Form 10-K for the year ended
December 31, 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to minimal market risks. Sensitivity of results of
operations to these risks is managed by maintaining a conservative investment
portfolio, which is comprised solely of money market funds, and entering into
long-term debt obligations with appropriate price and term characteristics. The
Company does not hold or issue derivative commodity instruments or other
financial instruments for trading purposes. Financial instruments held for
other than trading purposes do not impose a material market risk.
The Company is exposed to interest rate risk, as additional financing will
be needed due to the capital expenditures associated with expanding the
Company's business operations. The interest rate that the Company will be able
to obtain on debt financing will depend on market conditions at that time, and
may differ from the rates the Company has secured on its current debt.
Additionally, the Company is exposed to interest rate risk related to its credit
facility as of March 31, 2000. Advances against the credit facility periodically
renew, at which point the borrowings are subject to the then current market
interest rates, which may differ from the rates the Company is currently paying
on its borrowings.
The Company is exposed to foreign currency exchange rate risk, as it has
operations in Canada, France and the United Kingdom. The relative amount of
business transacted in these countries is outlined in footnote 11 to the
Consolidated Financial Statements of the Company's 1999 Form 10-K.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
10.8(i) Employment Agreement dated April 9, 1999 between
the Company and Shami Patel.
10.11 Loan and Servicing Agreement dated March 17, 2000
by and among TRM Inventory Funding Trust, TRM ATM
Corporation, Autobahn Funding Company LLC, Bank
Deutsche Genossenschaftsbank AG, and Keybank
National Association.
27.1 Financial Data Schedule
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the period.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TRM CORPORATION
Date: May 14, 2000 By: /s/ Daniel L. Spalding
----------------------------- -------------------------------------
Daniel L. Spalding
Vice President, Finance and
Chief Financial Officer
12
<PAGE>
Exhibit 10.8(i)
Shami Patel
1166 Pleasant Hill Circle
Lafayette, Ca. 94549
RE: EMPLOYMENT AGREEMENT
Dear Shami:
This Employment Agreement (this "Agreement") sets forth our agreement
concerning certain terms of your employment by TRM Corporation (the
"Company") as of April 9, 1999.
1. EMPLOYMENT AGREEMENT
1.1 EMPLOYMENT
(a) You will hold the position of Vice President, Finance and
Chief Financial Officer of the Company and perform those
duties as are generally associated with such a position. You
will report to the President and Chief Executive Officer and
the Board of Directors of the Company. You also agree to
perform such acts and duties as the President and Chief
Executive Officer and the Board of Directors of the Company
may reasonably direct, to comply with all applicable policies
and procedures of the Company, and to devote such time, energy
and skill to your assignment as the President and Chief
Executive Officer and the Board of Directors of the Company
considers reasonably necessary for the performance of your
duties. You and the Company understand and agree that
circumstances may arise in which you and the Company may
mutually agree to change, in whole or in part, the scope of
your responsibilities and the title of your position.
(b) Your employment with the Company will continue under this
Agreement until terminated by you or the Company as provided
in paragraph 2.1, below. Notwithstanding the designation of a
term for this Agreement, your employment with the Company will
be on an "at will" basis with both you and the Company
retaining the right to terminate the employment relationship
at any time and for any reason, without liability on the part
of the Company or any affiliated or related corporation for
the termination, except as expressly provided in this
Agreement. Your last day of employment with the Company is
referred to herein as your Separation Date.
<PAGE>
Shami Patel Employment Agreement
April 9, 1999
Page 2 of 5
1.2 SALARY. During the first term of this Agreement, you will be paid
the annualized equivalent of $150,000 as base salary, payable in
installments on regular Company paydays. The first term shall end
on December 31, 1999. Thereafter, your base salary shall be set
annually by the President and Chief Executive Officer or the Board
of Directors of the Company.
1.3 BENEFITS. In addition to your base compensation, you have been
guaranteed a first year bonus of $50,000 providing you are still
employed on December 31, 1999. You will be given an opportunity to
earn additional bonus in calendar year 1999 upon the achievement of
performance criteria to be established by the President and Chief
Executive Officer or the Board of Directors of the Company.
Thereafter, you will be eligible to receive incentive compensation
as the President and Chief Executive Officer or the Board of
Directors of the Company shall approve. You will also be eligible
to participate in any benefit plans or programs generally available
to the Company's management as the Board of Directors shall from
time-to-time approve, which shall include paid time off (PTO) which
will accrue beginning on your date of employment at a rate of 20
days per year.
1.4 STOCK OPTION. A stock option for 100,000 shares of TRM Stock was
issued to you on January 11, 1999. That option will vest 20% per
year for five years with an exercise period of ten years. The
option price of the shares will be based on the closing price of
TRM stock on the date you accept the employment offer.
2. TERMINATION OF AGREEMENT
2.1 TERMINATION. The term of this Agreement shall continue until
terminated earlier as follows:
(a) This Agreement may be terminated by you for any reason upon 30
days' written notice to the Company.
(b) This Agreement may be terminated by the Company for any reason
at any time with 30 days' written notice to you, subject only
to the obligation of the Company, if you are terminated for
reasons other than those specified in paragraph 2.2, to pay
severance pay according to the following formula:
(i) Six months' pay plus an additional one month's pay for
each year of employment of you by the Company (based on
your original hire date of January 11, 1999), up to a
maximum of 12 months pay (the "Salary Continuation
Period"), plus (ii) all incentive compensation earned but
unpaid on or prior to the Separation Date, plus (iii)
health insurance for the Salary Continuation Period at
the same coverage level as in effect immediately prior to
the Separation Date.
Severance pay may be paid to you at your option in a lump
sum or in regular payroll period installments.
<PAGE>
Shami Patel Employment Agreement
April 9, 1999
Page 3 of 5
(c) This Agreement shall automatically terminate in the event of
your death or disability. For purposes of this Agreement,
"disability" shall mean inability to perform all or
substantially all of your responsibilities for a period of
more than six (6) months.
(d) Eligibility for severance pay is conditioned upon your
execution of a Release of Claims in a form provided by the
Company at the time of termination. (sample attached)
2.2 INELIGIBILITY FOR SEVERANCE PAY. With respect to subparagraph
2.1(b), you will not be eligible for severance pay under this
Agreement if:
(a) you voluntarily resign or retire from your employment at any
time and for any reason except because of an involuntary
reduction in your base salary;
(b) the Company terminates your employment for cause (as defined
in paragraph 2.3, below) or your employment terminates due to
your death or disability;
(c) you breach the terms of paragraph 3; or
(d) you fail or refuse to sign the Release of Claims form provided
by the Company at the time of termination.
2.3 DEFINITION OF CAUSE. For purposes of this Agreement, "cause" for
termination shall be defined as (i) any misappropriation of funds
or property of the Company by you; (ii) the conviction of or plea
of guilty or nolo contendere by you of a felony or of any crime
involving moral turpitude; (iii) your engagement in illegal,
immoral or similar conduct tending to place you or the Company, by
association with you, in disrepute; (iv) indulgence in alcohol or
drugs to an extent that renders you unable or unfit to perform his
duties hereunder; or (v) your gross dereliction of duty.
3. CONFIDENTIALITY
3.1 PRESERVATION AND NON-USE OF CONFIDENTIAL INFORMATION. You
acknowledge that you have a fiduciary duty as an officer and
employee of the Company not to discuss Confidential Information
obtained during your employment with the Company. For purposes of
this Agreement, "Confidential Information" means any and all
confidential or proprietary information concerning the Company or
its affiliates, joint venturers or other related entities ("The
Company Group"), the disclosure of which could disadvantage The
Company Group. Confidential Information includes trades secrets as
defined under the Uniform Trades Secrets Act.
<PAGE>
Shami Patel Employment Agreement
April 9, 1999
Page 4 of 5
Except pursuant to your employment by the Company and as directed
by the President and Chief Executive Officer and the Board of
Directors of the Company, you agree not to use Confidential
Information, during the term of this Agreement or after its
termination for a period of five years, for any personal or
business purpose, either for your own benefit or that of any other
person, corporation, government or other entity.
You also agree that, except pursuant to your employment by the
Company as directed by the President and Chief Executive Officer
and the Board of Directors of the Company, you will not disclose or
disseminate any Confidential Information, directly or indirectly,
at any time during the term of this Agreement or after its
termination, to any person, agency, or court unless compelled to do
so pursuant to legal process (e.g., a summons or subpoena) or
otherwise required by law and then only after providing the Company
with prior notice and a copy of the legal process.
3.2 COVENANT NOT TO COMPETE. You also agree that while employed by the
Company, and for a period of one year after the termination of
employment, you shall not compete with the Company, either directly
or indirectly, in the geographical areas where the Company does
business, and you shall not perform services for or own an interest
in any business that does so.
4. RETURN OF PROPERTY
On or before your Separation Date, except as agreed to by the
Company, you will return all property belonging to The Company,
including, but not limited to, all documents, business machines,
computers, computer hardware and software programs, computer data,
telephones (cellular, mobile or otherwise), pagers, keys, card
keys, credit cards and other Company-owned property.
5. RIGHT TO CONSULT WITH ATTORNEY
You have the right to consult with an attorney or financial advisor
at your own expense regarding this Agreement.
<PAGE>
Shami Patel Employment Agreement
April 9, 1999
Page 5 of 5
6. DISPUTE RESOLUTION
You agree that any dispute (1) concerning the interpretation or
construction of this Agreement, (2) arising from your employment
with or termination of employment from the Company, (3) relating to
any compensation or benefits you may claim, or (4) relating in any
way to any claim by you for reinstatement or reemployment by the
Company after execution of this Agreement shall be submitted to
final and binding confidential arbitration. Except as specifically
provided herein, the arbitration shall be governed by the rules of
the American Arbitration Association or such other rules as agreed
to by the parties. Each party shall be responsible for its or his
own costs and attorneys' fees relating to mediation and
arbitration. Both parties agree that the procedures outlined in
this paragraph are the exclusive methods of dispute resolution.
7. ENTIRE AGREEMENT
This Agreement contains the entire agreement between you and the
Company concerning the subject matters discussed herein and
supersedes any other discus-sions, agreements, representations or
warranties of any kind. Any modification of this Agreement shall
be effective only if in writing and signed by each party or its
duly authorized representative. This Agreement supersedes all
prior employment agreements between you and the Company or any
corporation affiliated with or related to the Company. The terms
of this Agreement are contractual and not mere recitals. If for
any reason any provision of this Agreement shall be held invalid in
whole or in part, such invalidity shall not affect the remainder of
this Agreement.
This Agreement shall be construed in accordance with the laws of
the state of Oregon (without regard to the conflicts of laws
provisions thereof).
In order to reflect your voluntary acceptance and agreement with
these terms, please sign and return the enclosed copy of this
letter.
Sincerely,
TRM CORPORATION
By: FREDERIC P. STOCKTON
------------------------------------
President and CEO
ACKNOWLEDGMENT AND AGREEMENT:
I have read this Agreement and voluntarily enter into this Agreement after
careful consideration and the opportunity to review it with financial or
legal counsel of my choice.
SHAMI PATEL
------------------------------------
Shami Patel
<PAGE>
Exhibit 10.11
LOAN AND SERVICING AGREEMENT
Dated as of March 17, 2000
Among
TRM INVENTORY FUNDING TRUST
as Borrower
-----------
TRM ATM CORPORATION
in its individual capacity and as Servicer
------------------------------------------
AUTOBAHN FUNDING COMPANY LLC
as Lender
---------
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG
as Administrative Agent
-----------------------
and
KEYBANK NATIONAL ASSOCIATION
as Liquidity Agent and Collateral Agent
---------------------------------------
<PAGE>
<TABLE>
<S> <C>
ARTICLE ILOANS; CERTIFICATES
SECTION 1.01. Commitments to Lend; Limits on Lender's Obligations. 1
SECTION 1.02. Borrowing Procedures; Principal Amount 2
SECTION 1.03. Security Interest2
SECTION 1.04. Purchase of Certificates 2
SECTION 1.05. Use of Proceeds; Provision of Cash 3
SECTION 1.06. Cash Provision Fee 4
ARTICLE IINOTE
SECTION 2.01. Note. 4
SECTION 2.02. Interest on Loans and Yield on Certificates 5
SECTION 2.03. General Procedures 5
SECTION 2.04. Commitment Fee 5
SECTION 2.05. Registration; Registration of Transfer and Exchange of Notes 5
ARTICLE IIISETTLEMENTS
SECTION 3.01. Accounts; Investments 6
SECTION 3.02. Collection of Moneys 8
SECTION 3.03. Settlement 8
SECTION 3.04. Letter of Credit Matters 10
SECTION 3.05. Payments and Computations, Etc 11
ARTICLE IVYIELD PROTECTION
SECTION 4.01. 11
SECTION 4.02. Yield Protection 11
SECTION 4.03. Funding Losses 13
SECTION 4.04. Taxes 13
ARTICLE VCONDITIONS OF BORROWINGS
SECTION 5.01. Conditions Precedent to Initial Borrowing 14
SECTION 5.02. Conditions Precedent to All Borrowings 16
ARTICLE VIREPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Borrower 17
SECTION 6.02. Representations and Warranties of the Servicer and TRM ATM 20
ARTICLE VIIGENERAL COVENANTS OF BORROWER
SECTION 7.01. Affirmative Covenants of Borrower 23
SECTION 7.02. Reporting Requirements of Borrower 24
SECTION 7.03. Negative Covenants of Borrower 25
SECTION 7.04. Covenants of TRM ATM 26
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 7.05. Separate Existence. 28
ARTICLE VIIIADMINISTRATION AND COLLECTION
SECTION 8.01. Servicer to Act 30
SECTION 8.02. Insurance 31
SECTION 8.03. Reporting 31
SECTION 8.04. Books and Records 32
SECTION 8.05. [RESERVED]. 32
SECTION 8.06. Costs of Servicing; Servicer's Fee 32
SECTION 8.07. Successor Servicer 32
SECTION 8.08. Bailee for Lender 33
ARTICLE IXEVENTS OF DEFAULT
SECTION 9.01. Events of Default 33
SECTION 9.02. Remedies 36
ARTICLE XTHE ADMINISTRATIVE AGENT; COLLATERAL AGENT
SECTION 10.01. Authorization and Action 37
SECTION 10.02. Administrative Agent's and Collateral Agent's Reliance, Etc 37
SECTION 10.03. The Liquidity Agent, the Collateral Agent, the Administrative
Agent and Affiliates 37
SECTION 10.04. Appointment and Powers of Collateral Agent 38
SECTION 10.05. Collateral Agent and Employees of the Collateral Agent 39
SECTION 10.06. Successor Agent 40
ARTICLE XIASSIGNMENT OF LENDER'S INTEREST
SECTION 11.01. Restrictions on Assignments 41
SECTION 11.02. Rights of Assignee 42
SECTION 11.03. Evidence of Assignment 42
ARTICLE XIIINDEMNIFICATION
SECTION 12.01. Indemnities by Borrower and Administrator 42
SECTION 12.02. Indemnities by Servicer 44
SECTION 12.03. Indemnities by TRM ATM 45
ARTICLE XIIIMISCELLANEOUS
SECTION 13.01. Amendments, Etc 46
SECTION 13.02. Notices, Etc 46
SECTION 13.03. No Waiver; Remedies 47
SECTION 13.04. Binding Effect; Survival 47
SECTION 13.05. Costs, Expenses and Taxes 47
SECTION 13.06. No Proceedings 48
SECTION 13.07. Confidentiality 48
SECTION 13.08. [RESERVED] 49
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 13.09. Captions and Cross References 49
SECTION 13.10. Integration 50
SECTION 13.11. Governing Law 50
SECTION 13.12. Waiver of Jury Trial 50
SECTION 13.13. Consent to Jurisdiction; Waiver Of Immunities 50
SECTION 13.14. Execution in Counterparts; Severability 51
SECTION 13.15. No Recourse Against Certain Parties 51
SECTION 13.16. Limitation of Liability 51
</TABLE>
APPENDICES
APPENDIX A Definitions
SCHEDULES
SCHEDULE I Form of Armored Car Carrier Addendum
SCHEDULE II Insurance Schedule
EXHIBITS
EXHIBIT 1.02 Form of Borrowing Notice
EXHIBIT 2.01 Form of Note
EXHIBIT 8.07(i) Form of Servicing Report
<PAGE>
LOAN AND SERVICING AGREEMENT
----------------------------
Dated as of March 17, 2000
THIS IS A LOAN AND SERVICING AGREEMENT, among TRM INVENTORY FUNDING
TRUST, a Delaware business trust ("BORROWER"), TRM ATM CORPORATION, an Oregon
corporation, individually ("TRM ATM") and as initial servicer (in such
capacity, the "SERVICER"), AUTOBAHN FUNDING COMPANY LLC, a Delaware limited
liability company ("LENDER"), DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG, as
administrative agent for Lender (in such capacity, the "ADMINISTRATIVE
AGENT"), and KEYBANK NATIONAL ASSOCIATION, a national banking association
("KEYBANK"), as liquidity agent for Liquidity Providers (in such capacity,
the "LIQUIDITY AGENT") and as collateral agent for the Secured Parties (in
such capacity, the "COLLATERAL AGENT"). Unless otherwise indicated,
capitalized terms used in this Agreement are defined in APPENDIX A.
BACKGROUND
1. Borrower intends to borrow Loans from the Lender and sell
Certificates to the Lender. Borrower has requested Lender and Lender has
agreed, subject to the terms and conditions contained in this Agreement, to
make such Loans to and purchase the Certificates from Borrower from time to
time during the term of this Agreement, which Loans will be secured by a
security interest in all of the assets of Borrower.
2. The Servicer has agreed to undertake certain servicing
obligations for the benefit of the Secured Parties and Borrower as set forth
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
<PAGE>
ARTICLE I.
LOANS; CERTIFICATES
SECTION 1.01 COMMITMENTS TO LEND; LIMITS ON LENDER'S OBLIGATIONS.
Upon the terms and subject to ARTICLE 5 and the other conditions of this
Agreement, from time to time prior to the Termination Date, Borrower may
request that Lender make loans to Borrower on a revolving basis secured by a
Lien on all of the assets of Borrower (each, a "LOAN") and Lender shall make
such Loans; PROVIDED that (i) no Loan shall be made by Lender if, after
giving effect thereto, the sum of the Face Amount of all Commercial Paper
Notes issued by Lender with respect to the Transaction Documents plus the
aggregate principal or certificate balance of all Loans and Certificates
funded other than through the issuance of Commercial Paper Notes would exceed
$30,000,000, except as such amount is increased from time to time with the
consent of the Administrator, the Administrative Agent and the Liquidity
Agent (the "FACILITY LIMIT"); (ii) no Loan shall be made by Lender if, after
giving effect thereto, the Letter of Credit Stated Amount does not at least
equal the Letter of Credit Required Amount, and (iii) each Borrowing made
pursuant to this SECTION 1.01 shall have an initial principal amount of at
least $250,000 and shall be in integral multiples of $1,000, unless otherwise
approved by the Administrative Agent and the Liquidity Agent.
SECTION 1.02 BORROWING PROCEDURES; PRINCIPAL AMOUNT.
(a) NOTICE OF BORROWING. Each Borrowing by Borrower shall be
made on a Business Day on notice from Borrower (or the Administrator on its
behalf) to the Administrative Agent received by the Administrative Agent not
later than 11:00 a.m. (New York City time) on the second Business Day
preceding the date of such proposed Borrowing. Each such notice of a proposed
Borrowing shall be substantially in the form of EXHIBIT 1.02 (each, a
"BORROWING NOTICE") and shall specify the amount of such Borrowing and the
date on which such Borrowing is to be made. Any Borrowing Request given by
Borrower pursuant to this SECTION 1.02 shall be irrevocable and binding on
Borrower. The Borrower shall not be permitted to make more than two
Borrowings during any single calendar week without the consent of the
Administrative Agent and the Liquidity Agent.
(b) FUNDING OF BORROWING. On each Borrowing Date, upon
satisfaction of the applicable conditions set forth in ARTICLE V, Lender
shall make available to the Administrative Agent an amount equal to the
requested Borrowing in same day funds, and, after receipt by the
Administrative Agent of such funds, the Administrative Agent will deposit
such funds into one or more Disbursement Accounts specified by the Servicer;
PROVIDED, HOWEVER, that in the case of the initial Borrowing, the
Administrator shall be permitted to direct an amount equal to all cash in the
ATMs on the date of the initial Borrowing to be paid to an account specified
by the Administrator.
<PAGE>
SECTION 1.03 SECURITY INTEREST. Borrower hereby grants to the
Collateral Agent, for the benefit of the Secured Parties, a first priority
continuing lien and security interest in all of the assets of Borrower
(including, without limitation, all of Borrower's cash and currency,
accounts, chattel paper, instruments, general intangibles, deposit accounts,
inventory, investment property, equipment, rights under SECTIONS 1.05 and
1.06 hereof and all other personal property of Borrower), whether now owned
or hereafter acquired, wherever located, and including proceeds of the
foregoing. Such lien and security interest shall secure all of Borrower's
obligations hereunder, including, without limitation, the payments of
principal of, and interest on, the Note (and the Loans evidenced thereby).
SECTION 1.04 PURCHASE OF CERTIFICATES. On the date of the first
Borrowing under SECTION 1.01, the Borrower shall sell to the Lender and the
Lender shall purchase from the Borrower Certificates with an initial
outstanding certificate balance of $891,000 for a purchase price equal to
such outstanding certificate balance. In addition, if the Facility Limit
hereunder is increased with the consent of the Administrative Agent and the
Liquidity Agent, the Borrower may sell additional Certificates to the Lender
on the first Borrowing Date following any such increase (provided that 1% of
any additional Certificates shall be sold to GSS Holdings, Inc.). Lender
shall make available to the Administrative Agent an amount equal to the
outstanding principal balance of the Certificates purchased on the applicable
purchase date, and, after receipt by the Administrative Agent of such funds,
the Administrative Agent will deposit such funds into one or more
Disbursement Accounts specified by the Servicer.
SECTION 1.05 USE OF PROCEEDS; PROVISION OF CASH. The Borrower
covenants and agrees to use all proceeds of the Loans and sale of the
Certificates solely to provide Cash to TRM ATM for use by TRM ATM in the
ATM's. TRM ATM hereby covenants and agrees that the Borrower shall be the
sole and exclusive source of cash for its ATMs in the United States of
America and until the Final Payout Date hereunder it will not permit cash
from any other cash provider to be placed in such ATMs. TRM ATM hereby
appoints the Borrower as its cash provider and the Borrower hereby accepts
such appointment.
TRM ATM hereby acknowledges and agrees that all right, title and
interest in and to any and all Cash provided by the Borrower to TRM ATM or
its agents or subcontractors for use in the ATMs is and shall remain the sole
and separate property of the Borrower. TRM ATM expressly acknowledges that
the Cash supplied to the ATMs is not, and is not intended to be, a loan from
the Borrower to TRM ATM. If, however, notwithstanding the intent of the
Borrower and TRM ATM, the provision of Cash by Borrower to TRM ATM is
determined to be a loan by the Borrower to TRM ATM, then TRM ATM hereby
grants to the Borrower (which Borrower has assigned to the Collateral Agent
for the benefit of the Secured Parties) a security interest in all of TRM
ATM's right, title and interest in and to the Cash (whether in the form of
currency, credit balances in Networks or otherwise), now existing and
hereafter created, to secure a loan in an amount equal to the Outstanding
Facility Amount. TRM ATM shall acquire no right, title or interest in any
Cash or the proceeds thereof wherever located, including,
<PAGE>
without limitation, Cash (whether in the form of currency, credit balances in
a Network or otherwise) in the possession of a Transportation Agent, any
other agent or subcontractor of TRM ATM, a Processing Agent or at an ATM, in
the Credit Balance Settlement Account or in any other account.
Notwithstanding the foregoing and any other provision in the Transaction
Documents, the parties hereto acknowledge and agree that solely for federal,
state and local income tax purposes, for purposes of any other taxes imposed
upon, measured by or based upon gross or net income, and for franchise tax
purposes, Borrower shall be treated (i) as having made a loan or series of
loans to TRM ATM and (ii) as holding such Cash as security for the
obligations of TRM ATM (as borrower) to Borrower.
TRM ATM hereby acknowledges that the Borrower has granted to the
Collateral Agent, on behalf of the Secured Parties, a security interest in
all of the assets of the Borrower, including, without limitation, the Cash
and any credit balances in the Networks resulting from the dispensing of Cash
at ATMs. If TRM ATM has, or is declared or deemed to have, possession of any
Cash (whether in the form of currency, credit balances in a Networks or
otherwise), TRM ATM agrees that it shall hold all such Cash as custodian and
bailee on behalf of the Collateral Agent for purposes of perfecting the
Collateral Agent's security interest in such Cash.
SECTION 1.06 CASH PROVISION FEE. In consideration for the
Borrower agreeing to provide Cash to TRM ATM for use in the ATMs owned or
leased by TRM ATM, TRM ATM agrees to pay to the Borrower in arrears on each
Cash Provision Fee Payment Date the Cash Provision Fee which shall have
accrued through such date. TRM ATM covenants and agrees that it shall cause
all ATM Fees to be deposited by the applicable Processing Agent directly into
the ATM Fee Settlement Account.
In order to secure and provide for the payment of the TRM Secured
Obligations, TRM ATM hereby grants to the Borrower (which Borrower has
assigned to the Collateral Agent for the benefit of the Secured Parties), a
security interest in all of TRM ATM's right, title and interest in and to all
of the fees and charges earned or received in connection with all cash
withdrawal or other types of transactions initiated at ATMs (including,
without limitation, all Surcharge Fees, Interchange Fees, processing fees and
other fees and charges, whether in the form of a credit to the ATM Fee
Settlement Account, electronic funds, or otherwise ("ATM FEES")), whether now
owned or hereafter acquired or accrued. If an Event of Default or Servicer
Event of Default has occurred and is continuing, the Collateral Agent shall
be permitted to retain (and TRM ATM hereby authorizes the Collateral Agent to
retain and apply) all ATM Fees in the ATM Fee Settlement Account and withdraw
amounts as necessary to pay the TRM Secured Obligations as they become due
and payable in accordance with SECTION 3.03(d).
Prior to an Event of Default or Servicer Event of Default, TRM ATM
shall be permitted to withdraw ATM Fees from the ATM Fee Settlement Account
in its discretion.
<PAGE>
ARTICLE II.
NOTE
SECTION 2.01 NOTE. The Loans shall be evidenced by a promissory
note (as from time to time supplemented, extended, amended or replaced, the
"NOTE"), substantially in the form set forth in EXHIBIT 2.01, with
appropriate insertions, dated the date hereof, payable to the order of Lender
in the initial maximum principal amount of $29,100,000 on the Maturity Date.
If the Facility Limit is increased pursuant to SECTION 1.01, the Note shall
be replaced by a promissory note, substantially in the form of the existing
Note, with appropriate changes to reflect an increased maximum principal
amount to coincide with the increased Facility Limit. Upon receipt of a new
Note satisfactory to Lender, Lender shall cause the existing Note to be
destroyed. Principal of, and interest on, the Loans shall be paid from time
to time as set forth in SECTION 3.03. Borrower shall have the right to prepay
all or any portion of the Loans in full on any Settlement Date, PROVIDED that
Borrower notifies the Administrative Agent of such intention to prepay the
Loans in a notice delivered on the related Reporting Date preceding such
Settlement Date. Any such prepayment under this SECTION 2.01 shall be
accompanied by all accrued and unpaid interest on the Loans and all other
amounts then due hereunder. The Administrative Agent shall record in its
records, or at its option on the schedule attached to the Note, the date and
amount of each Loan made hereunder, the interest rate with respect thereto
(as determined under SECTION 2.02), each repayment thereof, and the other
information provided for thereon. The aggregate unpaid principal amount so
recorded shall be rebuttable presumptive evidence of the principal amount
owing and unpaid on the Note. The failure so to record any such information
or any error in so recording any such information shall not, however, limit
or otherwise affect the actual obligations of Borrower hereunder or under the
Note to repay the principal amount of all Loans, together with all interest
accruing thereon, as set forth in this Agreement.
SECTION 2.02 INTEREST ON LOANS AND YIELD ON CERTIFICATES. Each
Loan and each Certificate shall accrue interest or yield, respectively,
during each Settlement Period at a rate equal to the Interest Rate or Yield
Rate, as applicable, as in effect for such Settlement Period for such Loan or
Certificate, which interest or yield, as applicable, shall be payable on each
Settlement Date as set forth in SECTION 3.03. Interest and yield shall be
payable on each Settlement Date for the Settlement Period related to such
Settlement Date from amounts distributed pursuant to SECTION 3.03.
SECTION 2.03 GENERAL PROCEDURES. No outstanding principal or
certificate balance shall be considered reduced by any allocation, set aside
or distribution of any portion of Collections or any other payment unless
such Collections or other payment shall have been actually delivered to the
applicable Secured Party pursuant hereto. No principal or interest or
certificate balance or yield shall be considered paid by any distribution of
any portion of Collections or any other payment if at any time such
distribution or payment is rescinded or must otherwise be returned for any
reason. No
<PAGE>
provision of this Agreement shall require the payment or permit the
collection of interest in excess of the maximum permitted by Applicable Law.
SECTION 2.04 COMMITMENT FEE. Borrower agrees to pay to the
Lender a commitment fee (the "COMMITMENT FEE") for each day, from the date
hereof to the Termination Date, equal to the product of (x) the Facility
Limit, MINUS the Outstanding Facility Amount on such day, TIMES (y) 0.30%,
DIVIDED BY (z) 360. The Commitment Fee shall be paid in arrears, on each
Settlement Date as set forth in SECTION 3.03 and on the Termination Date, in
the amount that shall have accrued during the Settlement Period (or portion
thereof) related to such Settlement Date or other period then ending and
which shall not have been previously paid.
SECTION 2.05 REGISTRATION; REGISTRATION OF TRANSFER AND
EXCHANGE OF NOTES.
(a) The Owner Trustee shall be the Note Registrar hereunder.
The Note Registrar shall keep or cause to be kept, at its address set forth
on the signature page hereof, a Note Register in which, subject to such
reasonable regulations as it may prescribe, the Note Registrar shall provide
for the registration of Notes and of transfers and exchanges of Notes as
provided herein; PROVIDED, HOWEVER, that no Note may be subdivided in
denominations less than $100,000 or integral multiples of $1,000 upon any
transfer or exchange.
(b) At the option of a Noteholder, Notes may be exchanged
for other Notes in authorized denominations of a like aggregate principal
amount upon surrender of the Notes to be exchanged to the Note Registrar.
Upon surrender for registration of transfer or exchange of any Note, the
Owner Trustee shall execute on behalf of the Borrower, authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized denominations of a like aggregate amount dated the
date of authentication by the Owner Trustee or any authenticating agent.
(c) Every Note presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Note Registrar duly
executed by the Noteholder or his attorney duly authorized in writing. Each
Note surrendered for registration of transfer and exchange shall be canceled
and subsequently destroyed by the Note Registrar in accordance with its
customary practice. No service charge shall be made for any registration of
transfer or exchange of Notes, but the Owner Trustee or the Note Registrar
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Notes.
(d) The parties hereto agree that all actions of the Owner
Trustee as Note Registrar under this SECTION 2.05 shall be subject to the
provisions of Article VI of the Trust Agreement.
<PAGE>
ARTICLE III.
SETTLEMENTS
SECTION 3.01 ACCOUNTS; INVESTMENTS.
(a) ACCOUNTS. On or before the first Borrowing Date, Borrower
(or the Administrator on its behalf) shall establish in the name of the
Borrower for the benefit of the Collateral Agent, for the benefit of the
Secured Parties, the following accounts, which accounts shall be segregated
accounts maintained at the Collateral Agent or another Qualified Institution
(provided that, prior to the use of another Qualified Institution, the
Borrower (or the Administrator on its behalf) shall provide an opinion of
counsel with respect to perfection issues substantially in the form of the
opinion issued pursuant to SECTION 5.01(f) prior to the initial Borrowing and
otherwise acceptable to the Administrative Agent and the Liquidity Agent)
subject to account agreements in form and substance acceptable to the
Collateral Agent:
(i) the ATM Fee Settlement Account;
(ii) the Reserve Account; and
(iii) the Credit Balance Settlement Account.
There shall be established, in the name of the Borrower, for
the benefit of the Collateral Agent, a segregated deposit account
subject to a Depository Bank Agreement (each, a "DISBURSEMENT ACCOUNT")
at each Depository Bank from which the applicable Depository Bank shall
distribute funds in accordance with instructions received by such
Depository Bank from the Servicer (or its authorized agents), and in
accordance with the terms of the Transaction Documents and the
applicable Depository Bank Agreement, until such time as the Collateral
Agent instructs such Depository Bank, or instructs the Servicer to
instruct such Depository Bank, to cease such distribution of funds and
to distribute such funds only in accordance with further instructions
from the Collateral Agent. The initial Disbursement Account shall be at
Bank of America, N.A. in the State of North Carolina. Prior to adding
any additional Disbursement Accounts, Borrower (or the Administrator on
its behalf) shall provide an opinion of counsel with respect to
perfection issues substantially in the form of the opinion issued
pursuant to SECTION 5.01(f) prior to the initial Borrowing and
otherwise acceptable to the Administrative Agent and the Liquidity
Agent. All such amounts in the Credit Balance Settlement Account and
the Disbursement Accounts shall be held by the Collateral Agent, each
Depository Bank and the Servicer, as the case may be, in such accounts
as part of the Asset Pool as herein provided, subject to withdrawal by,
or at the direction of, the Collateral Agent or the Servicer, in
accordance with, and for the purposes specified in the provisions of,
this Agreement.
<PAGE>
(b) INVESTMENTS. All or a portion of the amounts in the Credit
Balance Settlement Account shall be invested and reinvested by the Collateral
Agent (as directed by the Administrator) in one or more Eligible Investments.
TRM ATM agrees to report as income for financial reporting and federal, state
and local income tax purposes (to the extent reportable) all investment
earnings, income and gains (if any) on amounts in the Credit Balance
Settlement Account, the ATM Fee Settlement Amount and the Reserve Account.
(c) MATURITY OF INVESTMENTS. No investment of any amount held
in the Credit Balance Settlement Account shall mature later than the earlier
of (i) the Business Day immediately preceding the Settlement Date which is
scheduled to occur immediately following the date of investment and (ii) one
week from the date of investment.
(d) FORM OF INVESTMENT. Any investment of any funds in the
Credit Balance Settlement Account shall be made under the following terms and
conditions:
(i) each such investment shall be made in the name of the
Collateral Agent (in its capacity as such) or in the name of a
nominee of the Collateral Agent, and
(ii) any certificate or other instrument evidencing such investment
shall be delivered directly to the Collateral Agent and endorsed
in the name of the Collateral Agent and the Collateral Agent
shall have sole possession of such instrument.
(e) COLLATERAL AGENT NOT LIABLE. The Collateral Agent shall
not in any way be held liable by reason of any insufficiency in the Credit
Balance Settlement Account resulting from losses on investments made in
accordance with the provisions of this SECTION 3.01 (but the Collateral Agent
shall at all times remain liable for its own debt obligations, if any,
constituting part of such investments). The Collateral Agent shall not be
liable for any investment made by it in accordance with this SECTION 3.01 on
the grounds that it could have made a more favorable investment.
SECTION 3.02 COLLECTION OF MONEYS. If at any time Borrower or
the Servicer shall receive any payment on or in respect of any Pool Asset, it
shall hold such payment in trust for the benefit of the Collateral Agent and
the other Secured Parties, shall segregate such payment from the other
property of Borrower or the Servicer, as the case may be, and shall, promptly
upon receipt, deliver such payment in the form received to the Collateral
Agent for deposit into the Credit Balance Settlement Account.
<PAGE>
SECTION 3.03 SETTLEMENT.
(a) CASH PROVISION FEES. The Servicer shall pay all Cash Provision
Fees payable to the Borrower to the Credit Balance Settlement Account. TRM ATM
covenants and agrees to cause all ATM Fees to be deposited directly into the
ATM Fee Settlement Account.
(b) CREDIT BALANCE DEPOSITS. Borrower and the Servicer shall
deposit, or cause to be deposited, all Collections (including all Cash
Provision Fees) into the Credit Balance Settlement Account within one
business day of receipt thereof.
(c) PROCESSING AGENT FEES. The Servicer shall cause all Processing
Agent Fees payable to any Processing Agent under a Processing Services
Agreement for services rendered in connection with the Cash to be settled out
of ATM Fees on a monthly basis prior to such ATM Fees being deposited in the
ATM Fee Settlement Account.
(d) CASH PROVISION SETTLEMENT PROCEDURES. Cash Provision Fees
deposited into the Credit Balance Settlement Account shall be disbursed on
each Settlement Date at the direction of the Servicer to the applicable
Persons or accounts identified in each of the following clauses, in the
amounts required and according to the following order of priority:
FIRST, an amount equal to any unpaid expenses of the
Collateral Agent shall be paid to the Collateral Agent;
SECOND, an amount equal to any unpaid Servicing Fee (if
neither TRM ATM nor any of its Affiliates is the Servicer) shall be
paid to the Servicer;
THIRD, an amount equal to the interest accrued in respect of
all Loans during the preceding Settlement Period, PLUS the
Commitment Fee accrued during the preceding Settlement Period, PLUS
any portion of interest on the Loans, and any portion of any
Commitment Fee not paid when due on any prior Settlement Date, shall
be paid to Administrative Agent on behalf of the Lender;
FOURTH, an amount equal to the yield accrued in respect of all
Certificates during the preceding Settlement Period, PLUS any
portion of yield on the Certificates not paid when due on any prior
Settlement Date, shall be paid to the Administrative Agent on behalf
of the Lender;
FIFTH, an amount equal to any other amounts due and owing to
the Secured Parties pursuant to this Agreement shall be paid to the
applicable Secured Parties;
SIXTH, first, an amount equal to any unpaid Administrative
Fees shall be paid to the Administrator and second, an amount equal
to any unpaid Servicing
<PAGE>
Fees not otherwise paid pursuant to CLAUSE SECOND above shall be
paid to the Servicer; and
SEVENTH, all remaining amounts shall be paid to the Servicer
as a supplemental servicing fee.
(e) CREDIT BALANCE SETTLEMENT PROCEDURES. Amounts on deposit in
the Credit Balance Settlement Account (other than Cash Provision Fees) shall
be withdrawn from the Credit Balance Settlement Account on each Business Day
and disbursed at the direction of the Servicer to the applicable Persons or
accounts identified in each of the following clauses, in the amounts required
and according to the following order of priority:
FIRST, an amount equal to the Loan Amortization Amount for
such date shall be paid to Administrative Agent on behalf of the
Lender and shall be applied to the outstanding principal amount of
the Loans;
SECOND, an amount equal to the Certificate Amortization Amount
for such date shall be paid to the Administrative Agent on behalf of
the Lender and shall be applied to the outstanding principal amount of
the Certificates;
THIRD, an amount equal to any other amounts due and owing to
the Secured Parties pursuant to this Agreement and not otherwise
paid pursuant to CLAUSE FIFTH of SECTION 3.03(d) shall be paid to
the applicable Secured Party; and
FOURTH, prior to the Final Payout Date, any remaining amounts
shall be transferred to one or more Disbursement Accounts for
disbursement to Transportation Agents for redeployment in ATMs upon
the direction of the Servicer, pursuant to the terms of this
Agreement and the Depository Bank Agreements and, after the Final
Payout Date, any remaining amounts shall be paid to Servicer as a
supplemental servicing fee.
SECTION 3.04 LETTER OF CREDIT MATTERS.
(a) LETTER OF CREDIT MATTERS. On or prior to the initial Borrowing
Date, TRM ATM shall deliver the Letter of Credit to the Collateral Agent as
security for the performance of its duties hereunder as TRM ATM, as Servicer
and as Administrator and as security for the Borrower's obligations to the
Secured Parties hereunder.
(b) DRAWINGS ON LETTER OF CREDIT. If by 12:00 noon (New York, New
York time) on any Settlement Date, (i) the amount of Cash Provision Fees paid
by TRM ATM to the Credit Balance Settlement Account is insufficient (as set
forth on the most recent Servicing Report) to permit on such Settlement Date
the distributions required by CLAUSES SECOND, THIRD and FOURTH of SECTION
3.03(d) or (ii) the amount of collected funds on deposit on the Credit Balance
Settlement Account is insufficient to permit on such Settlement Date the
distribution required by CLAUSES FIRST and SECOND of SECTION 3.03(e),
<PAGE>
then the Liquidity Agent shall direct the Collateral Agent to make a drawing
on the Letter of Credit in an amount equal to the aggregate shortfall and
apply the amounts received (x) first, in the case of a deficiency described
in clause (i) above, to pay the amounts required by CLAUSES SECOND through
FOURTH of SECTION 3.03(d), and (y) second, in the case of a deficiency
described in clause (ii) above, to the Credit Balance Settlement Account,
such amount as shall be necessary to make the distributions required by
CLAUSES FIRST and SECOND of SECTION 3.03(e).
(c) In the event that the short-term unsecured debt rating of the
Letter of Credit Bank falls below "P-1" by Moody's or "F1" by Fitch, then
within two (2) Business Days after TRM ATM shall have received notice or shall
have obtained actual knowledge of such event, TRM ATM shall notify the
Administrative Agent and the Liquidity Agent, and TRM ATM shall, within
twenty-one (21) Business Days after giving such notice, use all reasonable
efforts to obtain a replacement letter of credit for such Letter of Credit
issued by a Qualified Letter of Credit Bank in an amount equal to the Letter
of Credit Stated Amount. If TRM ATM does not replace such Letter of Credit as
aforesaid, the Liquidity Agent shall direct the Collateral Agent to make a
drawing on the Letter of Credit in an amount equal to the Letter of Credit
Stated Amount and deposit such amount into the Reserve Account to be held and
applied in accordance with SECTION 3.04(b).
(d) If the Collateral Agent has not received (i) from the existing
Letter of Credit Bank either (A) an amendment to the existing Letter of Credit
extending the existing Letter of Credit Expiry Date or (B) a new or
replacement letter of credit reflecting such extension or (ii) a replacement
Letter of Credit from a Qualified Letter of Credit Bank in an amount equal to
the Letter of Credit Stated Amount and effective as of the Letter of Credit
Expiry Date of the existing Letter of Credit, at least two (2) Business Days
prior to the Letter of Credit Expiry Date, then the Liquidity Agent shall
direct the Collateral Agent to draw on the Letter of Credit on the date two
(2) Business Days prior to the Letter of Credit Expiry Date, in an amount
equal to the Letter of Credit Stated Amount and deposit such amount in a
segregated trust account to be held and applied in accordance with SECTION
3.04(b).
SECTION 3.05 PAYMENTS AND COMPUTATIONS, ETC.
(a) PAYMENTS. All amounts to be paid or deposited by the Borrower,
TRM ATM or the Servicer to any other Person hereunder (other than amounts
payable under SECTION 4.02) shall be paid or deposited in accordance with the
terms hereof no later than 2:00 p.m. (New York, New York time) on the day when
due in lawful money of the United States of America in same day funds to the
accounts specified by the applicable Secured Parties in writing.
<PAGE>
(b) LATE PAYMENTS. Borrower, TRM ATM or Servicer, as applicable,
shall, to the extent permitted by law, pay to the applicable Secured Party
interest on all amounts not paid or deposited when due hereunder at 2% PER
ANNUM above the Base Rate (the "DEFAULT RATE"), payable on demand, PROVIDED,
HOWEVER, that such interest rate shall not at any time exceed the maximum rate
permitted by applicable law.
(c) METHOD OF COMPUTATION. All computations of interest, yield and
any fees payable by Borrower or TRM ATM hereunder shall be calculated on the
basis of a year of 360 days, for the actual days elapsed; PROVIDED, HOWEVER,
that interest or yield calculated at the Base Rate shall be on the basis of a
year of 365 days for the actual number of days elapsed.
ARTICLE IV.
YIELD PROTECTION
SECTION 4.01 [RESERVED.]
SECTION 4.02 YIELD PROTECTION.
(a) If after the date hereof (i) Regulation D of the Board of
Governors of the Federal Reserve System or (ii) any Regulatory Change:
(A) shall subject an Affected Party to any tax, duty or other
charge with respect to any Loan or Certificate owned or funded by it, or any
obligations or right to make Loans or purchase Certificates or to provide
funding therefor, or shall change the basis of taxation of payments to the
Affected Party of any interest or principal owed with respect to Loans or
Certificates funded in whole or in part by it or any other amounts due under
this Agreement in respect of the Loans or Certificates owned or funded by it
or its obligations or rights, if any, to make Loans, purchase Certificates or
to provide funding therefor (except for changes in the rate of tax on the
overall net income of such Affected Party imposed by the United States of
America or by any jurisdiction in which such Affected Party is
<PAGE>
organized or maintains its principal executive office or an office from which
it makes Loans); or
(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal Reserve
Board, but excluding any reserve included in the determination of interest on
the Loans or Certificates), special deposit or similar requirement against
assets of any Affected Party, deposits or obligations with or for the account
of any Affected Party or with or for the account of any Affiliate (or entity
deemed by the Federal Reserve Board to be an Affiliate) of any Affected Party
(to the extent such Affiliate is providing funding, liquidity or credit
enhancement for the Loans or Certificates), or credit extended by any Affected
Party; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Party; or
(D) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto) assesses,
deposit insurance premiums or similar charges; or
(E) shall impose any other condition affecting any Loan or
Certificate owned or funded in whole or in part by any Affected Party, or its
obligations or rights, if any, to make Loans, purchase Certificates or to
provide funding therefor;
and the result of any of the foregoing is or would be
(x) to increase the cost to or to impose a cost on (I) an
Affected Party funding, purchasing, making or maintaining any Loan or
Certificate, any purchases, reinvestments, or loans or other extensions
of credit under the Liquidity Agreement, or any commitment of such
Affected Party with respect to any of the foregoing, or (II) the
Administrative Agent or Liquidity Agent for continuing its or
Borrower's relationship with Lender,
(y) to reduce the amount of any sum received or receivable by
an Affected Party under this Agreement or under the Liquidity Agreement
with respect thereto, or
(z) in the good faith determination of such Affected Party, to
reduce the rate of return on the capital of an Affected Party as a
consequence of its obligations hereunder or arising in connection
herewith to a level below that which such Affected Party could
otherwise have achieved,
then within thirty days after demand by such Affected Party (which demand
shall be accompanied by a statement setting forth the basis of such demand),
Borrower shall pay directly to such Affected Party such additional amount or
amounts as will compensate such Affected Party for such additional or
increased cost or such reduction.
<PAGE>
(b) Each Affected Party will promptly notify Borrower, the
Liquidity Agent and the Administrative Agent of any event of which it has
knowledge which will entitle such Affected Party to compensation pursuant to
this SECTION 4.02. Failure or delay in giving such notification shall not
constitute a waiver of such Affected Party's right to such compensation;
PROVIDED that such Affected Party shall not be entitled to compensation under
this Section 4.02 for any increased costs or reductions incurred or suffered
with respect to any date unless such Affected Party shall have notified the
Borrower not more than 90 days after the later of (i) such date and (ii) the
date on which such Affected Party shall have become aware of such costs or
reductions.
(c) In determining any amount provided for or referred to in
this SECTION 4.02, an Affected Party may use any reasonable averaging and
attribution methods that it (in its sole discretion) shall deem applicable.
Any Affected Party when making a claim under this SECTION 4.02 shall submit
to Borrower a statement as to such increased cost or reduced return
(including calculation thereof in reasonable detail), which statement shall,
in the absence of demonstrable error, be conclusive and binding upon Borrower.
(d) Upon receipt by an Affected Party of a refund or credit
for any amounts indemnified by the Borrower under this Section 4.02, such
Affected Party shall pay to Borrower an amount equal to the amount of such
refund or credit plus any interest received by or credited to such Affected
Party with respect to such refund or credit.
SECTION 4.03 FUNDING LOSSES. In the event that any Affected
Party shall incur any loss or expense (including any loss or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by such Affected Party to make or maintain any liquidity funding
under the Liquidity Agreement) as a result of (i) any payment being made on
any day other than on a Settlement Date, or (ii) any Borrowing not being made
in accordance with a request therefor under SECTION 1.02, then, upon written
notice from the Administrative Agent or the Liquidity Agent to Borrower and
Servicer, Borrower shall pay to the applicable Affected Party the amount of
such loss or expense. Such written notice (which shall include calculations
in reasonable detail) shall, in the absence of manifest error, be conclusive
and binding upon Borrower.
SECTION 4.04 TAXES. Any and all payments by the Borrower, the
Administrator or the Servicer hereunder shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING, net income taxes that are imposed by the United States
and franchise taxes and net income taxes that are imposed by the state or
foreign jurisdiction under the laws of which the payee is organized or
conducts business or any political subdivision thereof, and also not
including such amounts resulting from any income tax filing by
Certificateholders inconsistent with the characterization of advances by the
Borrower to TRM ATM as a loan or series of loans for federal income tax
purposes other than any such filing required by any taxing authority (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "TAXES"). If Borrower, the
Administrator
<PAGE>
or the Servicer shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to the Lender or the Administrative
Agent, (i) the Borrower, the Administrator or the Servicer, as the case may
be, shall make an additional payment to the payee in an amount sufficient so
that, after making all required deductions (including deductions applicable
to additional sums payable under this section), the payee receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower, the Administrator or the Servicer, as the case may be,
shall make such deductions and (iii) the Borrower, the Administrator or the
Servicer, as the case may be, shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
If, in connection with an agreement or other document providing
liquidity support, credit enhancement or other similar support to the Lender
in connection with this Agreement or the funding or maintenance of the Loans
and/or Certificates hereunder, the Lender is required to compensate a bank or
other financial institution providing such liquidity support, credit
enhancement or other similar support in respect of taxes under circumstances
similar to those described in this section then upon written demand by the
Lender, the Borrower, the Administrator or the Servicer shall pay to the
Lender such additional amount or amounts as may be necessary to reimburse
such Lender for any amounts paid by it.
ARTICLE V.
CONDITIONS OF BORROWINGS
SECTION 5.01 CONDITIONS PRECEDENT TO INITIAL BORROWING. The
initial Borrowing hereunder is subject to the condition precedent that each
of the Administrative Agent and the Liquidity Agent shall have received, on
or before the date of such Borrowing, the following, each (unless otherwise
indicated) dated such date and in form and substance satisfactory to the
Administrative Agent and the Liquidity Agent:
(a) A copy of the approval of the Board of Directors of the
Servicer approving this Agreement and the other Transaction Documents to be
delivered by it hereunder and the transactions contemplated hereby, certified
by its Secretary or Assistant Secretary;
(b) A good standing certificate for Borrower issued by the
Secretary of State of Delaware and a status certificate for the Servicer
issued by the Secretary of State of Oregon;
(c) A certificate of the Secretary or Assistant Secretary of
the Servicer certifying the names and true signatures of the officers
authorized on its behalf to sign this Agreement and the other Transaction
Documents to be delivered by it hereunder (on which certificate the
Administrative Agent and the Liquidity Agent may conclusively rely until such
time as they shall receive a revised certificate meeting the requirements of
this SUBSECTION (c));
<PAGE>
(d) Execution copies of the organizational documentation of
Borrower and copies of the articles of incorporation and bylaws of Servicer,
certified by the Secretary or Assistant Secretary of the Servicer;
(e) Acknowledgment copies of proper financing statements
(Form UCC-1), filed on or prior to the date of the initial Borrowing, naming
Borrower as the debtor and the Collateral Agent as the secured party
describing all of the assets of the Borrower filed in the states of Delaware
and Oregon; copies of search reports listing all effective financing
statements that name Borrower as debtor and that are filed in the
jurisdictions in which filings were made pursuant to the preceding clause and
any other instruments or documents as may be necessary or desirable (in the
opinion of the Administrative Agent or the Liquidity Agent) to perfect the
Collateral Agent's interest in all Pool Assets; acknowledgment copies of
proper financing statements (Form UCC-1), filed on or prior to the date of
the initial Borrowing, naming TRM ATM as the debtor, the Borrower as the
Secured Party and the Collateral Agent as assignee in the state of Oregon;
copies of search reports listing all effective financing statements that name
TRM ATM as debtor and that are filed in Oregon;
(f) Favorable opinions of Stoel Rives LLP, counsel to
Borrower and Servicer, regarding such items as non-consolidation and
perfection of security interests, a favorable opinion of Mayer, Brown & Platt
regarding enforceability and a favorable opinion of counsel to the Indenture
Trustee regarding the enforceability of the Trust Agreement and other items;
(g) Such powers of attorney as the Collateral Agent shall
reasonably request to enable the Collateral Agent to collect all Cash and all
other Pool Assets;
(h) The Note and the Certificates, duly executed by Borrower;
(i) The Letter of Credit;
(j) A PRO FORMA Servicing Report, prepared in respect of the
proposed initial Borrowing;
(k) The Liquidity Agreement, duly executed by Lender, the
Liquidity Agent, each Liquidity Provider and the other parties thereto;
(l) Letters from the rating agencies then rating the
Commercial Paper Notes confirming that the existing ratings of the Commercial
Paper Notes will remain in effect after giving effect to the transactions
contemplated hereby;
(m) Execution copies of all agreements entered into by TRM
ATM relating to the ATMs and the transportation of the Cash, including,
without limitation, copies of the executed Cash Replenishment Services
Supplement, MAS Processing Letter
<PAGE>
Agreement, Addendum to Armored Car Carrier Agreement and Depository Bank
Agreement;
(n) Proof of insurance reasonably acceptable to the
Administrative Agent, the Liquidity Agent, Fitch and Moody's, covering any
theft, destruction, or other loss of Cash while such Cash is located in an
ATM or in the possession or care of a Transportation Agent naming the
Collateral Agent as loss payee;
(o) the transaction represented by the Transaction Documents
shall achieve a "shadow" rating of at least "A" by Fitch; and
(p) Such other documents, opinions and certificates as the
Administrative Agent or the Liquidity Agent may reasonably request.
SECTION 5.02 CONDITIONS PRECEDENT TO ALL BORROWINGS. Each
Borrowing (including the initial Borrowing) hereunder shall be subject to the
further conditions precedent that on the date of such Borrowing the following
statements shall be true (and Borrower by accepting the amount of such
Borrowing shall be deemed to have certified that):
(a) representations and warranties contained in SECTIONS
6.01 and 6.02 are correct in all material respects on and as of such day as
though made on and as of such day (and shall be deemed to have been made on
such day),
(b) event has occurred and is continuing, or would result
from such Borrowing, that constitutes an Event of Default, Servicer Event of
Default or Unmatured Event of Default,
(c) giving effect to each proposed Borrowing, (i) no Borrowing
Base Deficiency will exist and (ii) the Letter of Credit Stated Amount is at
least equal to the Letter of Credit Required Amount,
(d) Termination Date has not occurred,
(e) the Administrator shall have delivered, on behalf of the
Borrower, an executed Borrowing Notice (certified by the Controller or Chief
Financial Officer of the Administrator) to the Administrative Agent,
(f) the Servicer shall have delivered to the Administrative
Agent and the Liquidity Agent (I) a current list stating: (i) the identity of
each Transportation Agent (with a contact person and telephone number) and
each Armored Car Carrier, and (ii) the identity of each Processing Agent
(with a contact person and telephone number) and (II) execution copies of all
agreements relating to the ATMs or the transportation of Cash and proof of
the required insurance relating to any new Transportation Agents, Armored Car
Carriers or Processing Agents,
<PAGE>
(g) the Servicer shall have delivered to the Administrative
Agent and the Liquidity Agent copies of such executed written consents and
waivers from third parties as the Collateral Agent may reasonably request to
ensure the Collateral Agent's or each Transportation Agent's unfettered
access to the Cash;
(h) no law, rule or regulation shall prohibit and no order,
judgment or decree of any Governmental Authority shall prohibit or enjoin the
making of such Borrowing; and
(i) the Administrative Agent and Liquidity Agent shall have
received such other approvals, opinions and documents as they may reasonably
request.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 REPRESENTATIONS AND WARRANTIES OF BORROWER.
Borrower represents and warrants as follows:
(a) ORGANIZATION AND GOOD STANDING. It has been duly formed
and is validly existing as a business trust in good standing under the laws
of the State of Delaware.
(b) DUE QUALIFICATION. It is duly qualified to do business as
a foreign entity in good standing (if applicable), and has obtained all
necessary licenses and approvals, in all jurisdictions in which the failure
to obtain such qualifications, licenses or approvals could reasonably be
expected to have a Material Adverse Effect.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. It (i) has all
necessary power, authority and legal right to (A) own its properties and to
conduct its business as such properties are presently owned and such business
is presently conducted, (B) execute and deliver the Transaction Documents to
which it is a party, (C) carry out the terms of the Transaction Documents,
and (D) borrow the Loans, issue the Certificates and grant a security
interest in its assets on the terms and conditions herein provided and (ii)
has duly authorized by all necessary action the execution, delivery and
performance of this Agreement and the other Transaction Documents to which it
is a party and the borrowing of the Loans, the issuance of the Certificates
and the granting of the security interest in its assets on the terms and
conditions herein provided.
(d) BINDING OBLIGATIONS. Each Transaction Document to which it is
a party constitutes a legal, valid and binding obligation of it enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
<PAGE>
(e) NO CONFLICT. The consummation of the transactions contemplated
by the Transaction Documents and the fulfillment of the terms thereof will not
(i) conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time or both) a default
under, its organizational documentation, or any indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument to which it is a
party or by which it or any of its properties is bound, (ii) result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such indenture, loan agreement, mortgage, deed of trust, or other
agreement or instrument, other than this Agreement, or (iii) violate any
Applicable Law applicable to it or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best of its knowledge, threatened before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of any Transaction Document, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
any Transaction Document, or (iii) seeking any determination or ruling that
could reasonably be expected to have a Material Adverse Effect.
(g) JUDGMENTS. No injunction, decree or other decision has been
issued or made by any court, governmental agency or instrumentality thereof
that prevents, and to Borrower's knowledge no threat by any person has been
made that could be expected to result in any such decision that would prevent,
it from conducting a significant part of its business operations.
(h) GOVERNMENT APPROVALS. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by it of any
Transaction Document (other than the financing statements referred to in
SECTION 5.01(e)).
(i) FINANCIAL CONDITION. Since the date of its organization, there
has been no material adverse change in the financial condition, business,
business prospects or operations of the Borrower.
(j) MARGIN REGULATIONS. The use of funds obtained by Borrower
under this Agreement will not conflict with or contravene any of Regulations
T, U and X promulgated by the Board of Governors of the Federal Reserve System
from time to time.
(k) PERFECTED INTEREST. Each Pool Asset is owned by Borrower free
and clear of any Lien other than any Lien created under the Transactions
Documents for the benefit of the Collateral Agent. Except for the filing of
the financing statements referred to in SECTION 5.01, no further action,
including any filing or recording of any document, is necessary in order to
establish, protect and perfect the first priority security interest of the
Collateral Agent in the assets of Borrower. No financing statement or other
instrument similar in effect covering any asset of Borrower or any interest
therein is on file in any
<PAGE>
recording office except such as may be filed (i) in connection with any Lien
arising solely as the result of any action taken by Collateral Agent or (ii)
in favor of the Collateral Agent, for the benefit of the Secured Parties.
(l) ACCURATE INFORMATION. No Servicing Reports or other
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by or on behalf of Borrower or the Administrator
to the Administrative Agent or Liquidity Agent in connection with any of the
Transaction Documents was or will be inaccurate in any material respect as of
the date it was or will be dated or (except as otherwise disclosed to the
Administrative Agent or Liquidity Agent at such time) as of the date so
furnished, or contained or will contain any material misstatement of fact or
omitted or will omit to state a material fact or any fact necessary to make
the statements contained therein not materially misleading.
(m) OFFICES. The chief place of business and chief executive
office of Borrower are located at the address of Borrower identified on the
signature pages hereof and the offices where Borrower keeps all its books,
records and documents are located at such address (or at such other locations,
notified to the Administrative Agent and the Liquidity Agent in accordance
with SECTION 7.01(d), in jurisdictions where all action necessary to maintain
the Collateral Agent's first priority perfected interest in the assets of
Borrower has been taken and completed).
(n) CAPITAL OF BORROWER. Borrower is solvent and has adequate
capital for its business and undertakings.
(o) INVESTMENT COMPANY ACT. Borrower is not, and is not controlled
by, an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended.
(p) LEGAL NAMES. Borrower has not been known by any legal name,
and has used no trade names, other than the name set forth on the signature
page hereto and has not been the subject of any merger or other corporate
reorganization that resulted in a change of name, identity or corporate
structure.
(q) TAXES. Borrower has filed or caused to be filed all tax
returns which, to its knowledge, are required to be filed. Borrower has paid
or made adequate provisions for the payment of all taxes and all assessments
made against it or any of its property (other than any amount of tax the
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have
been provided on the books of Borrower), and no tax lien has been filed and,
to Borrower's knowledge, no claim is being asserted, with respect to any such
tax, fee or other charge.
<PAGE>
SECTION 6.02 REPRESENTATIONS AND WARRANTIES OF THE SERVICER AND
TRM ATM. Each of the Servicer and TRM ATM represents and warrants as follows:
(a) ORGANIZATION AND GOOD STANDING. It has been duly organized and
is validly existing as a corporation under the laws of the state of its
formation.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the failure to obtain such
qualification, licenses or approvals could reasonably be expected to have a
Material Adverse Effect.
(c) POWER AND AUTHORITY; DUE AUTHORIZATION. It (i) has all
necessary power, authority and legal right to (A) own its properties and to
conduct its business as such properties are presently owned and such business
is presently conducted, (B) execute and deliver the Transaction Documents to
which it is a party, and (C) carry out the terms of the Transaction Documents,
and (ii) has duly authorized by all necessary corporate action the execution,
delivery and performance of the other Transaction Documents to which it is a
party.
(d) BINDING OBLIGATIONS. Each Transaction Document to which it is
a party constitutes a legal, valid and binding obligation of it enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law.
(e) NO VIOLATION. The consummation of the transactions
contemplated by the Transaction Documents and the fulfillment of the terms
thereof will not (i) conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of time or
both) a default under, its organizational documentation or any indenture, loan
agreement, mortgage, deed of trust, or other agreement or instrument to which
it is a party or by which it or any of its properties is bound, (ii) result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, loan agreement, mortgage, deed of trust, or
other agreement or instrument, other than this Agreement, or (iii) violate any
Applicable Law applicable to it or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best of its knowledge, threatened before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of any Transaction Document, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
any Transaction Document, or (iii) seeking any determination or ruling that
might have a Material Adverse Effect.
<PAGE>
(g) GOVERNMENT APPROVALS. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by it of any
Transaction Document.
(h) JUDGMENTS. No injunction, decree or other decision has been
issued or made by any court, governmental agency or instrumentality thereof
that prevents, and to the TRM ATM's knowledge no threat by any person has been
made that could be expected to result in any such decision that would prevent,
it from conducting a significant part of its business operations.
(i) ACCURATE INFORMATION. No Servicing Report or other
information, exhibit, financial statement, document, book, record or report
furnished or to be furnished by or on behalf of TRM ATM or its Affiliates to
the Administrative Agent or the Liquidity Agent in connection with any of the
Transaction Documents was or will be inaccurate in any material respect as of
the date it was or will be dated or (except as otherwise disclosed to the
Administrative Agent and the Liquidity Agent at such time) as of the date so
furnished, or contained or will contain any material misstatement of fact or
omitted or will omit to state a material fact or any fact necessary to make
the statements contained therein not materially misleading.
(j) OFFICES. The chief place of business and chief executive
office of TRM ATM are located at the address of TRM ATM identified on the
signature pages hereof, and the offices where TRM ATM keeps all its books,
records and documents are located at such addresses (or at such other
locations, notified to the Administrative Agent and the Liquidity Agent at
least 30 days' prior to any such change).
(k) SERVICING PROGRAMS. No license or approval is required for the
Collateral Agent's use of any program used by Servicer in the servicing of the
Assets Pool, other than those which have been obtained (and are assignable by
the Servicer to the Collateral Agent or a successor Servicer) and are in full
force and effect.
(l) YEAR 2000 COMPATIBILITY. All hardware and software used by
Servicer in connection with its duties hereunder and under the transaction
documents are Year 2000 Compatible. For purposes of this Agreement, "Year 2000
Compatible" means that neither performance nor functionality is affected by
dates prior to, during, spanning or after January 1, 2000, and shall include,
but not be limited to: (i) accurately processing date/time data from, interim
between the 20th and 21st centuries in the years 1999 and 2000 and the leap
year calculations; (ii) functioning without error, interruption, or decreased
performance relating to such date/time data; (iii) accurately processing such
date/time data when used in combination with other technology; (iv) accurate
date/time data century recognition; and (v) processing, storing, receiving and
outputting all date/time in a format that accurately indicates the century of
the date/time data.
<PAGE>
(m) TAXES. Servicer has filed or caused to be filed all tax
returns which, to its knowledge, are required to be filed. Servicer has paid
or made adequate provisions for the payment of all taxes and all assessments
made against it or any of its property (other than any amount of tax the
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have
been provided on the books of Servicer), and no tax lien has been filed and,
to Servicer's knowledge, no claim is being asserted, with respect to any such
tax, fee or other charge.
(n) PERFECTED INTEREST. Except for the filing of the financing
statements referred to in SECTION 5.01, no further action, including any
filing or recording of any document, is necessary in order to establish,
protect and perfect the first priority security interest of the Borrower (and
the Collateral Agent as assignee of Borrower) in TRM ATM's right, title and
interest in and to the ATM Fees. No financing statement or other instrument
similar in effect covering TRM ATM's right, title and interest in and to the
ATM Fees is on file in any recording office except such as may be filed (i) in
connection with any Lien arising solely as the result of any action taken by
Collateral Agent or (ii) in favor of the Borrower and assigned to Collateral
Agent, for the benefit of the Secured Parties.
(o) FINANCIAL CONDITION. Since December 31, 1999, there has been
no material adverse change in its financial condition, business, business
prospects or operations.
ARTICLE VII.
GENERAL COVENANTS OF BORROWER
SECTION 7.01 AFFIRMATIVE COVENANTS OF BORROWER. From the date
hereof until the Final Payout Date, Borrower will, unless the Administrative
Agent and the Liquidity Agent shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Comply in all material respects
with all Applicable Laws, including, without limitation, those with respect to
the Assets Pool.
(b) PRESERVATION OF EXISTENCE. Preserve and maintain its
existence, rights, franchises and privileges in the jurisdiction of its
organization, and qualify and remain qualified in good standing (if
applicable) as a foreign entity in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could reasonably be expected to have a Material Adverse Effect.
(c) AUDITS. (i) At any time and from time to time during regular
business hours, permit the Administrative Agent, the Liquidity Agent and any
of their respective agents or representatives, (A) to examine and make copies
of and abstracts
<PAGE>
from all Borrower's books, records and documents (including, without
limitation, computer tapes and disks) in the possession or under the control
of Borrower, and (B) to visit the offices and properties of Borrower for the
purpose of examining such materials described in CLAUSE (i)(A) next above,
and to discuss matters relating to the Assets Pool or Borrower's performance
hereunder with any of the officers or employees of Borrower having knowledge
of such matters; and (ii) without limiting the provisions of CLAUSE (i) next
above, from time to time on reasonable request of Administrative Agent or the
Liquidity Agent, permit certified public accountants or other auditors
acceptable to the Administrative Agent and the Liquidity Agent to conduct, at
the Administrative Agent's or the Liquidity Agent's, as applicable, expense
once in each fiscal quarter, unless an Event of Default shall have occurred
and be continuing in which case the reviews will be at the expense of the
Administrator and as frequent as reasonably necessary, a review of Borrower's
books and records.
(d) LOCATION OF RECORDS. Keep its chief place of business and
chief executive office, and the offices where it keeps its records, at the
address of Borrower referred to in SECTION 6.01(m) or, upon 30 days' prior
written notice to the Administrative Agent and the Liquidity Agent, at such
other locations in jurisdictions where all action required to maintain the
Collateral Agent's first priority perfected interest in the assets of
Borrower shall have been taken and completed.
(e) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Pool Assets in the event
of the destruction of the originals thereof), and keep and maintain, all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Pool Assets (including, without
limitation, records adequate to permit the daily identification of the
outstanding Pool Assets).
(f) USE OF FUNDS. Apply all Loan and Certificate proceeds solely
to provide cash to TRM ATM pursuant hereto.
SECTION 7.02 REPORTING REQUIREMENTS OF BORROWER. From the date
hereof until the Final Payout Date, Borrower will (or will cause the Servicer
to), unless the Administrative Agent and the Liquidity Agent shall otherwise
consent in writing, furnish to the Administrative Agent and the Liquidity
Agent:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in
any event within 45 days after the end of each of the first three quarters of
each fiscal year of Borrower, copies of the financial statements of Borrower
prepared in conformity with GAAP (except as to the absence of footnotes), duly
certified by the Borrower;
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any
event within 90 days after the end of each fiscal year of Borrower, copies of
the financial statements of Borrower prepared in conformity with GAAP, duly
certified by independent certified public accountants of recognized standing
selected by Borrower;
<PAGE>
(c) ERISA. Promptly after the filing or receiving thereof, copies
of all reports and notices with respect to any Reportable Event defined in
Article IV of ERISA which Borrower files under ERISA with the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor or which Borrower receives from the Pension Benefit Guaranty Corporation;
(d) EVENT OF DEFAULTS. Immediately upon becoming aware of the
existence of any Event of Default or Unmatured Event of Default, a written
statement of an officer of Borrower setting forth details of such event and
the action that Borrower proposes to take with respect thereto;
(e) TERMINATION OF OTHER AGREEMENTS. Immediately upon receiving
notice of, or becoming aware of, the cancellation or termination of any
Armored Car Carrier Addendum, Automated Teller Machine Cash Services
Agreement, Depository Bank Agreement, Processing Services Agreement or
insurance policy covering the Cash, a copy of such notice or notice of such
cancellation or termination;
(f) LITIGATION AND INSURANCE CLAIMS. As soon as possible and in
any event within three Business Days of Borrower's knowledge thereof, notice
of (i) any litigation, investigation or proceeding which may exist at any time
which could reasonably be expected to have a Material Adverse Effect, (ii) any
material adverse development in previously disclosed litigation and (iii) any
material losses with respect to any Cash for which claims have been or will be
made by Borrower, the Servicer or any Transportation Agent; and
(g) OTHER. Promptly, from time to time, such other information,
documents, records or reports with respect to the assets of Borrower or the
condition or operations, financial or otherwise, of Borrower as the
Administrative Agent or the Liquidity Agent may from time to time reasonably
request in order to protect the interests of the Secured Parties under or as
contemplated by this Agreement.
SECTION 7.03 NEGATIVE COVENANTS OF BORROWER. From the date hereof
until the Final Payout Date, Borrower will not, without the prior written
consent of the Administrative Agent and the Liquidity Agent:
(a) SALES, LIENS, ETC. Except as otherwise provided herein, sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create
or suffer to exist any Lien (other than liens created under the Transaction
Documents) upon or with respect to, any of the assets of Borrower (including,
without limitation, the Pool Assets), or any interest therein, or any account
to which any Collections of any Pool Asset are sent, the Credit Balance
Settlement Account, any Disbursement Account or any right to receive income or
proceeds from or in respect of any of the foregoing.
(b) MERGERS, ACQUISITIONS, SALES, ETC. Be a party to any merger or
consolidation, or purchase or otherwise acquire all or substantially all of
the assets or
<PAGE>
stock of any class of, or partnership or joint venture interest in, any other
Person, or sell, transfer, convey or lease all or any substantial part of its
assets to another Person.
(c) INCURRENCE OF INDEBTEDNESS. Incur or permit to exist any
indebtedness or liability on account of deposits or advances or for borrowed
money or for the deferred purchase price of any property or services, except
(i) current accounts payable arising under the Transaction Documents and (ii)
the Loans.
(d) TRUST INTERESTS. Issue or register the transfer of any of its
Certificates to any Person other than a Secured Party.
(e) CONDUCT OF BUSINESS. Engage in any business or activity other
than the provision of Cash to TRM ATM and other activities necessary or
incidental thereto.
(f) ORGANIZATIONAL DOCUMENTATION. Amend or revoke its
organizational documentation.
(g) CHANGE OF NAME. Change its name or corporate structure unless
it has (i) given the Administrative Agent and the Liquidity Agent at least 30
days' prior written notice thereof and (ii) executed, delivered and filed such
amendments to the UCC financing statements filed in connection herewith as the
Administrative Agent and the Liquidity Agent may request, and take such other
actions as are necessary or advisable to continue the perfection of the
Collateral Agent's interest in the assets of Borrower.
(h) LIMITATION ON CASH IN TRANSIT. Allow any amount of Cash
greater than the amount for which Borrower is insured under approved insurance
policies to be in the possession of the Transportation Agents, in the
aggregate, at any one time.
(i) OTHER AGREEMENTS. Enter into any Armored Car Carrier Addendum,
Automated Teller Machine Cash Services Agreement, Processing Services
Agreement, Depository Bank Agreement or any other agreement which has not been
approved by the Administrative Agent and the Liquidity Agent (including,
without limitation, approval of the proposed parties to such agreements),
which approval shall not be unreasonably withheld; provided, that Borrower may
enter into approved Automated Teller Machine Cash Services Agreements with
Qualified Transportation Agents.
SECTION 7.04 COVENANTS OF TRM ATM. From the date hereof until the
Final Payout Date, TRM ATM will, unless the Administrative Agent and the
Liquidity Agent shall otherwise consent in writing:
(a) PRESERVATION OF EXISTENCE. Preserve and maintain its corporate
existence, rights, franchises and privileges in the jurisdiction of its
organization, and qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve and maintain
such existence, rights, franchises, privileges and qualification would have a
Material Adverse Effect. The Servicer shall comply with all applicable rules,
guidelines and operating procedures of any Network applicable to the
<PAGE>
ATMs and shall be responsible for all fines, penalties or other amounts
payable by it to such Network or any member or participant thereof as a
result of any failure to so comply or otherwise. The Servicer shall perform
all of its obligations under each Automated Teller Machine Cash Services
Agreement, Processing Services Agreement and each other agreement relating to
the ATMs.
(b) COMPLIANCE WITH LAWS. Comply in all material respects with all
Applicable Laws.
(c) AUDITS. (i) At any time and from time to time during regular
business hours, permit (and cause any sub-servicer to permit) Borrower, the
Administrative Agent, the Liquidity Agent and any of their respective agents
or representatives, (A) to examine and make copies of and abstracts from all
Servicer's books, records and documents (including, without limitation,
computer tapes and disks) in the possession or under the control of Servicer
relating to the Assets Pool and (B) to visit the offices and properties of
Servicer for the purpose of examining such materials described in CLAUSE
(i)(A) next above, and to discuss matters relating to the Assets Pool or
Servicer's performance hereunder with any of the officers or employees of
Servicer having knowledge of such matters; and (ii) without limiting the
provisions of CLAUSE (i) next above, from time to time on reasonable request
of Borrower, Administrative Agent or the Liquidity Agent, permit certified
public accountants or other auditors acceptable to the Borrower,
Administrative Agent or Liquidity Agent to conduct, at Borrower's, the
Administrative Agent's or the Liquidity Agent's, as applicable, expense once
in each fiscal quarter, unless an Event of Default shall have occurred and be
continuing in which case the reviews will be at the expense of the Servicer
and as frequent as reasonably necessary, a review of Servicer's books and
records with respect to the Assets Pool.
(d) UCC FINANCING STATEMENTS. File such UCC financing or
continuation statements, or amendments thereto or assignments thereof, and
such other instruments or notices, as may be necessary or appropriate, in
accordance with the terms of this Agreement to maintain the first priority
perfected security interest of the Collateral Agent in the assets of Borrower
which may be perfected by the filing of UCC financing statements. Not sell,
assign (by operation of law or otherwise) or otherwise dispose of, or create
or suffer to exist any Lien (other than liens created under the Transaction
Documents) upon or with respect to, TRM ATM's right, title and interest in and
to the Pool Assets, the ATM Fees, or any interest therein, or any account to
which any Pool Assets or the ATM Fees are sent. Not change its name or
corporate structure unless it has (i) given the Administrative Agent and the
Liquidity Agent at least 30 days' prior written notice thereof and (ii)
executed, delivered and filed such amendments to the UCC financing statements
filed in connection herewith as the Administrative Agent and the Liquidity
Agent may request, and take such other actions as are reasonably necessary or
advisable to continue the perfection of the Collateral Agent's interest in the
ATM Fees and the Pool Assets.
<PAGE>
(e) NOTICE. Deliver to the Administrative Agent and the Liquidity
Agent:
(i) immediately upon becoming aware of the existence of any Event
of Default, Servicer Event of Default or Unmatured Event of
Default, written notice describing its nature and period of
existence and what action Servicer is taking or proposing to
take with respect thereto;
(ii) as soon as possible or in any event within five (5) Business
Days of Servicer's knowledge thereof, notice of any
litigation, investigation or proceeding which may exist at
any time which could reasonably be expected to have a
Material Adverse Effect and any material adverse development
in previously disclosed litigation;
(iii) promptly, from time to time, such other information,
documents, records or reports respecting the Assets Pool or
condition or operations, financial or otherwise, of Servicer
as the Administrative Agent or the Liquidity Agent may from
time to time reasonably request in order to protect the
interests of the Secured Parties under or as contemplated by
this Agreement,
(iv) promptly upon the execution thereof, copies of all Automated
Teller Machine Cash Services Agreements, Processing Services
Agreements and other agreements relating to the ATMs entered
into by the Servicer in accordance with this Agreement, and
(v) immediately upon becoming aware of any cancellation or
termination of any Automated Teller Machine Cash Services
Agreement, Depository Bank Agreement or Processing Services
Agreement to which the Servicer is a party, written notice of
such cancellation or termination.
(f) QUARTERLY AND ANNUAL FINANCIAL STATEMENTS. Furnish to the
Administrative Agent and the Liquidity Agent:
(i) As soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of
TRM ATM, copies of the consolidated financial statements of
TRM Corporation prepared in conformity with GAAP (except as to
the absence of footnotes), duly certified by the chief
financial officer of the Servicer; and
(ii) As soon as available and in any event within 90 days after the
end of each fiscal year of TRM Corporation, copies of the
consolidated financial statements of TRM Corporation prepared
in conformity with GAAP, duly certified by independent
certified public accountants of recognized standing selected
by the Servicer;
(g) OTHER AGREEMENTS. Only enter into Automated Teller Machine
Cash Services Agreements, Processing Services Agreements, Depository Bank
<PAGE>
Agreements and other agreements with respect to the ATMs which have been
approved by the Administrative Agent and the Liquidity Agent (including,
without limitation, approval of the proposed parties to such agreements),
which approval shall not be unreasonably withheld; PROVIDED, that TRM ATM may
enter into approved Automated Teller Machine Cash Services Agreements with
Qualified Transportation Agents.
(h) EXXON AGREEMENT. Not to permit Cash in excess of $100,000 in
the aggregate to be placed in ATMs subject to that certain agreement with
Exxon Company. U.S.A. dated as of September 15, 1999 untill such time as such
agreement is amended to the satisfaction of the Administrative Agent and the
Liquidity Agent.
SECTION 7.05 SEPARATE EXISTENCE. Borrower hereby acknowledges
that the Secured Parties are entering into the transactions contemplated by
the Transaction Documents in reliance upon Borrower's identity as a legal
entity separate from TRM and its Affiliates. Therefore, from and after the
date hereof, Borrower and the Servicer shall take all steps specifically
required by this Agreement or reasonably required by the Administrative Agent
or the Liquidity Agent to continue Borrower's identity as a separate legal
entity and to make it apparent to third Persons that Borrower is an entity
with assets and liabilities distinct from those of any other Person and is
not a division of any other Person. Without limiting the generality of the
foregoing and in addition to and consistent with the other covenants set
forth herein, each of Borrower and Servicer shall take such actions as shall
be required in order that:
(a) Borrower will be a business trust whose primary activities are
restricted in its organizational documentation and whose purposes include
borrowing funds from Lender and using such funds to provide Cash to TRM ATM,
and conducting such other activities as it deems necessary or appropriate to
carry out its primary activities;
(b) Any employee, consultant or agent of Borrower will be
compensated from Borrower's funds for services provided to Borrower. Borrower
will not engage any agents other than its attorneys, auditors and other
professionals, and a servicer and any other agent contemplated by the
Transaction Documents, which servicer will be fully compensated for its
services by payment of the Servicing Fee;
(c) Borrower will not incur any material indirect or overhead
expenses for items shared with Servicer (or any other Affiliate thereof)
which are not reflected in the Servicing Fee. To the extent, if any, that
Servicer (or any Affiliate thereof) shares with Borrower items of expense not
reflected in the Servicing Fee, such as legal, auditing and other
professional services, such expenses will be allocated to the extent
practical on the basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to the actual use or the value of
services rendered;
(d) Except as provided in the Administration Agreement, Borrower's
operating expenses will not be paid by Servicer or any other Affiliate thereof;
<PAGE>
(e) Borrower will have its own mailing address and stationery
separate from those of any other Person other than the Owner Trustee;
(f) Borrower's books and records will be maintained separately
from those of any other Person;
(g) All financial statements of any Person that are consolidated
to include Borrower will contain detailed notes clearly stating that (A) all
of Borrower's assets are owned by Borrower, and (B) Borrower is a separate
entity with creditors who have received security interests in Borrower's
assets;
(h) Borrower's assets will be maintained in a manner that
facilitates their identification and segregation from those of any other
Person;
(i) Borrower will strictly observe trust formalities in its
dealings with Servicer and any Affiliate thereof, and funds or other assets of
Borrower will not be commingled with those of any other Person. Borrower shall
not maintain joint bank accounts or other depository accounts to which any
other Person has independent access (other than in accordance with the
Transaction Documents). Borrower is not named, and has not entered into any
agreement to be named, directly or indirectly, as a direct or contingent
beneficiary or loss payee on any insurance policy with respect to any loss
relating to the property of any other Person; and
(j) Borrower will not hold itself out to be responsible for the
debts of any other Person or the decisions or actions respecting the daily
business and affairs of any other Person. Borrower will immediately correct
any known misrepresentation with respect to the foregoing, and it will not
operate or purport to operate as an integrated single economic unit with
respect to or in its dealing with any other Person.
<PAGE>
ARTICLE VIII.
ADMINISTRATION AND COLLECTION
SECTION 8.01 SERVICER TO ACT. Borrower hereby appoints TRM ATM as
Servicer to perform the duties with respect to the provision of Cash to ATMs
as contemplated by this Agreement. Such services shall include: (i) entering
into and enforcing the Servicer's and Borrower's rights under Automated Teller
Machine Cash Services Agreements, Armored Car Carrier Addendums, Processing
Service Agreements and any other agreements necessary to provide cash for the
ATMs, (ii) making claims under any insurance policies covering the Cash, (iii)
preparing reports with respect to the ATM Fee Settlement Account, Credit
Balance Settlement Account and Disbursement Accounts activity and Cash
maintenance, (iv) maintaining a list of (A) the location of each ATM receiving
Cash, (B) each Transportation Agent (with a contact person and telephone
number), and (C) each Processing Agent (with contact person and telephone
number), (v) maintaining records with respect to the amount of Cash located in
each ATM at any time and (vi) instructing the Administrative Agent and the
Collateral Agent, as applicable, as to which Disbursement Accounts Cash is to
be deposited for distribution to the applicable Transportation Agents. The
Servicer covenants and agrees that under no circumstances will it direct any
Cash to be deposited into any account other than a Disbursement Account or the
Credit Balance Settlement Account. In addition, no transportation agent,
depository bank, armored car carrier or processing agent shall be utilized by
the Servicer unless such Person has been approved in writing by the
Administrative Agent and the Liquidity Agent (such approval shall not be
unreasonably withheld) and otherwise satisfies the definition of
"Transportation Agent," "Depository Bank," "Armored Car Carrier" and
"Processing Agent," as applicable; PROVIDED, that TRM ATM may enter into
approved Automated Teller Machine Cash Services Agreements with Qualified
Transportation Agents. The Servicer shall perform, and shall have full power
and authority to perform, subject to the requirements and limitations set
forth in this Agreement, any and all things in connection with such servicing
that are consistent with all Applicable Laws and consistent with customary
practices of servicers performing similar functions, but in performing its
duties hereunder, the Servicer will act on behalf of and for the benefit of
Borrower and the Secured Parties. If any Processing Agent is Disconnected for
more than 48 consecutive hours, the Servicer shall instruct all Transportation
Agents servicing ATMs for which such Processing Agent is acting as "Processing
Agent" to cease depositing Cash in such ATMs and remove all Cash from such
ATMs on the earlier of (i) two (2) Business Days prior to the next Settlement
Date and (ii) the next cycled service visit to such ATM and deposit such Cash
in the Credit Balance Settlement Account.
SECTION 8.02 INSURANCE. The Servicer shall maintain, or cause to
be maintained for Borrower's account, with respect to the Cash insurance
covering losses resulting from ATM malfunction, theft, fraud, fire, and any
other items as may be reasonably requested by the Administrative Agent or the
Liquidity Agent in the amounts specified in Exhibit 8.02. The Servicer shall
cause such insurance policies to be issued
<PAGE>
by reputable insurance companies with claims paying ratings of at least "A"
by Standard & Poor's and "Aa1" by Moody's. In addition, the Servicer shall
cause each such insurance policy to provide that (i) it may not be cancelled,
amended or terminated without at least 30 days prior written notice to
Borrower and the Collateral Agent and (ii) the Collateral Agent, for the
benefit of the Secured Parties, is the loss payee. The Servicer shall
promptly file and shall diligently pursue any claims with respect to the Cash
with the applicable insurer, and shall deposit all proceeds received in
connection therewith in the Credit Balance Settlement Account within one (1)
Business Day of receipt. Upon any failure of the Servicer to take any such
actions, the Collateral Agent shall have the right to take any such actions
in its place and stead and the Servicer shall cooperate with the Collateral
Agent in taking any such action. Within three (3) Business Days of obtaining
knowledge of any loss with respect to the Cash which is required to be
covered by insurance pursuant to this Agreement, the Servicer shall deposit
the full amount of such loss into the Credit Balance Settlement Account. Upon
receipt by the Servicer or the Collateral Agent of the proceeds of any claim
made with respect to any such loss for which the Servicer has advanced a loss
payment pursuant to the preceding sentence, such proceeds shall be paid to
the Servicer in reimbursement of its payment and shall not constitute
Collections to be distributed in accordance with SECTION 3.03.
SECTION 8.03 REPORTING. The Servicer shall deliver to Borrower,
the Administrative Agent and the Liquidity Agent the following:
(i) On the third Business Day prior to each Settlement Date (the
"REPORTING DATE"), a report substantially in the form of EXHIBIT
8.03(i) (a "SERVICING REPORT"), including a confirmation of all
Borrowing Notices for the preceding Settlement Period; and
(ii) Such other information as may be reasonably requested from
time to time by Borrower, the Administrative Agent or the
Liquidity Agent.
SECTION 8.04 BOOKS AND RECORDS. The Servicer shall keep and
maintain, or cause to be kept and maintained, accurate and complete books and
records for Borrower.
SECTION 8.05 [RESERVED].
SECTION 8.06 COSTS OF SERVICING; SERVICER'S FEE.
(a) COSTS OF SERVICING. All costs of servicing in the manner
required by this ARTICLE VIII shall be borne by the Servicer. The Servicer
shall be entitled to receive the servicing fee (the "SERVICING FEE") in the
amount described in SECTION 8.06(b).
(b) SERVICER'S FEE. The amount of the Servicing Fee which the
Servicer shall be entitled to receive on each Cash Provision Fee Payment Date
shall be determined by multiplying the average Borrowing Base during the
Settlement Period ending on such Settlement Date TIMES 1.00% TIMES 1/52.
<PAGE>
SECTION 8.07 SUCCESSOR SERVICER. Upon the occurrence of any
Servicer Event of Default or any Event of Default, the Collateral Agent may
give notice to Servicer that a new Servicer has been designated. Upon receipt
by Servicer of such notice, it shall terminate its activities as Servicer
hereunder in a manner that the Collateral Agent believes will facilitate the
transition of the performance of such activities to a new Servicer. Any new
Servicer must agree in writing to perform the duties and obligations of the
"Servicer" pursuant to the terms hereof. The Collateral Agent shall provide
each Rating Agency with notice of any change in the Servicer.
The Servicer hereby agrees to cooperate with any successor to the
Servicer appointed in accordance herewith in effecting the termination and
transfer of the responsibilities and rights of the Servicer hereunder to the
Collateral Agent or any successor to the Servicer, including, without
limitation, the transfer to the successor to the Servicer for administration
by it of all Cash which shall at the time be held by the Servicer or
thereafter received with respect to the Assets Pool. In addition, upon the
appointment of any successor Servicer, the Servicer shall obtain and/or
assign to such successor any license or approval required for the use of any
program used by the Servicer in the servicing of the Assets Pool. The
Servicer hereby designates any successor to the Servicer as its agent and
attorney-in-fact to execute transfers of financing statements and any other
filings or instruments which may be necessary or advisable to effect such
transfer of the Servicer's responsibilities and rights hereunder.
SECTION 8.08 BAILEE FOR LENDER. The Servicer hereby
acknowledges that Borrower has granted to the Collateral Agent, for the
benefit of the Secured Parties, a security interest in all of the assets of
Borrower, including, without limitation, the Cash and any credit balances in
a Network resulting from the dispensing of Cash at ATMs. If the Servicer has,
or is deemed to have, possession of any Cash (whether in the form of cash,
credit balances in a Network or otherwise), the Servicer agrees that it shall
hold all such Cash as custodian and bailee on behalf of the Collateral Agent
for the purposes of perfecting the security interest of the Secured Parties
in such Cash.
ARTICLE IX.
EVENTS OF DEFAULT
SECTION 9.01 EVENTS OF DEFAULT. The following events shall be
"EVENTS OF DEFAULT" hereunder:
(a) Borrower shall fail to make any payment or deposit to be made
by it hereunder when due or shall fail to pay any payment of principal,
interest or yield under the Note or the Certificates when due; or
(b) Any representation or warranty made or deemed to be made by
Borrower (or any of its officers) under or in connection with this Agreement
or other information or report delivered pursuant hereto shall prove to have
been false or incorrect
<PAGE>
in any material respect when made and such condition shall continue
unremedied for a period of five (5) Business Days after (i) written notice
thereof by the Administrative Agent or the Liquidity Agent or (ii) Borrower
(or the Administrator) has actual knowledge that such representation or
warranty is false or incorrect; or
(c) Borrower shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in this Agreement or
any of the other Transaction Documents on its part to be performed or observed
and any such failure shall remain unremedied for five (5) Business Days after
(i) written notice thereof shall have been given by the Administrative Agent
or the Liquidity Agent to Borrower or (ii) Borrower (or the Administrator) has
actual knowledge of such failure to perform or observe any covenant hereunder;
or
(d) A default shall have occurred and be continuing under any
instrument or agreement evidencing, securing or providing for the issuance of
indebtedness for borrowed money of, or guaranteed by, Borrower or TRM ATM
(PROVIDED that, in the case of TRM ATM, the principal of such indebtedness
exceeds $500,000), which default is a default in the payment of any amount due
thereunder (after giving effect to any periods of grace or right to cure) or
which default if unremedied, uncured, or unwaived (with or without the passage
of time or the giving of notice or both) would permit acceleration of the
maturity of such indebtedness and such default shall have continued
unremedied, uncured or unwaived for a period long enough to permit such
acceleration; or
(e) An Event of Bankruptcy shall have occurred and remain
continuing with respect to the Borrower, TRM ATM or TRM;
(f) Borrower shall fail to maintain insurance in accordance with
the terms of the Insurance Schedule and any such failure shall remain
unremedied for five (5) Business Days;
(g) (i) Any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed in
writing by Borrower to the Administrative Agent and the Liquidity Agent prior
to the date of execution and delivery of this Agreement is pending against
Borrower, or for an amount greater than $500,000 against TRM ATM or (ii) any
material development not so disclosed has occurred in any litigation
(including, without limitation, derivative actions), arbitration proceedings
or governmental proceedings so disclosed, which, in the case of CLAUSE (i) or
(ii), in the reasonable opinion of the Administrative Agent or the Liquidity
Agent, has a reasonable likelihood of having a Material Adverse Effect; or
(h) There shall exist any event or occurrence that would
reasonably be expected to cause a Material Adverse Effect; or
<PAGE>
(i) TRM ATM or TRM is subject to a Change in Control (which has
not otherwise been approved in writing by the Administrative Agent and the
Liquidity Agent); or
(j) The Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Internal Revenue Code with regard to any of
the assets of Borrower and such lien shall not have been released within five
(5) Business Days, or the Pension Benefit Guaranty Corporation shall, or shall
indicate its intention to, file notice of a lien pursuant to Section 4068 of
the ERISA with regard to any of the assets of Borrower or any of its
Affiliates; or
(k) A Servicer Event of Default occurs and is continuing; or
(l) a Borrowing Base Deficiency continues for more than two (2)
Business Days; or
(m) This Agreement shall for any reason (other than pursuant to
the terms hereof) cease to create, or there shall for any reason cease to be,
a valid and enforceable perfected first priority security interest in all of
the assets of Borrower free and clear of any other Lien or the Borrower (and
the Collateral Agent as assignee of the Borrower) shall for any reason cease
to have a valid and enforceable first priority security interest in TRM ATM's
right, title and interest in and to the ATM Fees free and clear of any other
Lien; or
(n) Lender shall become an "investment company" with the meaning
of the Investment Company Act of 1940, as amended, or its activities are
terminated by any Governmental Authority; or
(o) Borrower shall for any reason cease to have a valid and
enforceable ownership interest in the Cash; or
(p) The Letter of Credit Stated Amount shall fail to be at least
equal to 3% of the Facility Limit and such failure shall continue unremedied
for two (2) Business Day or, if the Letter of Credit has been drawn in full
and the proceeds deposited into the Reserve Account pursuant to Section 3.04,
the amount of funds in the Reserve Account shall fail to be at least equal to
3% of the Facility Limit and such failure shall continue unremedied for two
(2) Business Day; or
(q) The aggregate ATM Fees for any Settlement Period shall be less
than 200% of the amounts required to be paid out of the Cash Provision Fees
pursuant to SECTION 3.03 on the related Settlement Date; or
(r) TRM ATM shall default in any payment obligation under any
Automated Teller Machine Cash Services Agreement, Cash Replenishment Services
Supplement, Value Added Reseller Agreement or other agreement relating to the
ATM's,
<PAGE>
or for services to be rendered in connection with the Cash, to which it is a
party, and such payment default shall continue for a period of 30 days; or
(s) Any Transportation Agent or Depository Bank fails to maintain
a short term unsecured debt rating of at least P-1 by Moody's and F1 by Fitch
and is not replaced within 30 days of such failure; or
(t) The transaction represented by the Transaction Documents fails
to maintain its "shadow" rating of "A" by Fitch.
SECTION 9.02 REMEDIES.
(a) OPTIONAL ACCELERATION. Upon the occurrence of an Event of
Default (other than an Event of Default described in SECTION 9.01(e)), the
Administrative Agent or the Liquidity Agent may declare that the Termination
Date has occurred and the unpaid principal amount of the Note and the
Certificates to be due and payable immediately, by a notice in writing to
Borrower, and upon any such declaration, the Termination Date shall occur and
such principal amount shall be immediately due and payable, together with all
accrued and unpaid interest thereon, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by Borrower.
(b) AUTOMATIC ACCELERATION. Upon the occurrence of an Event of
Default described in SECTION 9.01(e), the Termination Date shall occur
automatically and the unpaid principal amount of the Note and the Certificates
shall automatically become due and payable, together with all accrued and
unpaid interest thereon, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by Borrower.
(c) ADDITIONAL REMEDIES. Upon any acceleration of the Note and the
Certificates pursuant to this SECTION 9.02, no Borrowings thereafter will be
made, and the Collateral Agent and other Secured Parties shall have, in
addition to all other rights and remedies under this Agreement or otherwise,
all other rights and remedies provided under the UCC of each applicable
jurisdiction and other applicable laws to a secured party, which rights shall
be cumulative. Upon the acceleration of the Note and Certificates, the
Collateral Agent may, and upon written direction from the Majority Liquidity
Providers shall, take all lawful action at the Administrator's expense (for
reasonable costs and expenses) to exercise any and all rights, remedies,
powers and privileges lawfully available to the Collateral Agent to the extent
and in the manner directed by either the Majority Liquidity Providers or, in
the absence of such direction, the Collateral Agent itself, including the
transmission of notices of default and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Borrower or the Servicer and to exercise any other remedies available to a
secured party. If an Event of Default shall have occurred and be continuing,
the Collateral Agent, at the direction of the Majority Liquidity Providers,
shall direct Borrower to exercise all rights, remedies, powers, privileges and
claims of Borrower against the Servicer or any other party under or in
connection with the Transaction Documents, including the right or
<PAGE>
power to take any action to compel performance or observance by the Servicer
or such other party of its obligations to Borrower, and the right to give any
consent, request, notice, direction, approval, extension or waiver in respect
of any Transaction Document. If Borrower shall have failed, within five (5)
Business Days of receiving the directions of the Collateral Agent, to
satisfactorily undertake such directed actions, the Collateral Agent may take
such previously directed actions on behalf of Borrower and the Secured
Parties. Without limiting the foregoing, upon the acceleration of the Note
and the Certificates pursuant to this SECTION 9.02, the Collateral Agent
shall have the right to give notice to the Servicer and each Transportation
Agent to arrange for the return (on the earlier of (i) two (2) Business Days
prior to the next Settlement Date and (ii) the next cycled service visit to
the ATMs serviced by such Transportation Agent) of all of the Cash in the
possession of such Transportation Agent or any ATM serviced by such
Transportation Agent (all such Cash to be deposited in the Credit Balance
Settlement Account).
ARTICLE X.
THE ADMINISTRATIVE AGENT; COLLATERAL AGENT
SECTION 10.01 AUTHORIZATION AND ACTION. Pursuant to agreements
entered into with the Administrative Agent, Lender has appointed and
authorized the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto.
SECTION 10.02 ADMINISTRATIVE AGENT'S AND COLLATERAL AGENT'S
RELIANCE, ETC. The Administrative Agent, the Collateral Agent and their
directors, officers, agents or employees shall not be liable for any action
taken or omitted to be taken by it or them under or in connection with the
Transaction Documents (including, without limitation, the servicing,
administering or collecting of Pool Assets as Servicer pursuant to SECTION
8.01), except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, each of the Administrative
Agent and the Collateral Agent: (a) may consult with legal counsel (including
counsel for Borrower), independent certified public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (b) makes no warranty or representation to any Secured
Party or any other holder of any interest in Assets Pool and shall not be
responsible to any Secured Party or any such other holder for any statements,
warranties or representations made in or in connection with any Transaction
Document; (c) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Transaction Document on the part of Borrower or the Servicer or to inspect the
property (including the books and records) of Borrower or the Servicer; (d)
shall not be responsible to any Secured Party or any other holder of any
interest in the Assets Pool for the due execution, legality, validity,
<PAGE>
enforceability, genuineness, sufficiency or value of any Transaction
Document; and (e) shall incur no liability under or in respect of this
Agreement by acting upon any notice (including notice by telephone where
permitted herein), consent, certificate or other instrument or writing (which
may be by facsimile or telex) in good faith believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 10.03 THE LIQUIDITY AGENT, THE COLLATERAL AGENT, THE
ADMINISTRATIVE AGENT AND AFFILIATES. The Liquidity Agent, the Collateral
Agent, the Administrative Agent and any of their respective Affiliates may
generally engage in any kind of business with Borrower or the Servicer, any
of their respective Affiliates and any Person who may do business with or own
securities of Borrower or the Servicer or any of their respective Affiliates,
all as if they were not the Administrative Agent, Collateral Agent and the
Liquidity Agent, respectively, and without any duty to account therefor to
any Secured Party or any other holder of an interest in the Assets Pool.
SECTION 10.04 APPOINTMENT AND POWERS OF COLLATERAL AGENT. The
Secured Parties hereby appoint the Collateral Agent as their agent hereunder
and hereby authorize the Collateral Agent to take such action on their behalf
and to exercise such rights, remedies, powers and privileges hereunder as are
specifically authorized to be exercised by the Collateral Agent by the terms
hereof, together with such rights, remedies, powers and privileges as are
reasonably incidental thereto. The parties hereto agree that the Collateral
Agent shall not be required to exercise any discretion or take any action or
refrain from taking any action in its capacity as Collateral Agent, but shall
only be required to act or refrain from acting in such capacity (and shall be
fully protected in so acting or refraining from acting) upon the instruction
of the Majority Liquidity Providers. The Collateral Agent shall be entitled
to retain experts and to act in reliance upon the advice of such experts
concerning all matters pertaining to the agencies hereby created and its
duties hereunder, and shall not be liable for any action taken or omitted to
be taken by it in good faith in accordance with the advice of such experts
selected by it. The relationship between the Collateral Agent and each of the
Secured Parties is that of Collateral Agent and principal only, and nothing
herein shall be deemed to constitute the Collateral Agent a trustee for any
of the Secured Parties or impose on the Collateral Agent any obligations
other than those for which express provision is made herein.
If the Collateral Agent receives unclear or conflicting
instructions, it shall be entitled to refrain from taking action until clear
or non-conflicting instructions are received, but shall inform the
instructing party or parties promptly of its decision to refrain from taking
such action. Except as required by the specific terms of this Agreement, the
Collateral Agent shall have no duty to exercise any right, power, remedy or
privilege granted to it hereby, or to take any affirmative action hereunder,
unless directed to do so by the Majority Liquidity Providers (and shall be
fully protected in acting or refraining from acting pursuant to such
directions which shall be binding on the Secured Parties), and shall not,
without the prior approval of the Majority Liquidity Providers, waive any
default on the part of Borrower or the Servicer. Notwithstanding anything
herein to the contrary, the Collateral Agent shall not be required to take
any
<PAGE>
action (i) which the Collateral Agent has determined will expose the
Collateral Agent to personal or financial liability, unless indemnified to
its satisfaction, or (ii) which is contrary to this Agreement, the other
Transaction Documents, or applicable law.
The Collateral Agent shall be entitled to rely on any communication,
instrument, paper or other document reasonably believed by it to be genuine
and correct and to have been given, signed or sent by the proper Person or
Persons. The Collateral Agent shall be entitled to assume that no Event of
Default shall have occurred and be continuing, unless an officer of the
Collateral Agent has actual knowledge thereof or the Collateral Agent has
received written notice thereof from the Secured Parties.
SECTION 10.05 COLLATERAL AGENT AND EMPLOYEES OF THE COLLATERAL
AGENT.
(a) Each Liquidity Provider hereby agrees to indemnify and hold
harmless, in accordance with its pro rata percentage of the sum of the
aggregate commitments under the Liquidity Agreement, the Collateral Agent (to
the extent not reimbursed by Administrator or Borrower) from and against any
and all losses, liabilities, actions, suits, judgments, demands, damages,
out-of-pocket costs and expenses of any kind whatsoever (including reasonable
fees and expenses of counsel and other experts) incurred or suffered by the
Collateral Agent in its capacity as Collateral Agent hereunder of the Secured
Parties as a result of any action taken or omitted to be taken by the
Collateral Agent in such capacity or otherwise incurred or suffered by, made
upon or assessed against the Collateral Agent in such capacity to the extent
not reimbursed by Administrator or Borrower or by application of the
Collateral; PROVIDED that no Liquidity Provider shall be liable for any
portion of any such losses, liabilities, actions, suits, judgments, demands,
costs or expenses resulting from or attributable to gross negligence or
willful misconduct on the part of the Collateral Agent. Without limiting the
generality of the foregoing, each Liquidity Provider hereby agrees to
reimburse, in the ratio aforesaid, the Collateral Agent promptly following its
demand for any out-of-pocket expenses (including reasonable fees and expenses
of counsel) incurred by the Collateral Agent hereunder and not promptly
reimbursed to the Collateral Agent by Administrator or Borrower or by
application of the Collateral. The obligations of each Liquidity Provider
under this paragraph shall survive the termination of the Liquidity Agreement.
If at any time, following its demand therefor, the Collateral Agent shall not
be reimbursed by Administrator or Borrower or by the Liquidity Providers, the
Collateral Agent is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all amounts
at any time held by the Collateral Agent for the benefit of the Liquidity
Providers, against any and all of the obligations of the Liquidity Providers
to the Collateral Agent now or hereafter existing under this Agreement. The
Collateral Agent agrees promptly to notify each Liquidity Provider after any
such set-off and application made by the Collateral Agent, PROVIDED that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Collateral Agent under this Section are in
addition to other rights and remedies which the Collateral Agent may have.
(b) No provision of this Agreement shall require the Collateral
Agent to expend or risk its own funds or otherwise incur any financial or
other liability in the
<PAGE>
performance of any duties hereunder or in the exercise of any rights and
powers hereunder.
(c) The Collateral Agent shall have the right at any time to seek
instructions from any court of competent jurisdiction. The Collateral Agent
may rely on the advice of counsel and shall be held harmless for actions
taken in reliance thereon.
(d) The Collateral Agent makes no representation as to, and shall
have no responsibility for, the correctness of any statement contained in, or
the validity or sufficiency of, this Agreement or any documents or
instruments referred to in this Agreement or the sufficiency or effectiveness
of any collateral assigned by this Agreement or as to or for the validity or
collectibility of any obligation contemplated by this Agreement. The
Collateral Agent shall not be accountable for the use or application by any
person of disbursements properly made by the Collateral Agent in conformity
with the provisions of this Agreement.
(e) The Collateral Agent may exercise any of its duties hereunder
by or through Collateral Agents or employees. The possession of the
Collateral by such Collateral Agents or employees shall be deemed to be the
possession of the Collateral Agent.
(f) The provisions of this Section shall survive the termination
of this Agreement and the resignation of the Collateral Agent hereunder.
SECTION 10.06 SUCCESSOR AGENT. The Collateral Agent acting
hereunder at any time may resign by an instrument in writing addressed and
delivered, 60 days prior to the effectiveness of such resignation, to each of
the Liquidity Providers, the Liquidity Agent, the Lender, and the Borrower,
and may be removed at any time with cause by an instrument in writing duly
executed by or on behalf of the Majority Liquidity Providers. Subject to the
provisions hereof, the Majority Liquidity Providers shall also have the right
to appoint a successor to the Collateral Agent upon any such resignation or
removal, by an instrument of substitution complying with the requirements of
applicable law, or, in the absence of any such requirements, without any
formality other than appointment and designation in writing. Upon the making
and acceptance of such appointment, the execution and delivery by such
successor Collateral Agent of a ratifying instrument pursuant to which such
successor Collateral Agent agrees to assume the duties and obligations
imposed on the Collateral Agent by the terms of this Agreement, and the
delivery to such successor Collateral Agent of the Collateral, and documents
and instruments then held by the retiring Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
estate, rights, powers, remedies, privileges, immunities, indemnities, duties
and obligations hereby granted to or conferred or imposed upon the retiring
Collateral Agent, and one such appointment and designation shall not exhaust
the right to appoint and designate further successor Collateral Agents
hereunder. No removal or resignation of the Collateral Agent shall be
effective unless and until a successor Collateral Agent has been duly
appointed, and the
<PAGE>
appointment of such successor Collateral Agent has been accepted by such
successor Collateral Agent. No Collateral Agent shall be discharged from its
duties or obligations hereunder until the Collateral and documents and
instruments then held by such retiring Collateral Agent shall have been
transferred or delivered to the successor Collateral Agent in its capacity as
bank or trust company, until such retiring Collateral Agent shall have
executed and delivered to the successor Collateral Agent appropriate
instruments substituting such successor Collateral Agent for purposes of this
Agreement and assigning the retiring Collateral Agent's interest in the
Collateral, to the successor Collateral Agent. If no successor Collateral
Agent shall be appointed, as aforesaid, or, if appointed, shall not have
accepted its appointment, within 30 days after notice of resignation or
removal of the retiring Collateral Agent, then, subject to the provisions
hereof, the retiring Collateral Agent may appoint a successor Collateral
Agent with the written consent of the Liquidity Agent. Each such successor
Collateral Agent shall provide Borrower, the Administrator the Lender, each
Liquidity Provider and the Liquidity Agent with its address and telephone
numbers. Notwithstanding the resignation or removal of any Collateral Agent
hereunder, the provisions of this ARTICLE X shall continue to inure to the
benefit of such retiring Collateral Agent in respect of any action taken or
omitted to be taken by such retiring Collateral Agent in its capacity as such
while it was Collateral Agent under this Agreement. Borrower shall provide
prompt notice to each Rating Agency and the Administrative Agent of the
appointment of a successor Collateral Agent.
ARTICLE XI.
ASSIGNMENT OF LENDER'S INTEREST
SECTION 11.01 RESTRICTIONS ON ASSIGNMENTS.
(a) Neither Borrower nor Servicer may assign its rights, or
delegate its duties hereunder or any interest herein, without the prior
written consent of the Administrative Agent and the Liquidity Agent. Lender
may not assign its rights hereunder or its Commitment, the Note or the
Certificates to any Person without the prior written consent of Borrower,
which shall not be unreasonably withheld; PROVIDED, HOWEVER, that
(i) Lender may assign all or any part of its rights and interests
in the Transaction Documents, together with all or any part of
its interest in the Assets Pool, to the Liquidity Agent, to
any Liquidity Provider, or to any "bankruptcy remote" or
commercial paper special purpose entity the business of which
is administered by the Administrative Agent or the Liquidity
Agent; and
(ii) Lender may assign and grant a security interest in all of its
rights in the Transaction Documents, together with all of its
rights and interest in the Assets Pool, to its collateral
agent, to secure Lender's obligations under or in connection
with the
<PAGE>
Commercial Paper Notes, the Liquidity Agreement, and certain
other obligations of Lender incurred in connection with the
funding of the Borrowings and Certificates hereunder, which
assignment and grant of a security interest shall not be
considered an "assignment" for purposes of this SECTION 11.01
or, prior to the enforcement of such security interest, for
purposes of any other provision of this Agreement.
(b) Borrower agrees to advise the Administrative Agent within
five (5) Business Days after notice to Borrower of any proposed assignment by
Lender not otherwise permitted under SUBSECTION (a) of Borrower's consent or
non-consent to such assignment and if it does not consent with respect to an
assignment, the reasons therefor. If Borrower does not consent to such
assignment by Lender, Lender may immediately assign its Commitment, the
Certificates and the Note (or any portion thereof) to the Liquidity Agent and
the Liquidity Provider. All of the aforementioned assignments shall be upon
such terms and conditions as the Lender and the assignee may mutually agree.
SECTION 11.02 RIGHTS OF ASSIGNEE. Upon the assignment by Lender
in accordance with this Article XI, the assignee receiving such assignment
shall have all of the rights of Lender with respect to the Transaction
Documents and the Assets Pool (or such portion thereof as has been assigned).
SECTION 11.03 EVIDENCE OF ASSIGNMENT. Any assignment of the
Commitment, the Note, the Certificates and the Assets Pool (or any portion
thereof) to any Person may be evidenced by such instruments or documents as
may be satisfactory to the Lender.
<PAGE>
ARTICLE XII.
INDEMNIFICATION
SECTION 12.01 INDEMNITIES BY BORROWER AND ADMINISTRATOR.
(a) GENERAL INDEMNITY. Without limiting any other rights which any
such Person may have hereunder or under Applicable Law, each of the Borrower
and TRM ATM, as Administrator, hereby agrees, jointly and severally, to
indemnify each of the Administrative Agent, the Lender, each
Certificateholder, the Liquidity Providers, the Liquidity Agent, the
Collateral Agent, each of their respective Affiliates, and all successors and
permitted transferees, participants and assigns and all officers, directors,
shareholders, controlling persons, employees and agents of any of the
foregoing (each an "INDEMNIFIED PARTY"), forthwith on demand, from and against
any and all damages, losses, claims, liabilities and related costs and
expenses, including reasonable attorneys' fees and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them as a result of a claim arising out of or
relating to the Transaction Documents or the transactions contemplated
thereby, EXCLUDING, HOWEVER, Indemnified Amounts to the extent determined by a
court of competent jurisdiction or in binding arbitration to have resulted
from gross negligence or willful misconduct on the part of such Indemnified
Party. Without limiting the foregoing, Borrower and TRM ATM, as Administrator,
shall indemnify each Indemnified Party for Indemnified Amounts arising out of
or relating to:
(i) the transfer by Borrower of any interest in any of its assets
other than the grant of a security interest granted to the
Collateral Agent and the other Secured Parties, pursuant to
SECTION 1.03 (or as otherwise permitted hereunder);
(ii) any representation or warranty made by Borrower (or any of its
officers or Affiliates) under or in connection with any
Transaction Document, any information or report delivered by
or on behalf of Borrower pursuant hereto, which shall have
been false, incorrect or misleading in any material respect
when made or deemed made (unless so disclosed at the time of
delivery);
(iii) the failure by Borrower or Administrator to comply with any
Applicable Law or the terms of any of the Transaction
Documents;
(iv) the failure to vest and maintain vested in the Collateral
Agent (A) a first priority perfected security interest in all
of the assets of Borrower which may be perfected by filing a
financing statement under the UCC, (B) a security interest in
all of the other assets of Borrower, in each case free and
clear of any Lien, other than a Lien arising solely as a
result of an act of the Secured Parties, whether existing at
the time of any Borrowing or at any time thereafter;
<PAGE>
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws
with respect to the assets of Borrower, whether at the time of
any Borrowing or at any time thereafter;
(vi) any failure of Borrower to perform its duties or obligations
in accordance with the provisions of ARTICLE VII or otherwise
hereunder or under any other Transaction Document;
(vii) any failure by Borrower to file any tax returns or pay any
taxes when due; and
(viii) any tax or governmental fee, fine or charge (but not
including U.S. federal income taxes upon or measured by net
income or state or local taxes upon or measured by net income
imposed on the Indemnified Parties by the jurisdiction in
which such Indemnified Party is organized or is otherwise
taxable without regard to their participation in the
transactions contemplated by the Transaction Documents, and
also not including such amounts resulting from any income tax
filing by Certificateholders being inconsistent with the
characterization of advances by the Borrower to TRM ATM as a
loan or series of loans for federal income tax purposes other
than any such filing required by any taxing authority), all
interest and penalties (including, but not limited to,
penalties for failure to file returns or pay amounts due)
thereon or with respect thereto, and all out-of-pocket costs
and expenses, including, but not limited to (i) the
reasonable fees and expenses of counsel in defending against
the same, which may arise by reason of the Loans, the
Certificates or any interest in the assets of Borrower
(including, without limitation, any fees, fines or charges
which may be imposed as a result of any failure to properly
disclose any fees charged to any consumer in an ATM
transaction) and (ii) the reasonable fees and expenses
incurred to file any returns required to be filed to report
the same. The parties hereto acknowledge and agree that
neither the Borrower nor any of the Indemnified Parties
derives tax nexus to any jurisdiction solely by reason by its
participation in the transaction or transactions contemplated
by the Transaction Documents, unless otherwise required by
appropriate taxing authorities.
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS. If any Indemnified
Party shall have notice of any attempt to impose or collect any tax or
governmental fee or charge for which indemnification will be sought from
Borrower under SECTION 12.01(a)(vii), such Indemnified Party shall give prompt
and timely notice of such attempt to Borrower and Borrower shall have the
right, at its expense, to participate in any proceedings resisting or
objecting to the imposition or collection of any such tax, governmental fee or
charge. Failure or delay in giving such notification shall not constitute a
waiver of such Indemnified Party's right to such compensation; PROVIDED, that
such Indemnified Party shall not be entitled to compensation under this
Section 12.01 for any Indemnified Amounts incurred or suffered with respect to
any date unless such Indemnified Party shall have notified the Borrower not
more than 90 days after the applicable Indemnified Party shall have notice of
any attempt to impose or collect any tax or governmental fee or charge for
which indemnification will be sought from Borrower
<PAGE>
under SECTION 12.01(a)(vii). Indemnification hereunder shall be in an amount
necessary to make the Indemnified Party whole after taking into account any
tax consequences to the Indemnified Party of the payment of any of the
aforesaid taxes and the receipt of the indemnity provided hereunder or of any
refund of any such tax previously indemnified hereunder, including the effect
of such tax or refund on the amount of tax measured by income or profits
which is or was payable by the Indemnified Party.
(c) CONTRIBUTION. If for any reason the indemnification provided
above in this SECTION 12.01 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then Borrower shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate
to reflect not only the relative benefits received by such Indemnified Party
on the one hand and Borrower on the other hand but also the relative fault of
such Indemnified Party as well as any other relevant equitable considerations.
(d) AVAILABLE FUNDS. Payments by Borrower under this SECTION 12.01
shall be paid solely to the extent funds are available pursuant to the
priorities set forth in SECTION 3.03.
SECTION 12.02 INDEMNITIES BY SERVICER.
(a) Without limiting any other rights which the Borrower or any
Indemnified Party may have hereunder or under Applicable Law, the Servicer
hereby agrees to indemnify the Borrower and the Indemnified Parties,
forthwith on demand, from and against any and all Indemnified Amounts awarded
against or incurred by any of them to the extent that such Indemnified
Amounts are a result of a claim arising out of or relating to (i) the Pool
Assets or Servicer's performance of, or failure to perform, any of its duties
or obligations under or in connection with any Transaction Documents, (ii)
any representation or warranty made by the Servicer under or in connection
with any Transaction Document, any Servicing Report or any other information
or request delivered by or on behalf of Servicer pursuant hereto, which shall
have been false, incorrect or misleading in any material respect when made or
deemed made (unless so disclosed at the time of delivery), (iii) the
co-mingling of any Cash or other Pool Assets with any of the assets of the
Servicer, (iv) any failure by the Servicer to pay any taxes when due, or (v)
any failure of Servicer to comply with any Applicable Law, EXCLUDING,
HOWEVER, Indemnified Losses to the extent determined by a court of competent
jurisdiction or in binding arbitration to have resulted from gross negligence
or willful misconduct on the part of such Indemnified Party.
(b) CONTRIBUTION. If for any reason the indemnification provided
above in this SECTION 12.02 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then the Servicer shall
contribute to the amount paid by such Indemnified Party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by such Indemnified Party on
the one hand and the Servicer on the other hand, but also the relative fault
of such
<PAGE>
Indemnified Party (if any) and the Servicer and any other relevant equitable
considerations.
SECTION 12.03 INDEMNITIES BY TRM ATM.
(a) Without limiting any other rights which the Borrower or any
Indemnified Party may have hereunder or under Applicable Law, TRM ATM hereby
agrees to indemnify the Borrower and the Indemnified Parties, forthwith on
demand, from and against any and all Indemnified Amounts awarded against or
incurred by any of them to the extent that such Indemnified Amounts are a
result of a claim arising out of or relating to (i) any tax or governmental
fee, fine or charge (but not including U.S. federal income taxes upon or
measured by net income or state or local taxes upon or measured by net income
imposed on the Borrower or the Indemnified Parties by the jurisdiction in
which the Borrower or such Indemnified Party is organized or is otherwise
taxable without regard to their participation in the transactions
contemplated by the Transaction Documents, and also not including such
amounts resulting from any income tax filing by Certificateholders being
inconsistent with the characterization of advances by the Borrower to TRM ATM
as a loan or series of loans for federal income tax purposes other than any
such filing required by any taxing authority), all interest and penalties
(including, but not limited to, penalties for failure to file returns or pay
amounts due) thereon or with respect thereto, and all out-of-pocket costs and
expenses, including, but not limited to (x) the reasonable fees and expenses
of counsel in defending against the same, which may arise by reason of or
relating to the Transaction Documents and (y) the reasonable fees and
expenses incurred to file any returns required to be filed to report the same
or (ii) any failure to vest and maintain vested in the Borrower a first
priority perfected security interest in the ATM Fees. The parties hereto
acknowledge and agree that neither the Borrower nor any of the Indemnified
Parties derives tax nexus to any jurisdiction solely by reason by its
participation in the transaction or transactions contemplated by the
Transaction Documents, unless otherwise required by appropriate taxing
authorities.
(b) CONTEST OF TAX CLAIM; AFTER-TAX BASIS. If the Borrower or any
Indemnified Party shall have notice of any attempt to impose or collect any
tax or governmental fee or charge for which indemnification will be sought
from TRM ATM under SECTION 12.03(a)(i), the Borrower or such Indemnified
Party shall give prompt and timely notice of such attempt to TRM ATM and TRM
ATM shall have the right, at its expense, to participate in any proceedings
resisting or objecting to the imposition or collection of any such tax,
governmental fee or charge. Failure or delay in giving such notification
shall not constitute a waiver of such party's right to such compensation;
PROVIDED, that such party shall not be entitled to compensation under this
Section 12.03 for any Indemnified Amounts incurred or suffered with respect
to any date unless such party shall have notified TRM ATM not more than 90
days after the applicable party shall have notice of any attempt to impose or
collect any tax or governmental fee or charge for which indemnification will
be sought from TRM ATM under SECTION 12.03(a)(i). Indemnification hereunder
shall be in an amount necessary to make the Borrower or Indemnified Party
whole after taking into account any tax consequences to such party of the
payment of any of the aforesaid taxes and the receipt of the indemnity
<PAGE>
provided hereunder or of any refund of any such tax previously indemnified
hereunder, including the effect of such tax or refund on the amount of tax
measured by income or profits which is or was payable by such party.
(c) CONTRIBUTION. If for any reason the indemnification provided
above in this SECTION 12.03 is unavailable to the Borrower or an Indemnified
Party or is insufficient to hold the Borrower or an Indemnified Party
harmless, then TRM ATM shall contribute to the amount paid or payable by the
Borrower or such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the
relative benefits received the Borrower or by such Indemnified Party on the
one hand and TRM ATM on the other hand but also the relative fault of the
Borrower or such Indemnified Party as well as any other relevant equitable
considerations.
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.01 AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement nor consent to any departure by Borrower or
Servicer therefrom shall in any event be effective unless the same shall be
in writing and signed by each of the parties hereto. The parties acknowledge
that, before entering into such an amendment or granting such a waiver or
consent, Lender may also be required to obtain the approval of some or all of
the Liquidity Providers or to obtain confirmation from the Rating Agencies
that such amendment, waiver or consent will not result in a withdrawal or
reduction of the ratings of the Commercial Paper Notes.
SECTION 13.02 NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent
by express mail or by overnight courier service, or by courier, or by
certified mail, postage prepaid, or by facsimile, to the intended party at
the address or facsimile number of such party set forth under its name on the
signature pages hereof or at such other address or facsimile number as shall
be designated by such party in a written notice to the other parties hereto.
All such notices and communications shall be effective, (a) if personally
delivered or sent by express mail or courier or if sent by certified mail,
when received, and (b) if transmitted by facsimile, when sent, receipt
confirmed by telephone.
SECTION 13.03 NO WAIVER; REMEDIES. No failure on the part of the
Administrative Agent, Liquidity Agent, any other Secured Party to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
<PAGE>
SECTION 13.04 BINDING EFFECT; SURVIVAL. This Agreement shall be
binding upon and inure to the benefit of Borrower, the Administrative Agent,
the Lender, TRM ATM, the Servicer, the Collateral Agent, the Liquidity Agent
and their respective successors and permitted assigns, and the provisions of
SECTION 4.02 and ARTICLE XII shall inure to the benefit of the Indemnified
Parties, respectively, and their respective successors and permitted assigns;
PROVIDED, HOWEVER, nothing in the foregoing shall be deemed to authorize any
assignment not permitted by SECTION 11.01. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance
with its terms, and shall remain in full force and effect until the Final
Payout Date. The indemnification and payment provisions of ARTICLE XII and
SECTIONS 4.02, 4.04, 13.05, 13.06, 13.07 AND 13.15, subject to the
limitations, if any, set forth therein, shall be continuing and shall survive
any termination of this Agreement.
SECTION 13.05 COSTS, EXPENSES AND TAXES. In addition to its
obligations under ARTICLE XII, TRM ATM, as Administrator, agrees to pay on
demand:
(a) all costs and expenses incurred by the Secured Parties
and their respective Affiliates in connection with the negotiation,
preparation, execution and delivery, the administration (including periodic
auditing as provided in this Agreement), the amendment or syndication thereof
or the enforcement of, or any actual or claimed breach of, the Transaction
Documents, including, without limitation (i) the reasonable fees and expenses
of counsel to any of such Persons incurred in connection with any of the
foregoing or in advising such Persons as to their respective rights and
remedies under any of the Transaction Documents, and (ii) all reasonable
out-of-pocket expenses (including reasonable fees and expenses of independent
accountants), incurred in connection with any review of Borrower's or the
Servicer's books and records either prior to the execution and delivery
hereof or pursuant to SECTIONS 7.01(c) and 7.04(c) (such out-of-pocket
expenses are typically expected to include periodic asset audit and field
examination expenses and legal and rating agency expenses incurred in
association with any amendments to any of the Transaction Documents); and
(b) all stamp and other taxes and fees payable or determined
to be payable in connection with the execution, delivery, filing and
recording of the Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or resulting from
any delay in paying or omission to pay such taxes and fees.
SECTION 13.06 NO PROCEEDINGS. Borrower, the Servicer, TRM ATM,
the Collateral Agent and the Liquidity Agent, each hereby agrees that it will
not institute against Lender, or join any other Person in instituting against
Lender, any insolvency proceeding (namely, any proceeding of the type
referred to in the definition of Event of Bankruptcy) so long as any
commercial paper issued by Lender shall be outstanding or there shall not
have elapsed one year plus one day since the last day on which any such
commercial paper shall have been outstanding. The foregoing shall not limit
Borrower's, TRM ATM's, the Servicer's, the Collateral Agent's or the
Liquidity Agent's right to file any claim in or otherwise take any action
with respect to any insolvency proceeding that
<PAGE>
was instituted by any other Person. The Servicer hereby agrees that it will
not institute against Borrower, or join any other person in instituting
against Borrower, any insolvency proceeding (namely, any proceeding of the
type referred to in the definition of "Event of Bankruptcy") so long as any
debt of Borrower shall be outstanding hereunder, the Certificates are
outstanding or there shall not have elapsed one year plus one day since the
last day on which any such debt or the Certificates shall have been
outstanding. The foregoing shall not limit the Servicer's right to file any
claim in or otherwise take any action with respect to any insolvency
proceeding that was instituted by any other Person. The provisions of this
SECTION 13.06 shall survive the termination of this Agreement.
SECTION 13.07 CONFIDENTIALITY.
(a) Each of the parties to this Agreement shall maintain, and
shall cause each of its employees and officers to maintain, the
confidentiality of this Agreement and all information with respect to the
other parties hereto, including all information regarding the Borrower and
the Servicer and their respective businesses obtained in connection with the
structuring, negotiating and execution of the transactions contemplated
herein, except that each such party and its officers and employees may (i)
disclose such information to its external accountants, attorneys, investors,
potential investors and their agents ("EXCEPTED PERSONS"); PROVIDED, HOWEVER,
that each Excepted Person shall, as a condition to any such disclosure, agree
for the benefit of the other parties hereto that such information shall be
used solely in connection with such Excepted Person's evaluation of the
Borrower, the Servicer and their respective affiliates or such Excepted
Person's relationship with such Person, (ii) disclose the existence of this
Agreement, but not the financial terms thereof, (iii) disclose such
information as is required by an applicable law or an order of an judicial or
administrative proceeding and (iv) disclose this Agreement and related
information in any suit, action, proceeding or investigation (whether in law
or in equity or pursuant to arbitration) involving any of the Transaction
Documents for the purpose of defending itself, reducing its liability, or
protecting or exercising any of its claims, rights, remedies, or interests
under or in connection with any of the Transaction Documents. It is
understood that the financial terms that may not be disclosed except in
compliance with this SECTION 13.07(a) include all fees and other pricing
terms and all Events of Default, Servicer Events of Default and priority of
payment provisions.
(b) Anything herein to the contrary notwithstanding, the Borrower
and the Servicer each hereby consents to the disclosure of any nonpublic
information with respect to it (i) to the other parties hereto or the
Liquidity Providers, (ii) by the other parties hereto or the Liquidity
Providers to any prospective or actual assignee or participant of any of them
or (iii) by the Administrative Agent or the Liquidity Agent to any rating
agency, Commercial Paper Note dealer or provider of a surety, guaranty or
credit or liquidity enhancement to the Lender and to any officers, directors,
employees, outside accountants and attorneys of any of the foregoing, provided
each such Person is informed of the confidential nature of such information.
In addition, any such nonpublic information may be disclosed as required
pursuant to any law, rule, regulation, direction,
<PAGE>
request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
(c) Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, (ii) disclosure of any and all information
(A) if required to do so by any applicable statute, law, rule or regulation,
(B) to any government agency or regulatory body having or claiming authority
to regulate or oversee any respects of the applicable Person's business or
that of their Affiliates, (C) pursuant to any subpoena, civil investigative
demand or similar demand or request of any court, regulatory authority,
arbitrator or arbitration to which the applicable Person, or its Affiliates or
an officer, director, employer or shareholder thereof is a party, (D) in any
preliminary or final offering circular, registration statement or contract or
other document pertaining to the transactions contemplated herein approved in
advance by the Borrower or Servicer or (E) to any affiliate, independent or
internal auditor, agent, employee or attorney of the applicable Person having
a need to know the same, provided that such Person advises such recipient of
the confidential nature of the information being disclosed, or (iii) any other
disclosure authorized by the Borrower or Servicer.
SECTION 13.08 [RESERVED].
SECTION 13.09 CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning
or interpretation of any provision of this Agreement. Unless otherwise
indicated, references in this Agreement to any Section, Appendix, Schedule or
Exhibit are to such Section of or Appendix, Schedule or Exhibit to this
Agreement, as the case may be, and references in any Section, subsection, or
clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.
SECTION 13.10 INTEGRATION. This Agreement contains a final and
complete integration of all prior expressions by the parties hereto with
respect to the subject matter hereof and shall constitute the entire
understanding among the parties hereto with respect to the subject matter
hereof, superseding all prior oral or written understandings.
SECTION 13.11 GOVERNING LAW. THIS AGREEMENT, INCLUDING THE
RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF NEW YORK.
SECTION 13.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR
<PAGE>
DOCUMENT DELIVERED OR WHICH MAY BE IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A
JURY TRIAL.
SECTION 13.13 CONSENT TO JURISDICTION; WAIVER OF IMMUNITIES.
EACH OF THE PARTIES HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL COURT, AND, IF FEDERAL JURISDICTION
IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW
YORK, NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, (ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL
COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT
IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER OR IN CONNECTION WITH THIS AGREEMENT.
SECTION 13.14 EXECUTION IN COUNTERPARTS; SEVERABILITY. This
Agreement may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 13.15 NO RECOURSE AGAINST CERTAIN PARTIES. No recourse
under or with respect to any obligation, covenant or agreement (including,
without limitation, the payment of any fees or any other obligations) of any
Secured Party as contained in any
<PAGE>
Transaction Document or any other agreement, instrument or document entered
into by it pursuant thereto or in connection therewith shall be had against
any incorporator, affiliate, administrator, stockholder, officer, employee or
director of such Secured Party, by the enforcement of any assessment or by
any legal or equitable proceeding, by virtue of any statute or otherwise; IT
BEING EXPRESSLY AGREED AND UNDERSTOOD that the agreements of each Secured
Party contained in the Transaction Documents and all of the other agreements,
instruments and documents entered into by it pursuant thereto or in
connection therewith are, in each case, solely the respective corporate
obligations of such Secured Party, and that no personal liability whatsoever
shall attach to or be incurred by any incorporator, stockholder, affiliate,
administrator, officer, employee or director under or by reason of any of the
obligations, covenants or agreements of such Secured Party contained in any
Transaction Document or in any other such instruments, documents or
agreements, or which are implied therefrom, and that any and all personal
liability of each incorporator, stockholder, affiliate, administrator,
officer, employee or director of any Secured Party for breaches by such
Secured Party of any such obligations, covenants or agreements, which
liability may arise either at common law or at equity, by statute or
otherwise, is hereby expressly waived as a condition of and in consideration
for the execution of this Agreement. The provisions of this SECTION 13.15
shall survive the termination of this Agreement.
SECTION 13.16 LIMITATION OF LIABILITY. It is expressly
understood and agreed by the parties hereto that: (a) this Agreement has been
executed and delivered by Wilmington Trust Company, not individually or
personally but solely as Owner Trustee of the Trust, in the exercise of the
powers and authority conferred and vested in it; (b) the representations,
undertakings and agreements made herein on the part of the Borrower are made
and intended not as personal representations, undertakings and agreements by
Wilmington Trust Company, but are made and intended for the purpose of
binding only the Borrower; and (c) under no circumstances shall Wilmington
Trust Company be personally liable for any payment of indebtedness or
expenses of the Borrower or for the breach or failure of any obligation,
warranty or covenant made by the Borrower herein or in the other Transaction
Documents.
<PAGE>
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/
Name:
Title:
TRM Inventory Funding Trust
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No.: (302) 651-8882
Attention: Corporate Trust Administration
With a copy to:
TRM ATM Corporation
as Administrator
5208 N.W. 122nd Avenue
Portland, Oregon 97230-1074
Facsimile No.: (503) 251-5473
Attention: Chief Financial Officer
<PAGE>
TRM ATM Corporation,
individually and as Servicer
By /s/
----------------------------------
Name:
Title:
TRM ATM Corporation
5208 N. W. 122nd Avenue
Portland, Oregon 97230-1074
Facsimile No.: (503) 251-5473
Attention: Chief Financial Officer
<PAGE>
AUTOBAHN FUNDING COMPANY LLC
as Lender
By: DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG
By /s/
Name:
Title:
Autobahn Funding Company LLC
c/o DG Bank Deutsche Genossenschaftsbank AG
609 5th Avenue, Suite 911
New York, New York 10017
Facsimile No.: (212) 745-1651
Attention: Michael Plunkett
<PAGE>
DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK AG
as Administrator
By /s/
Name:
Title:
By
Name:
Title:
DG Bank Deutsche Genossenschaftsbank AG
609 5th Avenue, Suite 911
New York, New York 10017
Facsimile No.: (212) 745-1651
Attention: Michael Plunkett
KEYBANK NATIONAL ASSOCIATION, as
Liquidity Agent and as Collateral Agent
By /s/
Name:
Title:
KeyBank National Association
127 Public Square, 4th Floor
Cleveland, OH 44114-1306
Facsimile No.: (216)689-8408
Attention: Asset Securitization Group
<PAGE>
Solely for purposes of
Section 2.05, in its
capacity of Note Registrar:
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee
By: /s/
-------------------------------
Name:
Title:
Wilmington Trust Company
Rodney Square North
110 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administrator
<PAGE>
APPENDIX A
DEFINITIONS
This is Appendix A to the Loan and Servicing Agreement dated as of
March 17, 2000 among TRM Inventory Funding Trust, TRM ATM Corporation,
Autobahn Funding Company LLC, DG Bank Deutsche Genossenschaftsbank AG and
KeyBank, National Association (as amended, supplemented or otherwise modified
from time to time, this "Agreement"). Each reference in this APPENDIX A to
any Section, the Preamble, Appendix or Exhibit refers to such Section of or
Appendix, Preamble or Exhibit to this Agreement.
A. DEFINED TERMS. As used in this Agreement, unless the
context requires a different meaning, the following terms have the meanings
indicated hereinbelow:
"ADMINISTRATIVE AGENT" has the meaning set forth in the PREAMBLE.
"ADMINISTRATOR" means TRM ATM, in its capacity as Administrator
under that certain Administration Agreement with Borrower.
"ADMINISTRATION AGREEMENT" means the Administration Agreement, dated
as of March 17, 2000, between the Trust and the Administrator, as the same
may from time to time be amended, modified or supplemented.
"AFFECTED PARTY" means each of the Lender, each Certificateholder,
each Liquidity Provider, any permitted assignee or participant of the Lender
or any Liquidity Provider, the Administrative Agent, the Liquidity Agent and
any permitted assignee or participant thereof.
"AFFILIATE" when used with respect to a Person means any other
Person controlling, controlled by, or under common control with, such Person.
"AGREEMENT" has the meaning set forth in the PREAMBLE.
"APPLICABLE LAW" means all existing and future applicable laws,
rules, regulations (including proposed, temporary and final income tax
regulations), statutes, treaties, codes, ordinances, permits, certificates,
orders and licenses of and interpretations by any Governmental Authority, and
applicable judgments, decrees, injunctions, writs, orders or like action of
any court, arbitrator or other administrative, judicial or quasi-judicial
tribunal or agency of competent jurisdiction.
"ARMORED CAR CARRIER" means a Person who performs armored car
carrier services and ATM maintenance services with respect to the ATMs
pursuant to an agreement with a Transportation Agent.
"ARMORED CAR CARRIER ADDENDUM" means an addendum substantially in
the form of SCHEDULE I between a Transportation Agent, the Collateral Agent,
Borrower and an Armored Car Carrier.
<PAGE>
"ASSET INTEREST" means the Note, the Certificates and all rights in
the Assets Pool and the Transaction Documents related to the Note.
"ASSETS POOL" means (i) the Cash; (ii) the Credit Balance Settlement
Account, and all investments and funds therein; (iii) the Disbursement
Accounts, and all investments and funds therein; (iv) all Related Rights; (v)
all of Borrower's right, title and interest in the ATM Fees and the Cash
Provision Fees and under SECTIONS 1.05 and 1.06, and the Armored Car Carrier
Addendums, Automated Teller Machine Cash Services Agreements, Depository Bank
Agreements and Processing Services Agreements; (vi) all books and records
related to the foregoing; (vii) the Letter of Credit; (viii) all Collections
and other proceeds thereof; and (ix) all proceeds of any and all of the
foregoing.
"ATM" means an automated teller machine owned or leased by TRM ATM
which (i) is accessible only to the applicable Transportation Agent; (ii) is
connected to a Network and a Processing Agent by means of a Switch; and (iii)
is insured with respect to losses resulting from malfunction, theft, fraud,
fire, and other customary events by a reputable insurance company with a
claims paying rating of at least "A" by Standard & Poor's and "Aa1" by
Moody's, the proceeds of which are payable to the Collateral Agent.
"ATM FEE SETTLEMENT ACCOUNT" means account number 379681003263
established at the Collateral Agent in the State of Oregon, in the name of
the Collateral Agent for the benefit of the Secured Parties, which account
has been designated as the ATM Fee Settlement Account, and any other account
designated as such by the Collateral Agent.
"ATM FEES" has the meaning set forth in SECTION 1.05.
"AUTOBAHN" means Autobahn Funding Company LLC, a Delaware limited
liability company, its successors and assigns.
"AUTOMATED TELLER MACHINE CASH SERVICES AGREEMENT" means an
agreement approved in writing by the Administrative Agent and the Liquidity
Agent between the TRM ATM and a Transportation Agent.
"BASE RATE" means, on any date, a fluctuating rate of interest PER
ANNUM equal to the rate of interest most recently publicly announced by the
Liquidity Agent at its principal office in Cleveland, Ohio as its prime
commercial lending rate. The Base Rate is not necessarily intended to be the
lowest rate of interest determined by the Liquidity Agent in connection with
extensions of credit.
"BORROWER" has the meaning set forth in the PREAMBLE.
"BORROWING" means the aggregate Loans made on a specific Borrowing
Date.
"BORROWING BASE" means the sum of (i) all Cash stored in the ATMs,
(ii) all Cash held by Depository Banks awaiting distribution to
Transportation Agents, (iii) all Cash held by Transportation Agents, (iv) all
credit balances with respect to the Cash owed from settlement banks which are
members of the Networks, and (v) all Cash in the Credit Balance Settlement
Account; PROVIDED, HOWEVER, that the Borrowing Base shall not include any ATM
Fees; and PROVIDED, FURTHER
<PAGE>
HOWEVER, that an amount equal to $100,000 shall be deducted from the
Borrowing Base until such time as the agreement with Exxon Company, U.S.A
referenced in SECTION 7.04(h) is terminated or otherwise amended to the
satisfaction of the Administrative Agent and the Liquidity Agent.
"BORROWING BASE DEFICIENCY" means, at any time, that the Outstanding
Facility Amount exceeds the Borrowing Base.
"BORROWING DATE" means each date on which a Borrowing is consummated.
"BORROWING NOTICE" has the meaning set forth in SECTION 1.02(a).
"BUSINESS DAY" means any day of the year other than a Saturday or
Sunday on which (a) banks are not required or authorized to be closed in
Cleveland, Ohio, Eugene, Oregon, New York, New York or Wilmington, Delaware,
and (b) if the term "Business Day" is used in connection with the Eurodollar
Rate, dealings in United States dollar deposits are carried on in the London
interbank market.
"CASH" means the funds lent to Borrower by the Lender pursuant to a
Borrowing hereunder and the purchase price of any Certificates purchased by
the Lender hereunder.
"CASH PROVISION FEE" means, with respect to any Settlement Period,
all amounts payable pursuant to clauses FIRST through SIXTH of SECTION
3.03(d) with respect to such Settlement Period.
"CASH PROVISION FEE PAYMENT DATE" means the last Business Day of
each calendar week.
"CERTIFICATE" means the "TRM Inventory Funding Trust Certificates"
issued by the Borrower to the Lender and GSS Holdings, Inc. pursuant to the
Trust Agreement.
"CERTIFICATE AMORTIZATION AMOUNT" means (i) following the repayment
in full of the Loans, the amount designated by the Borrower as a distribution
on the Certificates and (ii) after the earlier to occur of the Maturity Date
and the Termination Date so long as an Event of Default or Unmatured Event of
Default has occurred and is continuing, the outstanding principal balance of
the Certificates.
"CERTIFICATEHOLDER" means a registered holder of a Certificate.
"CHANGE IN CONTROL" means, with respect to any Person, the
acquisition by any Person or group of Persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under the Exchange Act) of issued
and outstanding shares of the capital stock of such Person entitled (without
regard to the occurrence of any contingency) to vote for the election of
members of the board of directors of such Person and having a then present
right to exercise 50% or more of the voting power for the election of members
of the board of directors of such Person attached to all such outstanding
shares of capital stock of such Person.
<PAGE>
"COLLATERAL AGENT" means KeyBank National Association, a national
banking association, together with any successors thereto.
"COLLECTIONS" means, with respect to the Pool Assets, (i) all funds
which are received by Borrower or Servicer with respect to such Pool Assets,
including any insurance proceeds related thereto, Cash Provision Fees, all
amounts deposited by a Processing Agent in the Credit Balance Settlement
Account, and all payments in respect of Related Rights; and (ii) all
Recoveries.
"COMMERCIAL PAPER HOLDERS" means the holders from time to time of
the Commercial Paper Notes.
"COMMERCIAL PAPER NOTES" means short-term promissory notes issued or
to be issued by Lender to fund its investments in financial assets.
"COMMITMENT" means the obligation of Lender to make Loans pursuant
to this Agreement.
"CP RATE" means, with respect to any Settlement Period, the per
annum rate equal to the weighted average of the per annum rates paid or
payable by the Lender from time to time as interest on or otherwise (by means
of interest rate hedges or otherwise) in respect of the Commercial Paper
Notes (or other Borrowings to fund small or odd commercial paper market) that
is allocated, in whole or in part, by the Administrative Agent to fund or
maintain the Asset Interest during such period, as determined by the
Administrative Agent; PROVIDED, the "CP Rate" shall be calculated in a manner
which includes the costs and expenses of the Lender of issuing the related
Commercial Paper Notes, including all dealer commissions thereon and note
issuance costs in connection therewith.
"CREDIT BALANCE SETTLEMENT ACCOUNT" means account number
379681003248 established at the Collateral Agent in the State of Oregon, in
the name of the Collateral Agent for the benefit of the Secured Parties,
which account has been designated as the Credit Balance Settlement Account or
"Principal Settlement Account" and any other account designated as such by
the Collateral Agent.
"DEPOSITORY BANK" means each financial institution approved in
writing by the Administrative Agent and the Liquidity Agent which has
executed a Depository Bank Agreement with TRM ATM pursuant to which it will
receive Cash and distribute the same solely to Transportation Agents. Each
Depository Bank must have a long-term rating of at least "A" or the
equivalent by each Rating Agency.
"DEPOSITORY BANK AGREEMENT" means an agreement approved in writing
by the Administrative Agent and the Liquidity Agent between a Depository Bank
and TRM ATM.
"DISBURSEMENT ACCOUNT" has the meaning set forth in SECTION 3.01(a).
"DISCONNECTED" means, with respect to any Processing Agent, the
Processing Agent is not connected with an ATM (or the connection is
inoperative) or such Processing Agent is not generating daily reports of ATM
activity in accordance with the requirements of its Processing Services
Agreement.
<PAGE>
"DOLLARS" means dollars in lawful money of the United States of
America.
"ELIGIBLE INVESTMENTS" means any one or more of the following
obligations or securities:
(i) direct non-callable obligations of, and non-callable
obligations fully guaranteed by, the United States of America, or
any agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America;
(ii) demand and time deposits in, certificates of
deposits of, and bankers' acceptances issued by, any depository
institution or trust company incorporated under the laws of the
United States of America or any state thereof, having a combined
capital and surplus of at least $250,000,000, and subject to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or
contractual commitment providing for such investment the commercial
paper or other short-term debt obligations of such depository
institution or trust company (or, in the case of a depository
institution that is the principal subsidiary of a holding company,
the commercial paper or other short-term debt obligations of such
holding company) are rated "P-1" by Moody's and "F1" by Fitch;
(iii) repurchase obligations with respect to and
collateralized by (A) any security described in CLAUSE (i) above or
(B) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in each case
entered into with a depository institution or trust company (acting
as principal) of the type described in CLAUSE (ii) above, PROVIDED
that the Collateral Agent has taken delivery of such security; and
(iv) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing
obligations, but excluding Commercial Paper Notes) payable on demand
or on a specified date not more than one year after the date of
issuance thereof rated "P-1" by Moody's and "F1" by Fitch at the
time of such investment.
"ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time.
"EURODOLLAR RATE (RESERVE ADJUSTED)" means, with respect to any
Settlement Period and any portion of the Asset Interest funded pursuant to
the Liquidity Agreement, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ---------------
1-Eurodollar
Reserve Percentage
WHERE:
"EURODOLLAR RATE" means, with respect to any Settlement Period, the
rate PER ANNUM at which Dollar deposits in immediately available
funds are offered to the Eurodollar Office of
<PAGE>
the Liquidity Agent two Eurodollar Business Days prior to the
beginning of such period by prime banks in the interbank Eurodollar
market at or about 11:00 a.m., New York City time, for delivery on
the first day of such Settlement Period, for the number of days
comprised therein and in an amount equal or comparable to the amount
of such portion of the Asset Interest.
"EURODOLLAR BUSINESS DAY" means a Business Day on which dealings are
carried on in the Eurodollar interbank market.
"EURODOLLAR RESERVE PERCENTAGE" means, with respect to any Settlement
Period, the then applicable percentage (expressed as a decimal)
prescribed by the Federal Reserve Board for determining reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D.
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with respect
to a Person if either:
(a) a case or other proceeding shall be commenced, without
the application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding
up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or substantially all
of its assets, or any similar action with respect to such Person
under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or
proceeding shall continue undismissed, or unstayed and in effect,
for a period of 30 consecutive days; or an order for relief in
respect of such Person shall be entered in an involuntary case under
the federal bankruptcy laws or other similar laws now or hereafter
in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law
now or hereafter in effect, or shall consent to the appointment of
or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) for, such Person
or for any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall fail to,
or admit in writing its inability to, pay its debts generally as
they become due, or, if a corporation or similar entity, its board
of directors shall vote to implement any of the foregoing.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 9.01.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended.
"FACE AMOUNT" means in relation to any Commercial Paper Note (a) if
issued on a discount basis, the face amount stated therein and (b) if issued
on an interest-bearing basis, the principal amount stated therein plus the
amount of all interest scheduled to accrue thereon through its stated
maturity date.
"FACILITY LIMIT" has the meaning set forth in SECTION 1.01.
<PAGE>
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.
"FINAL PAYOUT DATE" means the date following the Termination Date on
which the principal and interest of all Loans have been paid in full, the
principal and interest of all Certificates have been paid in full and all
other amounts payable by Borrower and Servicer under the Transaction
Documents shall have been paid in full.
"FITCH" means Fitch IBCA, Inc., or any successor thereto.
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"GOVERNMENTAL AUTHORITY" means any foreign or domestic federal,
state, county, municipal or other governmental or regulatory authority,
agency, board, body, commission, instrumentality, court or any political
subdivision thereof.
"INDEMNIFIED AMOUNTS" has the meaning set forth in SECTION 12.01.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 12.01.
"INSURANCE SCHEDULE" means the schedule attached hereto as SCHEDULE
I.
"INTERCHANGE FEES" means, with respect to a Transaction at an ATM,
all fees paid by the ATM customer's bank through the applicable Network to
TRM ATM in connection with such Transaction.
"INTEREST RATE" means, for any Settlement Period, (i) in the case of
any portion of the Asset Interest funded by Commercial Paper Notes, the CP
Rate plus 1.39% for such Settlement Period and (ii) in the case of any
portion of the Asset Interest funded pursuant to the Liquidity Agreement, the
Eurodollar Rate (Reserve Adjusted) for such Settlement Period plus 2.00%;
PROVIDED, HOWEVER, that, in either case, if the Liquidity Agent or
Administrative Agent declares that the Termination Date has occurred (or the
Termination Date occurs automatically in accordance with SECTION 9.02(b)),
the Interest Rate shall be the Base Rate as in effect from time to time, PLUS
2% per annum.
"KEYBANK" has the meaning set forth in the PREAMBLE.
"LENDER" has the meaning set forth in the PREAMBLE.
"LETTER OF CREDIT" means the irrevocable letter of credit issued by
the Letter of Credit Bank for the benefit of the Collateral Agent, as the
same may be reduced or reinstated from time to time in accordance with its
terms, and any letters of credit issued in substitution therefor or
replacement thereof in accordance with SECTION 3.04.
"LETTER OF CREDIT BANK" means Bank of America, N.A. and any
successor or assign that is a Qualified Letter of Credit Bank.
<PAGE>
"LETTER OF CREDIT EXPIRY DATE" means the expiry date of the Letter
of Credit as set forth therein, as extended from time to time in accordance
with the terms thereof.
"LETTER OF CREDIT REQUIRED AMOUNT" means, at any time, 3% of the
Facility Limit at such time.
"LETTER OF CREDIT STATED AMOUNT" shall equal at any time the amount
available to be drawn under the Letter of Credit at such time.
"LIEN" means any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and including,
but not limited to, the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt for a lease,
consignment or bailment for security purposes.
"LIQUIDITY AGENT" means KeyBank, as agent for the Liquidity
Providers under the Liquidity Agreement, or any successor in such capacity.
"LIQUIDITY AGREEMENT" means the Liquidity Purchase Agreement, dated
as of March 17, 2000, among the Lender, the Liquidity Agent and the Liquidity
Providers, as amended, supplemented or otherwise modified from time to time.
"LIQUIDITY PROVIDERS" means the liquidity institutions from time to
time that are parties to the Liquidity Agreement.
"LOAN" has the meaning set forth in SECTION 1.01.
"LOAN AMORTIZATION AMOUNT" means (i) the amount of any prepayment of
the Loans designated by Borrower pursuant to SECTION 2.01 and (ii) after the
earlier to occur of the Maturity Date and the Termination Date or so long as
an Event of Default or Unmatured Event of Default has occurred and is
continuing, the total outstanding principal balance of the Loans.
"MAJORITY LIQUIDITY PROVIDERS" has the meaning set forth in SECTION
1.02 of the Liquidity Agreement.
"MATERIAL ADVERSE EFFECT" with respect to any event or circumstance,
a material adverse effect on:
(i) the business, assets, financial condition or operations
of Borrower, TRM ATM or the Servicer;
(ii) the ability of the Servicer or Borrower to perform in any
material respect its obligations under any transaction Document;
(iii) the validity, enforceability or collectibility of any
Transaction Document or any Pool Asset; or
<PAGE>
(iv) the status, existence, perfection, priority or
enforceability of Collateral Agent's interest in the assets of
Borrower or Borrower's ownership interest in the Cash.
"MATURITY DATE" means March 17, 2005.
"MOODY'S" means Moody's Investor Services, Inc., or any successor
thereto.
"NETWORK" means an ATM or EFT Network which is owned by Visa,
MasterCard, American Express, Discover or an FDIC insured financial
institution with capital and surplus of at least $100 million.
"NOTE" has the meaning set forth in SECTION 2.01.
"OUTSTANDING FACILITY AMOUNT" means, at any time, the sum of (I) the
aggregate outstanding Face Amount of all Commercial Paper Notes issued by the
Lender with respect to the Transaction Documents at such time less the
aggregate amount of all interest or discount scheduled to accrue on such
Commercial Paper Notes through their stated maturity and (II) the aggregate
principal or certificate balance of all Loans and Certificates at such time
funded other than through the issuance of Commercial Paper Notes, plus any
accrued and unpaid interest or yield thereon.
"OWNER TRUSTEE" means Wilmington Trust Company, a Delaware banking
corporation.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company, government or any agency or
political subdivision thereof or any other entity.
"POOL ASSET" means an asset in the Assets Pool.
"PROCESSING AGENT" means a processor which (i) has executed a
Processing Services Agreement and (ii) has been certified by the applicable
Network and sponsored to participate in a Network in accordance with the
requirements of such Network.
"PROCESSING AGENT FEES" means that portion of the Surcharge Fees
payable to the Processing Agents pursuant to the Processing Services
Agreements.
"PROCESSING SERVICES AGREEMENT" means an agreement approved in
writing by the Administrative Agent and the Liquidity Agent between TRM ATM
and a Processing Agent pursuant to which the Processing Agent agrees to
provide ATM processing services to TRM ATM.
"QUALIFIED INSTITUTION" means a bank or other financial institution
whose short term unsecured debt is rated at least A-1/P-1 by Standard &
Poor's and Moody's, respectively.
"QUALIFIED LETTER OF CREDIT BANK" means a bank which has a
short-term unsecured debt rating of at least P-1 by Moody's and F1 by Fitch
and which has been approved by the Liquidity Agent, such approval not to be
unreasonably withheld or delayed.
<PAGE>
"QUALIFIED TRANSPORTATION AGENT" means NCR Corporation or any other
Transportation Agent whose short term unsecured debt is rated at least
A-1/P-1 by Standard & Poor's and Moody's, respectively.
"RATING AGENCY" means Fitch and Moody's.
"RECOVERIES" means moneys collected by the Servicer or any
Transportation Agent following instruction by Collateral Agent to return all
money lent to Borrower hereunder in possession of such Transportation Agent
or at any ATM serviced by such Transportation Agent.
"REGULATION D" means Regulation D of the Federal Reserve Board, or
any other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"REGULATORY CHANGE" means, relative to any Affected Party
(a) any change in (or the adoption, implementation,
change in phase-in or commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Affected Party;
(ii) regulation, interpretation, directive, requirement
or request (whether or not having the force of law) applicable to
such Affected Party of (A) any court, government authority charged
with the interpretation or administration of any law referred to in
CLAUSE (a)(i) or of (B) any fiscal, monetary or other authority
having jurisdiction over such Affected Party; or
(iii) generally accepted accounting principles or
regulatory accounting principles applicable to such Affected Party
and affecting the application to such Affected Party of any law,
regulation, interpretation, directive, requirement or request
referred to in CLAUSE (a)(i) or (a)(ii) above;
(iv) any requirement of any Rating Agency applicable to
such Affected Party; or
(b) any change in the application to such Affected Party of
any existing law, regulation, interpretation, directive,
requirement, request or accounting principles referred to in CLAUSE
(a)(i), (a)(ii) or (a)(iii) above.
"RELATED RIGHTS" means, with respect to any Cash, all of Borrower's
right, title and interest in and to all insurance claims related to such Cash.
"REPORTING DATE" shall have the meaning set forth in SECTION 8.03(i).
<PAGE>
"RESERVE ACCOUNT" means account number 379681003271 established at
the Collateral Agent in the State of Oregon, in the name of the Collateral
Agent for the benefit of the Secured Parties, which account has been
designated as the Reserve Account, and any other account designated as such
by the Collateral Agent.
"SECURED PARTIES" means Lender, the Administrative Agent, the
Liquidity Agent, the Collateral Agent, the Liquidity Providers and the other
Indemnified Parties.
"SERVICER" means TRM ATM initially, in its capacity as Servicer
hereunder, and any successor Servicer designated pursuant hereto.
"SERVICER EVENT OF DEFAULT" means each of the following events:
(i) Servicer shall fail to perform or observe in any
material respects any term, covenant or agreement that is an
obligation of Servicer hereunder (other than as referred to in
CLAUSE (ii) below) and such failure shall remain unremedied for five
(5) Business Days after (1) written notice thereof by the
Administrative Agent or the Liquidity Agent or (2) Servicer has
actual knowledge thereof; or
(ii) Servicer shall fail to make any payment or deposit
to be made by it hereunder when due; or
(iii) Any representation or warranty made or deemed to be
made by Servicer (or any of its officers ) under or in connection
with this Agreement or any Servicing Report or other information or
report delivered pursuant hereto shall prove to have been false or
incorrect in any material respect when made and such condition shall
continue unremedied for a period of five (5) Business Days after (1)
written notice thereof by the Administrative Agent or the Liquidity
Agent or (2) Servicer has actual knowledge thereof; or
(iv) An Event of Bankruptcy shall have occurred and
remain continuing with respect to Servicer; or
(v) There shall exist any event or occurrence that has
caused, or would reasonably be expected to cause, a Material Adverse
Effect; or
(vi) Servicer is subject to a Change in Control; or
(vii) A default shall have occurred and be continuing
under any instrument or agreement evidencing, securing or providing
for the issuance of indebtedness for borrowed money in excess of
$500,000 of, or guaranteed by, Servicer, which default is a default
in the payment of any amount due thereunder (after giving effect to
any periods of grace or right to cure) or which default if
unremedied, uncured, or unwaived (with or without the passage of
time or the giving of notice or both) would permit acceleration of
the maturity of such indebtedness and such default shall have
continued unremedied, uncured or unwaived for a period long enough
to permit such acceleration; or
<PAGE>
(viii) The Servicer shall fail to deliver the Servicer Report
within one (1) Business Day of the date required hereby.
"SERVICING FEE" has the meaning set forth in SECTION 8.06(a).
"SERVICING REPORT" has the meaning set forth in SECTION 8.03.
"SETTLEMENT DATE" means the 21st day of each calendar month, or of
any such day if not a Business Day, the next Business Day.
"SETTLEMENT PERIOD" with respect to any Loan or Certificate,
(a) the period from the date of the Borrowing of such
Loan or purchase of such Certificate hereunder to the first
Settlement Date thereafter; and
(b) thereafter, each period from the last day of the
next preceding Settlement Period to the next Settlement Date.
"SUBSIDIARY" means, with respect to any Person, a corporation of
which such Person and/or its other Subsidiaries own, directly or indirectly,
such number of outstanding shares as have more than 50% of the ordinary
voting power for the election of directors.
"SURCHARGE FEES" means all fees other than Interchange Fees charged
to the cardholder using the applicable ATM in connection with a Transaction.
"SWITCH" the system of computer hardware and software established
and operated by or on behalf of the Networks to interface electronically with
members of such Network for the purpose of processing electronic banking
transactions, Surcharge Fees and Interchange Fees.
"TERMINATION DATE" means the earliest of
(a) the date of termination (whether by scheduled
expiration, termination on default or otherwise) of the Liquidity
Providers' commitments under the Liquidity Agreement;
(b) the date that the Termination Date is declared
pursuant to SECTION 9.02(c);
(c) the date which becomes the Termination Date
automatically under SECTION 9.02(b); and
(d) March 17, 2005.
"TRANSACTION" means a withdrawal of cash by a customer of an ATM.
<PAGE>
"TRANSACTION DOCUMENTS" means this Agreement, the Certificates, the
Administration Agreement between Borrower and TRM ATM, the Trust Agreement,
the Note and the other documents to be executed and delivered in connection
herewith, including, without limitation, all documentation relating to the
ATMs and the transportation of the Cash.
"TRANSPORTATION AGENT" means a Person who, pursuant to an Automated
Teller Machine Cash Services Agreement with TRM ATM, has agreed to provide
cash transportation services to TRM ATM, including withdrawal of Cash from
the applicable Depository Banks, transportation of Cash to and from ATMs, and
other ATM maintenance services.
"TRM" means TRM Corporation, an Oregon corporation.
"TRM ATM" means TRM ATM Corporation, an Oregon corporation.
"TRM SECURED OBLIGATIONS" means all obligations of TRM ATM under the
Transaction Documents in its individual capacity, as Administrator, as
Servicer or otherwise, including, without limitation, its obligation to pay
the Cash Provision Fee, indemnity obligations under SECTION 12.02 and 12.03,
and costs and expenses under SECTION 13.05.
"TRUST AGREEMENT" means the Deposit Trust Agreement, dated as of
March 17, 2000, between TRM ATM and Wilmington Trust Company, as Owner
Trustee.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the applicable jurisdiction or jurisdictions.
"UNMATURED EVENT OF DEFAULT" means any event which, with the giving
of notice or lapse of time, or both, would become an Event of Default.
"YIELD RATE" means, for any Settlement Period, (I) in the case of
any portion of the Asset Interest funded by Commercial Paper Notes, the CP
Rate plus 1.39% for such Settlement Period, (II) in the case of any portion
of the Asset Interest funded pursuant to the Liquidity Agreement, the
Eurodollar Rate (Reserve Adjusted) for such Settlement Period plus 2.00%, and
(III) in the case of any Certificates held by GSS Holdings, Inc., 25%;
PROVIDED, HOWEVER, that, in case of clause (I) or (II) above, if the
Liquidity Agent or Administrative Agent declares that the Termination Date
has occurred (or the Termination Date occurs automatically in accordance with
SECTION 9.02(b)), the Yield Rate shall be the Base Rate as in effect from
time to time, PLUS 2% per annum.
B. OTHER TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles. All terms used in Article 9 of the UCC in the State of New York,
and not specifically defined herein, are used herein as defined in such
Article 9.
C. COMPUTATION OF TIME PERIODS. Unless otherwise stated in this
Agreement, in the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding".
<PAGE>
SCHEDULE II
INSURANCE REQUIREMENTS
1. Required Theft/Loss Insurance Protection
<TABLE>
<CAPTION>
Required Theft/Loss*
# of ATMS Insurance Protection
- -----------------------------------------------
<S> <C>
500 $500,000
501-750 $750,000
751-1000 $950,000
1001-1250 $1,100,000
1251-1500 $1,250,000
1501-1750 $1,375,000
1751-2000 $1,500,000
2001-2250 $1,625,000
2251-2500 $1,750.000
2501-2750 $1,850,000
2751-3000 $1,950,000
</TABLE>
* Minimum acceptable Theft/Loss coverage
2. Required "Available Coverage" (amount of theft/loss coverage remaining
after claims) by Quarter. If the Required Theft Insurance Protection is
reduced by claims to the Available Coverage Trigger percentages below,
additional coverage to the Restore % Requirement must be obtained by
TRMIF within 5 days or a Termination Event is triggered. If the
Effective Coverage reaches 25% of the Required Theft Insurance
Protection at any time, a Termination Event is triggered.
The additional coverage may take the form of:
A. Additional theft/loss insurance coverage from an insurance
company rated "A" or higher by Moody's
B: Cash collateral in an account in favor of the Collateral Agent
C: A Letter of Credit in favor of the Collateral Agent from a
bank rated "A" or higher by Moody's
<TABLE>
<CAPTION>
Q1 Q2 Q3 Q4
------------------------------------------------------
<S> <C> <C> <C> <C>
Available Coverage Trigger 50% 50% 50% 50%
Restore % Requirement 75% 70% 70% 50%
</TABLE>
Available Coverage Trigger = (%) * (Required Theft/Loss Insurance Coverage)
Restore Requirement = Required ratio of Available Coverage to Required
Theft/Loss Insurance Coverage
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 472
<SECURITIES> 0
<RECEIVABLES> 8,099
<ALLOWANCES> 161
<INVENTORY> 4,298
<CURRENT-ASSETS> 18,787
<PP&E> 95,199
<DEPRECIATION> (28,386)
<TOTAL-ASSETS> 87,899
<CURRENT-LIABILITIES> 11,986
<BONDS> 0
0
19,798
<COMMON> 19,130
<OTHER-SE> 21,628
<TOTAL-LIABILITY-AND-EQUITY> 87,899
<SALES> 18,081
<TOTAL-REVENUES> 18,081
<CGS> 8,933
<TOTAL-COSTS> 8,933
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 474
<INCOME-PRETAX> (1,354)
<INCOME-TAX> (543)
<INCOME-CONTINUING> (811)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (811)
<EPS-BASIC> (.17)
<EPS-DILUTED> (.17)
</TABLE>
